Anglo's diplomatic move by Carney; the Teck agreement hailed as a victory of short-term thinking by ALEX BRUMMER
In the economic landscape of Britain, several significant events have taken place over the past few months.
Firstly, the markets are expressing hopes for a slowdown in the Bank's quantitative tightening program, also known as quantitative tightening. This program involves the selling of government stock holdings to the market, a move that could potentially impact the economy.
The jobs market, meanwhile, is facing challenges. The high costs of the Employment Rights Bill, increases in the minimum wage, and the predicted impact of AI on payroll jobs are all contributing to a less optimistic outlook for Labour's working people. Additionally, there has been a steady decline in private sector payrolls by 153,000 since the last Budget.
The government's expansion under Labour has led to the employment of 75,000 new employees, which, in turn, has increased unfunded pension liabilities. This expansion, coupled with the aforementioned challenges in the jobs market, suggests a complex economic situation.
Inattention in Whitehall and the high turnover of business secretaries have not helped in preventing the sale of several British assets. Britain has a history of selling its crown jewels to foreign entities, with examples such as Thames Water, Heathrow, Arm Holdings, Ultra Electronics, and Cobham falling into foreign hands.
One notable deal that was blocked was the sale of Welsh chip-making minnow Newport Wafer Fab. However, the sale of Anglo American, despite having 62.4% equity in a merger with Vancouver-based copper firm Teck Resources, was not one of them. Interestingly, Anglo American agreed to have the headquarters of the merged company, Anglo Teck, in Canada.
The change might relieve pressure in the gilts market where longer-term yields are at disturbing levels, raising the cost of financing the national debt. The concern is that a company with a Canadian chairman and headquarters may eventually decide to move its share listing to another country.
The Bank of England is facing pressure to cut interest rates due to the softening jobs market and dropping wage growth. However, high inflation prevents this move. The US, on the other hand, has been tougher on overseas interlopers, as seen in the case of Nippon Steel acquiring US Steel.
In response to the attack on Jaguar Land Rover (JLR), trades union Unite is demanding government support. However, owners Tata are expected to take the hit. A cyber-attack on JLR has caused production to halt and forced 33,000 staff to stay at home for another week, affecting a further 104,000 workers across the country in a complex supply chain.
For those interested in DIY investing, there are several platforms available, including AJ Bell, Hargreaves Lansdown, interactive investor, InvestEngine, and Trading 212. The London Stock Exchange was also blocked from a £2.7 billion takeover of its Toronto counterpart in 2011.
Finally, it's worth noting that the National Security and Investment Act was designed to prevent such plundering, but it has been largely ineffective. The change in business secretary, with Peter Kyle taking over from Jonathan Reynolds, may bring new strategies to address these economic challenges.
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