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BBC News reported Britain’s imminent accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership behind two stories about racism in cricket, giving no suggestion that it might represent a major economic breakthrough. Rather the opposite, with emphasis
on the cautious official prediction that CPTPP membership will add just 0.08 per cent to UK GDP over the next 15 years.
But as a former Asia-Pacific wanderer myself, I’m almost as excited as Lord Frost about the prospect of tariff-free trade with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. This canny grouping of 500 million consumers should offer huge opportunities for UK businesses – and no one seems to question its future growth path from 15 towards 20 per cent of global GDP, with half a dozen other industrious nations, including Taiwan, Thailand and South Korea, keen to join.
Meanwhile that other bloc of 500 million citizens with whom we used to be closely associated, the European Union, stands at a similar GDP level but is predicted to slip steadily backwards under the weight of bureaucracy, sloth and welfare bills. So Downing Street’s eastward swing of the telescope has prompted jubilation for Frost and others who obsess over the remote possibility that the UK might be conned by Rejoiners into reapplying for EU membership.
But the truth is that we’d like to do as much trade as possible with both half-billion markets – and prospects with our neighbour continent are not diminished in importance by our access to the more exciting, but distant and disparate, treaty group.
Chocolate to Mexico
What we should really worry about is whether we have competitive, state-of-the-art products and services to offer our trading partners old and new, as well as to the US, India and others who, whenever they look this way, think first and foremost in terms of how much they can export to us. And in that context, I draw your attention to Business and Trade Secretary Kemi Badenoch’s email announcement of the CPTPP deal to Conservative party members.
‘Devonshire cheese, London gin, Scottish whisky and much more will now be more freely traded,’ she declared, with the suggestion that we’ll soon be shipping dairy produce to Canada – which has its own $8 billion dairy industry – and chocolate to Mexico, which invented the stuff. There’s even a reference to better prospects for ‘car manufacturers in Northern Ireland’ – of which the last of any significance was the fraudulent DeLorean venture that failed 40 years ago. And to be frank that’s the first I’ve ever heard of Devonshire cheese, though I can now see it’s available from Quicke’s near Exeter.
Badenoch’s bulletin might actually be read as a coded message to UK manufacturers: we’ve opened a golden gateway to trans-Pacific customers for you, now for heaven’s sake come up with something smart and useful to sell to them.
Inflation isn’t over
The price of crude oil – which had fallen back towards 2019 levels – jumped sharply at the start of the week, after Saudi Arabia, Iraq and other producers announced production cuts of a million barrels a day, on top of other cuts already programmed. The pump price of unleaded petrol, down to 147p from 190p last summer, is bound to go up again. And UK grocery inflation hit a new high of 17.5 per cent last month, with milk, eggs and cheese showing the steepest rises following earlier shortages of salad items. According to the research firm Kantar, households face an £837 rise in the cost of their annual food bill if they don’t shop around for the cheapest offers.
All of which means we should certainly expect at least two more quarter-point rises in interest rates – and a slowing of indications that consumers (or some of them) are beginning to spend freely again in the belief that the end of the price spike is in sight. It isn’t, I’m afraid. Much also depends on the war-affected trajectory of natural gas prices; but the OBR’s forecast that inflation will fall to 2.9 per cent by the end of the year will, I predict, look wobbly by midsummer.
Will Simpson’s survive?
The battle continues to save Simpson’s Tavern, the 266-year-old chophouse off Cornhill that closed in October when the landlord changed the locks after a dispute over unpaid rent. In February, the restaurant declared, ‘We have fought the winding up and won’; another court hearing is due on 28 April. But in the meantime, where can City trenchermen lunch – and at what price?
I’m looking at Simpson’s Bill of Fare from 1976, the year I started work in the City: a sustaining Scotch broth, steak and kidney pie with bubble and squeak followed by ‘stewed cheese’, washed down with a pint of Bass, cost £1.83 – about an hour and a half’s work at my 1976 wage. What’s that in modern money? The Bank of England’s online inflation calculator may inspire no more confidence than its governor, but let’s accept its answer that the 2023 equivalent would be £11.42, which barely buys a snack from Pret.
In fact you’ll pay £50 for lunch today at the nearby George & Vulture, more at Boisdale of Bishopsgate – and much more at Lutyens Grill in the old Midland Bank HQ, where the Wagyu sirloin alone will set you back £98. But that’s still an hour and a half’s work (or thereabouts) at today’s City pay rates, even with 3,000 jobs about to be shed in the UBS-Credit Suisse merger.
So the moral of this story is that the financiers who have caused so much pain and trouble over all these years are themselves no better off for it, at least at lunchtime. Ah well, let’s hope Simpson’s survives to nourish another hearty-eating generation. Meanwhile, border queues permitting, I’m off to France in search of better value.