No Face, No Name, No Number.


No Face, No Name, No Number.                                                           19 November 2020

According to DLD statistics, the top five nationalities, investing in the local property market last year, were Indians, Emiratis, Saudis, Chinese and the British.  Figures involved were 5.3.k and US$ 3.0 billion, 5.2k – US$ 2.2 billion, 2.2k – US$ 1.3 billion, 2.1k – US$ 1.0 billion and 2.1k – US$ 1.1 billion respectively. The next five nationalities were from Pakistan, Egypt, Jordan, US and Canada. The number of investments last year topped 47k, with a value of US$ 61.6 billion. When it comes to the most popular locations in which to invest, Dubai Marina ranked first, with 3.9k real estate investments in 2019, followed by Business Bay’s 3.5k, Al Khairan First area with 3.1k, Sheikh Mohammed Bin Rashid Gardens’ 2.8k investments and the Burj Khalifa’s 2.7k. Surprisingly, the number of added real estate units last year was noted at just over 17k.

Having initially forecast sales of almost US$ 545 million, (AED 2 billion), equating to 1.5k units, for 2020, (with Covid having driven this down to US$ 381 million), Dubai developer Sobha Realty is confident that, with the launch of new projects, this figure could hit US$ 680 million (AED 2.5 billion) next year. The projects would be part of its massive US$ 4.0 billion, ten-year Sobha Hartland master development in Mohammad bin Rashid City which is being financed through a mix of debt and equity. The developer points to positive changes to visa rules targeting retirees, along with vaccine developments as drivers to a potential boost in realty sales. This week, the emirate’s ten-year golden visa system was extended to embrace a wider range of professionals – another potential boost to the local housing market.

With only US$ 272 million in bank debt and Fitch-rated BB-, with a stable outlook, Azizi Developments is looking at investing nearly US 1 billion over the next two years. Even through this year of Covid, the developer has already launched three projects, with a further two prior to the end of the year, with a total value of US$ 272 million; it plans to deliver 3k property units in 2020. Financing for the forty-five buildings will be carried out by various sources – internal equity, off-plan sales, commercial loans and possibly upsizing its planned US$ 300 million Sukuk. The developer estimates that sales are still 30% lower, year on year.

With the recent introduction of an air corridor between the UAE and the UK, there has been a demand surge resulting in Emirates increasing its Heathrow daily schedule to four A380s, as well as operating the jumbo on the Manchester route to six times a week, and daily to Birmingham and Glasgow. The carrier will also increase the frequency of its Boeing 777s to UK destinations. The so-called air corridor means that passengers entering the UK from the UAE are no longer required to quarantine. This in turn will undoubtedly give the Dubai hospitality sector a much-needed boost, especially with the upcoming holiday season, including Christmas.

On the directives of HH Sheikh Mohammed bin Rashid Al Maktoum, more than 1k ministers, and senior federal/local government officials, have been holding eleven consultative meetings to discuss the path for the economic environment and economic models and sectors for the next fifty years. The meetings were part of the efforts of the fifty-year Development Plan Committee, with the aims of ensuring the country’s leading stature regionally and globally and strengthening government integration to chart the future to implement a comprehensive ongoing development plan. The meetings focussed on issues such as the business environment and stimulating entrepreneurship, foreign trade and partnerships, attracting investments, talents and skills, and building the capabilities of national cadres and qualifying them to lead the future economy.

Another new firm destined for the ever-growing DIFC is robo-advisory platform StashAway, which has just received an asset management licence from the Dubai Financial Services Authority. Although only founded in 2016, and based in Singapore, it has already become one

 of SE Asia’s largest digital wealth managers and has users from more than 145 countries. StashAway sees Dubai as the logical ME hub and expects to tap into a growing segment of affluent investors looking for low-cost ways to build their wealth. It hopes to follow its earlier success where it quickly became the benchmark for the financial services industry by delivering robust returns and low fees. Over the past year, its assets under management have grown more than 4.3 times and, to date, it has raised US$ 36 million in four funding rounds, with backers including Eight Roads Ventures, (the global investment firm backed by Fidelity and an early investor in Alibaba), and Square Peg, the largest venture capital fund in Australia.

