Boris to Win 43 Seat Majority Says Meta-Poll

You’ve heard of meta-analyses, where academics who can’t be bothered to do their own research just nick everyone else’s hard work, crunch the numbers a bit, and come out with a super-accurate result? Well here is our META-POLL. After much reading of the papers, surfing the net, and even talking to people, we have concluded that the Tory party will win. (Bet you saw that coming eh?)

Why do we think that?

  1. Farage folded, as predicted here recently, avoided splitting the leave vote, and crowned the Tories as winners

  2. The Labour manifesto was written to appeal to hard-line left wingers – who would have voted for Jeremy anyway. Only the naïve or those too young to remember the 1970s could think that nationalisation is the answer. (See our earlier report on rail user numbers pre- and post – nationalisation). The “free” broadband idea went down well, but the practicalities are horrible. By the time it is built, at five times the original cost, technology will have made it obsolete. And the big beneficiaries will be the farmers and isolated rural communities – who will not be voting Labour under any circumstances. Meanwhile, their fence-sitting on Brexit feels a bit like “Follow Me….. I don’t know where we are going, but Follow Me!”

  3. The Liberal Democrats have shown themselves to be neither liberal nor democratic. Their reverse Article 50 campaign can only appeal to the most die-hard europhiles. Meanwhile, Jo Swinson has not done well. Her claims to be PM in waiting invite the retort that she’ll be waiting a very long time.

  4. The Tories have avoided a May-style manifesto-suicide-note. Divisive figures such as Rees-Mogg have been kept out of the limelight. Boris himself has picked his battles carefully, with more to lose than win.

So what happens now?

There are still considerable risks for Mr Johnson. Will the left-leaning students be too busy recovering from their end-of-term parties to vote?

Students preparing to oversleep and miss voting

Just how many people were too embarrassed to tell pollsters that they would vote Tory (but will anyway)? Will tactical voting have any impact? Will Mr Trump try to intervene? He is not great at keeping his thoughts to himself is he? That could hurt Boris. In this last week, we expect the Tories to try to refocus on Brexit as the major issue – and Labour to try to talk about virtually anything else!

What does it all mean for Asset Prices?

The market had a lost year in 2019, with too much uncertainty. A Tory win is about 70% baked into the market, so we expect a moderate bounce on 13 December. This will be most pronounced for the likes of BT and other nationalisation victims. Despite longer term trading arrangements still being in the air, we feel that 2020 will turn into a log bull run for equities and commercial property, as investors get back to the serious business of making money.

FTSE 100 Forecast Flat Until March 2020

It is that time for us to kid ourselves that we have some insight of where FTSE is heading over the next six months. “Hurrah,” I hear you cry, “we’ve been waiting for a laugh.”

FTSE over 6 months

But first let’s have some humiliation by looking at what we foresaw back in March 2019. Back on 18 March, we confidently thought that Brexit would be resolved on 29 March. Oh how naïve we were. We thought that either a deal would be done, or no deal would be all sorted by September. Either way, we thought that resolution of Brexit would be supportive for FTSE, and so, with FTSE at 7228, we forecast 8150. The article was entitled “UK Equities About to Soar.” Wow, how confident we were. Sadly, our central assumption over Brexit was wrong, and so the out-turn of 7345 on 16 September was much lower. As we noted before, forecasting is particularly difficult when it involves the future (Ed; and as I remarked at the time, what other kind of forecasting is there? Now get on with it).

Market Screen

Looking forward to Monday 16 March 2020, what do we see? As noted last month, we see some risk of a global slow-down. And we have said this before, but surely by March, Brexit will be settled? The potential outcomes are;-

a) Deal on 31 October

b) No deal on 31 October

c) Extension to January, then Deal or No Deal

d) Revoke Article 50

Thus we feel that Brexit may well be off the scene. To some extent it will be hedged anyway, as a bad Brexit might lead to a lower GBP, which tends to support FTSE through the foreign earnings route.

Though we could have a Marxist/SNP/whatever coalition government too!

However Brexit is solved, we see it too soon to have a kick-start effect on the UK economy by March, and globally, we still see the risks on the downside. Therefore, we think the on-going global slowdown is bad for equities, but some kind of resolution of Brexit should help the UK market (dear God, any kind of closure, please, we implore you).

Thus for 16 March 2020, we forecast FTSE 100 at 7200. Yes, I know that is the same level we have forecast for December 2019, January 2020, and February 2020. At least we are consistent!

Brexit! Where is the Cummings Plan, Baldrick?

Parliament has been prorogued! And the important news for word-puzzle fans is that this ‘new’ verb is indeed in the Collins Scrabble Dictionary.

