The PM wants to multi-task on the trade agreement front too, with parallel talks between Europe and the US. We feel that will be a tall order, as talks with each party will no doubt be contingent on deals they strike between each other. For example, the EU will demand the same food quality standards from us if we are to have a free trade arrangement, but won’t sign off on that if we’re doing a deal with the US that might alter some of those processes – translate that across data security, privacy, services, finance and pretty much every other area where EU and US interests aren’t aligned and it’s going to be the sort of love triangle you wish Jeremy Kyle were still around for.
The good news is that the IMF forecasts the UK outperforming the EU in the first couple of years after Brexit. They say that growth will by 1.4% and 1% across 2020 and 2021 – assuming an orderly transition to a new relationship with the EU. That feels like a big assumption and poor growth numbers – but at this point anything that dodges recession would be welcomed.
A leading Harvard professor has told Boris Johnson to spend his way out of the Brexit uncertainty: Ken Rogoff, who specialises in economics and public policy, has said that Brexit is the rainy day that you save for and that it would be a mistake not to use national savings to take some of the pain out of it. The Telegraph has the story
We’ll have to wait for Sajid Javid’s budget in early March before we get an idea on how big the government’s spending plans are, but Mr Javid will be keen to make the most of being the government’s sole representative at Davos this week. Boris has banned other ministers from attending the World Economic Forum as it would apparently put them at odds with being part of a ‘people’s government’!
All five keynote addresses have gone to climate change issues at Davos – the irony isn’t lost on anyone that the carbon footprint for the event is huge. We’ll have to see if there are any actionable outcomes, or if there’s more talk about arbitrary targets to hit and no solid plan to get it done.
Last year a gentleman called out the whole event for dodging the elephant in the room – tax avoidance, saying that it was ‘like being at a firefighters conference and nobody is allowed to mention water’! The speech by Rutger Bregman is here.
From private jets to commercial ones… Boeing is apparently having to raise as much as $10bn following the 737 Max disasters and subsequent grounding of its fleet. Orders for the manufacturer hit near record lows this year as Airbus stole a giant lead on their competitor. Now Boeing needs the cash to see it through as the 737 isn’t likely to be approved for flying until late spring and the plane is probably going to have to be deeply discounted to lure would be purchasers back.
Other problems across the Pond: Trump’s impeachment starts today and the ground rules have been laid out by Senate leader Mitch McConnell; he wants to limit arguments from both sides to just 24 hours and there is the potential that they could decline to hear new evidence. There are plenty of twists in this tale, even before it gets started and the deeply partisan proceedings will be an interesting spectacle over the coming days. The New York Times has a good article on what’s been going on before it kicks off. The proceedings begin this evening UK time.
Today’s focus for the UK will be unemployment number, which are out first thing and then Mark Carney on a Davos panel talking about “solving the growth equation”.
Have a great day.