Sterling strengthened again this week. Ruchi Dhir followed it regularly to gauge the risks of the impact on purchasing from abroad and effects on the USD.
In a week where it was reported that consumers have started stockpiling already as a ‘no deal’ with the EU is widely discussed, questions on the advantage of stockpiling goods for sale are being floated in many wholesale and distribution industries.
Reports abounded this week of high street food retailers such as Marks and Spencer and Tesco stockpiling food, especially packet and tinned foods ahead of March. These fears have been fuelled by talk of a ‘no deal’Brexit.
What seems absurd though, is the Metropolitan Police’s suggestion that stores may want to think about ‘beefing up’ security during this period to cope with panic buying fears.
There seems to be no pressure in the reports to come to a deal, rather it seems to be accepted that food goods are being stockpiled and it may become normal that security is increased. There has also been mention of crowd control in supermarkets.
The pressure would come from disruption at the ports for imports, or if there were further checks at the ports or in the EU, which would delay deliveries.
This kind of news seems to feed into the drama and panic around the Brexit talks and impending ‘leave’ deadline. As an avid traveller, which you can find out on her travel blog, Ruchi Dhir is concerned by this!
The Financial Times reported on a ‘hamster list’ which has been circulated, as the FT states ‘without irony’ on social media in the UK. The ‘hamster list’ was dubbed as such as it was originally a civil defence plan updated by the German government in 2016. It listed those supplies of food, fuel and medicines needed to survive a 2-week emergency. When it was initially released, people made fun of it and posted pictures of hamsters with bulging cheeks on social media.
However, it has now taken on a more serious tone. There are genuine fears abounding on social media – the way that both positive and negative messages seem to be spread most easily – that a no deal Brexit could lead to empty Supermarket shelves and delayed deliveries or no deliveries at all.
The Financial Times article also refers to Jack Monroe’s new book ‘Tin Can Cook ‘ which is a cookbook full of recipes using only store cupboard ingredients.
They also sensibly touch on the fact that panic buying and stockpiling is also a self-fulfilling prophecy whereby the more that is panic bought, will itself create shortages. They also advise the government does not believe that any panic is necessary. The problem currently is the strength and momentum of these kinds of articles, groups –a facebook group called 48% preppers and tips being traded on Mumsnet by parents on freezing grapes and avocados, which people more readily engage in. Parliament seems to be in some kind of impasse at the moment and messages are foggy in terms of any kind of direction that we, as a country are moving in. Invariably, therefore, worry, panic and fear take hold of people in this vacuum.
On Tuesday 15th January, Theresa May’s Brexit deal will go to a commons vote. Politicians such as former Labour deputy leader, Roy Hattersley has said that Britons have a right to have their say on this deal and that he supports another Brexit referendum strongly. His reasoning is simply that the British public “voted by a small majority to leave the union, but had no idea what leaving the union meant “
He went on to say “We now know how bad it will be. We now know that it will be much worse than remaining in and that the British people have a right to express a view on whether they want to remain in or they want to leave. ”
He clarified that ” no deal would be the worst possible scenario and needs to be avoided. ” He had previously said that leaving the EU would be a disaster.
He also added that he didn’t think a general election would happen.
However, on the vote on Tuesday, it is expected that MPS will reject the deal and those MPS will also include Tory rebels.
A Peoples vote event ahead of Tuesday has been organised in Sheffield featuring Dame Margaret Beckett and Sir Vince Cable speaking. Ms Soubry will also attend the rally.
The anti-austerity march in London over the weekend of the 12th and 13th shows many people showing solidarity with the ” yellow vests” in Paris. There have been weeks of anti-austerity demonstrations by those wearing those vests in Paris.
And yet all of the above seems to have had a positive effect on the strength of sterling against the US dollar suggesting that the current mood and conversations may be pushing towards some clarity or at least some real consideration of the vulnerable should a no deal Brexit or indeed a Brexit become a reality.
Labours John McDonnell has said that 8 years of austerity in the UK has torn apart the very social fabric of the country.
There seems to be a greater demand for detail and the palpable reality of what a no deal Brexit will look like.
Transport Chris Grayling has waded into the debate on a closer assessment of the Brexit deal to say that “leaving the EU would cause the 17 million people who voted for Brexit to feel “cheated”, and that blocking it could lead to a surge in Far-Right extremism” but these comments have been dismissed by Lord Hattersley, Anna Soubry , and David Lammy, a former Labour minister has referred to Graylings comments as ” desperate” and an attempt to ‘hold our democracy to ransom’ by using a tiny far-right minority.
Jeremy Hunt, warned of Brexit ‘paralysis’ if May’s deal is rejected on Tuesday. The two commons defeat in the past week, which somehow has strengthened sterling, showed that parliament was determined to stop a ‘no deal ‘Brexit.
Hunt was concerned that if this continued, it would risk a no- Brexit which would break trust with the UK public. This echoed Graylings comments though it was more mildly put. Dominic Grieve has added that through May had done her best to negotiate a deal following the Brexit vote, she would never satisfy everyone and, if there was a third defeat on Tuesday, Grieve suggested there was no alternative than to go back to the British public for a second vote.
The Labour leader, Jeremy Corbyn still maintains that a general election is more of a priority than a second EU referendum.
As well as losing the trust of the British public, Jeremy Hunt has argued that, if Brexit paralysis leads to no Brexit, the UK would also lose face internationally, having maintained consistently they want to leave the EU, then following all the discussions and negotiations, found they were not able to. The two defeats this week and the ongoing commentary ahead of Tuesday suggest that Parliament is certainly not going to do nothing. The time to act seems to have come and an atmosphere whereby it seems likely that a democratic decision will be thrashed out, all of this proactive behaviour seems to have reflected well on sterling performance.
Ruchi also hopes that this does not affect her travelling to amazing interior design conventions and more, across the world. You can find out more about all this on Ruchi Dhir’s other blog.