Yet another start-up, Fenix, has landed almost US$ 4 million in seed funding from Maniv Mobility, in what is the first venture investment into a UAE company by an Israel-based VC. The co-founders, Jaideep Dhanoa and IQ Sayed, started the company after leaving Circ, a Berlin-based e-scooter hire firm, in January, which had been sold to US-based Bird. The start-up is forecasting that it will have the biggest fleet of e-scooters that have been “purpose-built for continuous shared use”. Scooters will cost US$ 0.27 per kilometre to ride, with a US$ 0.82 unlocking fee. There is no doubt that Fenix has entered a sector that is set to explode with estimates that the shared micro-mobility market – offering e-scooters and electric bikes for hire – is expected to be worth up to US$ 500 billion across the US, Europe and China by 2030. A further US study estimates that start-ups in the sector have attracted about US$ 5.3 billion in funding over the past five years.

Despite the pandemic, and the consequent tightening of liquidity across the board, some start-ups seem to have had no problem raising capital, including a Dubai-based fresh fruit delivery company.  Fruitful Day has managed to raise US$ 820k in two successive fundraising rounds, through global equity crowdfunding platform Eureeca, the last one which saw forty new investors from countries such as the UAE, Saudi Arabia, Switzerland and Singapore. The money raised will help the five-year old company to focus on further horizontal and vertical expansion in the home market. Covid was a driver in pushing its home deliveries higher.

The Ministry of Finance has announced that all companies in the UAE that engage in any of the Economic Substance Regulations, ESR’s relevant activities, within the fiscal year ending 31 December 2019 must submit an annual ESR notification to its Regulatory Authority no later than the end of this calendar year. The ministry will launch the ESR portal early next month and non-compliance will lead to penalties. All reports, notifications and supporting documents will be submitted electronically and interestingly, all companies must also re-submit the reports and notifications that were previously submitted to the regulatory authorities on the ESR Portal by the same deadline.

In a surprise announcement, it appears thatBR Shetty plans to return to the UAE ‘imminently’ to support authorities on the NMC probe, indicating that he hascomplete faith in the justice system of the UAE” and that he was looking forward to the perpetrators of the fraud facing justice.” Mr Shetty said he is returning to the UAE to support “all relevant bodies to correct any injustice done to the companies, their employees, shareholders and other stakeholders and help find solutions to outstanding matters”. The Indian billionaire doctor founded NMC Health in 1975 and grew it to become the country’s biggest privately-owned healthcare operator, and in 2012 took it to a London Stock Exchange listing, with a value of US$ 11.3 billion at its peak. The company was put into administration in April after it declared its debts at US$ 6.6 billon, more than the triple the figure of US$ 2.2 billion stated in its accounts. The DIFC courts have issued a worldwide freezing order on the businessman’s assets, whilst the company’s biggest creditor, ADCB, has started criminal legal proceedings against Mr Shetty and a number of other individuals.

The country’s largest Sharia-compliant lender by assets priced its five-year US$ 1 billion additional tier-1 sukuk, at a profit rate of 4.625% pa, carrying the lowest-ever yield achieved by any bank globally on tier-1 Sharia-compliant bonds. Earlier in the month, Dubai Islamic Bank completed the integration of Noor Bank, ahead of schedule, raising its asset base to more than US$ 81.7 billion. The sukuk is listed on Euronext Dublin and Nasdaq Dubai.

Dubai-listed Gulf Navigation posted a Q3 loss of US$ 3 million – a 37% improvement on comparative figures – bringing its retained losses to US$ 138 million; this was put down to several factors, including a decrease in revenue of all vessels, an increase in net finance costs and fluctuations in vessel rates due to Covid-19. The maritime and shipping company saw Q3 operating costs 23.0% lower at US$ 9 million and wrote off US$ 54 million for a vessel but recovered the same amount from an insurance claim; its Gulf Livestock 1 vessel capsized with 43 crew and almost 6k cattle on board in the East China Sea in September. Its nine-month revenue dipped almost 15% to US$ 30 million, with its loss 36.5% higher at US$ 17 million.

The bourse opened on Sunday 15 November and, 103 points (4.8%) to the good the previous week, rose 53 points (2.3%) to close on 2,316 by Thursday 19 November. Emaar Properties, US$ 0.07 higher the previous fortnight, traded up US$ 0.05 at US$ 0.83, whilst Arabtec is now in the throes of liquidation, with its last trading, late in September, at US$ 0.14. Thursday 19 November saw the market trading at 159 million shares, worth US$ 63 million, (compared to 391 million shares, at a value of US$ 73 million, on 12 November).

