Tuesday, 30 August 2016

The push me-pull you summer

Whether you think of the ‘pushmi-pullyu’ creature as a gazelle unicorn hybrid which featured in the original Dr Dolittle book series or the two-headed llama of the 1960s’ musical film starring Rex Harrison in the leading role, you will be aware of the frustrating existence with which it had come to terms.

Having one head for eating and one for talking has obvious advantages in terms of a productive use of its time but in having two sets of legs facing in opposite directions, the creature ended up going nowhere of its own accord.

It has been a pushmi-pullyu kind of summer even after the post-Brexit political flurry of the governing party’s internal and cabinet politics settled down. As an aside, the tug-of-war of words among Her Majesty’s Opposition continues but, for the time being, appears to have little influence on the wider national and international stage.

Brexit means Brexit but there are many Brexit options it seems. Will it be a buffet Brexit where we can help ourselves or will it be the set menu? Will we be Brexiting à la carte or just having the lighter, continental option? All of us in business just want to know what’s for Brexit soon please so that we can get on and plan with a degree of certainty for the next couple of years, at least.

The work that the Bank of England has done - and can carry on doing - to encourage the economy to take off is widely acknowledged as coming to the end of the runway. Monetary policy is about as loose as Governor Carney and his advisors can dare make it and they aren’t the type of people to wing it. While our central bank’s latest round of action nourishes the banks and, to some extent, the financial markets, it can only do this for a limited amount of time.

All eyes then are on an early Autumn Statement from Chancellor Hammond who, it has been heavily hinted, will use the opportunity to ‘reset’ the previous administration’s economic priorities and fiscal targets. So we face forward with bright eyes and a bushy tail in anticipation of this.

There appears to be a dual-headed approach to doing business with China and this has happened all of a sudden, apparently. Day-to-day deals are being done and are to be encouraged between British and Chinese businesses. Luckily for us, Chinese investors still appear keen to invest in British research and development, technology, companies and property.

Yet, at the eleventh hour, the new UK administration has gone on a summer retreat for some quiet contemplation about Chinese firms financing of over a third of the investment required for the new Hinkley Point C nuclear power plant.

Quite a surprising volte face from the pre-24 June administration’s position. So surprising, that Lord (Jim) O’Neill who, as a Treasury minister tasked with building relations with China as well as UK infrastructure development, wasn’t even pre-warned of this re-assessment of the situation by the new administration. 

There is one view abroad – and at home – among some commentators that the UK’s value to China was or is because of access to trading with the EU.  What the the utility company Électricité de France (EDF)will make of the new view of Hinkley Point development remains to be seen.

Nobody trying to do business likes surprises. But surprising things happen which make for good business. Just look at the phenomenal success of Pokémon Go this summer.
Some pokémon can speak human languages but imagine, much like Dr Dolittle, if we could talk to the pokémon, learn their languages? Think of all the things we could discuss.

Will Mooney MRICS

Commercial, Cambridge

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