Charlotte Street Partners




Written by Adam Shaw, associate partner
Edited by Kevin Pringle, partner
27 July 2020

Good morning,

We don’t know exactly when Joe Biden will announce his choice for vice-president. However, the presumptive Democratic nominee has previously said he hopes to reveal his decision in early August “several weeks before the convention”, which begins on 17 August.
That would suggest we are looking at some point in the next week for an announcement.
The choice of a running mate is a hotly anticipated moment in any presidential race. The drivers behind the choice and what they bring to the ticket are analysed in depth: addressing any perceived shortcomings of the nominee, boosting the campaign’s chances in particular states, and attracting or appeasing certain voter groups.
In reality, the evidence shows that the VP pick often has little bearing on the electoral maths. Sarah Palin damaging John McCain’s prospects in 2008, and Lyndon Johnson helping secure Texas and the south for John Kennedy in 1960, are viewed as notable exceptions.
However, with Biden, who has already publicly committed to choosing a female running mate, it has added salience.
Eight of the 44 US presidents – just shy of 20% – have died in office, and Joe Biden would be the oldest incoming president yet at 78 years-old. That is assuming he wins, of course, but as Alex Massie, Charlotte Street Partners’ correspondent at large, wrote a few weeks ago, there is good reason to believe we will see that outcome.
Biden himself has acknowledged that he needs a strong vice-president who is ready to assume the presidency on day one.
It’s also widely speculated that Biden will opt to serve only one term. In that event, his choice of vice-president would be in pole position to be the Democratic standard bearer in 2024. That will surely factor into his decision-making process.
One-term presidents are not usually remembered with particular acclaim. However, beating Donald Trump, restoring American liberalism, and helping pave the way for the first female president wouldn’t be a bad legacy.


The UK government has unveiled a new national campaign to tackle obesity, led by the prime minister. A ban on junk food adverts on TV and online before 9pm, stopping the display of sweets and chocolates at checkouts, and an end to “buy one, get one free” promotions on unhealthy food will all be part of the “Better Health” initiative.
Spain has insisted that outbreaks of new Covid-19 cases are isolated and it is safe for both Spaniards and tourists after the UK required all arrivals from the country to self-isolate for 14 days. The move, which is in effect in all four UK nations, prompted an angry response from the travel industry and travellers alike, and has led to concern that other countries could be added to the quarantine list at short notice, creating further disruption.
The Guardian reports that a radical plan for everyone over 40 to pay more in tax or national insurance, or be compelled to insure themselves, is emerging as the Department for Health and Social Care’s preferred option for tackling the social care crisis. Similar approaches exist in Japan and Germany, which are both widely admired for their social care systems.

Business and economy

The UK economy will not return to pre-pandemic levels until 2024, according to the latest analysis from the EY Item Club. The forecasting body anticipates a record recession as the economy contracts by 11.5% this year, followed by a slow rebound rather than a V-shaped recovery. Unemployment will more than double, it says, from 3.9% to nine per cent, leaving roughly three million people out of work as the furlough scheme ends. (£)
Ryanair has reported a €185m (£169m) loss for the first three months of its financial year, compared with a profit of €243m for the same period last year. The budget airline described the April-June period was the “most challenging” of its 35-year history. Looking ahead, the company refused to give financial guidance for the year due to continued uncertainty, and said its biggest fear was a second wave of Covid-19 in the autumn.
London-listed companies are more profitable when women make up more than one in three executive roles, according to new research from gender diversity business Pipeline. Listed firms where at least one-third of the bosses are women have a profit margin more than 10 times greater than those without, it suggests. Pipeline co-founder Lorna Fitzsimons said having more women in the decision-making room means businesses are better able to understand their customers. Currently, just 14 of the FTSE 350 companies are led by women, and 15% have no female executives at all.

Columns of note

In The Times, Libby Purvis argues that if we can put the same effort as we did into building the Nightingale hospitals and scientific and engineering development, then we should be able to find an overdue solution to the UK’s housing crisis. The opportunity she highlights is the likely fall in daily commuting and growth in online shopping, which offers the chance for a better residential and commercial blend in our city centres. (£)
The Financial Times Big Read looks at the escalating coronavirus crisis in India, which has the potential to reverse decades of progress. The country now has 1.4 million confirmed cases – the second highest in the world and likely a conservative figure considering limited testing capacity – despite having introduced one of the world’s most stringent lockdowns early in the crisis. However, it was introduced with little warning or planning, and for many living in abject poverty staying at home was not an option. (£)

Cartoon source: The Times


The week ahead

Wednesday’s US Federal Reserve meeting is the centrepiece of what is set to be a busy week in international markets. No rate change is anticipated, meaning the focus will be on any plans for further stimulus measures.
This will precede the first estimate of second-quarter US gross domestic product on Thursday, when the damage coronavirus has brought to the world’s largest economy will become clearer. The consensus among economists points to a 35% annualised decline, the worst since the second world war.
This may have a bearing on congressional negotiations regarding another round of pandemic relief, ahead of the current measures expiring at the end of the month.
Meanwhile, in Europe, EU lead negotiator Michel Barnier and the UK’s David Frost meet again for further discussions on the future EU-UK relationship, with no sign of immediate solutions to the areas of disagreement.
In corporate news, the big tech firms all report to the market this week. Weaker consumer spending is expected to negatively impact Apple when it posts its third-quarter results. Similarly, a fall in advertising revenue is likely to hit Google-owner Alphabet. However, it is thought a surge in online shopping will to boost Amazon. All three report on Thursday.
It is forecast that Facebook will see a rise in revenue when it reports on Wednesday.
Other organisations due to report include: Royal Dutch Shell, ExxonMobil, Chevron, Pfizer, AstraZeneca, GlaxoSmithKline, Barclays, Lloyds Banking Group, Standard Chartered, NatWest, HSBC, Ryanair, IAG, Next and BT.

What’s happening today?



BMO UK High Income Trust, Cambridge Cog, National Grid, TekCapital, City Pub Group

Infrastrata, SpaceandPeople

Int. Economic announcements
(09:00) IFO Current Assessment (GER)
(09:00) M3 Money Supply (EU)
(09:00) IFO Expectations (GER)
(09:00) IFO Business Climate (GER)
(13:30) Durable Goods Orders (US)

Source: Financial Times

did you know

Behind sugar, rugby players are the second biggest export from Fiji.

Parliamentary highlights

House of Commons

In recess until 1 September

House of Lords 

Oral Questions
Making learning to speak and read English compulsory – Baroness Verma
How the merger of the Foreign and Commonwealth Office and the Department for International Development will enhance the UK’s ability to help the poorest and most vulnerable communities abroad – Lord Harries of Pentregarth
Fulfilling the government commitments as a party to the 2009 Terezin Declaration 2009 and discussions with the government of Poland about the restitution of property seized from Polish Jewish citizens during the period of Nazi occupation – Baroness Deech
The operation and resourcing of the Probate Service – Baroness Ludford
Legislation: Parliamentary Constituencies Bill – second reading – Lord True

Scottish Parliament 

In recess until 10 August (with the exception of 30 July and 6 August 2020, on which dates business may be programmed by the bureau)

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