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DAILY BRIEFING

DAILY BRIEFING

The connection conundrum

Written by Li-Ann Chin, associate 
Edited by David Gaffney, partner
1 December 2020

Good morning,

With many of us resigned to working from home for the next few months, the pandemic has served to highlight the critical importance of robust gigabit connectivity for societal resilience and business continuity during times of crisis.
 
However, a new study by Global Wireless Solutions (GWS) conducted by Censuswide from September to November 2020 has found that almost one-third of British households suffer from “inadequate” internet speeds. Touted by many as the key to post-Covid economic recovery, digital infrastructure has evolved into something of a contentious subject for the UK government.
 
In announcing the UK government Spending Review 2020 last Wednesday, chancellor Rishi Sunak singled out broadband and mobile infrastructure as areas of added investment in going forward, vowing to “deliver faster broadband for over five million premises across the UK and better mobile connectivity with 4G coverage across 95% of the country by 2025.”
 
And yet, industry reaction to the Spending Review statement has been lukewarm at best. Many trade bodies and service suppliers have expressed confusion and disappointment that the review, in essence, only repeated previous commitments while giving notice of forthcoming cuts.
 
Indeed, by revising the target from “every home” by 2025 to a “minimum of 85 per cent coverage” by 2025, the chancellor tacitly confirmed that Britain’s gigabit-speed broadband plan has been rolled back as part of the review. While the budget of the plan remains £5 billion, only £1.2 billion of that sum is expected to be made available up until 2024.
 
Many will remember prime minister Boris Johnson’s ambitious vow during the election to deliver full-fibre broadband to all premises in the UK by 2025. At the time, the pledge was met with doubt, due to the sector’s financial and regulatory constraints. Flash forward to present day and the surreptitious watering down of the government’s self-imposed aim appears to vindicate the previous scepticism. Indeed, the retracting of plans could cost the UK £8.85bn and exclude rural communities from the post-Covid recovery, the Centre for Economics and Business Research has warned.
 
More importantly, however, the considerable change in policy direction has signalled that the UK government will rely more heavily on private investment into the country’s full fibre infrastructure over the next few years,  which wasn’t entirely as we were led to believe the government’s ‘levelling-up’ agenda would work.

News

According to an announcement made by the Moderna on Monday, final results from the trials of the pharmaceutical company’s vaccine against Covid-19 confirm it has 94% efficacy and nobody who received it developed severe disease. The firm is currently filing for US and European emergency regulatory approval of its vaccine so it can be recommended for widespread use.
 
The fourth version of  the contact tracing app used in England and Wales is to address a discrepancy that currently exists, adding a self-isolation payment feature as soon as next week, effectively allowing those told to stay at home to qualify for £500 of support. It is hoped the move will encourage more people to install the app and follow its guidance over the Christmas period, when there are concerns that cases of the coronavirus could spike again.
 
MPs will be voting later today on the government’s proposals for stricter Covid-19 tiers across England, following a debate in the House of Commons. The restrictions were announced last week and are expected to come into force when the second lockdown ends tomorrow. There is some opposition to the plans within the Commons, including those within the Conservative party, but with Labour and Scottish National Party set to abstain from the vote, the measures are likely to pass.

Business and economy

A “mad stampede” to buy houses before the stamp duty holiday ends drove UK mortgage approvals in October to the highest level since 2007, despite depressed economic activity and the risk of rising unemployment. Approvals for home purchases jumped to 97,500 in October, the highest level since September 2007. The figure was also 33% higher than approvals in February 2020 and about 10 times higher than the trough of 9,400 in May, Bank of England data showed on Monday.

Arcadia Group, owner of high street retailers Topshop and Miss Selfridge, formally turned down an emergency loan of £50 million mere hours after it was offered by Frasers Group Plc. A spokesperson for Frasers Group confirmed that it had not been given any reasons for the rejection nor had any form of engagement from Arcadia before the loan was declined.
 
From Tuesday, the UK’s points-based post-Brexit system will be going live, ensuring that all foreign nationals – including those from the European Union – have to apply online for a visa if they want to work in the UK starting 1 January. According to new immigration rules, those seeking a skilled worker visa will need a job offer, to be proficient in English and earn at least £25,600.
 
