By Richard Pickering, Head of Futures Strategy
Economic Outlook Mark Carney and Co. have once again held interest rates at current levels, this time by 6-2 in favour; however, the associated rhetoric continues to become more hawkish. The current market yield curve implies a 0.5% base rate increase during the course of the next three years. However, Carney expressed a view that rates could rise ‘faster than the market expects’, although refused to be drawn on how much and when. Although GDP growth ‘remains sluggish’ (marked down to 1.7% for 2017), and investment is ‘weaker than expected in a very strong world’ (global trade growing at its strongest since 2011), BoE is forecasting a ‘rotation to business investment’ and expects margins in the consumer sector to be rebuilt as imported inflation flushes through (CPI peaking at 3.0% in October), and household incomes rise modestly.
Tenants v Customers Speaking at VTS’s Accelerate 2017 earlier this summer, WeWork’s Chief Product Officer, Dave Fano, set out a view on the future of the organisation. Pointing to the fact that 85% of its members have been in business for over a year, and 25,000 of its 125,000 global membership are in companies with 1,000+ employees, highlights a transition of this market towards enterprise solutions. However, the ambitions are seemingly more extensive, ‘Real estate for us is like books for Amazon – now it’s the everything store’. Looking forward, ‘All the things that we’re doing aren’t going to have to be in the four walls that we manage’ ‘It’s going to break into two buckets – we come to you or you come to us’. This speaks to more than office as a service, and moves into the realm of workplace as a service. If the role of running our workplaces can be turned into a product, what does this do to the relationships between landlord and tenant and between employer and employee?
Asleep on the job A report released by the Sleep Health Foundation reveals a $26bn loss to the Australian economy due to a lack of sleep, with productivity losses accounting for the majority of this. Progressive employers such as Google find ways to integrate napping into office environment though use of furniture such as Metronaps Energy Pods. Meanwhile in China, there are instances of start-up employees being provided camp beds beside their desks. However, the idea of sleeping in the office is, for some, too far down the route of work-life integration rather than work-life balance. The alternative to taking naps at work is keeping people awake. For instance, the UK’s air traffic control service, NATS, fills their office with fake daylight to promote circadian rhythm, whereas an office without a good coffee machine is now of course totally unthinkable.
The Final Frontier I don’t imagine that many children dream of becoming a ‘surveyor’ when they grow up, and so alternative attributions such as ‘Real Estate Consultant’ or ‘Capital Markets Partner’ help to ameliorate any ego issues. I thought that getting to call myself ‘Head of Futures Strategy’ was pretty cool; or at least that’s what I told my mum. However, with the launch of a new vacant position by NASA last week, we all take a step down the job title hierarchy. Applications for the role of ‘Planetary Protection Officer’ are sought by next week. As part of ‘the leadership of NASA’s planetary protection capability’ the job requires ‘frequent travel’ – but quite how far is not stated… Leading the applications via Twitter is nine year old Jack Davis, who states, ‘I am young, so can learn to think like an alien’. I hate to break it to you Jack, but I have plenty of colleagues who have a 30-year march on you there.
New Europe is taking a break next week, whilst Richard researches the European heatwave, and the impact of sterling devaluation on the price of Mythos beer. The next issue will be on Wednesday 23 August.