But one has to ask, why did they do it? (I mean Boris, not Collins) And why in such a half-hearted manner? Conference season is coming up, so despite the headline “FIVE WEEK SUSPENSION”, in reality the proroguesion (Nope, that one isn’t a Scrabble word. Anyone got a number for Collins?) only made a few days difference to the actual sitting of Parliament. More importantly, the timing was such that Parliament had time to push through the no-deal bill that was always in prospect, and so the closing of Parliament had no real impact at all.

Boris; buffoon or battler?

To us, this high-profile political act was all about Team Boris tweaking Parliament’s tail, and continuing the theme of showing Parliament being against the referendum result and Boris battling manfully to enable what the people chose: Boris and the people versus Parliament if you like.

The two attempts by Boris to provoke a general election should be seen in the same light. The opposition parties saw a trick in that should an election have been called, selection of the date is in Boris’ gift, and hence he could choose a date after Brexit. However, forcing a second vote on the same issue gives the game away. The vote was for public consumption, designed to show the lengths to which Boris will go to deliver Brexit – even risk losing power – and the determination of the other parties to stop it. The subtlety of it being a no-deal Brexit that was stopped will be air-brushed over. This will be shown as Labour being determined to ignore the result of the referendum – and being frightened to face the electorate.

The third piece of evidence, m’lud, is Boris’s stated promise never to request an extension to Article 50, despite the eeyores of this world threatening him with prison. How much of a martyr would that make him? I note with surprise that ex-cons are allowed to stand as MP’s, so even if he was imprisoned, it would not prevent his comeback as a hero.

So, dear reader, you have a choice to make. Do you think that the current administration is ricocheting wildly from one crisis to another? This would not be out of alignment with the public image Boris has cultivated over many years.

Dominc Cummings – master strategist?

Or is this all a careful scheme, planned as the best option to cope with an unfavourable parliament? Boris is setting himself up as the people’s champion, fighting to the death (figuratively rather then literally we hope) to enact the referendum, and being frustrated at every turn by the self-important knuckle-heads in Parliament. Then when the inevitable election comes, Boris emerges with a very strong message. Dominic Cummings is a master at this kind of game…… we see a very Cummings plan Baldrick!

What Should An EU Trade Deal Look Like?

One of the major flaws (of many) in Mrs May’s Withdrawal Bill was that it favoured trade in goods rather than in services. And yet the UK runs a deficit in goods with the EU, and a surplus in services. So having an open market in goods, and accepting restrictions in services would be insane for UK. Why would we want no restrictions on the EU selling goods to UK, where they are strongest, but accept restrictions on us selling services, where we are best? Brilliant for EU, terrible for UK. But that is what Mrs May agreed! (Let’s ignore for now the smorgasbord of other problems with that dead deal.)

We believe that there should be a tariff-free trade agreement with EU. Despite their waning importance in global terms, the EU is a large economy and next door to us. Of course we want open access to it – just not at any price.

So what should an EU Trade Agreement look like?

  1. It must not preclude us making agreements with other countries such as Commonwealth countries, US, China, Japan etc. Therefore a customs union is ruled out.

  2. It cannot tie us to EU standards and ECJ ultimate ruling – this would truly be external control of the UK economy

  3. It must give open access for our financial and legal firms to access EU customers from UK. We have sophisticated financial oversight and regulation, and giving EU firms the ability to trade with London is in their interest too. A refusal by the EU to agree this would be cutting off their nose…..

  4. The transport of goods should be as smooth as possible, with the majority of forms completed online, away from borders. Thus lorries could have number-plate recognition and straight-through passage. Only intelligence-led spot-checks are necessary, as now. This is as true for Dover as it is Derry.

  5. Agricultural products with UK origin should be allowed into EU without restriction or tariffs. Our farm standards are among the highest in the world.

  6. Facilities must be included for freight going to and from Eire to travel through UK without hindrance. Failure to permit this would have a devastating blow to our cousins across the Irish Sea.

This may look to be an ambitious list. In essence, we support trade being as unrestricted as possible. But we do have plenty to offer. We are the EU’s largest export market. With the threat of US tariffs, a slowing EU economy and Italian insurrection against Brussels budgetary control, they need the deal as much as we do.

Can this all be achieved before 31 October? Frankly, No. We will lose the next 2 months in selecting a new PM and cabinet. And Europe will be closed in August with new commissioners to be appointed. Only when both sides are in their swanky offices can negotiating teams be appointed and briefed.

We could extend Article 50 for a year to allow Brexit to happen fully all at one time, or we can take WTO for a while. Either way, making a comprehensive, open and balance free-trade agreement with our friends and neighbours must be the second highest priority of the new Government.

