The state of play
The business news that matters
Hello and welcome to the latest Off to Lunch…
This will be the last newsletter for two weeks because Off to Lunch is taking a summer holiday. The newsletter will return on Monday September 4. The next episode of Business Studies will be with you as usual next Tuesday and is all about Uber, so look out for that.
Given the summer break and the headlines in the newspapers today, it feels like an opportune moment to look at the state of play in the UK.
Here is an example of the headlines in the business pages this morning…
Yes, the UK gilt yield is back in the spotlight. As the story in The Times explains, the yield on ten-year gilts has risen to the highest level since 2011 and is above where it was after Liz Truss and Kwasi Kwarteng’s mini-Budget last September. You can read The Times story here
As a reminder, gilts are bonds issued by the government and the rising yield means that the UK will have to pay more interest on its debt. Yields have moved again this week due to continuing concerns about inflation, with data showing a sharp rise in wages and that core inflation is stuck at 6.9 per cent (more in Wednesday’s Off to Lunch here). This means economists think that the Bank of England will have to increase interest rates again at their next meeting in September to try to push inflation down further.
However, this is not just a UK issue. The yield on US government debt is at the highest level since 2008. The graph below shows the movement in yields globally…
And it is not just the UK debating its competitiveness in the modern world either. For example, check-out the front page of The Economist this week…
You can read The Economist’s piece on Germany here. The analysis looks at concerns about ageing transport infrastructure, red tape, the pressure on manufacturing industries and how to invest in renewable energy. Sound familiar?
The UK undoubtedly has its own challenges, including the need to boost investment and productivity outside London. For more on that check-out the analysis below from John Burn-Murdoch at the Financial Times or read Bloomberg’s analysis on the struggles of Grimsby in Lincolnshire to revive its fishing industry. More here
But despite these concerns, there is definitely a growing sense of optimism among the business leaders and investors I am speaking to at the moment - a sense that the outlook for the UK economy, inflation and growth is clearer than it was, that even if the future is unlikely to bring spectacular growth, inflation is easing and there are going to be some exciting opportunities.
It is going to be fascinating to see what September brings. Off to Lunch will be back on September 4.
Other stories that matter…
1. Labour has toned down proposals to strengthen workers’ rights if they win the next general election amid concerns that the party could be portrayed as anti-business by the Conservatives. For example, under a Labour government, businesses would still be able to dismiss an employee who fails their probation period after joining. Financial Times story here
2. The number of babies born in England and Wales in 2022 was the lowest in a year for two decades according to the Office for National Statistics. This is another example of the changing demographics in the UK and how the average age of the population is likely to creep up. Guardian story here and full data here
3. A fascinating piece from The New York Times on how weight-loss drugs like Ozempic were developed. Like so many innovations, it involved an accidental discovery and a pivot away from an existing strategy. However, it is remarkable how little is still known about these drugs and whether there could be long-term side effects. Piece here
4. Construction of the HS2 station in Birmingham will begin early next year, it has been confirmed. The station is one of the most dramatic parts of the project and trains will be carried into the city centre by a 300-metre-long viaduct. Story here
5. Ahead of the Women’s World Cup final on Sunday, there are a couple of interesting profiles about England manager Sarina Wiegman and her leadership style. The Times looks at Wiegman’s attention to detail, with a former assistant describing her as a “control freak”. Piece here. Meanwhile, The Wall Street Journal looks at how Wiegman spent time at the University of North Carolina and worked with the coach of its women’s football team, Anson Dorrance, like many other successful players and coaches in the sport. Piece here
Podcast…
A reminder that the latest episode of Business Studies looks at the private equity industry and features an interview with Garry Wilson, the co-founder and managing partner of Endless. Wilson speaks about how he built one of the UK’s largest private equity firms and why his journey from Belfast to Leeds does not fit the stereotype that many have for this industry. You can listen on Substack here, Apple here and Spotify here
The next episode of Business Studies will be with you on Tuesday
And finally…
I was lucky enough to eat at the best restaurant in the world this week. Yes, I visited the Old Stamp House in Ambleside, Cumbria, which is the best fine-dining restaurant in the world according to Tripadvisor (where it has five stars out of five from more than 1,500 customer restaurants).
It did not disappoint. From the outside the restaurant looks unassuming and is based underneath an old Greggs. But the food is fantastic and the ambience inside the restaurant is cosy and relaxed. You get a three-page letter from chef patron Ryan Blackburn when you arrive which explains all the food and how it is sourced locally, including why he now serves trout instead of salmon due to concerns about the decline in wild salmon stocks. To give you a sense of how good the food is, my mum, who is not prone to hyperbole and considers “it was ok” to be praise, described the food at the Old Stamp House as the best meal she has ever had.
You can find more about the restaurant here and watch chef Tom Kerridge visit the Old Stamp House in his new BBC documentary series here. Ryan Blackburn has now acquired the old Greggs upstairs and is turning it into a tapas restaurant.
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Best
Graham