Daily Briefing: 19 January
Good morning,
In a turn of events that few would have predicted this time last year, it was announced yesterday by the Russian defence ministry that Russian and Turkish jets had carried out joint airstrikes on Islamic State positions in Syria.
This is remarkable when you consider that, just 14 months ago, the two countries were in the midst of a full blown diplomatic incident after a Russian Su-24 bomber was downed by a Turkish F-16 fighter jet in the airspace above the Turkish-Syria border.
However, despite the uneasy relationship between NATO — of which Turkey is a member — and Russia, the governments of Presidents Recep Tayyip Erdogan and Vladamir Putin are working together to restore stability in Syria. In conjunction with Iran, they are organising peace talks which are set to begin in the Kazakh capital, Astana, next week.
Ankara and Moscow are both strategically invested in the Syrian conflict and US inaction has created a vacuum. With President-elect Donald Trump due to be inaugurated tomorrow and his focus seemingly on the domestic agenda, it seems unlikely that the US will step back into the breach.
As an aside, I’m still hoping that President Obama might today do something that was suggested by one social media user: resign and let Vice President Joe Biden become the President for the day, resulting in all the memorabilia hailing Trump as the 45th President redundant. That would be magnificent.
News
Prime Minister Theresa May is set to tell delegates at the World Economic Forum in Davos that the UK is “open for business” but will also warn about those “left behind” by globalization. May will say that the global elites need to tackle the backlash against globalisation, liberalism and free trade, and will argue for reforms in order to create wealth for all.
A fifth of new drugs will be rationed as part of NHS cost cutting plans. This will lead to patients waiting longer for medicines, with sufferers of cancer, diabetes and asthma all having to queue for treatment. NHS England argues that limiting who can receive new drugs will avoid the need to cut other services.
Senegalese troops have massed on the Gambian border and have said they will cross if the brewing crisis is not resolved. President Yahya Jammeh, who has ruled the country since 1994 after taking power in a coup, is refusing to recognise the results of last month’s election which declared Adama Barrow as winner. Fears of violence have led the Foreign Office to advise against all but essential travel to Gambia and Britons have been urged to leave. Thomas Cook is evacuating its 1,000 UK customers currently in the country.
Business & Economy
Two major banks have said that jobs will be moved out of London due to Brexit. HSBC chief executive Stuart Gulliver said that about 1,000 employees working in areas covered by financial regulation would need to move to France “in about two years’ time when Brexit becomes effective”. Meanwhile, Axel Weber, chairman of UBS, said that around 1,000 of its employees would be impacted by the UK losing financial services passporting rights.
In an article for The Telegraph, International Trade Secretary Liam Fox has claimed that informal trade negotiations have already commenced with 12 countries across the world including China, India, Australia and South Korea.
Four hundred jobs will be lost at Clydesdale Bank and Yorkshire Bank after parent company CYBG said it would cut 79 branches, reducing its network to 168. The cuts are larger than expected. It had previously been thought that CYBG would reduce branch numbers to just below 200.
Markets
What happened yesterday
The FTSE 100 ended the day up 0.38% at 7,247.61 but was held back by several profit warnings.
Publisher Pearson — which used to own both The Economist and the Financial Times — was down almost 30% after warning that its earnings are set to be below expectations.
Smurfit Kappa Group, Capita and Experian were all down by more than 2%, making them the day’s the other big fallers. However, Burberry was up by more than 3% thanks to positive sales numbers.
On the currency markets, the pound fell after making its biggest one-day surge since 1998 on Tuesday. Sterling lost 0.9% of the 3% gain it had made against the dollar the previous day and closed at $1.2310. Against the Euro, it finished at €1.15425.
Finals
Chemring Group
Interims
NCC Group, 1pm
Trading Announcements
Halfords Group, Revolutions Bars Group
EGMs
Industrial Mlulti Property Trust
GMs
Northern Investors Co
International Economic Announcements
(09:00) Current Account (EU)
(12:45) ECB Interest Rate (EU)
(13:30) Building Permits (US)
(13:30) Continuing Claims (US)
(13:30) Housing Starts (US)
(13:30) Initial Jobless Claims (US)
(16:00) Crude Oil Inventories (US)
Source: FTSE100, The Financial Times
Columns of Note
Writing in The Guardian, Guy Verhofstadt MEP, chief Brexit negotiator for the European Parliament, welcomes clarity that Theresa May’s speech on Tuesday brought. He chastises Boris Johnson for the “deeply unhelpful” comments he made yesterday and insists that the EU is not out to punish the UK for Brexit. At the same time, he underlines just how big a challenge Brexit will be and drives home the point that the UK will not be able cherry pick the best bits of an à la carte Europe.
In The Times, David Aaronovitch looks at President Obama’s decision to pardon Chelsea Manning. He compares the views of two groups: the first that believes Manning did the world a services and should be thanked, and the second which thinks her treachery jeopardized national security and put American lives at risk. However, he argues that there is a third group which believes it was right that Manning was prosecuted but that the commutation demonstrates a belief in justice, not revenge.
Cartoon Source: The Guardian
On this day
1981: The United States and Iran sign the Algiers Accords which leads to the release of 52 American hostages held for 14 months at the US embassy in Tehran.
Parliamentary highlights
House of Commons
Oral Questions
Environment, Food and Rural Affairs, including Topical Questions; Church Commissioners and House of Commons Commission and Public Accounts Commission and Speaker’s Committee on the Electoral Commission
Business Statement
Leader of the House
Backbench Business
(i) Kashmir (ii) Holocaust Memorial Day 2017
Adjournment
Ayrshire Growth Deal — Patricia Gibson
House of Lords
Oral Questions
Estimate of the number of new homes required for migrants in England in each year up to 2039 — Lord Green of Deddington
Steps to implement the ban on lettings fees announced in the 2016 Autumn Statement
- Baroness Grender
Assessment of Young Minds’ analysis regarding the diversion of new funding for children’s mental health services to other areas
- Lord Hunt of Kings Heath
Israel–Palestine peace conference — Lord Steel of Aikwood
Debate
Impact of UK withdrawal from the EU on the creative industries sector — Lord Clement-Jones
Challenges to the liberal international order by the development populism and nationalism around the world — Lord Bruce of Bennachie
Orders and regulations
Draft Police and Criminal Evidence Act 1984 (Codes of Practice) (Revision of Codes C, D and H) Order 2016 — motion to approve — Baroness Williams of Trafford
Scottish Parliament
Parliamentary Bureau Motions
General Questions
First Minister’s Questions
Members’ Business — S5M-02971 Bob Doris: Closure of Glasgow Jobcentres
Parliamentary Bureau Motions
Ministerial Statement: Draft Climate Change Plan
Scottish Government Debate: The Future of Funding for Rural Development
Business Motions
Parliamentary Bureau Motions
Decision Time
Adam Shaw
Senior Associate
Charlotte Street Partners
