In all the years I have been following the ups and downs of the pound, I never expected to see a public health programme as a factor in its rise……but that is exactly what is happening.
Sterling has pushed higher in response to the Government achieving its vaccination targets, nudging the giddy heights of $1.41 against the Dollar and €1.15 against the Euro.
The UK’s vaccine success is pretty considerable, especially given how it has contrasted with some of the Government’s other responses to the pandemic over the past 12 months. In addition, BoJo's roadmap out of the restrictions seems pretty sensible to me……which is equally astonishing (my wife’s map reading skills (or lack of) will be challenged yet again).
The strength of the pound highlights the confidence the rest of the world is offering the UK currently. Credit where it is due.
Clearly the UK badly needs its vaccination programme for health reasons but for economic ones also. When 2020 was the UK’s worst performance for the economy in 300 years, you understand the impact the big fall in household spending has had.
A large part of UK consumer spending is driven by human contact. In a typical year we spend 25% more on recreation and culture than we do on food and non-alcoholic drink for the home.
The vaccine programme enables these contact consumer services to open up as soon as is safely possible. Rishi Sunak’s “eat out to help out” scheme last summer is now held up as an example of what the Government should not have done, but you can see what his point was.
BoJo’s February roadmap feels like the dawn of a new chapter or perhaps the closing of an old one. The beginning of the end. I learnt from CBeebies this month that the Chinese New Year is also known as the Lunar New Year or Spring Festival. It’s the time when we wave goodbye to the last year and get ready to fully embrace a new Spring. That feels and sounds absolutely perfect right now.
February also saw us waving goodbye to The Trump……which has caused me some huge personal issues……exactly what do I do when the news has a Trump sized hole in it?
Well, my mind got busy trying to fill the void by answering some of life’s big unanswered questions:
- When it’s -7°C and my postie is still out and about in his shorts, exactly what are these guys made of?
- Stevie Wonder’s real name is Stevland Hardaway Morris. Why didn’t he just drop ‘Morris’ and have the coolest name in music ever?
- Why is it that the older you get the less you are bothered by dates on food?
- I always say please and thank you to my Alexa……why do I feel that it’s important that the Government know I’m polite?
- In movies, why is the most important part of removing a bullet from someone the part when it is put in a metal dish afterwards for no reason?
- What is another word for ‘thesaurus’?
- Why is it impossible to clean your teeth with an electric toothbrush and hear the video you are watching on your smart phone at the same time? (and yes I have tried to clean my teeth with the electric toothbrush switched off as the work around).
Life’s big conundrums will just have to remain unanswered for another month.
The Numbers
With the announcement of the roadmap out of the way, all eyes and focus turn to the Budget on 3 March 2021. It doesn’t matter which way he reads the numbers, they are grim on every level for Rishi ‘unprecedented’ Sunak.
The background is a UK economy that shrunk by 10% over the last year and how the level of debt is managed. The £2.2 trillion of debt is now so large that a 1% increase in interest rates will soon cost an extra £10 billion a year.
As long as the economy is growing quickly, that’s manageable. But, even so, it’s a big bill. It is the equivalent of adding 1.5p on income tax for just a small rise in interest rates. The money could be better spent elsewhere.
There is hope that the economy could return to pre-pandemic levels by early next year as households start spending the £125 billion of lockdown savings and the vaccination programme reopens the country. The present lockdown will hit hard though and the Bank of England projects the economy will be 12% smaller by the end of March than before the pandemic. Interestingly, they also project all of that shortfall is expected to be recovered within 12 months.
Are you half full or half empty?
One thing we can be certain about is that the Chancellor will be constantly questioned on the level of debt and which taxes will need to rise to pay for it. At the same time he will be expected to be creative in encouraging economic growth. Good luck with that one.
Unemployment will be a big consideration for Rishi given that 20% of the entire UK workforce is currently on furlough.
Elsewhere……
Wage growth rose to its highest level since 2008 with the Office for National Statistics (ONS) reporting earnings had risen by 4.7% on an annual basis. It suggests that many of those in work were being rewarded for their performances during the pandemic.
UK house prices climbed by 8.5% over the past year……the highest annual growth rate since October 2014. The stamp duty holiday clearly contributing to the rise.
