27 thoughts on “I may not know much about UK trade but at least I know that….

  1. Off topic and more to do with yesterday, mortgage rates becoming ever cheaper Barclays now got a 10 year fix at 1.99%

    https://www.msn.com/en-gb/money/other/barclays-offers-britain-s-first-ever-10-year-mortgage-at-less-than-2-but-is-locking-in-for-so-long-a-good-idea/ar-BB1695ym?ocid=msedgntp

    Little wonder when you look at Shaun’s tweets below:

    Shaun Richards
    @notayesmansecon
    ·
    43m
    Perhaps somebody should tell Andy Haldane and the Bank of England that the two-year bond yield is -0.1% and that their policies ( QE) did it!
    Quote Tweet

    LiveSquawk
    @LiveSquawk
    · 49m
    BoE’s Haldane: Review Of Negative Rates Will Go Into 2H20

    Also this:

    Shaun Richards
    @notayesmansecon
    ·
    3h
    This will create panic at the Bank of England
    Quote Tweet

    Louisa Clarence-Smith
    @LouisaClarence
    · 3h
    Collision symbolRedrow has issued a profit warning and announced plan to scale back housebuilding in London to focus on regions
    -Says it will return furlough money given group’s resilient cashflow
    -Annual home sales and turnover down 37% and 36%
    -Urges gov to extend current Help to Buy scheme

    • H2B is QE for the housing market, once it started it cant be stopped without house prices imploding.

      It will be extended as its crony capitalism at its finest and the corporate builders have the govt in their pockets.

    • “Urges gov to extend current Help to Buy scheme”

      shouldn’t that be “Urges gov to extend current Help Us Profit scheme” ?

      Forbin

  2. Thought the £1bln for schools over 10 years (there are 30,000 schools) and this £5bln for building is peanuts compared to the £100s of billions they’ve recently spent on paying people not to work and businesses to stay closed in recent months.

    Besides so long as land prices are rigged at around the highest levels they’ve ever been then there isn’t going to be much of a building revolution in the private sector to go alongside this.

    If i could only find a 0.08 acre plot for £100k i’d create several well paid jobs, but that’s not allowed to happen!

    • Ah, but the point of the furlough scheme was to help build up people’s savings so they could go on holiday , buy cars and other stuff……

      Now if only they can be certain of having a job after September that might actually work (!) …….

      Forbin

    • Arthur,

      Yes its peanuts and amounts to £100 per person to put it into context.

      The shock is next to come once furlough finishes and the dole que climbs, then people will have to dip into all those savings and they wont last long.

      I sense a very worrying time late summer and autumn and that is when the damage will start to be revealed. Then if there is a second wave of the virus this county will go into crisis.

      I don’t want to be a doom and gloom merchant but I am a realist and take all the rhetoric about building Britain out of a hole with a pinch of salt.

  3. Great blog as usual, Shaun. Prostitution services are moved by the series for the UK male 16+ population are they not? Did the number of UK males show a dramatic drop in 2020Q1?
    The bulk of your article dealt with international trade. Tomorrow, the day variously called July 1, Dominion Day and Canada Day the agreement variously called the new NAFTA, USMCA and CUSMA comes into effect. (CUSMA is the preferred designation of the Global Affairs Department in Canada.) Unfortunately, leading up to it there has been increasing dread of American trade actions against Canada. There is the threat of tariffs being reimposed on American aluminum
    https://www.bnnbloomberg.ca/video/~1982721
    and four days ago Senate Minority Leader Chuck Shumer’s letter to US Trade Representative Robert Lighthizer asking him to “eliminate harmful dairy trade practices” by Canada.
    Tomorrow will be the first virtual Dominion Day celebration in Canada, and hopefully also the last, at least in my lifetime.

    • Hi Chris

      It is a great story isn’t it? Any others foiled by this tactic will be especially upset tonight as Gold futures hit US $1800 earlier.

      I thought it was tungsten based bars but perhaps there are some of them out there as well.

  4. I am fascinated by the ability of the ONS to estimate the “take” of Prostitution. Do they have a few “punters” on their payroll who report regularly on their activity and spend? Do they get expenses?

  5. Well Andy Haldane thinks we are on track for a V shaped recovery but with a caveat that millions are to go onto the dole. Well I don’t know about anyone else but you cannot have both, high unemployment will mean less money flushing round and we are a service economy which is a big proportion of GDP

    https://www.bbc.co.uk/news/business-53233705

    As for £5 billion in fast tracked infrastructure building its a drop in the ocean which is needed to get the economy moving.

    It needs far more innovative ideas, social care isn’t good enough that would be a start but this will cost the exchequer.

    If I was in charge I would have banned Dyson moving some of his operations abroad we have lost too many good companies over the years.

    With new technology we should be able to manufacture more in the UK a year ago I saw a new weaving mill reopen and its all very well rebuilding the UK but there is a lack of ideas at the moment.

    • Hi Peter

      That is classic Andy Haldane who as I have pointed out before is something of a loose cannon on the decks. A V recovery would mean a sharp drop in unemployment from present levels.

      As to the £5 billion the trouble with the spending side of fiscal policy is that it usually takes so long.It was good that we managed some road and rail repairs in the lockdown but in general these things take ages.

  6. Easynet set to get rid of over 700 pilots presumably well paid jobs and they wont be too keen to retrain going into the dirty building trade neither pick fruit in the fields at the minimum wa

    Forgive the pun but Joe Public is slowing losing their shirts and to that end TM Lewin the UK shirt maker closes over 60 stores with the loss of 600 jobs and the staff there wont want to get their hands dirty. More job losses at Harveys and Bensons and this is just the start.

    https://www.ft.com/content/318ddb12-cce2-4589-91ac-e453b7c33859

    The media not very impressed with Borris stamping on the podium today with build build build.

