ALEX BRUMMER: Sunak has done more to support the economy than anybody rightfully could have expected
The sub-octane growth data for August underline how vulnerable the UK still is to the pandemic.
The economy has grown for four consecutive months and the three-month growth rate picked up to 8 per cent from minus-6.8 per cent in July.
But at the end of Eat Out to Help Out August, output was still a chunky 9.2 per cent smaller than it was at pre-lockdown February levels.
Chancellor Rishi Sunak demonstrated his determination to avoid a furlough cliff-edge with a second, slightly less generous version, paying 67 per cent, for locked-down regions
So there is a huge amount of catching up to do. Regional lockdowns cast a big shadow over the ‘V’-shaped recovery in spite of a renewed effort by Chancellor Rishi Sunak to underpin jobs.
The Tories have gone all out to assist affected businesses. Sunak demonstrated his determination to avoid a furlough cliff-edge with a second, slightly less generous version, paying 67 per cent, for locked-down regions.
Cash grants of up to £3,000 are being offered to firms closed through no fault of their own.
This is in addition to the jobs support scheme (JSS), the UK version of Germany’s Kurzarbeit, designed to cushion the transfer of furloughed workers back into their jobs.
Labour continues to carp about the JSS, arguing it will lead to a loss of full-time jobs. The reality is that the Chancellor has gone further with support than anybody rightfully could have expected.
Sunak and the Bank of England are seeking to keep as much of the economy intact until the severity of the pandemic fades or there is a vaccine or antidote such as Regeneron, tested on no less a figure than President Donald Trump.
Propping up hospitality can only go so far in restoring output and jobs. Boris Johnson’s slogan of Global Britain requires the UK’s dominant services sector to be operating at full tilt.
That cannot happen while North Atlantic air routes are shut. The US is Britain’s biggest export market and one of the few with which we have a big trade surplus.
All the time that our financiers, consultants and architects are sitting at home, sales and momentum are being lost.
Easing lockdown pain is critical and the fiscal boost to the economy is bringing it back from the depths of the slump. But it is not enough.
The Italian job
Among the great City occasions is the London Stock Exchange (LSE) Christmas lunch. It would dig deep into a wine cellar built up over the decades and bonhomie would emerge.
I was present in 2007, the year that LSE bought Borsa Italiana, when the guests of honour included the cream of Italian finance as the City and Milan pledged an undying partnership. The government bond-trading platform was seen as the ultimate prize.
The role of stock exchanges is changing and the LSE is selling Borsa for £3.9billion to rival Euronext, against the £1billion originally paid.
Both the New York Stock Exchange owner, ICE, and the LSE are deploying technology and big data to become index and financial data providers.
The sale is part of the journey to acquiring Refinitiv, the former Reuters financial platform, which competes with Bloomberg (or sits alongside it) on the desks of traders around the world.
The goal of the Italian deal is to appease EU competition authorities who are scrutinising the transaction.
The LSE’s journey into tech and data was pioneered by former chief executive Xavier Rolet and continued by current incumbent David Schwimmer. It has been brilliant for the share price even though there is a view that it is overpaying for Refinitiv.
What is important is the recognition that AI, tech and data are the way forward for trading platforms.
The decision by inter-dealer broker TP Icap, the creation of Michael Spencer, to swallow fintech competitor Liquidnet (with 1,000 asset manager clients) is a move in the same direction, as London rides a digital wave.
Armed conflict
The risk for Garda World and its backers was that its low-ball offer for security firm G4S would flush out other bidders.
The emergence of US-based Allied Universal as a potential white knight sent G4S shares sharply higher and, at 212p, they are now way above the 190p opening salvo – worth £3billion – from Garda.
Some of the harsh criticisms coming from Garda boss Stephan Cretier may be justified but it has not endeared him to the G4S board or big investors such as Schroders.
En garde.