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Looking ahead: Chancellor Rachel Reeves
Every government needs a dose of good luck. The Conservatives left Labour unresolved on industrial issues such as the fate of Port Talbot, an unwanted Czech bid for Royal Mail and a liquidity crisis at the Harland & Wolff Titanic shipyard.
Ed Miliband could be joining the list with his attack on North Sea oil exploration and Aberdeen jobs.
Chancellor Rachel Reeves, for all her rhetoric about Tory chaos, is presiding over a far more buoyant economy than imagined.
The shifting of the world’s tectonic plates is helping France. France is in chaos, and the rantings of left-wing party leader Jean-Luc Melenchon, who thinks income tax on the rich should be raised to 90 percent, are not helping.
The United States is beset by its own political uncertainty following President Biden’s miscommunications at the conclusion of the NATO summit this week.
Against this backdrop, Britain seems an island of stability and the Truss tantrum a distant memory.
A centrist government with a large majority seems to offer an attractive place for investors. If the currency is a sign of confidence, the pound’s advance towards $1.30 must be considered a triumph.
The strength of the pound helps the Bank of England fight inflation as oil and other commodity prices, priced in dollars, become cheaper.
Two consecutive quarters of solid, forecast-beating growth do not constitute a full recovery, but no one can deny that a healthy recovery is underway.
This, when inflation is where it should be, at 2 percent, with the prospect of a 5.25 percent rate cut this summer.
Doomsayers like to point out the deplorable state of public finances.
National debt, which exceeds 90 per cent of national output, is high and borrowing is distorted by interest rate costs. Compared with most G7 countries, the UK budget is in a favourable position. There have been no funding problems.
Favourable circumstances, coupled with the London discount, have made the FTSE 350 and AIM markets an easy target 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 do any somersaults, but the confidence provided by a rising pound and record-breaking stock market can only improve growth prospects.
Checkmate
Britain is home to a large number of luxury department stores: Harrods, Harvey Nichols, Fortnum & Mason and Selfridges, among others.
However, it lacks the high-end global brands of LVMH, Hermes, Kering and Richemont. Burberry, known for its trench coats and scarves, comes closest.
Under the direction of brilliant American fashion gurus Rose Marie Bravo, Angela Ahrendts and Christopher Bailey, it enjoyed a meteoric rise with huge popularity in China, East Asia and the US thanks to astonishing innovation over the past two decades.
Under the current pedestrian leadership of chairman Gerry Murphy – also chairman of Tesco – and chief executive Jonathan Akeroyd, the situation is becoming desperate.
Partly this is because China is a low-income country, but my informant at the New York store reports that there are more shop assistants than customers and a new collection that includes clunky shoes, which is a hard sell.
As we reported today, stocks are going through a nightmare.
The shares have fallen almost 40 per cent this year and the market capitalisation stands at a paltry £3.2bn.
The fear is that the shares could fall further from their current 886.6 pence.
A great British totem, dating back to 1856, is in danger of being taken over by continental rivals or private equity firms.
Team spirit
If only money ruled football, the Three Lions should reign supreme tomorrow.
A study by flashscore.co.uk values England’s squad at £1.2bn, with Jude Bellingham valued at £165.3m.
The other finalist, Spain, who are playing the best football at Euro 2024 according to England manager Gareth Southgate, are worth just £783.9m.
This could be triggered if the result is the opposite.
Money for the elections