    • Hi Peter

      I believe it was 727 which led to a few jokes why not 747 and so on? Although a little care is needed as these will be people’s livelihoods. As to TM Lewin I have a neighbour who is in that sort of business and he thinks it will pretty much go online. Only time will tell and of course it is sad for those who have lost a job.

  7. All I know is, if ever I get to make a choice as to what I can come back as in the next life – it will be a builder, I have never ever known a time in my life or in history where one sector of the economy is protected and insulated from every economic woe and headwind and given state funds and zero interest rates in order to ensure their future profitability with a near state and treasury underwritten guarantee of profits.

    You just know the worse it gets for builders, the more money and subsidies the government will shower them with.

    • Kevin

      I am assume you mean a builder rather than a building worker. The best money for the building trade was in the 70s and 80s and then the building companies tightened up on wages. All the Help to Buy Schemes have done is propelled builders profits.

      Construction however hasn’t been as lucrative profits can soon disappear as costs rise while construction is carrying on. In 2012 1,500 construction firms went bust
      https://www.thisismoney.co.uk/money/news/article-2180741/More-1-500-construction-firms-went-bust-beginning-2012.html

      Not certain how long all this will last however even after the building boom in the 50s 60s ,and early 70s then in the 80s lots of builders went bust but I cannot remember the precise dates.

      They also need to be focusing on converting the high street but maybe its a little to early to see how bad it all ends up.

      • Maybe it was the 1976 crisis when builders went bust but I can remember them doing so. https://www.ft.com/content/3b583050-d277-11e6-b06b-680c49b4b4c0

        The difference then however was the oil spike so one cannot rely on history repeating itself the same way, we are a different economy now. Despite all that however I do not feel like we are in a good place at the moment in the UK nor the rest of the world for that matter and I don’t believe Haldane’s thinking we will see a V shaped recovery.

  8. Isn’t it one of those golden rules of stats that you don’t get overprecise and that it is only done to give an impression of expertise and accuracy, when the value is bound to be incorrect?

    No great surprise that the marginal propensity to save has risen by about 2%, despite the near-zero returns, alongside the fall in credit levels Shaun mentioned. That does only leave Help to Inflate Prices and the public failure to notice that falling exports and imports just mean less economic activity generally (ie: fewer jobs), whatever the balance of trade may actually be. Given that the banks went in deep some years ago to save Taylor Wimpey, more govt subsidies to building look likely, albeit Bobski the Polish builder has packed up and gone, along with many well-educated young Europeans, who were prepared to work in contact centres -you should see what the current standard of recruits is even there.

    The Build programme is even more hilarious – here in Scotland, there are the Borders railway extension (70 miles when 35 cost £350m to build and half of it is single-track), and the bridge to Ireland -across a deep channel full of WW2 explosives, let alone the weather. That just leaves 27 other projects the £5bn total ….. even Jeff Taylor was unimpressed.

    • Hi Dave

      In general yes but there is the story of Everest. Back in the day when they tried to measure it accurately their measurements came to 28,000 feet. Deciding that people would not believe the effort they had gone to the answer was switched to 28,002 feet. Later when technology had improved it was discovered that 28,002 was the right answer……

      As to the Borders railway thanks for making me aware of it. There is a potential catch though as this from ITV points out.

      “The Scottish government have been advising people against using public transport for the time being, and more people have been home working and organising virtual meetings — but campaigners don’t think this current change of lifestyle will hamper their case.

      Mr Walton said: “We certainly do need the railways and the railway network in general as an environmentally sustainable way of getting about of communicating in the future.

      “I don’t have any concerns that any change in lifestyle any change in the way we work will make any difference to a new Borders railway.””

      Meanwhile

      “Scotrail say that daily passenger numbers on the Borders railway have been consistently down by more than 85% per cent throughout coronavirus lockdown.

      A typical weekday pre-lockdown would see around 4,500 customers use the service. Now, that figure is down to around 600 to 700 passengers a day.”

      https://www.itv.com/news/border/2020-06-05/extension-of-borders-railway-more-important-than-ever/

      • I live in Gala, so I was a commuter on the line until late March. In February, I heard a guard saying the extension decision had been taken, but it would be two years before anything happened (the current line took ten years). However late last year, I heard a Borders Council planner saying the line had brought plenty of tourists, but had not made any other commercial impact. He said there is no population really beyond Hawick, so it is only viable for getting wood out of Kielder over the last 44 miles.
        The trouble is that it was built on the cheap with large sections of single track, so the timetable performance was a shambles from 2015 to 2018. It has got better, but peak time journeys are still over 55 minutes to Gala, which is why commuter numbers were not rising that fast. One morning, I went for the 0832 to find the 0802 was running very late. It left Gala at 0828, but with a clear line and down trains being held on the single sections, together with only stopping at the very busy Newcraighall (edge of Edinburgh shopping centre), we were in Waverley in 42 minutes, even getting delayed on the approach to central Edinburgh. A fast 40 minute train in peak hours really would bring the commuters for some fresh air – Michael Portillo did one of his train progs recently too.

  9. “you should see what the current standard of recruits is even there.”
    Frightening is the only way to describe the level of education and lack of understanding of the current youth(18-25 year olds) today, from my recent experiences with new recruits, who have failed exams complaining they were expected to do calculations(basic multiplication) without a calculator, and someone who was earning over £60K p.a labouring for a contractor on a rail project who could hardly string a sentence together without sounding like he was trying to impersonate Ali G.

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