Monday, 24 October 2016


Running the national business.  The International Monetary Fund (IMF) has published its latest review on the future prospects for the world’s economies. It is a subdued picture, predicting global Gross Domestic Product (GDP) to rise by 3.1% this year and 3.4% in 2017. These figures compare with an annual average growth rate at 3.8% in the six years to 2015. Recent growth has been driven largely by emergent economies. For example, over the same six years, PR China’s economy grew at an average rate of 8.4% per annum. But by 2021, the IMF expects China’s rate to be below 6%. The Fund reckons the UK will be the fastest (1.7%/1.8%) rise in the G7 leading economies this year. The prediction falls to 1.1% for 2017.

Fiscal and monetary policy.  Some international economists have been saying for a long time that the world’s governments have transferred too much responsibility to central banks, which are in charge of monetary policy. They adjust interest rates in attempts to make the economy go slower or faster. Individual governments manage fiscal policy, which is full of political decisions and decides who gets what. The related processes take money from specified groups or priorities and moves it towards others : tax cuts, expenditure on infrastructure, higher social benefits and so on. We are supposed to find these actions acceptable. This is why they are in the hands of elected representatives. The two policies are not wholly distinct. Monetary policy is distributional as well. If interest rates are cut, then people with mortgages benefit at the expense of savers. Things start getting tricky and noisy when the central bank (Bank of England hereabouts) installs something like quantitative easing (QE). There are radical effects. Experts do not fully agree on exactly what QE does, but it seems to boost the price of assets. So, QE gives money to the wealthy and prices those assets out of the reach of others. Check the global housing market for an example. That is fiscal policy. A regressive one by anybody’s standards. Central bankers are aware of this issue and are properly reluctant to stretch their mandates much further.

Why is Momentum so controversial?  It is a grassroots and left-wing campaign group in the Labour Party. The origins were in plans to elect Jeremy Corbyn MP as leader in 2015. There have been accusations of trying to ‘purge’ moderate MPs, and of abusing and intimidating Mr Corbyn’s critics. The Times has alleged that these activities are ‘undermining British values and democracy’. The (Trotskyist?) Alliance for Workers’ Liberty (AWL) has called on its members to ‘flood’ the Labour Party. There have been efforts to unseat MPs who do not back Jeremy Corbyn. Momentum insists its campaigns are conducted ethically and criticisms are ‘inaccurate’. AWL is a tiny minority. But a determined one. These are uncomfortable times in some constituency Labour Parties. Your scribe was around in the early ‘80s. The need to win elections will prevail.

The plastic ‘no’.  The French government has banned plastic plates, cups and cutlery. This decision might be the start of a major shift away from plastic. The new law comes into effect during 2020. Pack2Go Europe is based in Brussels. It lobbies for packaging manufacturers in Europe and says it will fight the legislation. Implementation will break the European Union’s rules on trade barriers.

A danger.  A lecture is a process by which the notes of the lecturer are passed into the notebook of the student without passing through the brains of either.’ Adage, quoted in a letter to The Times.

Tuesday, 11 October 2016


A sudden interest?  The Financial Reporting Council (FRC) has opened a debate on whether companies and their auditors should provide investors with more information about culture within organisations. In July, the FRC published its report, ‘Corporate Culture and the Role of Boards’. But what is ‘culture’?  The FRC says:  ‘Culture in a corporate context can be defined as a combination of the values, attitudes and behaviours manifested by a company in its operations and relations with its stakeholders. These stakeholders include shareholders, employees, customers, suppliers and the wider community and environment which are affected by a company’s conduct.This is a starting point.  So where do FRC and the rest of us go from here?

Are we cheap?  Anders Holch Povisen is a billionaire from Denmark. He buys land in the United Kingdom and now owns more land in Scotland than HM Queen. The Copenhagen Post says Mr Povisen is the principal shareholder of Bestseller, a clothing company, and now has a total of 200,000 acres.  He lags behind only the Duke of Buccleuch.

The European Union (EU) grows.  The EU has accepted Bosnia’s application to join it. The country will now be assessed on whether it meets certain criteria on human rights and the rule of law.