Credit Suisse has named outgoing Lloyds Banking Group chief executive António Horta-Osório as its next chairman. António Horta-Osório is expected to succeed Urs Rohner who will step down in 2021 as previously announced upon reaching the statutory term of 12 years, Switzerland’s second-biggest bank has confirmed.

Columns of note

When the pandemic is over, many of us will inevitably seek out places of celebration and shared experiences once again. And yet, The British Beer and Pub Association has warned that 72% of the businesses in its sector could soon close as a result of Covid-related restrictions. In The GuardianJohn Harris advocates for immediate action to support the hospitality sector before it is too late.

Aid has historically represented a top-down solution imposed on communities that are expected to be grateful but, all too often, are the victims of unintended consequences. Indeed, spending has often undermined economic development, obfuscated political reform and sown seeds of rampant corruption. Bearing this in mind, Matthew Syed argues in The Times that the debate on aid needs to shift away from the quantums of expenditure to the effectiveness of aid.

Cartoon source: The Telegraph

Markets

What happened yesterday?

U.S. stocks fell from records as investors assessed the prospects for risk assets after a blistering month-long rally.
 
The S&P 500 dropped the most in a week, dipping by 0.7% to 3,611.36 as of 12:24p.m New York time, the lowest in a week on the largest decrease in more than a week. However, it still remains on track for its best month since April. The tech-heavy Nasdaq indexes that trailed in November fared better than S&P on Monday.
 
The FTSE 100 is on course for its best month on record, boosted by growing optimism that an early coronavirus vaccine can trigger a faster than expected economic recovery from the Covid-19 recession.
 
Bitcoin hit a record high as advocates for the crypto currency say this rally is different to previous ones. In terms of commodities, West Texas Intermediate crude sank 1.4% to $44.88 a barrel, the lowest in a week on the largest tumble in more than two weeks. Gold depreciated 0.3% to $1,782.72 an ounce, the weakest in five months.
 
In company news:
 
S&P Global agreed to buy analytics group IHS Markit in a $44bn deal, in a bid to create a financial data and information juggernaut able to compete with market leader Bloomberg.
 
Facebook Inc is nearing a deal to buy Kustomer, a startup that specializes in customer-service platforms and chatbots, which looks to value the company at a little over $1 billion, according to people familiar with the matter.
 
Unilever confirmed it has moved its legal base to London, finally abandoning its dual-headed Dutch-UK structure after almost a century.

What’s happening today?

Finals
Gooch & Housego
Hyve Grp.

Interims
Bilby
Ince Group
Iomart
Mercia Asset
Sosandar
Tekmar Group P.

AGMs
Abstd Asiafocus
Aeorema Comm.
Blackrock Great
Tristel

UK Economic announcements
(09:30) PMI Manufacturing

Int. Economic announcements
(08:55) Unemployment Rate (GER)
(08:55) PMI Manufacturing (GER)
(09:00) PMI Manufacturing (EU)
(14:45) PMI Manufacturing (US)
(15:00) ISM Prices Paid (US)
(15:00) ISM Manufacturing (US)
(15:00) Construction Spending (US)
(23:30) Auto Sales (US)

Source: Financial Times

did you know

Brussels sprouts really did taste worse when you were a child. Starting in the 1990s, Dutch growers of Brussels sprouts created new varietals of Brussels sprouts that were much less bitter and much tastier.

Parliamentary highlights

House of Commons

Oral questions
HM Treasury (including Topical Questions)
 
Ten Minute Rule Motion
Apologies – John Howell
 
Motion
Motion to approve regulations related to public health
 
Adjournment
HIV Commission – Steve Brine

House of Lords 

Oral questions
Ending HIV transmissions by 2030 – Baroness Barker
Impact pre-exposure prophylaxis is having on new HIV transmissions and what steps are being taken to ensure that there is sufficient access to that treatment – Lord Cashman
Support older people at risk from domestic abuse while restrictions are in place to address the COVID-19 pandemic – Baroness Gale
 
Legislation
Covert Human Intelligence Sources (Criminal Conduct) Bill – committee stage (day 2) – Baroness Williams of Trafford
 
Motion
Motions to approve regulations related to Public Health – Lord Bethell

Scottish Parliament 

Ministerial Statement: COVID-19 

Equalities and Human Rights Committee Debate: Valuing the Third Sector 

Public Petitions Committee Debate: Mental Health Support for Young People in Scotland 

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