Charlotte Street Partners

DAILY BRIEFING

DAILY BRIEFING

Keep your guard up

Good morning,

Written by Rebecca Smithson, researcher
Edited by Adam Shaw, associate partner

3 September 2021

Living in the UK, rain is an occupational hazard. Whether, like me, you are near the (not-so-sunny) Pennines or situated in overcast Edinburgh, the weather is both a source of constant consternation and running joke.

However, elsewhere in the world it’s no laughing matter. At least 45 people have died as Hurricane Ida hit New York, New Jersey, and Pennsylvania last night, causing flash flooding in the subways and prompting the government to declare a state of emergency.

Ida follows the lead of Storm Henri, which also battered the north-eastern US last week, leaving 120,000 people without power. One might think that this would prompt a wave of realisation regarding climate change to wash over the US. However, with Tennessee governor Bill Lee claiming he is not “smart enough” to understand climate change, it would appear there’s still a healthy dose of scepticism around climate change among the country’s policymakers.

Other countries, often those that contribute least to climate change, are also bearing the brunt of the crisis. Only recently in the aftermath of a 7.2-magnitude earthquake did Storm Grace arrive to Haiti, aggravating a precarious situation by causing landslides and flash floods in already-damaged areas.

The injustices of climate change require no explanation. With Joe Biden stating the US government “must be better prepared” for weather disasters in the future and saying “historic investment” is needed to tackle the climate crisis, the question remains about what national governments are prepared to do about the problem at hand. All eyes are on Scotland as Cop26 looms at the end of October.

Elsewhere on these islands, it is the UK’s role in climate change that Extinction Rebellion is protesting against, particularly new fossil fuel investment such as the Cambo oil field to the west of Shetland.

While the UK government has made impressive promises to slash emissions by 78% by 2035, it would seem that much rests on the upcoming conference to see what role both the US and the UK will take in leading the global fight against climate change, and whether it will be enough.

With scientists concluding in a recent IPCC report that the world is experiencing a “code red” for climate change, such freak weather is likely to be a long-term forecast. Umbrellas up.

News

Government plans to raise national insurance contributions to fund social care are to be announced next week, with the Treasury undecided on an increase of one per cent or 1.25%. A cap of more than £50,000 on social care costs for an individual is also yet to be confirmed. The plans are reported to be part of a larger package designed to ease the impact of the social care crisis and increase funding for the NHS. (£)

Tougher penalties are planned for dog thieves as ministers unveiled a new criminal offence of pet abduction. Reported pet thefts increased 170% between 2019 and 2020.

Refugees arriving in the UK from Afghanistan are expected to enter a resettlement scheme involving English language learning and classes on British civic and political life. This follows a £30m aid pledge to those who have fled Afghanistan to neighbouring countries. (£)

Yoshihide Suga is to step down as Japanese prime minister at the end of the month after deciding not to run for re-election. Suga, who took up the role just a year ago following the resignation of Shinzo Abe, has seen his approval ratings fall due to the ongoing coronavirus infection rate in Japan and the unpopular decision to host the Olympic Games despite the pandemic. Japanese shares rose sharply on the back of the news, with the Topix stock index gaining 1.7%.

Business and economy

The number of people visiting UK shops rose to the highest level since the first Covid-19 lockdown during August, according to data from the British Retail Consortium. Footfall was boosted by the impact of staycations and relaxed restrictions, however, was still down 18% compared to August 2019. (£)

According to Citizens Advice, one in 10 users of “Buy Now Pay Later” schemes that spread the cost of purchases are chased by debt collectors. Citizens Advice criticised retailers for their lack of clarity, stating that “shoppers have been left unprotected and ill-informed during the rapid expansion of the sector”.

Half of all UK businesses are unable to work at full capacity, with 50% of businesses reporting no improvement in performance since April, according to a survey by logistics firm One World Express. Many businesses attribute this to a shortage of workers, with 81% of smaller businesses reportedly understaffed compared to 54% of larger firms.

Columns of note

In The Guardian, James Marriott argues for an increase of bank holidays in the UK after the TUC requested an additional four, outlining how Britain’s cultural attitudes to working and leisure time have changed over the past 500 years. Looking to the widespread increase in working hours for many during the pandemic, Marriott suggests holidays may be the perfect antidote to home-working stress.

Minxin Pei outlines the barriers to China’s economic growth in The Economist, asserting that the Chinese Communist Party’s fear of losing control and China’s ageing population will hold the country back in its race to become a global superpower. (£)

Cartoon source: Daily Telegraph

Markets

What happened yesterday?

The FTSE 100 ended the session up 0.2% at 7,163.90, while the FTSE 250 was down 0.1% at 24,226.27. The S&P 500 and Nasdaq both climbed 0.35%, bolstered by a drop in US unemployment claims and advancement in the tech sector, particularly for Apple.

Sterling finished trading 0.41% higher against the dollar at $1.3826 and gained 0.21% on the euro to close at €1.1657.

What’s happening today?

Finals
Allergy Thera
Jupiter European Opportunities Trust

Interims
Eurocell

AGMs
Berkeley Group
Stagecoach

UK Economic Announcements 
(09:30) PMI Services

International Economic Announcements 
(08:55) PMI Services (GER)
(08:55) PMI Composite (GER)
(09:00) PMI Composite (EU)
(09:00) PMI Services (EU)
(10:00) Retail Sales (EU)(13:30) Non-Farm Payrolls (US)
(13:30) Unemployment Rate (US)
(14:45) PMI Composite (US)
(14:45) PMI Services (US)
(15:00) ISM Services (US)
(15:00) ISM Prices Paid (US)

Source: Financial Times

did you know

We spend an average of 1,460 hours every year on our phones – enough time to allow us to read Marcel Proust’s 3,700-page work A la recherche du temps perdu 20 times over.

Parliamentary highlights

House of Commons

The House of Commons is in recess. The House will next sit on 6 September 2021.

House of Lords 

The House of Lords is in recess. The House will next sit on 6 September 2021.

Scottish parliament 

No business scheduled.

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