By Thursday, 19 November, Brent, US$ 2.64 (6.5%) higher the previous week, gained a further US$ 1.26 (3.1%) in this week’s trading to close on US$ 44.21. Gold, US$ 64 (3.3%) lower the previous week, shed  a further US$ 17 (1.0%) to close on US$ 1,879, by Thursday 19 November.

The UAE confirmed its commitment to proposed production cuts to be discussed by the Opec+ alliance. The country, the third largest OPEC producer accounting for an estimated 4.2% of global output, reported 126% compliance with the Opec+ agreement last month and lowered its crude output by 153k bpd, in line with the current level of curbs. Opec+ will convene online on 01 December and it seems likely that the current level of restrictions will be rolled over and that future agreed incrementally increases in production reversed. A leap in the number of Covid-19 cases, and subsequent reimposition of lockdowns in several parts of the world, have again seen the energy demand slow so this may result in further cuts being implemented.

After more than twenty months of being grounded, following two fatal crashes, in Indonesia and Ethiopia, the US Federal Aviation Administration has finally approved Boeing’s 737 Max to recommence flying. Airlines are now allowed to resume operating the 737 Max, the company’s best-selling jet, and deliveries can be resumed.  Early Tuesday trading saw its share value rally by over 5%. Whether the plane maker has learnt from its past history, of arrogant independence and a self-centred corporate culture, and whether it will focus more on core values of safety, quality and integrity, remains to be seen.  Also, in “the dock” is the US regulator who, at the end of the day, allowed a deeply flawed plane into service, resulting in tragedy.

It has been a mega year for Bitcoin which has leapfrogged by 130% so far YTD and reached US$ 17.3k by midweek – its highest level since January 2018 and up fourfold since its March lows. Whether it beats its all-time December 2017 high of US$ 19.7k remains to be seen. This year’s rally has been driven by some investors’ strong appetite for riskier assets in the wake of massive fiscal and monetary stimulus measures by global governments and central banks and a growing attraction to its purported inflation-proof qualities; with its supply capped at 21 million, this scarcity is alleged by some to shield it from central bank or government policies that stoke inflation. In October, PayPal said it would include Bitcoin and other cryptocurrencies on its platform, a move that has seen it jump in value by almost 50%.

Tata Steel has announced that it plans to keep its UK plants running, without financial support from India, but to sell its European business; a possible buyer is Swedish steel firm SSAB who are in discussions to acquire its interests in the Netherlands, including the steelworks at Ijmuiden. Meanwhile, the Indian conglomerate is dealing with the UK government about the business’s future in the country and the long-term future of Tata Steel UK, which employs 8k; Tata has also indicated that it will separate the UK and Netherlands arms of the business.

Probably the country’s best known bakery chain, Greggs, is to cut more than 800 jobs because of a sales slump, driven by Covid-19, as it would not be “profitable” if action was not taken. The Newcastle-based company noted that its “battle with Covid was intensifying further” and, two months ago, confirmed it was in talks with staff to cut hours to try and minimise job losses, but that has proved that more cost cuts were essential for it to remain a viable and profitable business.

EasyJet has reported its first annual loss, for the year ended 30 September, in the airline’s 25-year history, at US$ 1.7 billion, as the coronavirus crisis continued to ravage the travel sector; revenue more than halved over the twelve months, not helped by its entire fleet being grounded for eleven weeks at the start of the pandemic.  The budget airline believes that the underlying demand for air travel is still robust and, with this week’s news of a vaccine, the carrier saw bookings 50% higher. However, with a second wave hitting, EasyJet is hunkering down for a long hard winter and operating at just 20% capacity. To date, it considers the US$ 4 billion it has raised, through taking on more debt, including a US$ 800 million government loan, selling assets and extra equity financing, will leave it enough funds until Q2 next year.

Despite all the hassle associated with the pandemic, Airbnb has filed papers that will see the lodging website become a publicly listed company. The IPO is expected to raise around US$ 3.0 billion that would rate the twelve-year old company at more than US$ 30.0 billion – a lot of money considering last year it posted a US$ 674 million loss which has already been surpassed in only nine months to September this year. The 30% revenue growth reported in 2019 has all but eroded by September, with a twelve-month 32.4% slump to US$ 3.3 billion.

