TODAY’S FAYRE – CARNEY & TESCO

TODAY’S FAYRE – Wednesday 25th June 2014

“The brawling of a sparrow in the eaves,
The brilliant moon and all the milky sky,
And all that famous harmony of leaves,
Had blotted out man’s image and his cry.
A girl arose that had red mournful lips
And seemed the greatness of the world in tears,
Doomed like Odysseus and the labouring ships
And proud as Priam murdered with his peers;
Arose, and on the instant clamorous eaves,
A climbing moon upon an empty sky,
And all that lamentation of the leaves,
Could but compose man’s image and his cry.”

William Butler Yeats – poet – 1865-1939

Luis Suarez may be the greatest striker to hit these shores for many a year. But these biting antics – for the third time – are just unacceptable by any standards. Though one would have to have some passing sympathy for Liverpool supporters, he should be banned from playing in the Premiership for at least two years. What kind of a role model is he for our children?

It was good to see a bit of backbone from England’s ‘tail enders’ in support of Moeen Ali’s brilliant maiden hundred at Headingley, where England lost the series to Sri Lanka for the very first time on these shores off the second last ball. Don’t blame Jimmy Anderson. He did well to survive 81 balls in a brave quest to avoid defeat.

Post the Coulson scandal, PM Cameron may rue the day he called for the Leveson Enquiry. I think it was a huge mistake. I think our press is fantastic! – The best in the world! If people transgress such as hacking phones, which is illegal, let them go to prison without delay! That should be enough without all the shenanigans that regulation will now subject this fine profession to!

I am on holiday today, but now that life will be bitten by Wimbledon and continued reluctant support for the World Cup – interesting to note that England’s early exit may cost the economy as much £1.3 billion in all periphery aspects including sub-standard productivity from depressed fans – I just wanted to make two short comments on Mark Carney and Tesco.

I think Governor Carney has been unfairly attacked for prevarication and varying his interpretations on forward guidance. Forward guidance is not an exact science. Forward guidance says what it means and is entitled to be altered in concert with the strength or weakness of the UK’s economy. Perhaps the 7% unemployment threshold was an indifferent yardstick. No-one knew that the UK economy would improve to the degree it has. Is it temporary? It could be when one thinks that, apart from Germany, the EU is economically hanging in rags – very close to recession and the US will do well to beat 2.2% GDP for 2014, with China’s economy nothing like as robust as we had hoped for. Mr Carney also pointed out that there was plenty of slack in the Labour market, with wages remaining stagnant.

Also with a property bubble still a threat the BOE has to balance probability with keeping the glow of recovery still smouldering. Put interest rates up too quickly, will put the kibosh on confidence and retail. Retail is the essential ingredient for growth. Mr Carney’s MPC will be reluctant to throw the baby out with the bath water. Therefore Governor Carney should be allowed to adjust his forward guidance as often as he sees fit.

There is little doubt that Tesco is in in a pickle and that Phil Clarke’s leadership is under the cosh, with yet another departure in the form of Neela Mukherjee, head of UK merchandise, to be replaced by Robin Terrell. Her departure follows in the wake of Messrs Higginson, Brasher, McIlwee, Mason and Platt – all heavyweights. Clarke has his work cut out. However I was disappointed to hear that Lord McLaurin, the chairman of Tesco blamed Sir Terry Leahy for Tesco’s problems. After all Mi’Lord you were in situ! What did you do about it?

Companies reporting today and the rest of the week – Wednesday – NORTHGATE, STAGECOACH, Thursday – DIXONS RETAIL, CARPHONE WAREHOUSE, DS SMITH, Friday – HORNBY & SERCO.

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
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