Charlotte Street Partners



That sinking feeling

Written by Tom Gillingham, associate partner 
Edited by Kevin Pringle, partner
21 October 2020

Good morning,

In primary school, the thing to be concerned about was quicksand.
Judging by the amount of time devoted to it in both classroom and popular culture in the mid 90s, it seemed inevitable that lethal patches of shifting sediment would be ever-present in my adult life.
Funnily enough, the prevalence of quicksand has – so far – been underwhelming, but it would seem that several generations may have grown up with the same misplaced fear.
But all is not lost. It turns out that the rules for dealing with quicksand, that were weirdly consistent through those years, can be applied to an entirely different sort of sinking feeling.
With the Scottish retail stats out this morning (unfortunately not a pretty picture), joining a smörgåsbord of other statistical bulletins – including the producer price index, public sector net borrowing, the consumer price index and the retail price index – it is all too easy to be sucked into a miserable morass of statistics.
Almost every day it feels like there is a new rush of charts, percentages and tables vying for our weary attention. At the moment, good news is rarely contained within them, so it feels like a different approach to this information overload is needed. 
This is where the wild-eyed guidance of a p1 teacher who, I presume, was the veteran of several swamps, comes in useful when trying to navigate this very real quagmire.
Firstly, don’t flail around wildly. Secondly, try to relax. Finally, carefully try and take a few steps backwards.
The original Jumanji may not have had quite the same dramatic tension if Robin Williams had been enveloped by the latest set of ONS statistics rather than a patch of sand, but I’m increasingly convinced if he followed the stern guidance above, either way, he would make it through unscathed.
So, when it comes to sand and statistics, who says most of what you learn at school is a waste?


Health secretary Matt Hancock has told MPs a £60m offer to help Greater Manchester deal with the incoming “tier three” Covid-19 restrictions “remains on the table”. After a breakdown in talks yesterday, the region is instead set to get the lesser figure of £22m to help businesses and communities cope with strict the rules.
Thirteen days before the US election, former president Barack Obama will make his first appearance on Democratic nominee Joe Biden’s campaign trail. Obama will address an outdoor drive-in rally in Philadelphia later today.
The state of global air 2020 report found that air pollution last year caused the premature death of nearly half a million babies in their first month of life, with these numbers disproportionately concentrated in the developing world. Medical experts have warned for years of the impacts of dirty air on older people but are only just beginning to understand the implications it has for babies in the womb.

Business and economy

Scotland’s retail sales fell by six per cent in the last month, marking the eighth month in a row of declining sales. While it was a slight improvement on the 7.5% drop recorded in August, the report’s authors suggested that the ongoing pandemic was now combining with Brexit uncertainty to undermine consumer confidence.
UK inflation increased in September, as the end of the government’s ‘eat out to help out’ meal scheme and a surge in demand for second-hand cars pushed up prices. The headline rate of inflation on the consumer prices index, which tracks the cost of everyday goods and services, hit 0.5% in September, an increase of 0.2% on the previous month.
The US and the UK have expressed some optimism about the prospects of a post-Brexit trade deal as the two sides reflected on their latest talks yesterday. There are still significant barriers to overcome, including the difficult issue of food standards, but trade minister Liz Truss said the sides are “Intensifying talks as they enter a fifth round.”

Columns of note

Writing in the New Statesman, political editor Stephen Bush suggests that the government has two incompatible Covid-19 policies – namely pursuing an ambitious lockdown strategy whilst also trying to reduce public spending. It is his belief that the two objectives can’t co-exist.
John Connolly says that Andy Burnham has gone down fighting, but Greater Manchester is still going into ‘tier three’ of Covid-19 restrictions. In his piece for the Spectator he wonders if the government will now fear other English regions will be inspired by the mayor’s show of defiance. It has, after all, taken ten days for this particular northern rebellion to be quashed.

Cartoon source: The Times


What happened yesterday?

London stocks finished the day in positive territory, with the FTSE 100 ending up 0.08% at 5,889.22, and the FTSE 250 was 0.35% up at 17,929.20. Despite this, ongoing concerns about the progress of the Covid-19 pandemic and the looming US stimulus deadline meant that overall gains were muted.
Sterling had a mixed day, gaining 0.03% on the dollar to trade at $1.30, but it lost 0.41% against the euro to hit €1.10.
In the US, the Dow Jones Industrial Average closed up 0.40% at 28,308.79, while the S&P 500 was 0.47% up at 3,443.12, and the Nasdaq Composite ended the session 0.33% stronger at 11,516.49.
In company news:
Reacting to the introduction of one-hour Covid-19 tests at Heathrow airport, British Airways and Iberia owner IAG ended the day 6.85% higher. Engine maker Rolls-Royce and GKN owner Melrose also pushed higher, by 3.18% and 3.47%. Hotel stocks also had a positive day, led by InterContinental Hotels and Premier Inn owner Whitbread, which were up 3.59% and 2.62%, respectively.

What’s happening today?

C&C Group

Trading announcements
William Hill

Duke Royalty
Dwf Group
Frontier Dev
Standard Life UK

UK economic announcements
(07:00) Retail Sales
(07:00) Producer Price Index
(07:00) Public Sector Net Borrowing
(07:00) Consumer Price Index
(07:00) Retail Price Index


Int economic announcements
(12:00) MBA Mortgage Applications (US)
(15:30) Crude Oil Inventories (US)

Source: Financial Times

did you know

Three per cent of all movies released in the 1960s featured quicksand. (Slate)

Parliamentary highlights

House of Commons

Oral questions
Women and equalities (Including topical questions)
Prime Minister’s Question Time

House of Lords 

Oral questions
Purpose, scope and publication of the review of rail schemes in Network Rail’s enhancements pipeline and whether the High Speed 2 will be subject to similar review – Lord Berkeley
Oral questions
Impact on prisons, prisoners, and those on remand of increasing the maximum period of remand in custody by eight weeks – Lord German
Oral questions
Reciprocal agreement on visa-free short-term travel mobility in negotiations for the UK’s departure from the EU – The Earl of Clancarty
Oral questions
Ensuring the national curriculum accurately reflects the diverse history of the UK – Lord Woolley of Woodford
EU Exit: Update on negotiations and the work of the Joint Committee – Lord True

Scottish Parliament 

No business scheduled.

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