Jeremy Corbyn, MP for Islington North was re-elected with a larger majority as leader of the Labour Party.  The Economist says the bulk of his support came from members who joined after 2015’s general election. The unexpected result at 61.8% of votes will not overcome the Party’s divisions. John McDonnell, MP for Hayes and Harlington and Shadow Chancellor, promised to bring socialism back into the mainstream. This is unlikely to be popular with the electorate.

An addiction gone.  BlackBerry has announced that it will cease to design and produce smartphones. Instead, development will be outsourced to other companies. This will allow BlackBerry to focus on software and services. It shaped the emergent industry of fifteen years ago, but quickly fell behind rivals. BlackBerry now has less than 1% of global sales.

Sting in the Tale.  This is a story about four people named Everybody, Somebody, Anybody and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it but Nobody did.

Somebody got angry about that, because it was Everybody’s job.  Everybody thought Anybody would do it, but Nobody realised that Everybody wouldn’t do it. So, Everybody blamed Somebody when Nobody did what Anybody could have done!

Graffiti.  ‘Egotists do not talk about other people.’

Monday, 26 September 2016


Forecasts.  The Organisation for Economic Co-operation and Development (OECD) is the rich countries’ talking shop.  It has just published forecasts for the UK.  The major feature is that weak growth in trade and financial distortions are worsening slow global economic growth.  John Ashcroft points out that unusually low – and sometimes negative – interest rates are distorting financial markets and increasing risk across the financial systems.

‘Brexit means Brexit’ our new Prime Minister declares. But non-one is brave enough to give us a definition, other than it is the UK’s withdrawal from the European Union.  Propaganda is trying to convince us that there has been no damage to the economy since the Government’s announcement of its decision. Figures on the economy challenge the claim. Living standards have fallen. The international purchasing power of the UK fell immediately as the pound depreciated in the wake of the referendum’s result. The Bank of England’s measure of the value of the currency has fallen by 15% or so since the poll. Such a fall will lead to higher prices.

The unexpected result.  The Office of National Statistics has reported that 29% of graduates last year are earning less per hour than a non-graduate who had taken an apprenticeship.  This figure is up from 25% in 2014.

Footall in England.  Mark Halsey is a respected and admired referee of matches in the Premier League.  This is the most watched league in the world, a product that generates substantial revenue and profits. The intense competition creates significant pressure on clubs, managers and players to get positive results. Mr Halsey has claimed he was told to state he had not seen in incident in a game he was officiating in 2011 between Stoke City and Blackburn Rovers, in order to make sure that the offending player was punished after the fixture. This admission prompted immediate denials, confirmations and debate. There are now good reasons to reconsider the management, networks and protocols relating to referees in England.

Confirms our suspicions?  ‘Alcohol enables Parliament to do things at 11 at night that no sane person would do at 11 in the morning.’ George Bernard Shaw (1850-1950), Irish dramatist and critic.

The battle.  ‘Class distinctions do not die; they merely learn new ways of expressing themselves.’ Richard Hoggart (1918-2014), British academic in sociology, English literature and cultural studies.

Wednesday, 14 September 2016


British investment in America.  Confederation of British Industry (CBI) has published the eighth edition of Sterling Assets, its annual survey of British investment in the United States.  The report highlights this country’s position as the largest foreign investor, employing over one million Americans. British businesses create jobs in every state. Texas leads the way – with 102,000 of jobs supported by British companies – followed by California and New York.

‘Brexit means Brexit’.  That was the crisp statement from Prime Minister Theresa May. It does not help those citizens employed outside the Westminster bubble. The biggest concern of many managers is that Brexit will be seen as something easy to do.  There is pressure to cut the UK’s ties quickly, but there is a lot of devil in the detail.  A terrible error would be for post-Brexit UK to use its newly-found powers unwisely.  The specialist Secretaries of State (Rt Hon David Davis MP and Rt Hon Liam Fox MP) must show a desire to reduce red tape.

