Thursday 21 November 2019

The Punt: May day alerts for George Osborne

Chancellor of the Exchequer George Osborne outside 11 Downing Street, London, before heading to the House of Commons to deliver his annual Budget statement
Chancellor of the Exchequer George Osborne outside 11 Downing Street, London, before heading to the House of Commons to deliver his annual Budget statement

The timing couldn't be worse for George Osborne.

With just weeks to go until the British general election, the UK Chancellor of the Exchequer is facing a raft of dim economic news that could spark a few unwelcome headlines as he and Prime Minister David Cameron try to convince the voting public that the Conservative-led government has transformed Britain's economy.

Sterling hit a five-year low against the dollar yesterday as economic data suggested the UK economy will register a slowdown in the first three months of the year.

On top of that, the Office for National Statistics revealed that both industrial production and construction had slowed in February.

Another whammy was that industrial output barely grew at all, hit by a major fall in oil and gas production.

Construction output also shrank, according to official data that was weaker than forecast by analysts.

The numbers mean overall economic growth in the first three months of 2015 is likely to show a slowdown when figures are published nine days before the May 7 election.

That will potentially make it harder for Cameron to persuade voters to trust his party to run the economy.

What a bummer for David and George.

That Helsinking feeling ...

Finland faces a "Rehn of Terror," with polls showing the Center Party in lead position to form a government after elections on April 19.

With former European Commissioner Olli Rehn as a candidate it's fairly clear where the Center Party sits on the vexed question of spending cuts.

Rehn was the evangelist of austerity in Brussels, pushing for bruising cuts in Ireland, Portugal and Greece as a condition for bailout loans.

Now Finland's economy is floundering, in part due to the decline of Nokia, and Rehn hasn't softened his cough.

In an interview with Bloomberg, Rehn suggested Ireland's half decade of cuts as a model for his home country, a turn up for those of us used to looking at the Nordic states as models for everything from education policy to gender balance.

"Finland shouldn't follow countries like France and Italy, which raised taxes and asphyxiated growth.

"Countries, which adjusted their budgets by cutting spending, such as Ireland or Spain, managed to return to the path of growth, also with the help of structural reforms," he said.

Could Moocall be a cash cow?

Michael Smurfit has been busy of late.

The Irish Independent reported recently how his Isle of Man based investment vehicle, Bacchantes, had stuffed €300,000 into Dublin firm Inflection Biosciences. It was the first time he had invested in the business, which is developing possible cancer treatments.

Now the Punt sees that Smurfit has put more money into another Irish company, Moocall.

The paper baron first invested in Moocall last year as part of a €750,000 funding round, which was also backed by the 'Irish Farmers' Journal' investment trust.

Moocall, developed by farmer Niall Austin, uses a sensor system that lets farmers know by text message when a cow is about to calve.

New filings with the Companies Office show that Moocall received just under €40,000 from Bacchantes back in January. It had invested €150,000 in the firm last year.

Moocall chief executive Niall Savage said recently that with 2,000 units now in use in Ireland and some in the UK, the company is now setting its sights on markets including Australia, New Zealand and the US.

Not much call for them in Monaco, the Punt suspects.

Irish Independent

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