Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

No going back

Written by Ralitsa Bobcheva, associate
Edited by Kevin Pringle, partner

16 July 2021

Good morning,

For many, Monday is set to mark a significant milestone in what the prime minister coined as the return to “pretty much life before Covid-19”, including a gradual return to the office in England. I wouldn’t hold my breath just yet though; recent surveys show that over 40% of the global workforce is considering quitting their job due to inflexible working arrangements. 
 
After months of mulling the future of work, it seems fair to say that the great work-from-home experiment is no longer an experiment, it is a reality. Just a few days ago, UK travel company TUI told its staff that they will only need to spend one day a month in the office, stating that: “Work is something we do, not somewhere we go”.
 
The new trial for companies is identifying the arrangements that will ensure more sustainable ways of working. By launching a series of schemes for junior lawyers, law firm Slaughter and May has dismissed the belief that a return to the office will make up for the lack of work-life balance experienced by a number of employees working from home.
 
Employers are getting serious about hybrid and the whole new set of challenges it entails. A recent McKinsey article argues that as opposed to the swift changes in working practices that took place over the past year, shaping the next operating model of work will take years and should be seen as a separate effort from the near-term return to the office.
 
And as the world of work changes, so will the concept of “corporate” work practices. From the industrial revolution to automation and later digitalization, history shows that the form and nature of work has evolved in parallel with and has often determined the character of civilization. 
 
The office has long been the realm of corporate identity, and the lack of belonging that employees experience as a result of remote work could be one explanation for the so-called great resignation phenomenon currently seen in the US. Successful hybrid models will need to balance the need for belonging that corporate identity entails and the move towards “post-corporate” sentiments brought by the shift to remote work.
 
There may be many unknowns when it comes to the future of work, but one thing seems certain: there is no going back. 

News

At least 70 people have died in western Germany and Belgium amid heavy rains and flooding. Most of the deaths have been reported in the states of North Rhine-Westphalia and Rhineland-Palatinate. More heavy rain is forecast across the region in the coming days, while local officials have blamed climate change. Chancellor Angela Merkel has said her “heart goes out” to the victims of the flood as the search for an estimated 1,300 missing people continues.
 
Tedros Adhanom Ghebreyesus, head of the World Health Organization, has ruled out the potential link between the Covid-19 pandemic and a laboratory leak as premature. He added that he was asking China for more transparency and that getting access to raw data had been a challenge for the team that was sent to China to investigate the origins of Covid-19.
 
Boris Johnson has been accused by northern English politicians and leaders of having no clear plan for how to turn his levelling up agenda into reality. This comes after the prime minister delivered a keynote speech yesterday in which he pledged that his policy would “raise living standards, spread opportunity, improve our public services and restore people’s sense of pride in their community”.

Business and economy

The Bank of England has been urged by the House of Lords economic affairs committee to provide more justification for believing the rise in inflation is temporary. Lord Michael Forsyth of Drumlean, chair of the committee, said that the Bank “has become addicted” to quantitative easing, using it as the “answer to all the country’s economic problems”. (£)
 
A new report from Bill Grimsey has found that independent high street businesses face a potential “tsunami of closures” after their debt climbed to almost five times above the level it was in pre-pandemic times. Around 150,000 small businesses have racked up £2.3bn in debt, based on government-backed loans and not including rent debt.
 
Goldman Sachs has asked staff returning to the office on Monday to wear face coverings in the building in spite of lockdown restriction rules being eased. However, it will not require staff to be vaccinated to come into the workplace. The banking giant has also expressed hopes that 70% of UK staff will return to the office in the coming weeks.

Columns of note

Following the EU’s decision not to recognize Covishield, the India-manufactured version of the AstraZeneca vaccine, other countries have followed suit in creating patchy vaccination requirements that threaten to discriminate against people from poorer countries. In the Guardian, Laura Spinney argues that there is an obvious solution to this and urges all countries to adopt it.
 
In The Times, James Mariott draws on a recent study by the think tank Onward that describes a growing sense of isolation often described as an “epidemic of loneliness”. Looking through the lens of history, Mariott argues that the catchphrase falls short of giving an accurate description of a growing sense of social disconnection in western societies. (£)

Cartoon source: The New Yorker

Markets

What happened yesterday?

The FTSE 100 finished the session down 1.12% at 7,012.02, and the FTSE 250 dropped 1.09% at 22,501.25. Sterling was in a mixed state, last trading 0.02% weaker against the dollar at $1.3857, but gaining 0.2% on the euro to €1.1732.
 
Across the Atlantic, the Dow Jones Industrial Average climbed 0.15% to end at 34,987.02 points, while the S&P 500 fell 0.33% to 4,360.03.
 
In company news:
 
Royal Dutch Shell has partnered with ScottishPower in the hope of developing the world’s first large-scale floating offshore windfarms in the north-east of Scotland.
 
Fashion company Asos reported revenues of almost £1.3bn for the four months to 30 June but has warned of slowing sales growth and increased costs related to Brexit and global supply chain problems.

What’s happening today?

Finals
Renold

Trading Announcements
Burberry
Eve Sleep
Rio Tinto

AGMs
DCC
Homeserve
Oracle Power
Ormonde Mining

Final Dividend Payment Date
Michelmersh Brick Holdings

Int. economic announcements
(10:00) Consumer Price Index (EU)
(10:00) Balance of Trade (EU)
(13:30) Retail Sales (US)
(15:00) Business Inventories (US)
(15:00) U. of Michigan Confidence (Prelim) (US)

Source: Financial Times

did you know

The UK’s first national lottery in 1567 promised ‘get out of jail free cards’. To boost sales, ticket holders could avoid arrest for misdemeanour crimes. (@qikipedia)

Parliamentary highlights

House of Commons

The House of Commons is not sitting. The House will next sit on 19 July 2021.

House of Lords 

Legislation
Elderly Social Care (Insurance) Bill [HL] – second reading
 
Legislation
Organ Tourism and Cadavers on Display Bill [HL] – second reading
 
Legislation
Education (Environment and Sustainable Citizenship) Bill [HL] – second reading

Scottish parliament 

The Scottish parliament is in recess until 30 August but will be recalled on 3 August for a Covid update.

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