Be careful what you wish for
When Theresa May entered parliament, winning her seat in 1997 at the third attempt, she will no doubt have aspired, but nothing more, to rise to the highest office. Now as she looks down from the summit she can be forgiven for thinking “why did I bother?”
Prime Minister is the making of some: Churchill, Thatcher, Blair who seem born to the role, yet it drains the life from others: Home, Callaghan, Brown.
Mrs May now fits very well into the second category.
Despite being a remain supporter, she, presumably, looked upon the chance to be Prime Minister as a once in a lifetime opportunity which wouldn’t come again. When Boris Johnson called and said, “Tell you what Theresa you take the top job, I’ll be happy to take foreign secretary,” she should have seen the writing on the wall.
There is a famous monologue by a British comedian about how live fish in a tank watch in fascination as the one singled out for dinner is chased around the tank. That is just how ministers are now treating Mrs May. It is a matter for conjecture as to how long before she appears skewered on a plate - but the Tory Party Conference in early October is a lot of people’s guess.
Its Brexit, stupid
In the same way as the famous sign was hung in Bill Clinton’s campaign headquarters in 1992 such a reminder is needed for the government right now.
Nothing else matters, or more accurately, everything stems from this in one issue. Someone needs to get to grips with the issue. The problem is that that someone is the Prime Minister and she has as much supports as straw house in a hurricane.
The government pays lip service to Brexit, clearing the parliamentary decks of all other business for two years, then retreats into a cave and pokes a stick at the giant grizzly that Brexit has become.
The reality of Brexit has been grasped by the EU far better than the UK. It is obvious that M. Barnier admits “it’s not what we wanted but we have to get on with it”. He is backed by an army of bureaucrats happy to have some real work to do after sitting drawing large salaries for years.
In the UK there seems to be a reticence to “grasp the nettle”. A politician isn’t used to fighting for a cause he doesn’t believe in (unless a lobbyist promises a big fat cheque), so to create a cogent Brexit plan when most of the Cabinet are remainers is a real challenge.
Sterling suffering set to continue
There are numerous reasons why Sterling is suffering now but the most salient one I have heard recently is that there truly is no reason to buy it. We can all cite our favourite reason for the fall in the pound; there’s Brexit, Brexit, oh and of course Brexit.
When the pound collapsed following the referendum and again during the “flash crash of last October, there were cries of overreaction from leave campaigners. Those who sold can now be congratulated for being cogent in their reaction.
In the FX market, there is a word that hasn’t surfaced in a while which always provokes a reaction.
Parity.
It makes no difference what currency pair it refers to, traders always have a strong view.
It is ironic that, at the start of the year, the common currency was seemingly destined to test parity against the dollar, then the market got to grips with the Trump Presidency!
Now, we are looking at EUR/GBP, or if you prefer GBP/EUR either way parity will mean 1.00.
Exporters will be hoping for a weak pound to kick off their business following Brexit but imported inflation is going to hit consumers hard.
A winter of discontent could turn into a nuclear winter but as they say in Game of Thrones, “Winter is Coming”.