House of Commons
In recess until 1 September
Feeling the heat
Written by Katie Stanton, associate partner
Edited by Adam Shaw, associate partner
12 August 2020
The heat that presently blankets London – and I’m sure much of the rest of the UK – is at least a 13 togger. It’s unique to this city, I think. Like drowning in wet, close airlessness, wearing a big fur coat that pulls you down to your eventual desperate surrender on the stone slabs of the bathroom floor, where you remain, splayed, until the sun rises and the relentless fight begins again.
Most impressive though, is the ‘Keep Calm and Carry On’ tenacity of Londoners who refuse to accept this new climate – which if I’m not mistaken, has been the norm for around a decade – and instead soldier on freezing T-shirts, loitering around the open fridge door and generally fanning themselves with warm air in unairconditioned flats.
But every year the £300 for a decent aircon just seems a wildly luxurious affront, and so we beat on, as they say, getting it wrong every damn time.
Happily, we are not the only ones. In fact, there have been a few whoopsies this week.
Firstly, the Scottish government has backtracked big time on an exam results fiasco which saw a moderation system downgrade 125,000 estimated results due to the historical performance of schools. As a consequence, it is thought that young people in the most deprived areas had their grades lowered simply due to their postcode. The government yesterday agreed to accept teacher estimates of scores instead, thus upgrading the results of tens of thousands of school pupils.
John Swinney, the education secretary, and Nicola Sturgeon had both previously argued that basing grades on teacher estimates alone would damage the credibility of this year’s results compared to previous years. They have since apologised.
But what will this mean for English results, with A-levels due tomorrow? The Department for Education has this morning announced a ‘triple lock’ safety net system (talk about last minute), promising students that their final results will be no lower than their mock exams. Students could accept their calculated grade, appeal to receive a valid mock result, or sit autumn exams to ensure maximum fairness.
It’s fair to say the reaction has been… mixed. It is understood that schools and universities had not been consulted before the decision.
Meanwhile, in the business world, shares in Kodak fell sharply after the American International Development Finance Corporation (DFC) confirmed that it was holding back its proposed $765m government loan to help transform the former photography group into a pharmaceutical company.
Now I hate to say I told you so, but I did. The deal raised eyebrows from the beginning: why haven’t existing pharmaceutical companies been awarded such contracts? Why were the chief executive and chairman of Kodak awarded stock options the day before the announcement? And why did the share price rise so significantly the day before too, for that matter?
Hopefully, all will be revealed in the weeks to come. For now, at least, it seems we’re all feeling the heat.
Democratic Party presidential candidate Joe Biden has picked Kamala Harris as his running mate for the 2020 election, making the California senator the first black and south Asian American woman to run on a major political party’s presidential ticket.
The local lockdown imposed in Aberdeen a week ago following a spike in coronavirus cases is due for review later. Since last Wednesday, pubs and restaurants have been closed and restrictions on meeting and travelling have been in place. The first minister, Nicola Sturgeon, has said the lockdown will not last longer than necessary, but has not ruled out an extension.
Protesters have clashed with riot police for the third night running in cities across Belarus, prompting the European Union to threaten to reimpose sanctions over suspected vote-rigging and a violent crackdown on demonstrators.
Coronavirus cases in France have nearly doubled in the past 24 hours as prime minister Jean Castex warned that the country had been going “the wrong way” for two weeks. It is thought that France may soon be removed from the UK government’s ‘green list’ of countries which do not necessitate a quarantine period upon return to the UK.
Business and economy
The UK has officially fallen into a recession for the first time in 11 years due to the impact of the coronavirus pandemic. According to the Office for National Statistics, the economy shrank 20.4% between April and June – the biggest slump on record.
