Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Get me out of here

Written by Li-Ann Chin,  associate 
Edited by Kevin Pringle, partner
15 March 2021

Good morning,

I’ve reached a point in this pandemic where I’m increasingly envious of people who live in nice areas with green spaces and beautiful scenery.
 
Full disclosure, living in a city during lockdown takes its toll on you. Spending in nature is good for the soul, this we know. Riding out the pandemic amid the cramped squalor of central London is decidedly not.
 
I know I am not alone in this, and indeed the unprecedented exodus from London we have witnessed speaks for itself. The rise in remote working, and by default the fall of commuting, has seen people move to places with fresher air and cheaper rent. A report by PwC forecasts that London’s population is set to decline for the first time since 1988, with its number of residents falling by more than 300,000 in 2021.  
 
Last week, Mark Dixon, chief executive of IWG, confirmed the global workspace provider’s plans to expand into provinces and country towns: “People are moving to nice places to live because they know they can work from there. They think that there’s a future of not having to go to the office every day,” he said, listing Cornwall, rural Wales and the Hebrides as places he would “absolutely” consider opening centres in.
 
This makes sense. Telecommuting suggests that you can theoretically work from anywhere you like and not necessarily from a city-based office. Notably, the likes of HSBC, BPDeutsche Bank and Standard Life Aberdeen have recently announced plans to downsize their office spaces in favour of flexible working policies.
 
Hugo Rifkind writes in The Times that people are attracted to cities for their culture, the glamour and sense of being where everything it is. That is true, to a certain extent. But will cafes, theatres and entertainment hubs still hold the same glittering allure as they once did post-pandemic? I have my doubts.

News

Met Police Commissioner Cressida Dick has said she will not resign amid growing calls for her to step down in response to clashes between the police and protestors at a vigil held on Saturday for Sarah Everard. This comes as London Mayor Sadiq Khan ordered multiple investigations into the Met Police’s handling of the event.
 
As the first anniversary of lockdown approaches, prime minister Boris Johnson has reportedly acknowledged it was a mistake to delay the start of the first national lockdown. According to close allies, he would in hindsight have acted “harder, earlier and faster”, raising the possibility of a mea culpa moment in a future inquiry into the handling of the pandemic. (£)
 
British Airways is set to launch its own digital “vaccine passport” in time for the return of international travel in May. Those who have had two doses of the Covid-19 vaccine will be asked to log their details in their existing app.
 
The UK and United Nations have condemned mass killings by Myanmar’s military on Sunday as “appalling” and “heartbreaking”, as the death toll rose to 44 on Sunday, making it more than 120 civilians killed in total. Townships could reportedly be placed under martial law.

Business and economy

Analysis commissioned by the Scottish Hospitality Group, UK Hospitality Scotland, the Scottish Licensed Trade Association, Night Time Industries Association and the Scottish Beer and Pub Association indicates that 60,000 jobs in the hospitality sector could be saved if the Scottish government changes its Covid exit plans to mirror that of England. The industry group has submitted a new proposed version of the roadmap to ministers.
 
A row has broken out between EU member states over covid vaccine allocation, following from AstraZeneca’s worsening supply to the bloc. Leaders from Austria, Bulgaria, Croatia, the Czech Republic, Latvia and Slovenia wrote to the presidents of the European Council and European Commission complaining of “huge disparities” in the allocations between member states. (£)
 
The rapid rollout of vaccines across Europe, particularly in the UK, has led to business confidence hitting its highest levels in three years. According to IHS Markit global business outlook survey, business confidence now stands at +32%, up from +26% in October. Hiring optimism amongst UK firms is at its strongest since mid-2015 and last month saw a resurgence in planned capital spending.

Columns of note

Almost all women have experienced some degree of sexual harassment. Just ask anyone of us and we will tell you. And yet, every time something like the Sarah Everard case happens, there are those who inevitably partake in victim-blaming. Catherine Mayer, co-founder of the Women’s Equality Party, argues in The Guardian that to best honour the victims of violence, we need to collectively challenge the systems and cultures that enable violence and pin the blame on victims.
 
There are too many super rich people now and that is a dangerous thing, argues Matthew Syed in The Sunday Times. In recent years, we have seen an “overproduction” of overeducated, overqualified graduates, while prestigious jobs and opportunities remain finite. This, he cautions, may well lead to corruption, cronyism and a breakdown in moral order. After all, there is no resentment quite as inflammatory as that of a wealthy person spurned.

Cartoon source: The New Yorker

Markets

The week ahead

The UK government will on Tuesday set out its “integrated review” of foreign and defence policy, highlighting the economic opportunities in Asia and the potential strategic threat that China poses.
 
The Bank of England’s (BoE) Monetary Policy Committee is expected to gather this Thursday for an interest rate-setting meeting. It is however worth noting that Andrew Bailey, governor of BoE, mentioned last week that the bank would not look to raise rates.
 
Across the Atlantic, the Federal Reserve convenes for its policy meeting this week, at a pivotal point for the US economic recovery. Rumours about its plans to manage a rise in borrowing costs abound.
 
No change in policy is likely when the Bank of Japan meets, but it is expected to publish a review of its monetary policy strategy.
 
Turkey is also one to be closely watched this week, as the central bank could well deliver one of the first G20 interest rate rises of 2021 as monetary officials try to control inflation.
 
In company news
 
Greggs is expected to report a pre-tax loss of up to £15m for its financial year, marking its first annual loss since its listing in 1984.
 
Volkswagen is set to unveil a robust earnings report. It has previously confirmed that the final three months of last year were stronger than the previous quarter, in which the company made €3.6bn in pre-tax profits.
 
Nike is likely to enjoy a boost in sales as people worried about exercising in gyms continue to buy items for outdoor activities.
 
Accenture will similarly receive a boost in demand for its consulting and outsourcing services as remote working continues.

What’s happening today?

Finals
Diaceutics
HgCapital Trust plc
TransGlobe Energy

AGMs
Hardide

GMs
Coro Energy

Final Dividend Payment Date
Lloyds Grp6.475
Newcastle 125/8

Int. economic announcements
(12:30) Current Account (US)

Source: Financial Times

did you know

The city of London covers only 1.2 square miles and has a population of around 7,500 residents. As such, the city of London is actually the smallest city in England.

Parliamentary highlights

House of Commons

Oral questions
Defence (including topical questions)

Adjournment
Use of critical minerals in the UK’s renewables future – Alexander Stafford

House of Lords 

Oral questions
Various
 
Legislation
Domestic Abuse Bill – report stage (day 3)

Scottish Parliament 

No business scheduled

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