Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Fire is catching

Written by Li-Ann Chin, associate 
Edited by Tom Gillingham, associate partner
19 April 2021

Good morning,

If you haven’t seen the cover for the latest issue of TIME, I suggest you take a look.
 
Famed for their vivid depictions of notable individuals and current affairs, I think most of us will agree that TIME magazine covers are iconic.
 
To illustrate the impact of climate change on our interconnected world for the April 26 issue of TIME, Malaysian artist Red Hongyi constructed a 7.5 x 10-foot world map out of 50,000 green-tipped matchsticks. She then set the art piece on fire, demonstrating how the climate crisis will affect virtually everyone and no corner of the globe can be immune from it.
 
Over the weekend, headlines were made when, despite strained diplomatic ties, the world’s two biggest economies – US and China – agreed to work together to reduce emissions in line with the 2015 Paris climate accord. The US is also expected to unveil new climate targets at President Joe Biden’s virtual summit on climate change taking place later this week.
 
This commitment represents significant progress on the climate action front. And yet, it is imperative that the spirit of international cooperation is extended to poorer countries. It has long been cautioned that the sectors hardest hit by climate change are likely to be  agriculture, fisheries and tourism, all of which are key contributors to national income and employment for developing economies.
 
An analysis by Carbon Brief reveals that an estimated $3.5tn investment is needed for developing countries to implement their United Nation climate pledges up to 2030. In accordance with the Paris agreement, developed countries are expected to commit $50 billion annually to the Green Climate Fund. As of November 2020, however, only £7.2 billion had been approved and £1.4 billion disbursed. There is much, much more that needs to be done in improving the access that poorer nations have to these funds.
 
Speaking about the inspiration behind her artwork, Red said, “The idea comes from wanting to highlight a world map, where everyone’s involved, and if one place is affected, the whole place is affected.”
 
Tackling climate change is not a zero-sum game. There can be no winners nor losers. If one match catches on fire, the rest will burn together.

News

Two Russian men suspected of carrying out the 2018 Salisbury poisonings are being linked to a deadly explosion at an ammunition dump in Czech Republic. Both men are reportedly from a unit of Russian military intelligence, known as the GRU. In response to the news Britain has said it stands with the Czech government..
 
President Biden’s chief medical adviser, Anthony Fauci, has confirmed that Johnson & Johnson’s Covid-19 vaccine is likely to return to use in the US by Friday, following a pause because of concerns over blood clots in some patients. (£)
 
Mike Tildesley, a member of the Scientific Pandemic Influenza Group on Modelling, which provides evidence on Covid-19 to the UK government’s Sage committee, has called for as much information about India’s Covid-19 variant to be gathered “as quickly as possible”. According to Public Health England, 77 cases of the variant has been discovered in the UK.

Business and economy

UK pub and restaurant owners are left concerned over staff shortages after thousands of workers left the hospitality industry to take other jobs or return to their home countries during the pandemic. The problem is reportedly most acutely felt in London, which generally had a higher proportion of foreign employees. (£)
 
Environment secretary George Eustice defended David Cameron, former prime minister, for his role in the Greensill Capital lobbying scandal, citing that Cameron “meticulously observed the rules” around lobbying. A probe set to be unveiled today will require every living former Prime Minister not still involved in Westminster politics to give evidence at a major parliamentary inquiry into lobbying and anti-corruption.
 
More than 70 Leon outlets across the UK and Europe have been sold to Mohson Issa and Zuber Issa, founders of EG Group, a British company which operates petrol stations and fast food outlets. The company is reportedly committed to keeping on Leon’s management team and staff.