Some airline customers have waited since the start of the pandemic for refunds for cancelled flights, according to consumer champion Which?. By law, refunds for cancelled flights should be paid within seven days, but this has taken much longer for many due to the unprecedented number of refund requests due to coronavirus. Last month, the Civil Aviation Authority said it was “not satisfied” that Virgin Atlantic, Ryanair or Tui were processing refunds quickly enough. (£)
The chancellor, Rishi Sunak, is considering a delay his autumn budget – billed as the defining economic moment for Boris Johnson’s government – if the UK is hit with a second wave of coronavirus. Fears over a surge in unemployment when the furlough scheme ends in October add to his concerns. (£)
Two-in-five UK businesses expect to cut jobs in the next six months as a result of coronavirus, research has found. According to a survey of 800 senior finance executives, one third had already cut jobs since the start of lockdown and 54% said their organisation had furloughed staff.
Columns of note
Writing in the Financial Times, Tom Faber exposes the real problem with the military-entertainment complex. ‘Virtual training devices’ – video games for the army – are incredibly useful in a military context; they aid in recruitment, strategy and testing, and even in helping veterans suffering from PTSD. The problem is, they aren’t confined to the military; they overlap with the most popular games on the market – think Call of Duty or Battlefield. What is most troubling, Faber argues, is not the fact that games feel like war, but rather that war, to many new recruits, now feels like a game. (£)
In this morning’s Times, Philip Aldrick poses that the employment data is too good to be true – it is essentially unchanged on last year at a low not seen since 1974. In fact, in the three months to June, when all we were hearing was of job cuts across industry, unemployment actually declined by 10,000. So where are the real, hidden victims of this crisis? (£)
What happened yesterday?
Global stock markets surged yesterday on optimism that lawmakers in Washington will agree a new stimulus package for the crippled American economy. In addition, the reports of a new coronavirus vaccine developed by Russian scientists, which is expected to go into production in September, buoyed investors with optimism that breakthroughs will continue to come and they will soon make a tangible difference for the outlook of heavily hit ‘value stocks’.
As a result, the FTSE 100 closed ahead 103 points, or 1.72%, at 6,154. The midcap FTSE 250 gained over 272 points to the end the session at 17,997. On Wall Street, the S&P 500 index added around 15 at 3,376, while the Dow Jones Industrial Average added 264 points at 28,055, although shares plummeted later in the day after the Republican leader in the Senate, Mitch McConnell, said there had been no talks on a new economic stimulus package since Friday, denting hopes for an imminent deal.
Meanwhile, metals plummeted. Gold was down more than three per cent yesterday at around $1,954 an ounce and silver lost over six per cent.
On the currency markets, the pound was down 0.15% against the dollar at $1.31 and edged down 0.13% against the euro at €1.11.
In company news:
London-listed Prudential is to spin off its American retirement business, completing the break-up of the sprawling insurer that was called for by Third Point, the US hedge fund. (£)
A US appeals court handed Qualcomm a victory yesterday, reversing an earlier ruling against the chipmaker in a case brought by antitrust regulators. (£)
Online payments group Stripe has appointed Dhivya Suryadevara as its chief financial officer. Suryadevara joins the company from General Motors, the largest American automobile manufacturer. Her appointment is seen as a precursor to an initial public offering for Stripe, which was valued at $36bn earlier this year.
What’s happening today?
Capital & Counties
UK economic announcements
(07:00) Industrial Production
(07:00) Manufacturing Production
(07:00) Index of Services
(07:00) GDP (Preliminary)
(07:00) Balance of Trade
(07:00) Gross Domestic Product
Int. economic announcements
(10:00) Industrial Production (EU)
(12:00) MBA Mortgage Applications (US)
(13:30) Consumer Price Index (US)
(15:30) Crude Oil Inventories (US)
The phrases: ‘shut up’, ‘dirt cheap’, ‘dog tired’, ‘dinner-party’, and ‘brace yourself’ were all first recorded in the works of Jane Austen.
House of Commons
In recess until 1 September
House of Lords
In recess until 2 September 2020.
First minister’s questions
Ensuring a safe and welcoming return to school for children, young people and staff
Scottish government debate
An implementation plan for economic recovery