There’s something catching in the Alpine air.
First, David Cameron was caught on camera in the ski-resort telling a leading industrialist that ‘Brexit’s not a disaster, it’s turned out less badly than we thought.’
Then our usually glum Chancellor, Philip Hammond, bounced around Davos yesterday, talking about the economy and future financial services deals with the EU with the sort of optimism that has been sorely lacking in the past.
As well as warning Brussels chiefs that the UK’s financial sector is ‘larger than the rest of the EU’s put together’, he rubbished hopes that EU capitals can capture City business as a fantasy.
Upbeat: Chancellor Philip Hammond bounced around Davos yesterday, talking about future financial services deals with the EU with the optimism and language of a born again Brexiteer
This is a side Hammond has kept under wraps: the high-altitude thinner air clearly suits him. Either that, or Boris Johnson’s latest bid for the leadership, with his demand for more money for the NHS, really has put the wind up Cabinet rivals.
So wound up was Hammond that he was cheeky enough to take a swipe at Christine Lagarde, boss of the IMF, with whom he shared a debate at the World Economic Forum, suggesting that she might like to revise her UK growth forecasts upwards in the light of recent events.
As the Chancellor delighted in saying, sterling is strong, inflation is weakening, real wages should start rising and unemployment is low.
Lagarde, you will remember, is a close buddy of Hammond’s predecessor, George Osborne, and was one of the gloomiest apostles of Project Fear.
She still is: the IMF’s latest forecast suggested lower growth of 1.5pc for next year because of Brexit. Let’s see if Lagarde rises to his challenge.
Hammond also took aim at EU negotiators by insisting that there would be a deal for financial services as part of the overall Brexit agreement, and for once acknowledged just how much negotiating weight the UK has in those discussions because of the size of our financial sector.
About time too. Most pertinently for City firms, he pointed out the UK can continue to trade without passporting through some kind of enhanced equivalence regime, one that makes both sides feel comfortable.
Hammond also finally closed down the lie that Frankfurt, Paris, Madrid or any other European capital could take over from London’s financial centre as a ‘fantasy that isn’t going to happen.’
If anyone is going to win out from a loss of City trading, it’s New York or Singapore. He’s right.
Even the most rigid Remainers and many of Germany’s leading politicians are beginning to accept an exodus from London to other EU capitals is not only fantasy but would not be good for Europe either.
This is particularly true of the clearing of euro-denominated securities, a massive business with a notional £631billion cleared each day in London in about 26 currencies.
Slowly, it’s dawning on EU leaders that they will be the ultimate losers if clearing is allowed to drift away from London as the cost of capital will soar for corporates, investors and pensioners across Europe.
Experts reckon the efficiency of the London Stock Exchange’s LCH clearing operations saved customers £17.5billion in regulatory capital in 2015. Not money to be sniffed at.
The smart EU financiers know the devastating effect that switching the clearing business elsewhere – even to New York – could have on the real European economy.
Hammond needs to bottle some of that Davos air, and keep hammering home that there is a win-win deal to be done.
Hats off to Nick Beighton, boss of Asos who has reported a huge leap in sales and profits over the crucial Christmas period.
It’s a fantastic result for Asos, now one of the most sophisticated online retailers in the world. What’s so cool about Asos, is the way Beighton is investing like mad on new technologies to stay ahead of the game.
About half of the current £200million spending is going on new services such as the latest app which allows customers to try clothes on at home, and pay for those they want to keep. That’s some service.
So is the same-day delivery and other loyalty schemes that give its young twenty somethings free delivery.
Put that together with one of the best fashion social media sites in the business, and it’s no surprise Asos has more than 15m loyal followers in the UK. It’s expanding in Europe with distribution centres in Berlin and in the US.
And Beighton hasn’t run out of new ideas: he promises more apps and new services. Shares at £70 may be a little frothy though.
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