The German economy has stagnated due to significant falls in spending and exports. New figures show that GDP ‘flat lined’ (financial jargon for neither growing nor contracting) in the final quarter of 2019, bad news since economists and analysts had hoped that it would grow about 0.1%. It means Germany’s performance matches that of the UK – arguably a worse situation for Germany given it doesn’t have a major political meltdown to blame during the period in question.
The figures show that the Europe’s Teutonic locomotive grew by just 0.6% over the whole of 2019, and again analysts regard this is a very disappointing result. A lot of the weakness is due to three key factors: seismic changes in the car making industry, a slowing European economy more widely, and global trade tensions caused by Trump’s China tariffs depressing exports.
Sajid Javid quits – or was pushed – as chancellor apparently because he was told he would have to sack his entire team of political advisors, presumably to be replaced by those vetted by Dominic Cummings, the prime minister’s main aide. Rumours have swirled around for a while that No 10 (read: Cummings) and Javid were at odds over who really had control over the Treasury. Boris Johnson’s plans to open up the coffers for massive infrastructure investments across the UK were met with some reticence from Javid, who as a traditional fiscal conservative wanted to make sure spending was definitely under control.
It was big news, not least because it would seem even the PM didn’t see the resignation coming. Javid says “no self-respecting minister” could accept the terms on offer, and in his resignation letter urged the PM to ensure people of “integrity” still populated key government posts. His replacement is someone called Rishi Sunak, who most had never heard of but who was Javid’s deputy in the department. He has acquiesced to the demands that his advisors be drawn from a shared pool between Numbers 10 and 11.
The Royal Bank of Scotland has joined the green gravy train saying it will stop any lending to those energy companies which do not align themselves with the objectives of the Paris climate agreement by 2021. The bank has a new chief exec, Alison Rose, who said it will also cease offering underwriting agreements to fossil fuel producers which can’t stump up believable “transition” plans aimed at keeping global warming under the feted 2-degree threshold.
Finally, it’s going a little further into the supply chain as well: it won’t lend to companies that have more than 15% of their activity dedicated to coal production or supply, and wants to reduce its coal finance customers to zero by 2030.
RBS seems finally to be reliably back in the black having posted a third consecutive year of profit, the only years since its bailout by the taxpayer back at the height of the financial crash in 2008. Its full-year results showed pre-tax profits almost doubling to £3.1bn, up from £1.6bn in the previous reporting period. It was helped by selling off its share of a bank in the Middle East called Alawwal in 2019.
The boss of Norton Motorcycles has dodged a pensions hearing after his firm became embroiled in an investment scandal a few weeks ago. He was supposed to appear in front of the pensions ombudsman to hear the allegations from members of the pension fund attached to his company, who are worried that all their retirement cash has disappeared. Again for legal reasons, I will direct you to other coverage of the story – papers with big legal departments are on safer ground with this stuff!
That’s all for today.