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DAILY BRIEFING

DAILY BRIEFING

London first?

Written by Li-Ann Chin, associate
Edited by Harriet Moll, creative director
13 October 2020

Good morning,

I’ve always enjoyed trains. When I was younger, my father used to take me on train rides as a weekend treat.  I would position myself strategically beside the window to stare elatedly at the train tracks as we trundled on.  

When I first moved to London in 2015, the city’s comprehensive Underground tube system awed me. I would wax lyrical about it to anyone willing to listen. The ease, the convenience, the sheer magnitude! During pre-Covid times, figures from Transport for London (TfL) show that as many as 1.1 million people commuted on public transport into the city every day

Since the pandemic struck, footfall has fallen dramatically. Traffic figures by Network Rail in April revealed that passenger footfall across some of the city’s busiest stations had fallen by approximately 93 per cent on weekdays, rising to 96 per cent on weekends. Card taps on the Underground from September were still only around a third of their level of a year ago and bus journeys were down by about half.

The impact on TfL has not been insignificant. Last week, it was reported that the transport body is in negotiations with the Department for Transport to secure emergency central government funding, with Mayor Sadiq Khan asking for £5.65bn over the next 18 months as Tube numbers are anticipated to be far below pre-Covid levels for the foreseeable future. It’s first bailout of £1.6bn given in May is due to run out by 17 October. 

With science and technology set to drive UK’s new industrial strategy, trailed news of the policy suggests that there will be a heavy focus on promoting the importance of cities beyond London, such as Manchester and Birmingham, as well as the science and technology corridor between Oxford and Cambridge. This does not bode well for London nor TfL. In September, footfall in London’s West End remained stubbornly down by 56 per cent compared to last year. Mayor of London, Sadiq Khan has warned that the capital is facing an existential threat from the pandemic

Khan said, “for decades central London has been the economic engine of the UK, a cultural powerhouse and a gateway for global tourism to the UK.” But with the pandemic sparking an ongoing exodus from the city, this new decade may well be different.

News

Liverpool will be on the highest coronavirus alert from Wednesday following the launch of a three-tier system intended to reboot the fight to contain the virus in England. Placed in the lowest level category, medium risk, London narrowly escapes new restrictions. However, City Hall has warned that it will not last. (£) 

Oliver Dowden has disowned a government advertising campaign that suggested ballet dancers could “reboot” their careers by retraining in IT, tweeting that he agreed it was ‘crass’. The advert struck a particular nerve because many of the freelancers that prop up the decimated arts industry feel locked out of government support. 

A network of clothing manufacturers in Leicester are involved in money laundering and VAT fraud, a BBC investigation has found. Some of the firms involved have supplied fast fashion brands, including Boohoo. 

Latest figures from the Bioindustry Association and Clarivate representing the UK’s biotech and life sciences sector show the scale of fundraising accelerated between June and August. While companies involved in developing vaccines or treatments have received most attention, the biotech industry has raised £1.9bn to date this year, with 2020 on target to be the best year on record.

Business and economy

According to forecasts by the Institute of Fiscal Studies, Rishi Sunak, the chancellor, will need to raise taxes by more than £40bn a year by 2025 to stop public debt spiralling upwards. Around two-thirds of the increase is owing to extra spending to bolster public services and limit the economic impact of the pandemic. (£)

The Bank of England took further steps towards the introduction of zero or negative rates as a tool to support the UK economy yesterday. Following through on a commitment set out by the central bank’s monetary policy committee in August, the BoE wrote to banks asking them to complete a form about their readiness to deal with a zero or negative bank rate. (£)

Firms have begun shifting around €150bn (€135bn) of UK assets from the City into France ahead of the Brexit transition period deadline, according to the governor of the Bank of France. These companies have mostly been French investment firms “simply moving assets home”.

A deal to implement global digital tax will not be agreed this year as had previously been hoped for, the OECD has conceded. Negotiations over how to tax companies like Facebook, Amazon, Apple and Google will continue between 137 countries until summer of next year. 

