Blain’s Morning Porridge, June 6 2022: Now the Hurly Burly’s done, it’s a Big Week In UK Politics!
“I think he honestly believes that it is churlish of us not to regard him as an exception, one who should be free of the network of obligation which binds everyone else.”
This morning: Big theme for the week in UK politics will be the last act in The Tragedy of Boris Johnson. His likely denouement coincides with rising economic stress, increasing corporate defaults and doubts on sterling. Time to Panic? Not at all! Bring it on.. We’ve suffered worse!
Before getting stuck into Markets through the rest of the month, it’s worth a quick comment on the UK and politics. Change is coming… likely this week if the papers are to be believed.
It’s not that I worry about UK Inc – we’ve been doing just fine for over a 1000 years with just a few hic-cups. Its just things are about to get, well, fraught and uncertain – and markets dislike uncertainty.
Why do I not worry?
Perhaps the very least well-known Shakespeare play is King John – yet it contains a singular line that sums up this Barmy Little United Kingdom best:
“Come the three corners of the world in arms, and we shall shock them”.
We may be a tiny, windswept Isle off the unfashionable west of Yoorp.. but we know ourselves. Change may be coming. We thrive in adversity.. perhaps because we are so used to it.
We’ve just spent a bonkers long weekend celebrating the Platinum Jubilee of Her Majesty and the absolute rightness of being British. It was all about being incredibly nice about monarchy – saying thanks to our Monarch. She is Queen Elizabeth the Second of England, and Queen Elizabeth of Scotland. A drone display over Buckingham Palace of a Corgi licking a bone got a massive cheer! At least we now know where The Queen keeps her Marmalade Sandwiches – that’s what handbags are for.
Yet, perhaps it is now time to leave aside these childish things and face the uncertain future.
However funny the Paddington having tea with Her Majesty skit was, in the real-world Priti Patel would be shipping him off to Rwanda next week. Britain’s great success has always been our multiculturism – blending successive waves of immigration into our cosmopolitan and inventive society.
The degree of love for Her Majesty is reciprocated in the growing contempt for our Premier.
Boris the Buffoon was booed whenever he had the temerity to appear. National Treasure Sir Stephen Fry caught the mood of the nation suggesting Her Majesty “tolerates” him. The monarchy will thrive as long as long as the alternative is “President Thatcher ” or “Chairman Blair”.
(Like many disillusioned voters, I was quite looking forward to the high-point of our national celebration being the Queen appearing on the balcony to announce Boris has been sent on a one way trip to the Tower.)
After the party, sadly, its back to reality this morning as the global economy stumbles, the pound tumbles, stocks wobble, bond yields rise, recession looms, rail strikes and civil service failure abound, and a likely non-confidence vote in our Premier as the requisite number of Tory MPs realise they will otherwise be looking for new jobs.
Last week my youngest got made redundant. Her firm was barely keeping its head above water through Covid. Inflation and the rising cost of living has mortally wounded it. She will not be the only one to lose out. Companies think the looming recession and cost of living crisis will do what Covid could not – decimate the corporate landscape. In a survey of over 500 CEOs, BDO cite rising energy costs, inflation, and supply chains as the main threats to UK commerce. Consumers with zero discretionary spending should be front and centre. Things are only going to get worse as earnings decline.
Yet, the increasingly unstable UK financial base of the economy is not dominating the narrative. Instead, we’re focused on and distracted by politics – which, even if we get change, will ultimately solve little. It’s time to move on.
While I am tolerated in Yacht Clubs as a token lefty, members tend to be Conservative in nature. Not any more; the main subject in the bars during our Jubilee Regatta was government failure and disgust with Boris in particular. When sensible business leaders and frothing-at-the-mouth Brexiteers are all demanding Boris goes… it’s finally going to happen. When Tory councillors tell you they despair at the what they hear on the doorsteps.. it’s time to listen.
Boris’ inevitable departure (this week or soon), will leave a massive political vacuum at the heart of the UK.
Excellent. His departure will remove the distraction… Buying boots on?
The Tories will be leaderless. Is there one among their number with the credibility with the public to replace him? The Labour party looks rudderless with its own leadership issues. There is talk of a new centre party or alliance. If I was a gambling man I’d be betting on a Liberal Democrat resurgence – at which point I either go off sailing round the world in despair or accept that anything is better than current broken UK politics….
Cometh the hour, cometh the woman… (or maybe man..)?
The crisis of politics about to engulf the UK is about priorities:
- How to cope with, and how to pay for the coming global recession?
- How to reopen the doors to Europe?
- How to secure energy and food, and how to plan an energy transition policy?
- How to balance budgets, reform the NHS, improve Education, raise productivity and defend the nation?
- How to right size government while providing social support, benefits and ensuring equality and social justice?
Standard political stuff – but wholly unanswered since 2019. (I blame myself. I voted for him – and now regret it.) In a world where the answers are not obvious, then addressing these issues will be fraught. What’s the alternative? More weeks and months of Boris clinging on? Long-Term in Boris’ book is surviving through to the middle of this week, achieved by distracting the nation from the business of recovery?
Time for change.
As has been previously said in Westminster…. ‘You have sat there too long for all the good you have done, in the name of God, go!”
Meanwhile.. outside the amusement park…
Lots of market positivity out there as China reopens from lockdowns, folk hope that inflation is easing, and that central banks will hold off on further hikes….
Yeah.. sure.. Buckle up!
Five Things to Read This Morning
Out of time, and back to the day job
Strategist – Shard Capital