Willie Walsh kicked off at the government’s rescue of FlyBe. The IAG CEO, who is due to retire at the end of June, filed a complaint with the EU Commission that the government’s move to defer payment of the taxes Flybe owe it constitute state aid and therefore unfair competition. Mr Walsh points out that the owners of FlyBe include Virgin and Delta airlines, the latter being one of the most profitable in the world. Unsurprisingly it’s not just airlines that are kicking off; train operators are saying it’s unfair and plenty of climate aware observers are saying that it’s crazy to be making allowances for such an environmentally damaging form of transport! Good luck to the government talking their way out of this one… City AM for some more detail.

Two pieces on Brexit: Ursula von der Leyen has said it’s only the UK that can ask for an extension to the transition period, but that Brussels is well placed to move quickly on the talks.

Angela Merkel gave an exclusive interview to the FT saying that Brexit should serve as a wake up call to the EU. The German Chancellor also makes a point that she feels Germany is too small to hold political weight in the world and needs the EU as a collective bargainer and agent of change – interesting perspective, as they’re about 25% larger than us from an output perspective! Picking up on a theme we wrote about earlier in the week, she also believes that Germany should have more manufacturing capability in areas such as microchips and battery cells. This is really a worthwhile read and a welcome insight to Europe’s longest serving leader.

The Swiss have said they’ve got room to loosen monetary policy if needed… Joining the easy money train that pretty much every major central bank has said they’re keen to jump back on, the SNB has said there’s room to leverage the balance sheet if needed. Bloomberg has a bit more.



The award for ‘curve ball of the day’ went to Vladimir Putin yesterday after Russia’s government resigned to help facilitate sweeping changes that Mr Putin wants to make to the Russian constitution. Him wanting to hold onto power comes as no surprise, but him doing this so early in his term, which isn’t due to expire until 2024 does – not only to us, but to his cabinet too, if reports are to be believed! The BBC has a rundown of what was said and what this might mean – but it’s pretty safe to say he’s doing this for his own benefit.

Across the Pond, Steven Mnuchin thinks the China deal and the revised USMCA (US-Mexico-Canada) deal are going to add 50-75 basis points to GDP. Whether that’s enough  to offset the costs of what the trade war cost in the first place is highly questionable. This article from CNN highlighting the costs of the trade war to various facets of the US is enlightening.

On trade relationships; there’s an article in the Washington Post that reports Trump threatening Europe if they didn’t call out Tehran for breaching the nuclear accord. Trump apparently threatened 25% tariffs on autos unless Europe accused Iran of not meeting its obligations under the deal. Still, it wouldn’t be the first time Trump has leveraged the threat of financial penalties to his advantage…

..and that’s exactly why his impeachment trial is going to be heard in the Senate! House Democrats have judged the timing to be right to send the trial to the Republican controlled Senate for alleged abuse of power in threatening to withhold state aid to Ukraine unless they investigated Democratic presidential rival Joe Biden. The fact that it’s a Republican controlled trial means it’s not likely he’ll be removed, but you live in hope!

Looking to today: We’re back on the economic data wagon with US retail sales, jobs data and Christine Lagarde speaking this evening. The UK gets off lightly, with no major data sets, but yesterday’s UK inflation data coming out softer than expected has increased odds of a rate cut from the BoE this month to 62%.

Have a great day


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