This is a big week, with a lot more than five important things happening. But here are my top five.
The biggest event of the week has to be the inauguration of a new President of the United States. It will be noisy, with many people unable to accept the democratic process and an equal number thrilled by the defeat of what they see as the sneering liberal elite.
At noon Eastern Standard Time, Donald Trump takes office. There will be a huge amount of attention paid to the demonstrations, the boycotts, the endorsements. Ignore them. What will matter will be any indication, any indication at all, that Donald Trump as President will be different to Donald Trump as candidate.
The past few days have been discouraging, for the combative, bellicose and offensive Donald has far outshone the pensive and measured one. But let’s see. Anything that gives a clue to the way the new President will conduct himself is gold dust, telling us something important about the next four years.
Next, China at Davos, where, for the first time ever, Xi Jinping will become the first Chinese president to attend the World Economic Forum. He is expected to explain the country’s support for globalisation, and in particular its efforts to negotiate new regional trade deals. The big idea is that as the US retreats into protectionism China will take up the baton of free trade. In short, it will be a direct attempt to position China as the new leader of the world economy, the country that looks out, not in.
Now you could say that China has exploited the global trading system, copying the technology of the West, exporting the products to America and Europe, and denying full access to its own market. But the idea that China is the supporter of globalisation, while the US is the attacker, is a fascinating switch of roles.
Then there is Britain. On Tuesday, Theresa May will set out the UK position on Brexit, which, since this may also be the week the Supreme Court rules on whether Parliament will vote on the issue, will lead to another bout of soul-searching and debate.
Actually, we should remember that what Europe wants will be just as important, maybe more so, than what the UK wants. So the thing to watch for will be May’s thoughts about Europe as well as Europe’s thoughts about the UK.
Somewhere there has to be a deal, and the place to find that deal will be on the common ground about a future that would work for both. Maybe we won’t get any thoughts on the future of Europe, but let’s hope we do.
Our negotiating stance will be greatly affected by the performance of the UK economy, which, the fall of sterling apart, has so far been largely unaffected. Will that still be the case? There are a lot of statistics out this week, including inflation figures and employment and unemployment, which will either confirm that growth is solid, or suggest that Brexit is starting to damage UK performance. Is Armageddon merely postponed? We will learn a bit more in the next few days.
Finally, the markets. The upward march of UK share prices has now become the longest run of consecutive increases for the FT100 index since it was founded in 1984. Is this a vote of confidence in the economy or merely a re-pricing in reaction to the fall in sterling? Or both?
Either way, it matters. Can it go on? Is there a crash around the corner, or a high plateau? We are not clever enough to be able to answer, but solid share prices are a sign of confidence. Some people at least think the world won’t end tomorrow after all.
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