[The End of May]2

Oh those happy, naïve, days back in January, where we were asking How Long Can The Brexit Fun Last? We thought 3 or 4 weeks would be the most we could stretch it out. And now, 4 months later, we foresee another 18 months of this disaster. Was there ever a slower car-crash?????

Here’s why;

  1. Mrs May’s deal is dead in the water. It is more Zombie’d than a Zombie-thing. Even though there is less than the thickness of a fag-paper (which is approx 2 thou’) between the reds and blues, they cannot agree a deal.

    Mrs May
  2. And even if they do agree a deal, it won’t get through Parliament – either it has a customs union, which will lose more Tory support than it gains from Labour, or it doesn’t have a customs deal – in which case Labour won’t back it.

  3. Both lots will receive an even larger drubbing in the European Elections on 23 May than they suffered in the local council elections

  4. So there can be no general election – all those turkeys in Parliament still won’t vote for Christmas. But Mrs May will finally have to admit defeat!

  5. So the only solution is a new Tory leader. On the over-riding need to win the next election, it will be BoJo or Liz Truss………….

    Johnson and Truss in an appropriate setting (photo from Nursery Times)
  6. ………..who will then inform Messrs. Barnier, Juncker and Tusk that they negotiated too tough a deal, and that it will never pass Parliament.

  7. Hence the EU must choose – another 12 months to negotiate a deal that is fair to UK, or No-Deal on 31 October.

  8. The EU will huff and puff, but back down. It doesn’t want to be blamed for No-Deal


You heard it here first;-

The End of May by the End of May

Brexit Delayed until 31 October 2020

Now can we all get on with our lives?  Er, no. We have all the drama of the Euro Elections, the Peterborough By-election, a Tory leadership election, and Brexit Delay. The fun clearly has months to run!

PS. Did you like the Quant-joke in the headline?

[The End of May]2 = [The End of May] * [The End of May] = The End of May BY The End of May

Brexit With Only A Short Delay

Sorry, Brexit again today!

Still businesses cannot plan for the second half of the year. Will the EU27 put us out of our misery? Everyone has had enough of Brexit by now surely – except for the media?  I’d love to know how it affects newspaper sales and radio/tv listener and viewer figures.

The betting is on a much longer extension than Mrs May’s proposed 30 June. Given that she has been neutered by Parliament, she will have to accept whatever delay she is given. Of course, the EU leaders will determine what is in their own best interests. They can agree on any date they like, and even demand all sorts of concessions. What will be their drivers?

  1. Nobody wants to take the blame for a No Deal Brexit.

  2. The EU does not want to have endless focus on Brexit when it has plenty of other issues to resolve

  3. They must expect that forcing the UK to hold European elections on 23 May risks a huge vote for the Brexit Party/UKIP – which is not the example they will want to show to their own populist voters.

  4. They can see that the Tory/Labour “talks” are being held for show, and are unlikely to get a Parliament-proof agreement.

  5. Any date beyond 30 June will mean that they have a new UK Prime Minister, who will be keen to make a mark by taking a much tougher approach with negotiations, starting with tearing up the existing Withdrawal Agreement. This is not good news for the EU.

It feels like the best scenario for the EU is to keep those deadlines short and tight, perhaps pushing Parliament to choose between the current May Deal or revoking Article 50 altogether. This could result in a cast-iron, firm leaving date of 22 May – and maybe even as soon as 26 April.

From a business point of view, the uncertainty must cease. Having a year-long postponement just means kicking the can down the road, with nothing being settled for another year. Such an outcome will not play well with the electorate, and could be very damaging to the Conservative Party. But it would give plenty of time for a new leader to be installed and start negotiations anew.

Given the five aspects listed above, it is clear that No-deal could still happen, and to us, a short extension feels most likely, with 30 June as the backstop. (No, not THAT backstop.  Actually, the Ireland Island issue has been quiet recently hasn’t it?). And this time, there really will be No Deal if Parliament doesn’t vote for anything else.


Please, just get it over with, and make it as quick and painless as possible.


Party Management is Killing Brexit Negotiations. No Deal is not Zero Probability.

What a bizarre sight. A Remainer is arguing for a harder Brexit, negotiating with a Leaver, who wants to effectively stay in the EU. It’s not easy being a politician is it? Poor old Theresa May doesn’t even believe in Brexit, but is trying to hold together a party which on the whole feels it should deliver it, whilst having a full spectrum from the ERG to Dominic Grieve. Meanwhile, even poorer and even older Jeremy Corbyn does want Brexit, but is trying to lead a party that is happy to oppose it.

