TRUMP, BREXIT AND CLIFF EDGE MOMENTS

Politically naïve Theresa May is not.  She has done well so far under some of the most demanding circumstances of the last 50 years.  She will have to both “dodge a bullet” and “catch a falling knife” in order to bring the U.K through to a positive and stable position in Europe and beyond, but her new industrial policy is dependent upon trade deals in America, the E.U and the wider world.  The industrial policy espoused by Greg Clarke, the Secretary of State for Business Energy and Industrial Strategy, has included the opportunity for smaller businesses to benefit from public procurement with the promise of reduced red tape.  We shall see.

Our tax pound only comes from earnings and as a former (now retired) banker made the point to me over a Belgian beer recently; “Mark, our economy is only in theoretical surplus in that it is entirely dependent upon property values continuing to rise so as to offset borrowings. There is more cash leaving the wallet than is going into it”.

So that leaves us with the thought that the countries well-being with manufacturing less than 14% of GDP, remains to some extent dependent upon continuing rises in property values.

The first cliff edge moment of the Brexit vote in June stopped the housing market in its tracks, since then it has recovered fully and more with housebuilders reporting excellent figures.   But we are in a phony war at the moment.  We are still in the EU.  Decisions are only now being taken following Theresa May’s latest cliff edge moment declaring that the UK will not be in the single market post Brexit.

But her first meeting seemed to go better than expected with President Trump (“stunning victory Mr President” she said as he raised an eyebrow to his son-in-law at the endorsement) and she will have to continue to suck-it-up but her first broken high-heel moment lay in wait having extended a warm invitation to the President for a state visit (quickly accepted) in the summer only to find, 56 hours later, that over a million UK subjects had demanded its reversal following his latest executive order to deny Muslims almost carte blanche, entry into the USA.

We can’t know where this roller coaster ride with an individual displaying inattentiveness, hyperactivity and impulsiveness is going to take us, hopefully not to oblivion, to say nothing of the EU negotiations but we have to stay in the real world and not one with wishful thinking tendencies.

He won’t be there for ever, but whilst he is we must be savvy enough to play to his tune as and when it is in our interest to do so and like all demagogues he loves to be loved. It just surprised me that he didn’t move a bust of Julius Caesar as well as Churchill back into the Oval office.

Despite many failings and demagogue tendencies I think the press are wrong when they say that being a property tycoon means he must win and all others must lose. So long as both sides in any negotiation are properly and professionally represented, common interests can often surprise.

 

MSH 

January 2017

 

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