Columns of note

Now that retail and hospitality venues are gradually reopening across the UK, many are optimistically predicting that consumer spending is likely to bounce back and drive a recovery reminiscent of the Roaring Twenties. Not so fast, argues Diane Coyle. Recent figures from the Resolution Foundation indicate that 20% of new Universal Credit (UC) claimants are behind on essential bills. Thirty percent of families that started claiming UC during this pandemic are more in debt than they were in February 2020. If and when aggregate figures indicate a vigorous recovery, only half will have cause to celebrate, she cautions in the Financial Times. (£)
 
Many have evaluated David Cameron’s lobbying scandal through a legalistic prism. Matthew Syed argues that this approach misses the point entirely. This isn’t about the nuances of law, but the brazenness that has infiltrated the elites, he writes in The Times. When politicians lack integrity and no longer feel shame, you have a recipe for disaster. (£)

Cartoon source: The New Yorker

Markets

The week ahead

All eyes will be on the UK’s March inflation reading, set to be released on Wednesday, as the results could mark a point when price growth indicates an upward trajectory. A Bloomberg survey predicts the UK’s March CPI to rise to 0.8%, double that of February. UK labour market data, published on Tuesday, will also be closely watched.
 
On Thursday, European Central Bank (ECB) policymakers must decide whether they are doing enough to bolster an economy still largely held back by lockdowns. Since its last meeting, the ECB has bought €19bn of bonds a week, compared to a previous average of €15bn. However, some economists are of mind that the ECB could be buying more.
 
Flash PMIs for April will similarly be in focus this week. Particularly in the US where the reopening of its economy is expected to deliver a boost to both manufacturing and services. Central banks in Israel, China, Indonesia and Russia are expected to meet.
 
In company news:

The likes of IBM; United Airlines and Coca-Cola are set to publish earning reports today. It is predicted that restrictions on restaurants and bar openings in Q1 2021 will weigh on the latter.
 
Subscriber figures will be scrutinised on Tuesday when Netflix releases its earnings report, after the video-streaming company reported an increase of 37m customers at the end of 2020. Associated British Foods, the holding company of Primark, will also be reporting then.
 
American Airlines; Southwest Airlines and Spirit Airlines will update on Thursday, with investors set to analyse the results for signs that travel demand is recovering.
 
American Express; Kimberly-Clark and Honeywall are scheduled for Friday. 2021 as it experienced a strong first quarter of online trading.

What’s happening today?

Finals
Churchill China

AGMs
ECR Minerals

Int. economic announcements
(09:00) Current Account (EU)

Source: Financial Times

did you know

Tropical forests are incredibly effective at storing carbon, providing at least a third of the mitigation action needed to prevent the worst climate change scenarios. Yet nature-based solutions receive only 3% of all climate funding. (Source: Conservation.org)

Parliamentary highlights

House of Commons

Oral questions
Various
 
Motion
Finance (No. 2) Bill: Ways and Means (Freeports (Stamp Duty Land Tax)) – Rishi Sunak
 
Legislation
Finance Bill Committee (Day 1)
 
Adjournment
Gender pension gap
 

House of Lords 

Oral questions
Joining-up family policy across government so that it is “fit for the 2020s” – Lord Farmer
 
Role of nuclear energy in meeting the UK’s hydrogen production targets – Lord Ravensdale
 
Reports that highly skilled migrants from Commonwealth countries who have lived in the UK have been refused indefinite leave to remain – Lord Woolley of Woodford
 
Revising planning rules to ensure all decisions are aligned with the UK’s net zero emissions targets 2021 – Baroness Sheehan
 
Private Notice Question
To ask the government what is their assessment of the reports that pro-democracy campaigners have been sentenced in Hong-Kong for participation in pro-democracy protests – Baroness Kennedy of The Shaws
 
Statement
Return date for university students and plans to provide financial compensation for lost teaching and rent during the coronavirus pandemic – Lord Parkinson of Whitley Bay
 
Legislation
Overseas Operations (Service Personnel and Veterans) Bill – third reading – Baroness Goldie
Financial Services Bill – report (day 3) & third reading – Earl Howe

Scottish Parliament 

The Scottish parliament is in recess ahead of the election on 6 May

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