Houses of No Decisions
Corbyn just before Brexit started

Clearly, the talks are just about the blame game, with both leaders wanting to avoid any backlash. In reality, the two positions are so close that a skinny fag-paper (which is an official engineering measure by the way) could not get between them. Which puts Jeremy Corbyn in a tough position. Having started the year by committing to oppose any Tory deal, now he needs to be seen to get meaningful changes in the talks. But Mrs May can’t give significant ground at this stage as it will split her party – which is of course the real reason he is there at all.

Corbyn in negotiation mode

And across the channel, where Merkel and Macron are to lose another day of their lives listening to British begging, perhaps it is dawning that imposing an impossible deal on the weak Mrs May could lead to an unpleasant outcome for EU.

Yet again we are begging for an extension, but the only credible justification Mrs May can offer is her own resignation – which will lead to a tougher scenario for the EU, as whoever follows is likely to be more antagonistic.

The City has decided that Brexit is not going to happen. In our view, the risk of the EU refusing a long deal is not negligible. They might give us only a month, just so that all sides can finalise their no-deal preparations. And leaving on Friday, although unlikely, is not impossible.

Given the City’s complacency, there is little upside on being long UK assets and GBP this next few days. A long delay is built into prices. If a quick deal or no-deal happens, expect a sharp move downwards.

Ha. Ha. Ha. Ha. Ha. Ha. Ha. Ha. at Parliament

Well the Guardian already has the headline “No. No. No. No. No. No. No. No. With all those “No’s”, it could almost have been a negotiation with the DUP. We are now past despair and into gallows humour at Brexit.

Guardian Front Page captures Parliament’s Historic Choices

So the House of Commons took control – and then didn’t know what to do with it! Laughable isn’t it? But once we have finished smirking at their incompetence, it does leave one small, irritating, nagging point hanging there.


Democratic Unionist Party. The Clue is in the Name!

As we said yesterday, we don’t think that the DUP will fold. If they did, then the May Deal would get through, she would resign in the next few weeks, and we can have the excitement of a leadership election over May and June.

Assuming that Mrs May’s Withdrawal Deal doesn’t get through, then what? A general election seems as unlikely now as it did when we reviewed in January. Whilst the Tory Party has plenty of turkeys, they still won’t vote for Christmas. A long delay still feels like No Brexit, and that won’t get through Parliament either.

Having failed to make any decision for all this time, will the EU put us out of our misery? Someone has to be the grown-up in this relationship – and, humiliatingly, it is not the UK.

Suddenly, No Deal is looking more likely than ever!

May Deal May Fly. But Probably Won’t

So here we are once more, sat on the edge of our seats and trying to remember the channel number for BBC Parliament.

BBC Parliament – Still can’t remember the Channel number

How will the indicative votes go over the next few days? Frankly, most of the ground has been covered before. They will not agree to Revoke Article  50, nor to a Second Referendum.  A Norway+ or Common Market 2.0 will not pass the reality test, and voting for No Deal would not pass, even if it was added to the ballot paper. It is hard to see a majority for any of the proposals remainer John Bercow is likely to choose.

Oli Robbins, ace negotiator?

Given that this process is planned to continue until next Monday, the whole indicative votes feels like Parliament wasting another week. Which will lead us to the Oli Robbins choice…… the May Deal or a Long Delay. So expect a climatic drama next week, where the MP’s have to choose the May Deal or No Brexit.

I am indebted to “Mark” for introducing me to the Guardian’s Will-They Won’t They Back The May Deal calculator. Going through the numbers, with the DUP sticking to their principles (and the Northern Irish have a great track record of placing principles above everything), it doesn’t look like Mrs May’s Deal can fly, even if all the Tory Brexiteers cave in.

Plaid Cymru, Princes of Wales

After a joyful few minutes on the Guardian site, it is clear that the only way Mrs May can get her deal “over the line” is by doing a deal with Plaid Cymru! So expect a few £1bln bribes – sorry investments – heading over Offa’s Dyke. I guess we could always offer to let them win a rugby tournament too……  Oh.

Tariffs for a No Deal Brexit – The Negotiations Continue

Clever move eh? Cutting tariff levels to zero on a wide wide range of imports has two clear messages;-

Goods Being Imported
  1. To the EU that perhaps they need to be a bit more flexible in their no-more-negotiations approach, or they can expect their exports to UK to decline drastically (especially hot topics like Irish farmers and German car-makers)

  2. To the UK consumers – who tend to be voters – that leaving the EU without a deal could have some upside too, with cheaper prices for a wide range of goods.

So they just need to protect the farmers (hence still some taxes on imports of agricultural products) to avoid any bad publicity.

Oh, and a third message to Brexit Nerds (such as us). The May Deal is still open for negotiation.

The fun goes on!

Cheaper Imports?