ALEX BRUMMER: Sunak shuns the world stage to focus on his first budget

ALEX BRUMMER: Sunak shuns the world stage at the G20 summit to focus on his first budget

Putting to one side Britain’s special defence relationship with Saudi Arabia it is curious for a government partly elected on the ‘global Britain’ slogan to eschew one of the first official opportunities to put down some markers on the international stage at this weekend’s G20 summit.

Chancellor Rishi Sunak has his head down preparing for the March 11 Budget and is not studying the Cheltenham Festival form book.

But as the former chief secretary, with a weather eye on the public finances, he is not coming to his new brief cold, irrespective of the sudden resignation of predecessor Sajid Javid.

Chancellor Rishi Sunak has his head down preparing for the March 11 Budget and is not studying the Cheltenham Festival form book

The G20 finance gathering in Riyadh would have been an ideal chance for Sunak to meet his global counterparts, including delegates from China and India. 

Indeed, the World Economic Forum reckons that India is on course to displace the UK as the world’s fifth largest economy.

There may be geopolitical reasons for missing out, given the assassination of Jamal Khashoggi. 

But as the IMF indicates in a blog ahead of the G20, this is one of those potentially signal moments of the kind which led former chancellor Gordon Brown to initiate the creation of the group.

IMF managing director Kristalina Georgieva notes that even after 49 central banks cut interest rates 71 times in 2019 ‘the global economy is far from solid ground’.

The global health emergency caused by the coronavirus is the most pressing. It may prove a short-term disruption to China and supply chains which will temporarily damage fragile growth. 

But a long-lasting catastrophe could lead to a persistent drop in investor confidence and slump.

Britain will not be excluded from Riyadh, as the Treasury is to send a senior mandarin to the G20. 

It seems extraordinary that at such a juncture, with the US-China trade war far from resolved, that the Chancellor won’t be at the top table.

Sunak has a great deal of budget work to complete and a visionary speech to write. There are decisions to be taken on issues such as cutting tax relief on pensions for people earning £50,000 a year or more.

A major point of contention will be a proposed loosening of fiscal rules beyond those outlined by Javid. 

The former chancellor’s reset pushed out the date of a balanced current budget to three years into the Parliament, and raised the ceiling on investment spend to 3 per cent of output.

Sunak will find himself caught between the Treasury’s desire to keep the lid on the public finances and louche spending ideas coming from No 10.

It will not be easy but he would be better armed with context after hearing what his cohorts have to say.

Quinn’s CV polish

HSBC has not covered itself in glory by asking its interim chief executive Noel Quinn to take the tough decisions about reshaping the bank but delaying a more permanent arrangement.

Faced with similar interregnums at Barclays, past chairmen Peter Middleton and John McFarlane took the executive reins themselves and made hard decisions. 

Mark Tucker and his board at HSBC may have done the headhunters a big favour.

Whatever the outcome of the City regulators’ probes into Jes Staley’s relationship with Jeffrey Epstein, he is likely to be seen as spoilt goods by stakeholders. 

This, in spite of a stellar record in repairing the investment bank. So Barclays will almost certainly seek a successor near-term.

Similarly, Antonio Horta-Osorio did a good job in making Lloyds safe again. But after almost a decade it would hardly be surprising if he were not looking to new pastures.

Quinn could be a shoo-in for either job.

Anglo pressure

There is a tendency to disparage hedge fund bosses as locusts. But more often than not their investment calls are right.

It is encouraging to see the ‘Becks’ of high finance Crispin Odey lining up with Sirius private investors to demand a higher price from Anglo American for the shares.

My contention is that the best way for Anglo American to silence critics is to give the diverse Sirius investors a chance to enjoy some of the uplift, when the fertiliser project comes to fruition, through a special share class or some other form of paper.

Anglo chief executive Mark Cutifani needs to do some levelling up for the people of North Yorkshire.


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