Author: johnredwood

The Remain media were ever willing to report the falling pound, but have gone silent in the last couple of days as the pound has risen against the dollar and Euro. All it needed was the Bank to say it would not cur rates again and not print yet more money, and the pound bounced. If the Bank would restore rates to where they were pre the vote it would rise further. It reached $1.2485 today compared to a low below $1.20.

The court case made for convoluted and anti democratic reading. The vote of the people was only mentioned at the end, and dismissed for no good reason as advisory. Did they not read the Hansards where the PM and other Ministers stressed the people were to decide? Did they not read the leaflets sent by the government to each household with Parliament’s approval and using public money voted by Parliament to pay for them? These leaflets all said we, the people, were making the decision.

Did the Judges not understand that Parliament can anytime if it wishes debate and vote on the Article 50 letter? It has been the choice of the Opposition not to do so.

I hope the government will now table a motion saying

“This House approves the sending of an Article 50 letter in accordance with the wishes of the people as expressed in the referendum, any judgement of the courts notwithstanding”

The government should then send the letter.

I would expect the motion to pass easily, as I cannot believe Labour will impose a 3 line whip to expressly go against the results of the referendum. If they did the government should still win the vote, given Labour rebels, some Northern Ireland MPs and most Conservatives voting for.

I am always cautious about relying on PMI surveys, as they can give misleading readings, as we saw immediately after the EU vote. However, many other forecasters like them and use them. It will be interesting to see if they follow their logic through. Those who revised forecasts down sharply after the vote because the initial PMI figures were weak should presumably be revising them up substantially now they are strong. Today’s Services PMI came out at 54.5 for October compared to 52.6 for September. The overall whole economy PMI hit 54.6, up from 53.8 in September. These figures have to be below 50 to forecast a downturn.

I am sticking with my forecast of 2% growth this year, in line with the Treasury forecast in March. It is also difficult to see why many forecasters are still so pessimistic about 2017.

The Bank of England will doubtless want to put out a gloomy forecast for inflation for next year based on a lower pound.

They need to remember that October showed a further 1.7% fall in shop prices, including a 1.2% fall in food prices. This is from the BRC Index. This 1.7% decline figure is identical to the declines of 1.7% recorded in April and May this year before the vote.

It is true that imports will get a bit dearer from here, but important to remember we start from negative inflation on shop prices.

I trust the Treasury and Bank are revisiting their forecasts for 2017 as we speak.

Yesterday the UK’s largest housebuilder, Persimmon, announced another good set of figures. New home sales were up 19% year on year. They have pre sold their homes for 2016, and are ahead of last yea’s performance in sales for the following year. House prices have stayed up, despite Bank and Treasury forecasts to the contrary. Even better news came with Persimmon telling us they are putting in a new brick factory in Doncaster, and aim to be making bricks there next summer. That is exactly the kind of import saving investment we need, to cater for rising domestic demand. Persimmon also pre fabricate parts of their homes from a Midlands factory to speed site construction and improve precision.

A new potash mine investment is going ahead in Yorkshire with a £2.5bn investment. Output of automotive engines was up 6.7% so far this year at end September. Car manufacturing output is up 10.5% over the last year.

Various retailers have confirmed that sales of luxury brands to visitors to the UK have risen sharply following the decline in sterling. Burberrys, for example, said UK retail sales were up 30% when worldwide sales were pretty flat. Meanwhile retail prices fell again last month in sterling terms, despite the fall in the pound. Overall retail sales have been strong since June 23rd and real incomes have continued to rise.

The Bank’s pessimism centres on fears that major companies will postpone or even cancel investment projects. It is difficult to see why, when money, credit and demand are all growing so well. The Nissan news reflects the need for highly productive investors in the UK to reinforce their success for what is an important growing domestic market. UK manufacturing has just become 15% more competitive, underwriting the success of Uk factories for foreign investors. I want to see the government promote UK purchasing. The government itself is a mighty buyer of products. Once free of the EU controls, you would expect exciting new approaches.

Money and credit are growing faster than before the vote. This implies continuing good growth next year. The average forecaster has now revised up their 2016 forecast to the levels last seen before the vote. isn’t it time they did the same for 2017?

The OBR/Treasury forecast matters because it will inform the Autumn Statement. If they persist with a downbeat and inaccurate estimate for next year they will claim tax revenues are lower than the March forecast and spending higher. It is important markets look through this and understand that in practice things are likely to turn out as forecast in March, with a lower deficit as a result.

I agree that people should not end up working for one employer for less than the living wage, under duress to say they are self employed. Uber made clear this is not what they do. I am also in favour of people being able to suit themselves when they work by opting for self employment, and having other jobs at the same time if they wish and if they can manage them. Many of the drivers like the flexibility they gain from their work, and they do other things as well.

I mainly get around central London by walking or by tube. Sometimes I am given a lift in a hired vehicle if I am going to a studio to provide a tv or radio interview. More of the production companies now offer their guests who take no fees a drive there and back, and may use a hired car. When this happens I often ask the driver to tell me what he thinks of the remuneration system and how it affects his life.

The drivers I have talked to so far are either very positive about the system, or neutral. I have not yet been driven by a strong critic of the scheme. One driver told me he had come to the UK as a migrant. He earned good money because he drove long hours. He had recently managed in his spare time to qualify as a technical computer specialist of some sort. He was now setting up his own computer service company and would flex his driving hours down as his business developed. I asked him why he had not left driving to work for a computer company with his new qualification. He said because that would be a pay cut, and because he wanted the flexibility to set up his own business whilst still having sufficient income.

Another older driver had a different approach. Instead of working long hours to make good money, he set himself a target each day of how much money he wanted to earn. On a good day he got home early, offering and needing less than a day’s work. On a bad day it took all day to hit target. I was with him on a bad day, largely because there was unusually high congestion stopping drivers completing enough jobs.

This issue needs some commonsense to resolve it. Of course no-one should be made to be self employed yet work for just one firm and end up below the living wage. But shouldn’t people who want to be self employed, want to do more than one thing, and want to be flexible about how many hours they work and how much they earn also have the right to do just that?