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The Financial Ironmonger Blog No 11/2019

The Financial Ironmonger Blog No 11/2019

Every week our guest blogger, David Oakes of Mosaic Money Management (aka The Financial Ironmonger), shares with us his take on some of the major UK and overseas macro and political events that shaped the previous week.

Please be reminded the value of investments, and the income from them, may fall or rise. The views expressed in this article are those of the author at the date of publication and not necessarily those of Chelverton Asset Management Limited or Mosaic Money Management. The contents of this article are not intended as investment or tax advice and will not be updated after publication unless otherwise stated.


Those engrossed by the Cheltenham Festival, and the final round of the six nations rugby contest will have had a fascinating week with more than enough to divert your attention from the antics of Westminster.

The Withdrawal Agreement was dragged back for a second attempt to get it passed on Tuesday, where it went down by 149 votes, having failed by 230 on the previous outing. It is debatable whether they can keep presenting the same deal on numerous occasions, but maybe it is academic, since the gulf is so huge. At the time of writing, another attempt might be made early next week, ahead of the European summit on Thursday.

It remains the law that the UK will leave the EU a week on Friday unless it asks for an extension to the timetable, and the EU grant it, which is by no means certain. There are suggestions that Tory rebels might fall in to line in exchange for the Prime Minister’s resignation, although it is not clear what that would achieve since the opposing views on Brexit are irreconcilable.

Incredibly, a government that has ceased to function, in any conventional sense, remains 10 points ahead of the opposition in the polls, support for the later having drained away to the new Independent Group, which is registering around 12%, despite not actually being a political party. In truth, whatever the pundits predict, the outcome of an election would be so totally uncertain that no one would dare call it.

In to this happy mess, the Chancellor gave his spring statement on Wednesday, and had to admit, through gritted teeth, that the UK economy was in pretty good health, despite the inevitable uncertainty caused by Brexit. More people are in work than ever before, and household spending is at record levels, even if they have given up on buying cars. Furthermore, if only the “deal” was passed, there would be a £26bn dividend that he could release in to the economy, forgetting to mention that £39bn would be saved by having no deal.

This was frontloaded by releasing the tariffs that were likely to be enacted, once we leave, which presumably would be reciprocal. Although, as an afterthought, these would not apply to goods between the north and south of Ireland, which might explain the very happy Irish contingent at Cheltenham this week. A smugglers’ charter, if ever there was one.

The Irish Taoiseach, Leo Varadkar, pushed his luck on the annual St. Patricks Day visit to the White House, telling the Donald that the EU had wonderful trade deals with both Japan and Canada, and he should do one, too. The response was that whilst he would love to do a really big deal with the UK, the Europeans had screwed America over, particularly the German car makers, and even if there were to be a deal with the EU, (which there won’t be), “we would win it, anyway”.

No mention of this exchange by  our unbiased national broadcaster, which preferred to feature his view that the Prime Minister had ignored his negotiating advice on Brexit, which was a “shame”, but he is in good company; everyone  else is in the same boat.

The UK equity market has concluded that any form of Brexit will be of the mildest kind, and has recovered some of its composure from the collapse last autumn; I suspect that it might be too relaxed on the risks since there are just 10 working days until we leave, by law, and good luck getting that changed in so short a space of time.

Finally, whilst some will wonder about my fascination with the collapse of the glorified coffee shop, Patisserie Valerie, it is in no small part in trying to understand how £450mn of market capitalisation simply disappeared from the radar. The latest report from the administrators, KPMG, reveals a black hole of £94mn, up from the previous estimate of £40mn. To some extent, this is accounted for by a false claim to have £54mn of cash, whilst assets were overstated by £23mn. Obviously, the value of assets is always subjective; cash is exactly that, and easily verifiable.

You might think that the auditors, Grant Thornton, would be in the crosshairs of creditors, but KPMG have declined to bring any action against them, “which would not be appropriate”, since they act as auditors to KPMG.

Which, neatly, sums up a week, the like of which I cannot remember.


David joined Manchester stockbroker Henry Cooke, Lumsden in 1977 and after becoming a member of the London Stock Exchange in 1984 held a number of senior positions within the firm including Managing Director of the in-house fund management company and member of the Executive Committee.

After senior appointments at Cazenove Fund Management and latterly Mercater Capital Management, David joined Mosaic Money Management in 2013. He has successfully managed private client and fund portfolios for over thirty years and has particular expertise in providing a multi manager service to his loyal client base.

The Financial Ironmonger is a hat-tip to Ironmonger Lane, the location of Chelverton’s London office.