10. Weekly Newsletter

US Calls for Revived UK Trade Talks

Senior lawmakers in Washington are pushing for a reignition of US-UK trade talks following the successfully negotiated Windsor agreement over Northern Ireland. On Thursday (2nd March) a Democratic senator introduced legislation to give the US president the authority to negotiate a free trade agreement (FTA) with the UK. This proposal was co-sponsored by the second-most senior Republican in the upper chamber of Congress and would provide President Biden with two years to secure an agreement before the next presidential election.

The US Trade Representative, Tai, said that Biden has looked to resolve previous trade disputes from former administrations and understands the need to strengthen America’s allies economically- particularly with regards to increasing competition from China. Senior figures within the US have also indicated that the president may visit Northern Ireland, in April, to commemorate the 25th anniversary of the Good Friday Agreement. However, this is likely reliant upon the restoration of the Northern Ireland assembly at Stormont.

Newspapers & The London Stock Exchange

The UK’s front page news cycle over the last seven days has covered a wide range of topics with the ‘Brexit Breakthrough’, as hailed in The Times, being the leading business story of the week. In politics, the investigation into former PM Johnson’s ‘partygate’ scandal has faced widespread coverage over whether he did ‘mislead’ parliament. Some of the newspaper front pages over the last week were:

• The Mail on Sunday: Rishi- Make No Mistake, I’ll Deport Channel Migrants
• The Guardian: Partygate- fresh evidence that Johnson misled MPs
• The Times: MPs could punish Johnson
• Financial Times Weekend: Arm’s snub to City blamed on FCA
• The Independent: MI5’s missed chance to stop Manchester Arena bomber
• Financial Times: Fears for City’s status after Arm and building giant opt to list in New York
• The Guardian: Confidence in COVID inquiry hit after leak of Hancock messages
• Financial Times: Bailey seeks to take heat out of market expectations for further rate increases
• Financial Times: Jaguar owner Tata demands £500mn of aid to build battery plant in Britain
• The Independent: Sunak secures breakthrough on Brexit- as tensions loom
• The Daily Telegraph: EU chief flies in to seal Brexit deal as revolt brews
• The Times: I’ve won big concessions from EU, claims Sunak

Last week Arm, the Cambridge-based microchip designer, announced that it will solely list on a US stock exchange rather than pursuing a London listing. The company, acquired by SoftBank, is looking for a valuation of around $50bn in a American IPO in 2023 with blame pointed at the UK’s Financial Conduct Authority (FCA) over their regulations. Last Thursday (2nd March) CRH PLC, the world’s largest building materials company, and Flutter Entertainment PLC both announced plans to move their London listings to New York due to the higher valuations in the US. However, Arm will consider a UK listing “in due course” and last week it was revealed that Shell explored delisting from European exchanges and moving to the US- but decided to consolidate its base and stock market listing in London (leaving the Netherlands).

UK Luxury Retail

The Managing Director of Harrods, Michael Ward, was recently interviewed whereby he outlined his confidence in British luxury retailing. Harrods, famed for running the largest department store in Britain, is trading above pre-pandemic levels and refocused it’s business model following the collapse in tourist numbers due to COVID. A majority of spending at the business now comes from British shoppers despite Chinese nationals having been the largest spenders pre-pandemic.

The outlook for luxury goods worldwide, according to Bain & Co, will see 2022 revenues of €353bn grow by “at least” 3-8% this year. However, the Harrods MD believes that when Chinese tourists return to Europe in the second half of 2023 that “France is the only European country that’s mentioned”. The threat to UK luxury retail also stems from shoppers focusing upon “superbrands” (such as Louis Vuitton and Hermès) which leaves British brands like Burberry exposed to falling into the middle ground. Smaller brands such as Ted Baker remain far below pre-pandemic revenue levels.