High summer marks ‘the silly season’ in journalistic parlance. Amidst a dearth of news stories, hacks scramble around for material – and much speculative nonsense finds its way into print.
We’ve seen important and, indeed, disturbing news this summer. Media attention over the last week has rightly focused on Charlottesville, Virginia. And what looks like another terrorist attack in Europe – this time Barcelona – now leads the bulletins.
Having last week announced his intention to leave Parliament after 34 years, Former Cabinet Minister Peter Lilley used his final Prime Minister’s Questions to wish Theresa May “Godspeed”. The member for Hitchen and Harpenden also asked his party leader if she still recognized, when it comes to the UK’s Article 50 negotiations, “that to get a reasonable deal we must accept that no deal is better than a bad deal”?
May famously used this phrase in her pivotal Lancaster House speech on Brexit in January. In stark contrast to her predecessor, who foolishly declared up front his support for Remain in last summer’s referendum on European Union membership, whatever the outcome of his “renegotiation”, May took a much tougher line.
Britain will be among the fastest-growing economies in the industrialized world this year, according to the International Monetary Fund. With the UK set to expand by 2pc in 2017, outstripping Germany, France, Japan and second only to the United States, the IMF last week became the latest in a long line of official forecasters to ditch predictions of British economic woe after last summer’s Brexit vote.
It wasn’t the IMF, though, that caused the pound to rally last week – even if its UK growth forecast was sharply increased from 1.5pc, with Britain getting the biggest upgrade of any major economy. Sterling surged by 4pc against the dollar last Tuesday, hitting a six-and-half month high, because of a snap election.
For decades, across much of the UK, far too few homes have been built. The average house now costs almost eight times annual earnings – an all-time record. In London and the South-East, of course, this ratio is even higher.
Much of “generation rent” is simply unable to buy a home. For millions of youngsters, even those with professional qualifications and good jobs, property-ownership is an ever more distant dream. Ten years ago, 64pc of 25- to 34-year olds, the crucial family-forming age group, owned their own home. In 2015, it was 39pc.
Caution is warranted,” said Gertjan Vlieghe last week, as he argued now isn’t the time to raise interest rates. I’d say Vlieghe, a member of the Bank of England’s Monetary Policy Committee, should reconsider.
The UK is heading for a downturn, believes the half-Belgian economist, as the fall in sterling after last summer’s Brexit vote pushes up inflation, so squeezing household finances. “The consumer slowdown, which initially didn’t materialize, now appears to be under way,” said Vlieghe during a speech in London, arguing rates should stay put at an ultra-low 0.25pc.
“After nine months on the launch pad,” wrote Boris Johnson in the Telegraph earlier this week, “Britain has finally engaged the most famous ignition sequence in diplomatic history”.
The Foreign Secretary was referring, of course, to Theresa May’s triggering last Wednesday of Article 50. The UK now has two years to agree the terms under which it will leave the EU, while trying to determine the nature of our future relationship with the remaining 27 member states.
What are grown-up investors to make of relations between Russia and the West? The rhetoric emanating from politicians and media commentators, in the US and UK at least, seems to be drawn from another era. Mainstream British and American newspapers are full of coverage about the Kremlin’s connections to US President Donald Trump, Secretary of State Rex Tillerson and Trump’s former National Security Advisor Michael Flynn. Some headlines go into full Cold War retro mode, talking of spy swaps and “Soviet agents”.
Russia’s official media has, typically, responded in spades. Against the background of the Ukraine crisis and related sanctions, accusations of “Kremlin meddling” in the US election have been met with more, even harsher, anti-Western rhetoric from Moscow. Such spiralling paranoia makes it seem like we’re through a bizarre re-run of the halcyon days of McCarthyism and Mutually Assured Destruction.