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Wednesday's Business and Politics round-up

22 May 2019

Person sat at a table reading a newspaper

Good morning,

Theresa May has set out her plan to get a Brexit deal through the Commons - though the response has been less than welcoming.

The Prime Minister has offered a guaranteed vote in Parliament on whether to hold a second referendum, a vote on different customs options, and a legal obligation to seek alternative arrangements to the backstop as well as a range of other promises. The text of the Withdrawal Agreement Bill (WAB) that incorporates these will be published today.

May stated that a vote against the deal would likely pave the way for a general election or no Brexit.

Former Tory leader Iain Duncan Smith described the plan as a 'bad buffet', as reported in the Daily Telegraph. Jeremy Corbyn labelled it a 'repackaging of the same old bad deal'. Once again, the Matt cartoon is well worth a look.

The morning's top stories, rounded up for your convenience. 

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Growing pains

Global growth forecasts have been slashed by the Organization for Economic Co-Operation and Development (OECD), amid a brewing trade war between the US and China.

The world's GDP increase is expected by the OECD to dip to 3.2 per cent this year, down from its November forecast of 3.5 per cent. The UK's growth expectations actually increased to 1.2 per cent, however the organization warned of the impact of Brexit uncertainty.

Whereas trade growth normally ticks along at a higher rate than GDP growth, that has reversed this year. Angel Gurria, the OECD's secretary general, said that trade should be the 'locomotive pulling GDP growth and now it is not working like that'.

Meanwhile, household name brands Nike and Adidas have joined 171 other companies in calling for President Trump to bring the US's trade war with China 'to an end.'

The letter warns of the effect that imposing import tariffs has on working class families. It argues that the extra 25 per cent duty planned on footwear would be 'catastrophic' for the firms' consumers.

You Musk be kidding 

Tesla's share price could fall as low as $11, according to worst-case scenario projections by Morgan Stanley.

The electric car manufacturer's stock price currently sits at $205. However, according to analyst Adam Jonas, 'Tesla has grown too big relative to near-term demand, putting great strain on the fundamentals. However, Jonas added, 'We give Tesla credit for tapping into the world’s largest EV market [China] for a number of years'.

Tesla chief executive Elon Musk has previously called for short-selling to be illegal, labelling the SEC (which oversees US financial and stock rules) the 'Short-seller enrichment commission'. One analysis claimed that the tweeted tirade benefited the short-sellers themselves to the tune of over half a billion dollars as the stock price fell at the time by around 7 per cent.

Musk has been requested by the SEC not to tweet potentially market-moving information. Yesterday it was announced that Tesla has hired as its new social media manager the man behind the 'absolute unit' meme.

In other vehicular news, a Milton Keynes-based firm that digitally maps cities has raised £3.6m as interest in the technology's applications for autonomous cars continues to heighten.

Food for thought

Jamie Oliver's restaurant chain has entered administration, leading to the loss of around 1,000 jobs.

22 restaurants will be closed, with only three outlets in Gatwick Airport remaining.

The Jamie's Italian brand launched in 2008, but required a £12.6m funding injection from the Naked Chef in 2017. As Will Wright, an administrator from KPMG commented, 'The current trading environment for companies across the casual dining sector is as tough as I’ve ever seen.'

Oliver stated, 'I am deeply saddened by this outcome and would like to thank all of the staff and our suppliers who have put their hearts and souls into this business for over a decade. I appreciate how difficult this is for everyone affected.'

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