As I See It: Terry Murden
Our old friend Optimism paid us a visit at the end of last week and has been welcomed with open arms after months of being forced to endure that miserable blighter Pessimism.
With Boris Johnson lifted by unexpectedly positive responses from the Brexit negotiators and Donald Trump ready to sign a first phase trade deal with China, the mood music has suddenly begun to sound much sweeter.
Investors, economists and the public at large at last have a reason to iron a few more shirts ahead of the new working week, although there is one corner of the world where Optimism may not get such a big hug. SNP members gathering in Aberdeen for their annual festival of separation must be wondering how they are supposed to greet growing indications that Boris might actually pull it off.
The SNP leadership has repeatedly warned of the dangers to the economy of a Boris-led hard Brexit, while knowing that such an outcome would deliver the party a huge boost at the polls. The opening paragraph of a press release issued by the party today on the back of a new opinion poll from Survation states: “An overwhelming majority of voters in Scotland say they are more likely to vote for independence if the UK crashes out of the EU without a deal.”
So there you have it: an admission by the SNP that No Deal is in its own best interests. Indeed, while the doom-mongering Westminster leader Ian Blackford keeps warning about the dire impact of No Deal his party is rejoicing at the prospect.
Suppose, therefore, that Boris gets his deal, defying those who keep telling us he doesn’t want one, how will the SNP, as well as all other Opposition parties, respond? After campaigning to stop a No Deal, they are surely duty bound to support a deal that is offered to them. Or will they continue to play hard ball and argue that whatever deal is reached it won’t be good enough?
The prime minister will tell the German chancellor, Angela Merkel, France’s president, Emmanuel Macron, and the European Commission president, Jean-Claude Juncker, that they should get an agreement wrapped up this week, ahead of the European Summit.
The change in mood is already putting a spring in the step of investors and economists weighed down by months of impasse in Brussels and Washington. Sterling and UK-exposed stocks were sharply higher at the tail end of last week on hopes of a break through in both negotiations on both sides of the Atlantic.
The domestic-focused FTSE 250 index advanced more than 3% while the banks rose more than 11% and housebuilders saw gains of more than 10%.
Sterling enjoyed its best two days since 2017 and hit a three month high against the US dollar, up more than 1.7% .
The Dow Jones, S&P 500 and Nasdaq all rose by more than 1% in Friday’s session.
Data firm MSCI says stocks in London would rise 10% and the pound would claw back 8% against the dollar if a Brexit deal is reached.
At home, Tim Allan, president of the Scottish Chambers of Commerce, says a “wall of cash” is ready to be invested in the economy if a deal is agreed.
One thing is guaranteed. None of this will be mentioned by the SNP leadership this weekend. In his speech to conference, Mr Blackford makes no mention of a possible deal, instead repeating the same old mantra of not giving in to the “chaos and crisis” at Westminster.
The message will be repeated by successive speakers, delivered to a membership desperate to believe that going it alone is the answer. Not one speaker will be prepared to re-write their dread-filled speeches and welcome the prospect of any breakthrough in the Brexit talks, an uplift in the economy and the markets, and the chances of the year ending on a note of optimism.