There are two reports relating to Topshop owner Arcadia; one is that it is in discussions with lenders to secure US$ 40 million in funding and the other that it is drawing up plans to place the business under administration, the latter of which has been refuted by the retailer. Arcadia – owned by the controversial Sir Philip Green – is confident that it will secure financing to continue trading, as phase 2 of the pandemic begins to impact on the retail sector which has been forced to close until 02 December. Topshop – which also owns Miss Selfridge, Evans, Burton and Dorothy Perkins – furloughed most of its 15k workforce in their 500 outlets during the first outbreak.

New Xbox consoles and fresh releases to the Call of Duty games franchise are being blamed for the UK’s leading internet providers – including BT, Virgin Media, Sky, TalkTalk, Vodafone, City Fibre and Zen Internet – recently experiencing record broadband use; it seems that much of the activity was generated by video gamers downloading large files.  For example, the recent release of updates to Call of Duty: Modern Warfare and Warzone and an update to Bungie’s video game Destiny 2   both range up to 65GB in size, whilst pre-loads of Call of Duty: Black Ops Cold War take up to 130GB. The internet service providers will be tested again today, on 19 November, when the PlayStation 5 comes to the UK.

Having been charged by The Securities and Exchange Commission for endorsing and disclosing sales metrics Wells Fargo should have known were false, ex-chief John Stumpf has agreed to pay US$ 2.5 million to settle the charges, whilst Carrie Tolstedt, the former head of its community banking operation, is fighting the fraud claims in court.  The major US financial institution has been under investigation for the past four years, when it was revealed the firm had boosted its sales by opening millions of accounts without authorisation. Earlier in the year, the bank paid US$ 3.0 billion to settle an US Department of Justice and SEC investigation, whilst their ex-chief was fined US$ 18 million and barred from working in the banking industry for life.

In the US, Amazon has introduced its own online pharmacy that will allow customers to buy prescription medicines and give its Prime members free two-day delivery and discounts of up to 80% on generic medicines and 40% on prescribed brand-name drugs. All that the tech company needs to know are the bare facts, such as whether customers are pregnant, date of birth, gender and insurance details. Doctors can send prescriptions directly to Amazon Pharmacy or patients can request a transfer from their existing retailer. Two years ago, Amazon acquired online pharmacy Pillpack for US$ 753 million and confirmed that health data would remain separate and distinct from that on its retail site.

A day after Crown Casinos admitted to an inquiry that accounts it set up for VIP players could have been used for money laundering, NSW’s gaming regulator has banned them from opening its new Sydney casino next month. This has thrown into disarray the gaming conglomerate’s plans to open its US$ 1.5 billion development at Barangaroo, which includes a casino, fourteen bars and opening restaurants, along with a 350-room hotel. A final decision whether Crown can keep its licence will be made within three months and will come a year after the regulator started examining Crown’s fitness to hold its 99-year licence for the casino.  It now seems that “Crown will focus on opening the non-gaming operations at Crown Sydney, in consultation with ILGA, in the absence of the commencement of gaming operations.”  It seems highly likely that Crown will have to ditch its principal shareholder, James Packer, to have any chance of salvaging its core business interest – the casino. Now it seems that questions will be asked by the governments and gambling regulators of both Victoria and Western Australia where Crown has casinos in their capital cities of Melbourne and Perth.

It is reported that one of Australia’s leading builders is in financial difficulties. Grocon, which has built two of the country’s tallest buildings, Eureka Tower and the Rialto Towers, and Melbourne’s casino. Now it seems that almost 100 subcontractors, on its Collingwood office tower development, are owed US$ 4 million, with invoices months in arrears. Sources suggest the company has been impacted by several expensive legal battles, with the NSW and Queensland governments, and not helped by the COVID pandemic which has seen the stalling of some future projects. It has recently won a US$ 55 million contract to help in cleaning up and rebuilding after Victoria’s bushfires.

