There are myriad ways to mark the inauguration of President Trump. So how nice of that arch “currency manipulator” China to come up with something right up his highway: a bit of fake news.
Yes, China has just released its 2016 GDP figures, all totted up with military precision within 20 days of the year end. And you’ve got to say its forecasters are a lot better at predicting the future than Mark Carney and his Bank of England chums. Last March, the National People’s Congress was told of a GDP target of 6.5 per cent to 7 per cent. And guess what? It’s come in, bang in the middle, at 6.7 per cent; exactly the number, too, that President Xi presciently plumped for this week at Davos.
And, to be fair, China’s National Bureau of Statistics does object to claims the whole thing’s made up — allegations that might look a little wilder, too, if the governor of the Liaoning rust belt hadn’t admitted this week that officials had cooked the books between 2011 and 2014. Not the only ones, you imagine.
Yet that’s not really the point. It’s that even GDP figures widely considered heroic are still the worst for 25 years. More worrying, China’s attempted metamorphosis from an economy reliant on state investment to one built on consumer spending has involved letting debt rip. In 12 months, the debt-to-GDP ratio has rocketed from an already impressive 254 per cent to 277 per cent, as UBS analysts pointed out, with more new credit used for debt servicing costs.
Even President Xi knows this is unsustainable, which partly explains why GDP is officially forecast to fall this year to 6.5 per cent. Analysts expect China to cool the housing market, with a knock-on effect on consumption. Meantime, rising US interest rates could trigger more capital outflows, exacerbating the stresses on China’s financial system. Even the stats bureau warned that “domestic and external conditions are still complicated and severe”.
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So ask yourself this: what will happen if President Trump starts his promised trade war? Couldn’t it force an already slowing China into a faster downturn, hurting the global economy, including America? Larry Summers, the former US Treasury secretary, told Bloomberg TV yesterday that the biggest risks from the Trump presidency were “geopolitical”, not least the “huge provocation vis a vis China”. Noting that “protectionist economics” don’t work, he spelt out just one of the risks: that die-hard Trump backers suffer most “because they’re going to be paying much higher prices for the products they buy”. Even Mr Trump might struggle to dismiss that as fake news.
All out of love
What is Barratt Developments? A housebuilder or a rom-com? On Thursday, it chose 3.57pm to disclose that its chief financial officer Neil Cooper had “left the company by mutual agreement, effective immediately” — just 14 months after joining. What had the man poached from William Hill done, you ask? Well, Barratt’s boss David Thomas let it be known via house broker Credit Suisse that Mr Cooper’s exit was “based purely on a lack of cultural fit”, while one insider noted that “from a chemistry point of view it just wasn’t working”. Anyone would think they were starring in a sequel to La La Land.
In fact, Mr Cooper was simply fired, or what amounts to as much, because in the opinion of the board, chaired by Tesco chairman John Allan, he wasn’t doing a good enough job. Hence, his £741,000 pay-off, including £9,500 towards legal fees. Yes, culture played a minor part: bookmaking’s more “laddish”, apparently. Yet the main issue was that the board wanted more detail from Mr Cooper on the numbers: a long-running complaint, even if not the experience of William Hill. And to be clear, there is no link between his exit and last year’s arrest of a Barratt executive: a case pre-dating Mr Cooper’s arrival.
Neither is Barratt blaming headhunter Russell Reynolds: Mr Cooper also had sector experience after a stint at Bovis Homes. And maybe Barratt was only trying to protect the reputation of Mr Cooper, who didn’t return calls, by blaming the split on chemistry. It’s just that it is a bit misleading.
Victory for ethics
Nicholas Wilson calls himself “Mr Ethical” on Twitter. And his 115,000 tweets include such observations as: “WHY am I the only person exposing the invidious, corrupt relationship between the BBC and HSBC?”
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Yet it’s thanks to the 59-year old’s 13-year campaign, and one that’s pretty much impoverished him, that HSBC has finally been forced to cough up £4 million to compensate 6,700 people who held credit cards with two lenders owned by the bank: HFC Bank and John Lewis Financial Services. They were the customers hit by swingeing “debt collection charges” of 16.4 per cent.
Mr Wilson typically finds the settlement “derisory”. Yet even the FCA wrote to him yesterday to acknowledge the redress was “due in no small part to the effort and persistence you have shown”. That’s the same FCA, incidentally, forced to apologise to him in 2015 for its initial decision “not to look into the allegations”. It’s no credit to the regulators that Mr Wilson had to keep blowing the whistle for so long.
It never rains . . .
An update on the branch of the Met Office otherwise known as Bonmarché. The clothing retailer “for the mature female demographic” has at last experienced “more seasonally appropriate weather”: a contrast to its usual whinges over “inconsistent weather” etc. And sales still fell, even if the shares went up. Cloudy with sunny intervals.