Agility.  Managers face the constant demand for corporate agility. The HR Magazine points to several enemies of effective action. These include : Hierarchical structures which hide how a business actually functions day to day. Organisational politics. Treating change as a destination. Absence of clear purpose. Fixed or too prescriptive job descriptions. Sub-standard managerial practices.

Traingate in August. Rt Hon Jeremy Corbyn MP (since 1983) is leader of the Labour Party. He has encountered the difficulties of a big jump from lone protestor to a collective motivator, who eschews spin of any kind. The media and their users watched Mr Corbyn and his aides reveal they were unable to stage a photograph opportunity. His sitting on the floor in a corridor of a Virgin train was explained by a trivial untruth. Basic research would have shown that the 11.00 am from Kings Cross to Newcastle is never overcrowded. The alleged lack of available seats was claimed to be part of the major case for nationalising railways.

Do politicians tell lies? Donald Trump has introduced them to new approaches.  The Economist says he is the leading exponent of ‘post-truth’ politics. This is a reliance on assertions that ‘feel true’ but have no basis in fact. His brazenness is not punished, but taken as evidence of his willingness to stand up to elite power. This is a worrying situation. Strong democracies can draw on inbuilt defences against post-truth. Authoritarian regimes are more vulnerable. For them, the novelty of post-truth may lead back to old-fashioned oppression.

Of course.  ‘The older I get, the better I used to be.’ Connie Hawkins, baseball star.  Quoted in Harper’s Magazine and TheWeek.

And again.  ‘When a stupid man is doing something he is ashamed of, he always declares that is his duty.’ George Bernard Shaw (1850 – 1950), Irish dramatist and critic.

Tuesday, 30 August 2016


Quantitative easing (QE). The Bank of England’s latest programme has hit a proverbial brick wall. The plan was to buy £1.17 billion of long-dated gilts. Not enough bondholders wished to sell, despite the Bank being prepared to pay prices well above those in the market. What’s going on? Pension funds and insurance companies are keen to have the payments from bonds. They especially want long-dated paper, which helps them to match their liabilities with almost guaranteed income. However, reinvestment of funds at historically low and consistently falling interest rates and yields are not attractive options. Investors are worried that they will end-up with too little money to cover payouts in the future. In other words, HM Government’s plan for quantitative easing faces major difficulties caused by earlier quantitative easing.

Getting better. Orders for the UK’s exports were higher in August than each of the previous two years. This reduced fears of a further fall in manufacturing. The Confederation of British Industry’s (CBI) industrial survey found that demands for 505 of this country’s largest exporters had risen to their highest level since 2014. 21% reported orders at above their normal levels. The CBI said the major factor in the figures was by chemicals’ manufacturers, which accounted for over half the increase. Of course, the weakness of the pound has helped these companies, but pushes up costs and prices. Capital Economics reckons the results are a reason to be ‘tentatively optimistic’ about outlooks for the UK’s economy.

Innovation is a much-used word. Our government loves it. The UK has been ranked third, after Switzerland and Sweden, in the World Economic Forums’ Global Innovation Index for 2016. This country was second last year and scores ‘highly for infrastructure, as well as market sophistication and creative outputs.’ This index is produced by the World Intellectual Property Organisation (WIPO), Cornell University and INSEAD. The group assesses 128 of the largest economies.

Decisions, decisions, decisions. All decisions should be made as near to the action as possible. The charge of the Light Brigade was ordered by an officer who was not looking at the territory. There are two kinds of decisions: those which are expensive to change, and the rest. A decision on relocation from Manchester to Cardiff must not be made hastily. Nor should one to build the self-drive motor car. Plenty of contributions from operating people and specialists are important, too. But the common or garden decisions ought to be made quickly. Brand of pencil and times for canteen can be decided in three seconds and changed at little cost later. The company might lose a lot of business while you oscillate between blue and white coffee cups.

A warning. ‘Education costs money. But then so does ignorance.’ Claus Moser. British statistician. Quoted in and in MoneyWeek.

The future. ‘That period of time in which our affairs prosper, our friends are true and our happiness is assured.’ Ambrose Bierce, 1842 - 1914.  American journalist and humorist.