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Dullness Dividend Falls Due

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Dullness dividend falls due

When the chief executive of a large company resigns, he secretly hopes the shares will sink.

Look at how much the City loves me, he says to himself — they think this business is doomed without me!

Journalists openly hope the shares jump, so we get to write that the City was positively relieved that the failing CEO is out the door.

When Liz Truss resigned this afternoon, the FTSE 100 didn’t move much, but then it is dominated by companies who make large amounts of money away from the UK.

But the pound rose and UK borrowing costs fell, as the PM took what we’ll politely call the honourable way out.

One of the (I think) unfair advantages the Conservative Party has over Labour is the free pass it gets from the City.

The leaders of financial institutions are either openly Tory, or else trending that way.

There are no socialist bank chief executives.

The wider markets reflect that bias. So even if the Conservative Party is doing something flat out nuts, it gets leeway.

The City might hate its spending plans from time to time, but it still lends money out on the cheap, since it intrinsically trusts the Party.

Sometimes this is a result for the nation – it gets stuff cheaper than it should because the money men think the Tories will be on the straight and narrow before long, even if they are wobbly from time to time.

Under Truss things were so bad that the free pass had been withdrawn.

For the sake of my pension and your mortgage, the hope must now be that things calm down. That the Tory Party remembers it is supposed to be boring, rather than an arm of the entertainment industry.

Simon French at Panmure Gordon calls this the “dullness dividend”.

We are owed it.

Press release of the day

More than a fifth of the over 55s are postponing retirement plans due to the cost-of-living issue, says this from Totaljobs.

Despite this, skill gaps and labour shortages remain.

A third of employers admit they offer nothing specific to retain talent over the age of 50.

Stories that will keep rolling

1) How has the LSE gained/lost from bond market chaos?

2) Are the latest retail sales indicative of looming recession?

3) Are UK shares cheap?

4) Is Deliveroo suffering because people are cutting back on takeaways, or gaining because they have stopped going to restaurants?


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