Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Let IT be

Written by Ralitsa Bobcheva, associate 
Edited by Harriet Moll, partner
2 December 2020

Good morning,

Over the last nine months, we have seen a new form of inequality reveal itself before our eyes: the digital divide.

Even before the pandemic highlighted the need for elevating the role of digital in driving economic growth, the UK was facing a huge digital skills gap. In Scotland, where the IT skills gap has long loomed over the business community, about three quarters of employers reported difficulties in recruiting qualified digital staff at the beginning of this year.

The incentive for bridging the digital skills gap is strong. Estimates show that the existing skills gap in Britain amounts to losing around £63bn in GDP each year – a figure that is set to grow given the rapid shift in ways of working across sectors.

There is no doubt that the onset of the pandemic has fast-forwarded digital adoption, with more than half of workforces reporting improvement in their digital skill-sets.

But behold, the digital transformation hasn’t only had implications for home-office workers. For those with jobs which cannot be done from home, lockdown disruptions have resulted in many quickly developing essential IT skills that as, Andrew Hill argues, could have profound implications for future job design.

While it is true that the pandemic has expedited the government’s response to bridging the digital skills gap, it also creates an impetus for accelerating its digital transformation ambitions. The job support schemes unveiled by Rishi Sunak last week were a welcome step in the right direction, but they failed to address UK’s significant digital skills shortage. 

With the OECD’s latest economic outlook forecasting that the UK’s economic recovery will lag behind nearly every other major economy, it seems more crucial than ever that the government seizes on the newly found confidence in adopting digital technology and invest in upskilling the UK workforce. Let IT be!

News

England’s four-week lockdown ends today and enters a tougher version of its three-tier system of restrictions. The majority of areas have been placed into the high and very high coronavirus risk category – tiers two and three. These will be reviewed every 14 days, with the first review due on 16 December.

British regulator MHRA has approved the Pfizer/BioNTech coronavirus vaccine for widespread use, in a move that makes the UK the first country to license a vaccine against Covid-19. According to the regulator the jab is safe for roll out and immunisations could start within days for those most at risk. The UK has already ordered 40m doses which will vaccinate 20m people, with two shots each.

Fourteen countries responsible for 40% of the world’s coastlines have agreed on a global sustainable fishing initiative which would end overfishing, restore dwindling fish populations and stop the flow of plastic pollution into the seas in the next 10 years. Under the agreement, the countries have pledged to put an end to subsidies and will aim to eliminate illegal fishing through better regulation.

Business and economy

Debenhams is set to go into liquidation after Christmas, in a move that will see the closure of 124 stores and the loss of up to 12,000 jobs. The news came shortly after Arcadia group, the owner of brands such as Topshop, Miss Selfridge and Wallis, collapsed into administration. Debenhams will launch a massive stock clearance sale today as non-essential shops in England are allowed to reopen for the first time after the end of lockdown.

US president-elect Joe Biden formally introduced his team of economic advisers yesterday, in preparation to deal with one of the biggest financial crises in decades. Biden’s nominations place several women in top economic roles illustrating his commitment to diversity. Among the nominees are Janet Yellen, Cecilia Rouse, Heather Boushey and Jared Bernstein.

Tesco has announced that it will repay £585m in business rates relief received from the government during the coronavirus crisis. According to its October estimates, the pandemic will cost the company around £725m in 2020 – well above the level of relief received. However, Tesco’s board has said that the supermarket group has proved resilient in “the most challenging of times”. (£)

Columns of note

Writing in City AM, James Lawson cautions that, despite challenging circumstances, we should not succumb to the widespread backlash against technology. In a new report for the Adam Smith Institute, he argues that the prospect of a robot-driven future could not only improve our lives, but also contribute to post-pandemic recovery.

 In Forbes, Enrique Dans sheds light on a significant announcement that has passed by relatively unnoticed: Apple’s decision to shift assembly of its most advanced product from China to India. Could this move be yet another indicator of a potential change in the economic cycle? 

Cartoon source: The Telegraph

Markets

What happened yesterday?

London stocks made a positive start to the month, driven by coronavirus vaccine hopes and UK and China manufacturing data. At close, the FTSE 100 was up 1.89% at 6,384.73, and the FTSE 250 down 2.63% at 19,844.81.

Sterling was in a weaker state, last rising 0.59% on the dollar to $1.3401, but weakening 0.3% against the euro to €1.1136.

In the US, the Dow Jones Industrial Average climbed 0.92% to 29,910.46, while the S&P 500 and the Nasdaq Composite both jumped to record highs – 1.42% to 3,673.05 and 1.55% to 12,387.57 respectively.

In company news:

Arqiva is set to pull its investment in digital TV platform Freeview amid a row over how to stave off pressure from streaming rivals.

Messaging app Slack has been sold to business software giant Salesforce for $27.7bn.

Revolut has announced that it will offer its customers who receive their salary via Bacs credit the opportunity to access their salary a day early.

What’s happening today?

Finals
Avon Rubber
Ixico
Residential Sec
Stock Spirit

Interims
Augmentum Fint.
Loungers Plc

AGMs
Brighton Pier
Jpmorgan Glob
Kingswood H.
Target Healthc.
Tri-star Res.

UK Economic announcements
(00:01) BRC Shop Price Index
(09:30) PMI Construction

Int. Economic announcements
(07:00) Retail Sales (GER)
(10:00) Unemployment Rate (EU)
(10:00) Producer Price Index (EU)
(12:00) MBA Mortgage Applications (US) 
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

The password for the computer controls of nuclear tipped missiles of the U.S was 00000000 for eight years.

Parliamentary highlights

House of Commons

Oral questions
Northern Ireland
 
Prime Minister’s Question Time
 
Ten Minute Rule Motion
Automated External Defibrillators (Public Access) – Jim Shannon
 
Motion
Motion to approve the Draft Agriculture and Horticulture Development Board (Amendment) Order 2020, the Draft Direct Payments to Farmers (England) (Amendment) Regulations 2020 and the Draft World Trade Organisation Agreement on Agriculture (Domestic Support) Regulations 2020
– George Eustice
 
Motion
Motion to approve the Draft Plant Health (Amendment etc.) (EU Exit) Regulations 2020 and the Draft Plant Health (Phytosanitary Conditions) (Amendment) (EU Exit) Regulations 2020
– George Eustice
 
Adjournment
Broadcasting and the 60th Anniversary of Coronation Street – Tracy Brabin

House of Lords 

Oral questions
Various
 
Legislation
United Kingdom Internal Market Bill – third reading – Lord Callanan
 
Orders and regulations
Various

Scottish Parliament 

Portfolio Questions
 
Scottish Labour Party Business
Green Jobs
 
Scottish Labour Party Debate 
Jobs and Recovery
 
Members’ Business 
Stewart Stevenson: Recognising the Importance of Whole Grains on International Whole Grain Day

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