By Richard Pickering, Head of Futures Strategy
‘Boris is Boris’ Only days before her big announcement in Florence later this week, Theresa May is unlikely to have welcomed Boris’s 4,000 word dissertation on the future of Brexit. A refrain of his £350m-for-the-NHS claim, it provoked ‘surprise and disappointment’ from UK Statistics Authority chief Sir David Norgrove; however, that perhaps misses the point. Ken Clarke’s calls for Johnson to be sacked have met with a shrug of May’s shoulders, ‘Boris is Boris’. One might surmise that either: (a) Boris’s words reflect May’s speech in prospect and that we won’t ‘bottle it’; or (b) more frequently suggested that he senses May’s weakness and is gearing up for a leadership challenge. The bookmakers still have him (10/1) at double David Davis’s odds (5/1) to become next Prime Minister. Meanwhile, favourite Jeremy Corbyn (3/1) is presumably happy to keep quiet and watch it all play out.
Global rents In a speech this week, Mark Carney sets out the increasing impact of globalisation on our domestic economy. He points to an increasing disconnectedness between domestic slack and domestic inflation, and a strengthening link between domestic wages and global wages. A global shift towards service economies, combined with a technological revolution, has allowed the ‘unbundling of production into global value chains’ (i.e. spitting up the production process across countries), which leads to ‘greater synchronisation of pricing across countries’. In the long run, this trend is set to continue, as the UK seeks to open up trade with new countries and digital platforms accelerate the efficiency of this de-bundling process. As production costs across geographies converge, so surely must rents (economic residuals) also converge? Location is the major driver of differentials in rent and, as long as businesses still discern on location, then differentials will be maintained. However, in a truly global economy could there one day be a single global rent?
Greater than Ever As Deputy Mayor of New York, Dan Doctoroff presided over a period of significant regeneration in the city, including the creation of the High Line and the redevelopment of Lower Manhattan in the wake of 9/11. This week he releases his book ‘Greater than Ever’, charting tough decisions on rezoning, social housing and property tax hikes. However, now as CEO of Alphabet-funded Sidewalk Labs, Doctoroff has the new challenge of combining this experience with Google’s technological prowess in a mission to build a new city. From a foundation of ‘ubiquitous connectivity’, the focus will be on ‘accelerating urban innovation’; the vehicle for this being ‘a large scale district that can serve as a laboratory for urban technology’. Apparently they are well advanced in selecting a site. Specific projects include: automated fabrication, integrated public services and adaptive traffic lights. Interestingly, their ambitions also extend to urban scenario modelling, allowing the public to vote on visually modelled town planning alternatives and economic interventions. And some say we have had enough of referenda?