We start the new year with a confident new government in the UK and bitter political struggle in the US which will reach a climax with the election in November.
We took no party political position during the UK election but the Conservative manifesto represented a better suite of policies for our members than Labour’s and, with the exception of the position on Brexit, broadly looks like a continuation of the social democratic consensus of the last 30 years. The result (which we correctly predicted here) means debate about the referendum result is over and the focus will be on the future trade relationship with the EU and the US.
The EU has misjudged the UK’s determination on Brexit both before the referendum and during the last three years of exit arguments, and there is real risk that it will do so again. Insisting from the outset on a ‘level playing field’ on regulation as a precondition for market access will backfire as it is deeply unlikely that the UK government will agree to abide by rules it has no part in setting. As we have said many times before, we would like to see a positive trade relationship with zero tariffs and minimal market access inhibitors between the UK and the EU but we need to be prepared for the real possibility that the UK walks away. We expect renewed energy around US UK trade talks and see upside here; we hope the UK will quickly publish its negotiating objectives so that discussions can begin in earnest.
The impeachment of a President in the US feels like a civic tragedy but, it must be said, not one which has had an impact on business or the economy…or at least not yet. Assuming that the predictions for acquittal are correct, we are in for a highly bruising political campaign for the next 11 months. The UK system is far from perfect but the speed at which elections are conducted and the relative simplicity of renewing or replacing a government when it isn’t working is a refreshing contrast. Meanwhile the US economy powers on; the consumer continues to drive things forward and the exceptionally strong employment numbers at the end of last year, together with wage growth at close to 4%, suggest this will continue through 2020.
There was some good news on trade at the end of the year; USMCA finally passed after two years of wrangling and a ‘phase 1’ agreement was reached between China and the USA which means an end, for now at least, to the escalation of the dispute. Trade, the freedom to invest internationally and the contribution that this makes to the economies of the USA and the UK are at the heart of what BAB is about and expect us to talk about this throughout the year ahead.
Our year of events kicks off in January with round tables with two exceptional CEOs, Keith Barr of IHG in London and Steve Swartz of Hearst in New York. You can check out these and all of our upcoming events on our new look website here. Please let us know what you think!
Those of you with good memories may remember I made some predictions this time last year. You can find them here and I am giving myself 5 out of 8! As to 2020, the overwhelming issue will be the outcome of the US election and this feels too hard to call! I’d like to wish all our members and partners the very best for the year ahead and look forward to seeing you along the way.
