The Monday Briefing
A succinct and eclectic weekly take on economics and finance from Ian Stewart, Deloitte's Chief Economist in the UK
Financial markets and the fight against climate change
On Friday, millions of people around the world joined climate change protests. Earlier in the week, Bill Gates, the Microsoft co-founder and philanthropist, warned climate change campaigners that divesting or refusing to hold fossil fuel stocks such as oil companies, was a waste of time. “Divestment, to date, probably has reduced about zero tonnes of emissions. It’s not like you’ve capital-starved [the] people making steel and gasoline”.
A number of prominent investors see divestment as an important tool in tackling climate change. Last year the Church of England voted in favour of selling holdings in fossil fuel companies that have not aligned their businesses with the Paris climate accord by 2023. A growing number of global asset managers, sovereign wealth funds and pension funds are pledging to divest.
350.org, a climate change activist group, which has signed up more than 1,000 investors who are committed to divesting fossil fuel holdings, responded to Mr Gates saying that the idea is not to shut companies off from capital, but to remove their “social licence to operate”, making it easier for governments to act by reducing the political influence of fossil fuel businesses.
The quiet jobs revolution
Jobs markets are barometers of social change. In the last 30 years much of the growth in employment in the West has been driven by women and foreign-born workers. Employment rates for men have declined. In the US in the early 1950s around 90% of men of working age were in work or searching for a job; today, with America’s unemployment rate close to record lows, just over 70% of men are working. Explanations range from the loss of traditionally ‘male’ jobs to diminishing returns to unskilled labour, the competing appeal of computer gaming and the role of women, parents and the government in supporting male incomes.
What happened over the summer
The weather may have been good but the global economy has had a lacklustre summer. Activity has been disappointing and forecasts for GDP growth next year are drifting down.
The decline and rise of London
London is a major force in the UK economy, accounting for between a quarter and a third of UK output, depending on how the boundaries are drawn. And London is, by a multiple of over seven, the UK’s most populous city.
Global warnings
The global economy has been slowing for some time. The question is whether we are heading for a soft landing or something worse.
Holiday Quiz
Our summer quiz offers a test of your knowledge of holiday-related trivia through an economics lens. The answers along with a brief explanation are at the end of this note.
Where is the cheapest housing?
House prices in the developed and developing world have risen rapidly since the financial crisis.
Summer reading list
A personal view from Ian Stewart, Deloitte's Chief Economist in the UK. To subscribe and/or view previous editions just google 'Deloitte Monday Briefing'.
Britain’s minimum wage at 20
The introduction, just over 20 years ago, of the UK’s National Minimum Wage (NMW) counts as one of the most significant policy innovations of the period. As it enters its 21st year we assess whether Britain’s NMW has achieved its aims and examine its prospects.
Assessing the outlook for global growth
Economists went into 2019 forecasting a slowdown in global growth. That slowdown has come faster than expected. Alarmed by the speed of the downturn, the US Federal Reserve and European Central Bank have switched from tightening monetary policy to easing.
The combination of slower growth and easier policy has elicited very different responses from business and financial markets.
Corporate caution, financial market optimism
Today we are launching our quarterly “UK corporate environment” chart book, which is available here: https://blogs.deloitte.co.uk/mondaybriefing/
2019/07/uk-corporate-environment.html. The report aims to provide a graphical summary of the key trends and themes shaping the UK corporate sector, setting the context to the CFO survey. We will be developing and refining the chart book and welcome your feedback. Do feel free to use any of the charts in your own presentations and drop my colleague Tom Simmons a line at tsimmons@deloitte.co.uk with ideas and comments.