Published: 15 April 2024
By Suzanne Evans, Director, Political Insight
Iran-Israel conflict: Financial markets, having been exceedingly jittery last week in the face of mounting geopolitical tensions, appear less troubled this morning after Israel, together with the help of the US, the UK, France and Jordan repelled attacks by hundreds of Iranian drones over the weekend. The FTSE is only marginally down and the FTSE 250 is marginally up at the time of writing, boosted partly by a rise in defence companies and, surprisingly perhaps, airlines, suggesting investors had already baked in concerns. Oil prices, despite being seen as an indicator of global volatility, are down. Brent crude however, albeit lower, is still trading close to $90 a barrel this morning, having risen in expectation of action by Iran last week, hitting a near six-month high. The escalating tensions have lifted gold prices by 0.51% to $2,356.39 per ounce, and the ‘safe haven’ US dollar us up 1.6% on last week. The pound has also rallied against the dollar rising around 0.3% in early trade to around $1.25, having dipped to as low as $1.24 against the dollar — its lowest price since November - last week. Bitcoin’s value has dropped by nearly 3% to $65,281, falling below $62,000 yesterday. City AM suggests that: “the use of slow-moving drones [by Iran] has been interpreted by many as a sign that Tehran also does not want a major conflict”. The US has warned Israel that it would not join in with any retaliatory action, while UN secretary general Antonio Guterres urged for "maximum restraint", adding: "Now is the time to defuse and de-escalate. Neither the region nor the world can afford more war."
Defence: Defence companies Airbus and Babcock are urging Britain to ramp up military spending as the threat of war grows across the world, the Telegraph reports. Ben Bridge, global head of space and defence at Airbus, said military spending must be prioritised at a time when “war is very much on our doorstep”. He said there was “a need for the UK and other nations to take those threats seriously and then respond appropriately.” Babcock CEO David Lockwood meanwhile, called for greater defence spending, warning that Britain needed sovereign capabilities in order to defend itself from threats to its values. He said: “I do think this is the first time in my lifetime when we’re not taking Western freedoms for granted. Because even in the Cold War, frankly, we were either going to be free or blown to smithereens – we weren’t under threat in the way we are now.” The Secretary of State for Defence, Grant Shapps, called recently to raise defence spending to 2.5% of GDP, up from 2.2% now. Former prime minister Boris Johnson has also called for a boost to Britain’s defence budget, as he said last week that “now is the moment for an even more robust posture”.
Social Media: The Government is reported to be planning a ban children under the age of 16 from accessing social media platforms. A report in yesterday’s Sunday Times said the proposal is to be unveiled as part of a consultation aimed at safeguarding children online within weeks. Currently, most platforms allow children to sign up from the age of 13. A Department for Science, Innovation and Technology spokesman said: “We do not comment on speculation. Our commitment to making the UK the safest place for children to be online is unwavering, as evidenced by our world-leading Online Safety Act.” Esther Ghey, the mother of murdered 16-year-old transgender girl, Brianna Ghey, recently called for a social media ban for under-16s.
Stamp duty on share trading: Revolut and Monzo are among a group of top fintech firms urging the Government to scrap the stamp duty taxes on share trading today to boost the appeal of the London Stock Exchange, City AM reports. The Unicorn Council for UK Fintech (UCFT), a group launched by industry body Innovate Finance last month, comprises CEOs and founders of the UK’s largest fintech firms with a combined valuation of more than £50bn. Other members include Zilch, Clearbank, Primarybid and Oaknorth. “You’re paying a fee to buy UK stocks, and it’s free to buy US stocks. It’s no wonder you have retail investors buying Tesla instead of Rolls-Royce,” Philip Belamant,CEO of Zilch and UCFT co-chair, told the newspaper.
Marks & Spencer Chair Archie Norman, a former Conservative MP, has warned the Labour Party that Britain risks being unable to attract investment if it overhauls worker’s rights as planned. “Any incoming government should consider carefully whether a package that reduces flexibility, makes it more costly to hire people, and seeks to bring unions back into the workplace will help attract new investment,” he said. Britain, he added, already has “some of the best employers, terms and practices in the world” and that while “of course there are exceptions,” “in a knowledge-based economy most businesses are very focused on building motivated engaged workforces.”
Getir, one of the world's largest grocery delivery platforms, is in “make or break” talks about a radical restructuring just two years after it was valued at nearly $12bn (£9.6bn) – more than Marks & Spencer and J Sainsbury combined - Sky News has learnt. Sources said the firm, founded in 2015 in Turkey originally, could also break-up completely or exit from a number of its remaining markets. However, it was denied that any form of insolvency process was under consideration, saying that if it decided to exit a country it would do so "in an orderly fashion". Last September, Getir axed roughly 2,500 jobs, or about 10% of its global employee base, and pulled out of Italy, Portugal and Spain. AlixPartners, the restructuring firm, is understood to be advising on the situation at Getir. "
Misconduct in Public Office sentencing: The former managing director of a now defunct Airbus subsidiary was jailed for two and a half years on Friday for accepting kickbacks when working for the Ministry of Defence (MoD) nearly two decades ago, Reuters reports. Jeffrey Cook was convicted of misconduct in public office in January after a long-running criminal investigation into allegations bribes were paid to top officials in Saudi Arabia. The Judge said his offending was so serious that only an immediate jail sentence would suffice.
And finally… Public donations to pay off the national debt have hit their highest level in at least a decade, thee Telegraph has discovered. Members of the public handed almost £700,000 over to the Government through six individual bequests and donations last year, according to Debt Management Office (DMO) figures obtained via a Freedom of Information request. The amount for the 2023-24 financial year was the highest in at least a decade, with the biggest single payment to help pay off Britain’s £2.65 trillion debt pile coming from a £500,000 bequest, according to the DMO, which did not provide names of individual donors. In 2022-23, six other donations and bequests totalled just £47,000. Public debt has climbed from 85.2% of GDP in 2020 to 97.1% now.
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