Shafted

Hello, you glorious beasts.

Starmer had a good week, scoring two international trade deals in a matter of days, even (reportedly) bagging another one with the EU for next week.

Not bad for a man whose father was a toolmaker (in case you didn’t know). 

THE MARKETS

*courtesy of Google Finance as of market close

The pound rallied at the news of an expected trade deal. But the FTSE 100 went limp after the Bank of England cut interest rates, slumping a sad 0.32%, breaking its record-breaking streak. 

TRADE
A deal so good it’ll make everyone jealous (apparently)

The UK and US agreed to a trade deal today, the first trade deal Trumpian America has made with another country. 

Trump suggested it’s so good we’ll make all the other countries jealous. 

Farage, meanwhile, said we could only make the deal because of Brexit. Kemi Badenoch, not a country (but perhaps a little jealous), said we’ve been “shafted”.

In brief: 

✅ Good day for British car makers

❌ Bad day for British farmers

🐔 And we’ll not have to eat chlorinated chicken or steroid-infused beef. 

Happy day? 

Or:

Have we been shafted? 

Perhaps we have.

🇬🇧 10% tariffs remain in place on most British goods (Mr. Trump reassured us that he’s doing that with all the other countries)

🇺🇲 US companies selling to the UK? Ah, well, we’ll charge them zero, zilch, nada.

The US cut tariffs on British

• Steel (0%)

• Cars (10%, as opposed to the previous 27.5%)

• Jet engines (0%). 

Thank heavens for that: the US is our auto industry’s biggest market. We sold them £9 billion’s worth of cars last year alone. 

Rolls-Royce and Boeing share prices, quite naturally, rose at the news. 

What’s the beef? 

British farmers got a bad lot. 

The US will charge a 4-10% tariff on our beef. But we’ll charge them zero. Sounds like a shafting to me. 

That’s 13,000 metric tonnes of beef by the way, the equivalent of the Eiffel Tower and the London Eye combined. In beef. 

Here’s the rub: US ethanol producers will also enjoy tariff-free access to the British market, which British arable farmers rely on as a livelihood, and which the National Farmers Union (NFU) found concerning. 

Number 10 reassured brewers, confusedly claiming that the price of a pint will go down because they (briefly) thought ethanol was used in the brewing process.

The good news? 

• Donald is still letting us tax big US tech companies a sky-high… 2%. Which is rather lovely.

• The UK will build a pharmaceutical supply chain with the US, though what that means in practice remains a mystery

• UK food standards won’t be lowered to accommodate American crap

What happens now? 

Despite what Donald says, the deal isn’t in his hands: it’s up to Congress to decide. 

In short, it’ll take a few months of legal wrangling to get it finalised. 

Until then, tariffs.

BANKING
Regulator bins lending rules because it went so well last time

The UK’s financial regulator will end the requirement for mortgage lenders to carry out affordability assessments on British homeowners.  

What’s the controversy? 

Remember the 2008 Financial Crisis? Remember when rogue mortgage lenders handed out loans they knew customers couldn’t afford? 

Oh yes: they are binning the very rules specifically designed to prevent another financial crisis from happening again: 

• Lenders won’t have to give formal advice to customers about a loan’s suitability

• Assess whether they can afford to pay it off

• Or tell them what support is available to them if interest rates rise. 

Hmm. 

Why are they doing this?

Remortaging means homeowners can find a better deal, often allowing them to get better terms or pay off the loan faster. 

Plus, the government wants to unleash growth. Get people building and buying houses. 

So what’s the problem? 

Remortaging a house isn’t for ill-informed clotpolls.

Brits who remortgage are more likely to fall into poverty than those who don’t. Interest rates rise unexpectedly, and now bad actors can now (theoretically) sell them loans they can’t afford or don’t understand the scope of. 

Consumer groups are worried. 

Because this went so well last time, didn’t it, you glorious beasts? 

ENERGY
Government’s 2030 carbon-zero target ruined by Vikings

The UK’s biggest offshore windfarm project was scrapped by the Danish firm building it because Donald Trump doesn’t like renewable energy. 

What happened?

Government insiders blame Trump, who, last month

• Cancelled a big offshore wind project in US waters

• Causing Orsted’s share price to drop because it had a stake in Equinor, the Norwegian firm building it

• Plus, Trump’s hammered the whole cleantech industry with tariffs. Not fun.

And they got scared. 

Why is this a problem?

The Hornsea 4 project formed a big part of the Government’s 2030 clean energy target. It could power 1 million homes and provide thousands of good jobs. 

“Orsted have a lot to answer for,” said one Whitehall insider (possibly squeezing a sensory squeeze ball in rage). 

What happens now?

Orsted could sell it on or strike a new deal with the Government. 

But the whole project will be put on ice for at least 2 years. 

This wasn’t the first time some Danes had utterly ruined us via the North Sea.

NEWS BITES
This just in…

• 🪖 ⚠️ Westerners think World War 3 is coming within 10 years. The vast majority think we’ll be fighting Russians and Islamists, apart from Germans, 55% of whom think they’ll be fighting the USA. Europeans think their militaries would be useless. Americans are the opposite. 

• 📺️ 🇬🇧 One third of global unscripted TV adaptations are copied from the UK. We’re talking reality TV and game shows. Ever heard of the Great American Baking Show, anyone? 

• 🏥 💻️ It’ll cost £21 billion to digitise the NHS over the next 5 years, a report found. This means digitising patient records, storing them in the cloud, securing them with cyber security, and training people to use it correctly. 

• 🍞 🤝 Kingsmill and Hovis are thinking about a merger. The UK’s two biggest sliced bread brands (since sliced bread) have been having a hard time, what with higher wheat and energy prices, and consumers preferring posh sourdough over white bread that collapses shamefully from just a smidge of butter. 

• 🥵 ☀️ Britain is having its driest spring in 69 years. Farmers can’t grow crops, and reservoirs are “exceptionally” low in some places. To make matters worse, we could have a summer drought. The Environment Agency thinks water companies will have to restrict water usage. Maybe even ban hosepipes. 

• 🏦 ✂️ The Bank of England (BoE) cut interest rates from 4.5% to 4.25%, making borrowing a little less horribly expensive. The BoE said they wanted to put some fire under the economy’s feet, what with the looming trade war. Plus, it’s the right time: price rises have slowed and inflation has dropped from 2.8% to 2.6%.