Unspontaneous protest

Press freedom in Sri Lanka, mace-wielding John McDonnell, the return of Wegg-Prosser - and much more

A Heath Row

I travel everywhere by organic dow, but don't necessarily expect others to live up to my absurdly high ethical standards, least not the masses of under-sunned Brits for whom the proposed new runway at Heathrow Airport will provide yet more exciting opportunities to flay themselves on Mediterranean beaches.

Not everyone is delighted by this prospect though, and among the political classes a surprisingly broad consensus has emerged against the plan. Green Queen Caroline Lucas compared plans for peaceful protests against the development to those of the suffragettes (er, didn't they throw an axe at the prime minister?), explaining that a new runway: "..would lead to spiralling carbon dioxide emissions, unacceptable noise pollution for millions living in London and the South East and worsening air quality." Other groups joining the 'Climate Rush' include the pleasant Christians at Ekklesia, whose co-director Simon Barrow recently wrote for newstatesman.com's Faith Column about the need to use our wealth for the common good – which presumably doesn't include holidays in Malta.

Rumbold on Pickled Politics felt that supporters of the runway had failed to articulate a plausible case, positing that more efficient airport management could solve many of Heathrow's current troubles. He argued that improved rail networks could help cut the number of flights in and out – obviating the need for the new runway and cutting carbon emissions.

Speculating over the fallout from the pending decision, Iain Dale predicted trouble ahead for Hilary "not a Bennite" Benn. He wrote:

"It's difficult to see how Climate Change Minister Ed Miliband could defend it, but he won't go. The one Minister I can see resigning is Hilary Benn, who has already made his position very clear.

As if that wasn't exciting enough, top celebs like Emma Thompson and TV's Alistair McGowan joined megabucks Tory candidate Zac Goldsmith (the only PPC I've ever seen with an art nouveau font on his website) in buying up tracts of earmarked land to thwart the developers. Will it work? Probably not, but worth a shot.

Thursday saw the project given government approval, provoking the ire of, amongst others, left-winger John McDonnell MP, who reached for the mace in what Iain Dale described as an “unspontaneous protest”…

What have we learned this week?

Terrific news: one of this blog's favourites, Ben Wegg-Prosser has been given a new platform! Labour List, the new enterprise of Derek Draper (unkindly monikered "Dolly" by bloggers of the right) promises posts from Benjamin, though the Moscow-based former Number 10 weblord has yet to contribute. The inevitable tussle between Labour List and the longer-established Labour Home to become the primary online base for activists is "absolutely on" sources behind the project whisper – so it may be worth keeping an eye on.

Around the World

Concerns over the state of press freedom in Sri Lanka peaked this week, with the murder of Lasantha Wickramatunga, a highly respected journalist who had consistently campaigned to expose corruption and human rights abuses. Chit Chat ran images from the scene, while London-based Rine mourned both his death and the state of government on the island, angrily asking:

"Who do we have at this moment who will fight against the injustice that is a corrupt government terrorising its own people under the veil
of a war?"

Lakimba was less gracious. Acknowledging that: "It is indeed sad news when a human being has been killed prior to their time," he added the caveat, "...even when a person with a twisted mind and a strong anti-Sri Lankan agenda like Mr. Lasantha Wickramatunga".

Videos of the Week

Following President Bush's melancholy and almost ruminative final press conference, numerous YouTubers decided to stitch together retrospectives. This is a rather beautiful look back on his eight baffling years in office.

Back in Britain, the Tories have launched a series of new ads highlighting the scale of the national debt, including this one, in which an adorable infant is born into a life of burdened misery thanks to the prime minister.

Quote of the Week

"Has some charmer organised a denial of service attack on LabourList just as it was being featured live on Channel 4 News? Bit of a coincidence that it should "go down" at the precise moment if there was no mischief afoot. Very strange."

A somewhat paranoid Chris Paul fears online sabotage.

Paul Evans is a freelance journalist, and formerly worked for an MP. He lives in London, but maintains his Somerset roots by drinking cider.
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Promoted by Janus Henderson

Europe: as the politics subside

How long can a resurgence of investor interest in Europe last?

Might Europe be the place to be?

I think European equities tick a lot of the right boxes right now. Economies are recovering – indeed the first quarter of 2017 saw Europe once more grow faster than the US, having outpaced the world’s largest economy in 2016. Valuations are not excessive, either relative to the region’s history or the US equity market. Like almost anything, I believe European equities also look compelling relative to bonds. The final part of the jigsaw puzzle might have been earnings growth, but here too Europe is, at last, getting close to achieving a gold star.

Most of this has been known for quite a few months now and is part of the explanation for the better performance of Europe year to date. Even the euro has strengthened against the US dollar, from about $1.05 at the start of 2017 to $1.12 at the time of writing. Politics looks more settled, after the surprises of the Brexit vote last year in the UK and the election of Donald Trump in the US Presidential election. Perhaps a comment I made at the beginning of 2017, that “by the end of 2017 the UK and the US might look to have been the exceptions” when it comes to successful populist votes, seems more prescient.

Now that the political backdrop is perhaps more settled, with the UK’s potentially tragic Brexit decision an exception, how long can a resurgence of interest in Europe last? One threat is the gradual move towards ‘tapering’ by the European Central Bank (ECB) of its unprecedented quantitative easing program, and the support this provides economies by injecting cash to drive down the cost of borrowing and increase consumer and business spending. But it is already clear that this will be a very slow process. The economic recovery in Europe remains quite slow and inflation, outside the UK, is well below the ECB’s target of ‘below or close to’ 2%. At the same time, the damaging effect of negative interest rates needs to be avoided.

 

What could derail this market?

The one exception to what looks to be a relatively rosy scenario, in my view, remains the UK. The Brexit ball is rolling onwards, following the invocation of the now infamous Article 50, but the calling of a General Election was another distraction. The UK is still no closer to knowing what sort of Brexit is desirable, or more likely, economically feasible. Once the reality of debt, demographics and a weak currency become clear, I suspect that the UK market will continue to struggle against other European peers.

Elsewhere in Europe, economies look well set, and I suspect that more capital spending and investment are likely to be incentivised with tax cuts in Europe, again outside the UK. In this scenario, those capital investment-related names such as Siemens, Legrand and Atlas Copco should continue to do well. Luxury names, and auto makers, many of which have rallied hard so far in 2017, are likely to struggle due to subdued consumer demand. Financials have also seen mixed performance so far, with insurance underperforming banks. This seems an anomaly given the paramount importance of long-term savings to cater for retirement.

It would be entirely healthy for European markets to drift through what will hopefully be a quiet summer, without shocks such as Brexit to contend with. I think all seems well set though for European markets to trade higher than current levels by the end of 2017.

Before investing in an investment trust referred to in this document, you should satisfy yourself as to its suitability and the risks involved, you may wish to consult a financial adviser. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested. Nothing in this document is intended to or should be construed as advice. This document is not a recommendation to sell or purchase any investment. It does not form part of any contract for the sale or purchase of any investment. Issued in the UK by Henderson Investment Funds Limited (reg. no. 2678531), incorporated and registered in England and Wales with registered office at 201 Bishopsgate, London EC2M 3AE, is authorised and regulated by the Financial Conduct Authority to provide investment products and services.

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