Interest rates stayed the same at 0.01% and the imminent prospect of negative interest rates seems to be diminishing. The Bank of England commented that negative interest rates were operationally feasible but that it would take 6 months for lenders to prepare for them. Some relief for savers……for now!
On the day when Quarantine Hotels were announced in the UK, Botswana had 0 new cases. Yet they were on the UK’s 'red list' meaning if you come from there you must quarantine (or pick up 10 years in jail). On the same day, America had 96,460 new cases but is not on the ‘red list’. Looks like it's not really about Covid-19 at all is it?
Today I passed 350 days working from home.
Trump of the Month
When you take The Trump out of the news, some really good candidates step up out of his shadows.
Take Dido Harding’s Track & Trace programme, which according to her has been a “huge success”. Yet according to the National Audit Office the programme has been unable to get in touch with 375,000 people so far and at the same time contacted 126,000 people in error and told them to self-isolate when there was no need to. Classic Trump-like incompetence.
Or there was Kwasi Kwarteng MP (the Business Secretary) trying to justify the Government’s £1 billion loan to BASF (the world’s largest chemicals producer based in Germany) in April to save jobs in their UK operations. The small print being that they only employ 700 people in the UK and they are now reducing that by closing the Middlesbrough factory. Why did the government not get guarantees about employment for such a large sum of support? Classic Government mismanagement of finances that The Trump would be proud of.
Then there was BoJo with another comic gaff. On a visit to a coronavirus vaccination centre in Wales, BoJo thought it was appropriate to make an entirely inappropriate joke when struggling to put on a pair of surgical gloves and reference an infamous moment during the murder trial of OJ Simpson when a blood soaked glove was found not to fit. He really thought it was appropriate to compare himself to OJ Simpson! You can imagine his PR adviser…..
PR Adviser: "What did I tell you not to do?"
BoJo: "Draw attention to the deaths."
PR Adviser: "And what did you do?"
BoJo: "Compared myself to OJ Simpson and highlighted I have blood on my hands."
Classic BoJo.
Let’s not forget The Trump himself who fended off a second impeachment. It finished as we knew it would……with The Trump acquitted of inciting an insurrection. And let’s be very clear here……he was not found to be innocent. There was simply not enough of his own political party brave enough to vote against him. That’s not innocence.
Far too many people are saying that history will judge The Trump. Why couldn’t he be judged now……with judges! If you don't impeach and remove a President for staging a coup, what's the point of impeachment?
After his acquittal, Mr Trump released a statement denouncing the trial as "the greatest witch hunt in history". Yea, good one.
However, the ‘Trump of the Month’ award goes (yet again) to Matt Hancock.
In the early days of the daily briefings my wife confessed to having trouble telling Matt Hancock from Dominic Raab. I said that Hancock looks like he drained the company pension fund by accident and Raab looks like he did it on purpose……and I stand by that.
Under Hancock’s watch, UK Government broke law by failing to publish details of billions of pounds of public spending on PPE. A case had been brought by campaign group The Good Law Project seeking details of undisclosed deals with firms that had no medical procurement experience and had in some cases delivered faulty equipment.
The Judge at a London High Court ruled that Hancock had failed to comply with public procurement law by failing to publish contract awards within 30 days. The Judge stated that Hancock had “spent vast quantities of public money on pandemic-related procurements during 2020” and “the public were entitled to see who this money was going to, what it was being spent on and how the relevant contracts were awarded."
The Good Law Project highlighted three PPE contracts to illustrate their case: a £252 million contract for the supply of face masks with a finance company, Ayanda Capital, a £108 million contract with Clandeboye Agencies that had previously supplied only confectionery products and PPE contracts worth £345 million with a company trading as Pestfix.
Hancock has yet to apologise for any of this……despite the court ruling. He either doesn’t know how incompetent he is or he blatantly believes he is above the law. The Trump would be proud either way.
If it looks like corruption, smells like corruption and it legally is corruption……then it’s corruption.
Trump Lunacy Rating: 10/10
And Finally……
Our favourite Tom died at the age of 100 in February. He made it count, didn't he? For all those worrying about how much time we'll have lost when this ghastly crisis finally ends, Captain Tom gave an inspiring reminder that you might be 99 years old but still have some of your greatest adventures ahead of you.
Rest in Peace Captain Sir Tom.
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