Friday round-up
The business news that matters
Hello everyone and welcome to the latest edition of Off to Lunch…
It’s Friday, Black Friday to be precise, one of the biggest shopping days of the year, and the end of a long week. So let’s keep this newsletter short and sweet today.
There has obviously been a lot of news and analysis about the Autumn Statement this week, but below is an amusing reminder from Paul Johnson of the Institute for Fiscal Studies that much of the discussion is based on forecasts about the outlook for the UK economy that may not actually happen...
However, there are two things that are worth flagging about the UK economy today. Firstly, the latest consumer confidence index by GFK shows an uptick in the mood of consumers, just in time for Christmas. The index rose by six points to -24 for November, recovering some of the ground it lost last month, as you can see below…
The GFK survey is closely watched by economists and is considered the leading barometer of consumer confidence. The survey is conducted among 2,000 people across the UK who are representative of the broader population. They responded to the survey between November 1 and November 14.
Joe Staton, client strategy director at GFK, said:
“Consumer confidence strengthened in November with improvements across all measures. Recent ups and downs in confidence have underlined the nation’s topsy-turvy economic mood as encouraging news about falling inflation and wage growth is offset by high personal taxation, alongside costly fuel and energy bills. Although the Overall Index Score is still tracking firmly in negative territory, it is good to see that consumers are more optimistic about their personal financial situation.”
The other news I wanted to flag is an interview that Huw Pill, the chief economist of the Bank of England, has given to the Financial Times. Pill has warned that the fight against high inflation is not over and that the pressure on prices is “stubbornly high”. He added:
“There’s slower growth in activity and employment as we’ve discussed. But because I think that is more supply-driven rather than demand-driven, the weakening of activity is not as associated with easing of inflationary pressures”
You can read that piece in full here
Other stories that matter…
1. I think everyone has heard plenty about OpenAI this week, but I wanted to end the week by pointing out three excellent and free-to-read pieces that are worth checking-out for a neat summary of the boardroom drama. Firstly, AI expert Gary Marcus has looked at what OpenAI’s supposed new technological breakthrough might be. It looks increasingly like this breakthrough - codenamed Q* - played a role in Sam Altman’s ousting. You can read more here. Secondly, I recommend reading the excellent day-by-day guide to the boardroom drama at OpenAI by the well-informed The Pragmatic Engineer. You can read that tech newsletter here. Lastly, even Vanity Fair got in the act this week. It published a piece about why the whole saga reflects badly on Silicon Valley and especially the “cult of personality” around CEOs. “The Valley’s obsession with cults of personality wrongly suggests these CEOs possess superhuman brilliance, when in reality they are simply fallible humans running influential businesses,” the piece says. “Most importantly, this constant praise imbues the founders and CEOs with an air of unassailable authority with the media, the government, and the boards that are supposed to (but rarely ever do) evaluate and oversee them to ensure they’re doing the right thing.” You can read that piece here
2. Jeff Zucker, the former CNN boss, has accused rival bidders for The Daily Telegraph of “slinging mud” and offered to make guarantees to the government about protecting the newspaper’s independence. Zucker is leading a bid through his RedBird IMI investment fund, which is backed by Abu Dhabi. The bid is facing a government investigation into whether the deal could hand Abu Dhabi political influence. Zucker made the comments in an interview with the Financial Times. You can read more here
3. Sam Bankman-Fried is offering cryptocurrency tips to jail guards and traded pouches of mackerel to a fellow inmate to get them to cut his hair. Bankman-Fried was convicted of fraud earlier this month after the collapse of his cryptocurrency exchange FTX. The Wall Street Journal has more on his life behind bars here
4. Warren Buffett deeply admired the woman who ran a local furniture store in Nebraska, Rose Blumkin. He ended up buying Nebraska Furniture Mart for $55 million (£44 million). “One question I always ask myself in appraising a business is how I would like, assuming I had ample capital and skilled personnel, to compete with it,” Buffett wrote in 1983. “I’d rather wrestle grizzlies than compete with Mrs. B and her progeny. They buy brilliantly, they operate at expense ratios competitors don’t even dream about, and they then pass on to their customers much of the savings. It’s the ideal business - one built upon exceptional value to the customer that in turn translates into exceptional economics for its owners.” You can find out more about Buffett’s admiration for Rose Blumkin in The Alchemy of Money newsletter here
5. There are two excellent bits of analysis out today about the issues that flexible working is causing for the productivity of businesses. Tim Harford writes in the Financial Times about the challenges of everyone not being in the same place at the same time. “Now everything is out of step: you can do what you want, but good luck finding someone who happens to be free at the same time to do it with you,” he writes in a column here. Meanwhile, Harry Wallop writes in The Times that an increase in working from home means people are walking less - and that is bad for health and bad for creativity. You can read that piece here
Podcast…
A reminder that our new podcast episode is out. It tells the story of the Crown Estate, a truly unique organisation, and how its chief executive Dan Labbad went from Sydney to trying to create “lasting and shared prosperity for the UK".
In the episode we look at the Crown Estate's remarkable £16 billion collection of assets, how Dan Labbad's approach to management has been shaped by the discrimination his Egyptian father suffered in Australia, and why nudging the world in the right direction rather than trying to change it could be the best approach to management.
You can listen via Substack here, Spotify here and Apple Podcasts here
And finally…
For reasons I don’t fully understand I decided to read Rob Delaney’s book A Heart That Works. The book was released last year and is about the death of his son, Henry. I was broadly aware of what the book covered and had read articles that Delaney had written about it. Frankly, they were heartbreaking enough. But so many people had continued to recommend the book - including many Off to Lunch subscribers - that I finally decided to read it. My verdict - everyone should read this book, whether they are a parent or not. It is a remarkable account of love and grief. The book is only 170 pages long and I got through it in a weekend. You can find more about the book here
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Best
Graham