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Friday's Business and Politics round-up

16 Nov 2018

Person reading the IoD's news round up with breakfast

Good morning and happy Friday!

The past 48 or so hours have been extraordinary in the UK political world, as Prime Minister Theresa May continues to fight for the Withdrawal Agreement that sets out the terms of UK’s departure from the EU. Headlines are dominated by the latest developments this morning – see further analysis below.

While Government suffered from resignations yesterday, the business world didn’t get away from it either. The chief executive of Patisserie Holdings, Paul May, has resigned after 12 years in the company – the second board member to quit the firm after a £40 million black hole was found in its finances a few weeks ago. While the details of the causes of the resignation have not been published, it is believed that Mr May decided to go rather than being pushed out.

Mr May has been replaced by Steve Francis, who has a “proven track record of rapid operational performance improvements.” That certainly sounds like what the company needs right now!

In other, more joyful news, the new John Lewis Christmas advert is out now, featuring Sir Elton John. John Lewis Christmas adverts have become a crucial part of the Christmas season, with other retailers, including Sainsbury’s and Marks and Spencer also spending increasing amounts on Christmas ads.

Have a great weekend! 

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All by Mayself

Prime Minister Theresa May faced turmoil yesterday, as a number of Ministers quit her Government in protest of the terms of the Withdrawal Agreement, including now former Brexit Secretary Dominic Raab and Work and Pensions Secretary Esther McVey.

Replacements have not been appointed yet, with Mrs May joking last night that she hasn’t had time to think about it. She was indeed busy defending the Withdrawal Agreement to Parliament yesterday and trying to save her position as Prime Minister, as rumours spread that Eurosceptic MPs were handing in their letters of no confidence in her.

Despite the turmoil, Mrs May declared last night at a news conference that she believes “with every fibre in my being that the course I’ve set out is the right one for our country and for all our people. Am I going to see this through? Yes.”

Today is likely to be another day of chaos - it has been reported that Michael Gove has refused the position of the Brexit Secretary, unless he is allowed to renegotiate the current deal. Meanwhile, EU leaders have warned that renegotiating the deal at this stage was not on the table and emphasised the need to prepare for a ‘no-deal’ because of the “uncertainty” in the UK.

The pound dropped against the dollar at the biggest rate in two years, by almost 2% to below $1.28 in response to yesterday’s developments.

So what’s in the agreement? The 585-page document sets out details of the divorce bill, how the transition period will operate and commitments to secure the rights of EU citizens living in the UK and vice versa. If the agreement gets approval of UK Parliament and the 27 EU states, negotiations can then proceed to discussions about the future trading relationship.

The Irish border issue had been the major sticking point in the talks and is the main cause of backlash against the agreement. The current terms state that a “backstop” will be put in place to ensure there is no return to a hard border – Northern Ireland would stay aligned to some EU rules on things like food and goods standards, while the whole of the UK would also remain in the EU customs union for a limited amount of time until a solution is agreed.

Check out the BBC’s ��guide to where we are’ on Brexit for a more in-depth analysis on what is going on.

Can't bank on it

Banks across the UK have closed nearly 13,000 branches in the past 30 years, leaving one in five people having to travel more than three kilometres to access their nearest branch, according to the latest figures by the consumer group Which?.

Scotland has been the most affected by the developments, while the South-West and East of England have also been disproportionally impacted.

Although bank closures have been largely driven by more consumers banking online, Which? have urged banks to justify the amount of closures that have taken place. “We can’t stop tech disrupting traditional models of banking, but this is happening at such a pace, we are concerned some people are being disenfranchised and excluded from accessing finance,” said Gareth Shaw from Which?.

Several banks have partnered with the Post Office to allow individuals to bank at post offices. However, a large number of individuals remain unaware of the offering. 

Shop till you drop

Retail sales fell by 0.5% in October, a rate that was worse than expected by economists, according to the latest figures by the Office for National Statistics (ONS). The fall has resulted in a drop of the annual rate of growth from 3.3% to 2.2%.

Analyst have suggested that consumers have cut back spending on home appliances and electronics, while a mild autumn is also thought to have affected sales of winter clothes.

Retail sales are seen as a key measure of household confidence and have broadly held up since the Brexit vote despite the slow growth of real incomes. Meanwhile, inflation remained at a rate of 2.4% in October, despite expectations that it would increase, according to the ONS. Prices of food and clothing fell, while utility bills and petrol prices rose.

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Contact Press Office

Donjeta Miftari, Head of Communications  

020 7451 3285

Euan Holmes, Press Officer

020 7451 3280

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