Columns of note

According to research by housing charity Shelter, 320,000 people are homeless in the UK, with domestic abuse one of the leading causes of homelessness for women and children. And yet, even before the pandemic, Women’s Aid reported that 60 percent of women being referred to specialist refugees were turned away due to a lack of space. In City A.M Keith Breslauer argues that impact investing may be the solution. 

The coronavirus pandemic has upended lives and disrupted the global economy. The sooner we can get a vaccine, the sooner we have a chance at returning to normal. That doesn’t mean we should needlessly rush it. In BloombergSam Fazeli highlights the importance of preserving public trust. If an early approved vaccine turns out to be sub-optimal, it could shake confidence in vaccinations as a whole. 

Cartoon source: Telegraph

Markets

What happened yesterday?

The S&P 500 extended gains into a fourth day, climbing 1.6% as of 4pm New York time.  The Nasdaq 100 posted its biggest advance since April after surging as much as 4.1%. European equities picked up modest gains but the FTSE 100 remained resolutely flat.

Share prices for Amazon.com Inc. soared ahead of its Prime Day while Apple Inc. jumped as the tech giant is set to embrace 5G as one of its most significant additions to this year’s iPhones.

The British pound climbed 0.2% to $1.3066. The euro fell 0.1% to $1.1812.

Germany’s 10-year yield fell two basis points to -0.55% while Britain’s 10-year yield declined one basis point to 0.271%.

Gold weakened 0.4% to $1,923.29 an ounce.

In company news:

Facebook has explicitly banned Holocaust denial content for the first time. The social network said its new policy prohibits “any content that denies or distorts the Holocaust”.

Mitchells & Butlers, the pubs and restaurants group, has begun redundancy consultations with a number of staff as it struggles with the impact of the coronavirus pandemic.

Unilever has announced that 99 per cent of investors in the UK voted for the company to be based in London, a significant step in the consumer group’s attempt to simplify its corporate structure.

What’s happening today?

Interims
B.p Marsh
Lidco
Onthemarket

AGMs
Apq Global
Newmark Security

Finals
Essensys
Nanoco
Netcall

UK economic announcements
(00:01) Retail Sales
(07:00) Unemployment Rate
(07:00) Claimant count Rate

Int economic announcements
(07:00) Consumer Price Index (GER)
(10:00) ZEW Survey (EU) – Economic Sentiment
(10:00) ZEW Survey (GER) – Current Situation
(10:00) ZEW Survey (GER) – Economic Sentiment
(13:30) Consumer Price Index (US)

Source: Financial Times

did you know

During the Second World War, part of the Piccadilly line (Holborn – Aldwych branch), was closed and British Museum treasures were stored in the empty spaces.

Parliamentary highlights

House of Commons

Oral questions
Foreign, Commonwealth and Development Office (including Topical Questions)
 
Ten minute rule motion
School Breakfast – Mrs Emma Lewell-Buck
 
Legislation
Fisheries bill: remaining stages
 
Motion
The Health Protection (Coronavirus, Restrictions) (No. 2) (England) (Amendment) (No.5) – Matt Hancock
 
General debate
Covid-19
 
Adjournment
Government support for women’s rugby – Fay Jones

House of Lords 

Introductions
Baroness Hoey and Lord Moore of Etchingham
 
Oral questions
Ensuring no renter who has lost income due to coronavirus will be forced out of their home – Baroness Grender
Following the Divorce, Dissolution and Separation Act 2020, the Introduction of changes to divorce procedure, court information technology systems and online information and guidance – Lord Farmer
Efficacy of the Housing Delivery Test – Baroness Thornhill
Great Barrington Declaration on the physical and mental health impacts of COVID-19 policies – Lord Robathan
 
Legislation
Social Security (Up-rating of Benefits) Bill – second reading

Scottish Parliament 

No business scheduled.

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