Time was that lunch with a top City banker in August might involve a trip to St Tropez or St Lucia. Not this week. I found one hunkered down in the office where he plans to be most of the month, plotting an autumn assault on the markets. Recent trading figures from Wall Street banks suggest it’s a case of “financial crisis, what financial crisis?” Unlike the changes in personnel, strategy and capital requirements that British banks have been undergoing, they are powering ahead again as if the credit crunch never happened.
A healthy dose of realism helps. The most successful lenders do not expect anything like the returns on equity they enjoyed in the boom years. Instead, they are planning for little or no top-line growth this year and are scrapping for market share in everything from foreign exchange to merger advice.
Bonus rules from Brussels mean that, to make up the difference, there is a rising tide in basic salaries, as flagged by HSBC last week, which means that middling performers are getting paid more than management would like.
Smartphones mean it is not just the top executives who are never really on holiday any more. The sad truth is that those who don’t even board the plane and instead put the hours in during the dog days of summer will reap the rewards come the winter bonus round.
Global hub London must help the high-fliers
It has been a useful week to catch up on chief executives who spend only a fraction of their time in London. We talk proudly about the capital as home to global businesses, but rarely consider what that entails.
David Levin, the boss of trade shows organiser UBM, was just back from two weeks in China and preparing to set off for Brazil. He gets to America at least once a month, too. UBM has come a long way from Labour peer Lord Hollick’s empire that straddled all sorts of assets, including the Daily Express and Exchange and Mart. Now Mr Levin’s biggest hub of operations is Shanghai.
There was a similar jet-setting story for Julian Roberts at financial services group Old Mutual, a business whose roots lie in Africa. He has travelled more in the first seven months of this year than in the whole of 2012. Two days after we had lunch, he was preparing for a flight to Kenya.
It is gratifying to hear first-hand how London maintains its role as a handy node from which to run global affairs. But it makes you think how much the Government, whose handling of the economy is gaining business supporters thanks to a string of rosy indicators, needs to crack the south-east’s aviation problem if it is to stay on the right side of leaders who take the world view.
Even superhero Carney should be challenged
People who barely gave central bankers a second glance have been entranced by Mark Carney, even down to his on-trend smart casual look, which had more than a passing resemblance to what David Cameron has been spotted wearing this summer – with less successful results. So for anyone to go against the new superhero Bank of England Governor came as a shock. It caused all the bigger tremor because the dissent surrounded Mr Carney’s grand plan of issuing forward guidance that will keep interest rates low until unemployment falls.
If the experts in Threadneedle Street don’t all think it’s a good idea, then why should the markets, which are convinced interest rates will rise earlier than the Bank has suggested, buy it? I think a contrary voice on the Monetary Policy Committee in the shape of Martin Weale is a good thing, if it gives the inflation worriers their own pin-up.
This economic feelgood factor is all very well. But feeling good thanks to a great summer of sport, the royal baby and sunny weather is prone to dispel when consumers examine their shrinking pay packets each month. Yes, the jobless count is a better bellwether to follow, but the price of getting Britain back to work seems to be little or no increase in wages, which won’t keep us ticking over for long.
ITV is making dramatic waves across the Pond
Something remarkable happened in the pages of the zeitgeisty New Yorker. Not just a review of an ITV drama, but a positive one. The arts and culture weekly praised the bleak murder whodunnit Broadchurch, airing on BBC America, for its “restrained approach, along the lines of an Agatha Christie novel”.
That the broadcaster is gaining a reputation for its drama at home has been helped by the BBC and Channel 4’s misfiring output. Winning plaudits abroad plays to boss Adam Crozier’s ambition to create exportable hits, which has fired up the share price.
It is worth pointing out that the Beeb’s commercial arm is a useful showcase for programming from across Britain’s production industry. Also that Broadchurch was made by Kudos, ultimately owned by 21st Century Fox, so not the money-spinner for Mr Crozier it would have been if ITV’s production arm was responsible. Still, the broadcaster is making waves in America in a way it didn’t do a few years ago.