Looking Ahead: Chancellor Rachel Reeves
All governments need a dose of luck.
The Tories left Labour with unresolved industrial problems, including the fate of Port Talbot, an unwanted takeover of Royal Mail by the Czech Republic and a cash crisis at Titanic shipbuilder Harland & Wolff.
Ed Miliband may add to the list with his attack on North Sea oil exploration and jobs in Aberdeen.
Despite all her rhetoric about chaos within the Conservative Party, Chancellor of the Exchequer Rachel Reeves envisions a much brighter economy than previously thought.
She is helped by shifting global tectonic plates. France is in chaos – not helped by the tirades of left-wing party leader Jean-Luc Melenchon who believes income tax for the rich should be raised to 90 percent.
The US is facing political uncertainty after President Biden’s blunders at the end of this week’s NATO summit.
Against this backdrop, Britain seems an island of stability and the ‘Truss tantrum’ is a distant memory.
A centrist government, with a large majority, wants to provide an attractive location for investors. If the currency is a sign of confidence, the rise of the pound towards $1.30 must be seen as a triumph.
The strength of the pound helps the Bank of England combat inflation as the prices of oil and other commodities become cheaper when expressed in dollars.
Two consecutive quarters of robust growth that beat forecasts does not constitute a full recovery. But no one can deny that a healthy recovery is underway.
And this while inflation is at the expected level of 2 percent, with the prospect of an interest rate cut of 5.25 percent this summer.
Doomsayers like to point to the poor state of government finances.
Government debt, more than 90 percent of national output, is high and borrowing is distorted by interest costs. Compared with most G7 countries, the UK budget is favourable. There has been no problem with financing.
Favourable conditions, coupled with the bargain corner of the ‘London discount’, have made the FTSE 350 and AIM markets easy targets for predators.
Fund managers, including the world’s largest asset manager Blackrock, are optimistic. Pictet Wealth Management says the UK is enjoying “a honeymoon period.”
Don’t expect Reeves to make great leaps, but the confidence that a rising pound and a record-breaking stock market price bring can only improve the growth outlook.
Checkmate
Britain is blessed with an abundance of luxury department stores, including Harrods, Harvey Nichols, Fortnum & Mason and Selfridges.
However, it lacks glossy global brands such as LVMH, Hermes, Kering and Richemont. Burberry, known for its trench coats and scarves, comes closest.
Led by brilliant American fashion gurus Rose Marie Bravo, Angela Ahrendts and Christopher Bailey, it has made a meteoric rise, becoming hugely popular in China, East Asia and the US thanks to stunning innovations over the past two decades.
Under the current leadership of chairman Gerry Murphy – also chairman of Tesco – and chief executive Jonathan Akeroyd, the company is going through a disastrous time.
Part of this is due to a low-octane China. But my informant in the New York store reports that there are more clerks than customers and that there is a new collection, including clunky shoes, which are a tough sell.
As we reported today, stocks are experiencing a nightmare.
The share price has fallen almost 40 per cent this year and the market capitalisation is a mere £3.2 billion.
There are fears the shares could fall further from the current 886.6p.
A major British stronghold dating back to 1856 is at risk of being taken over by rivals on the European mainland or by private equity.
Team spirit
If money were the only rule in football, the Three Lions would rule tomorrow.
Research from flashscore.co.uk estimates the value of the England squad at £1.2 billion, with Jude Bellingham valued at £165.3 million.
The other finalists, Spain, who England manager Gareth Southgate believes will play the best football at Euro 2024, are worth just £783.9m.
That could rise even further if the outcome is wrong.