And it will be the progress of our discussions to leave the European Union that will be the principal topic of discussion. Already the Liberal Democrats have set their stall out as seeking to overturn the referendum result and encourage remainers of whatever political persuasion to join them. I’m not sure they will be successful in this endeavour, though on the other hand I’ve never known a time when both the main political parties have been in such turmoil.
As if that was not enough, it seems that the trade war with China is hotting up. In a third round of tariff hikes, the United States is targeting around half of all the goods China exports to the world’s largest economy. China, as you might have expected, has retaliated by launching its own range of tariffs, though the reality is that they import far less than they export to the US, which sort of justifies President Trump’s actions. With trade talks between these two powerful nations due to start next week, it is to be hoped that some form of reconciliation can be achieved.
Despite the fact that this battle of the giants could have serious implications for the rest of the world, markets have reacted in a relatively calm fashion. Our own Footsie index is off its peak, but not by a huge margin, while indices in America are close to all-time highs. Indeed, Wall Street’s immediate response was to trade higher. It seems that investors are unfazed by current developments, at least so far.
As it happens, recent published data has not been too bad. Figures for our economy showed reasonable growth for July, while business confidence indices are pretty robust on both sides of the Atlantic. Warnings that a messy exit from Europe could have severe consequences for the domestic economy from, amongst others, the IMF have been largely shrugged aside, but Brexit continues to grab centre stage in the media.
There is not much that is exciting due presently on either the corporate or the economic front. We have retail sales numbers for August and the Bank of England’s quarterly inflation report, not to mention the launch of Tesco’s answer to the rise of the discounters. Perhaps the most significant recent event has been the European leaders Summit in Salzburg, but unfortunately that has meant the B word getting even more of an airing. Still, time is running out for these talks.