The latest Economist Intelligence Unit’s survey confirms that the three most expensive cities in the world are Hong Kong, Zurich (overtaking Singapore) and Paris (replacing Osaka), with Tel Aviv moving up two places and ranked alongside Osaka as the world’s fifth costliest city. Surprisingly, Amman is the most expensive ME city, moving down ten places to 27th with both Abu Dhabi and Dubai slipping to 53rd and 66th. Because of a fall in the greenback and the rise in both the euro and sterling, cities in the Americas, Africa and Eastern Europe have become less expensive since last year and western European cities have become costlier. The index uses various measures in their rankings including currency volatility, supply chain problems, the impact of taxes and subsidies, and shifts in consumer preferences.

The world’s third largest economy, which took a battering at the onset of the pandemic in March, has bounced back in Q3. Japan, whose economy jumped 5.0% in Q3, is one of the Asian countries that are leading the way for a global recovery in what has become known as the “Zoom boom” – because of the increased demand for IT equipment from the rising number of people working from home and utilising online meeting platforms like Zoom. After an 8.2% Q2 contraction, Japan’s economy returned to positive territory, because of a rise in domestic demand as well as exports, although some analysts see future growth to be moderate. By the end of Japan’s fiscal year in March, the economy is expected to have slumped by 5.6% over the previous twelve months.

However, there is only one regional country that will end the year in the black and that is Vietnam, with a forecast 2.4% growth. The IMF noted the reason for this positive news was that its government took “decisive steps to contain the health and economic fallout from Covid-19”. To date, it has registered only 35 deaths and 1.3k cases. There are many reasons why the country has appeared to get off so lightly, including that it was quick to develop testing kits, and used a combination of strategic testing, aggressive contact tracing to help control numbers. However, although its tourist trade took a battering, it has benefitted from the global move to work from home which boosted the sales of laptops and office furniture, both of which are manufactured in the country; in the first nine months of the year, exports to the US came in 23% to the good, whilst global electronic exports grew by 26%.

Just as Australians seem to be ditching their credit cards with buy now, pay later cards, there are warnings from the Australian Securities and Investments Commission that some consumers are having to cut back on essentials, such as meals, because of debt they have racked up from using them; it is estimated that 20% are missing payments. Although not yet suggesting that they should be more regulated, the corporate watchdog’s review of six companies found that harm was being done – and that despite concerns from consumer advocates that it is just another form of credit that allows people to take on too much debt. It is reported that the number of buy now, pay later transactions almost doubled to 32 million last year, with missed payment fees up 38%, making up 20% of cards’ total revenue. Almost 70% of those who had taken out another loan to make their buy now, pay later payments – which should be settled every fifteen days – had also missed a payment, and half were under 30. An interim Senate enquiry seems to back self-regulation rather than a ‘one-size-fits- all’ approach.

Following details of the ongoing trade rift between Australia and Chinese – and its negative impact on the wine industry – there are signs that Australia’s multi-million-dollar wine trade with China has effectively been closed, as it appears that none of their wine has cleared China’s customs in the past two weeks. It is estimated that up to 60% of wine that would normally be exported to China remains in Australia and that local winemakers are expecting tariffs to be applied shortly. It is estimated that more than half of all wine exports to China has not left Australian shores due to growing uncertainty in the industry – a major worry with the upcoming maximum export time leading up to the Chinese New Year. There is every chance that tariffs will be levied because authorities believe that Australian winemakers have been selling produce below cost and have been receiving government subsidies. Last year, more than 2.4k exporters sold wine to China worth almost US$ 900 million.

At the weekend, fifteen countries – comprising ten SE Asian nations, as well as South Korea, China, Japan, Australia and New Zealand – signed an agreement forming the world’s largest trading bloc, covering nearly a third of the planet’s total population and accounting for 29% of global GDP. A notable absentee was the US, which withdrew from the then Trans-Pacific Partnership in 2017; India was initially in talks but withdrew over concerns that lower tariffs could hurt local producers. At the time, it was seen to be a counterbalance to China’s surging power in the region but, eight years in the making, the new pact, the Regional Comprehensive Economic Partnership, confirms China’s advancing influence in the region. The venture hopes to eliminate a range of tariffs on imports by 2040 and also covers provisions on intellectual property, telecommunications, financial services, e-commerce and professional services.

Saturday will see the start of a two-day virtual G20 summit, hosted by Saudi Arabia, bringing the twenty leading global economies to discuss the most pressing global socio-economic issues. It will focus on empowering people, safeguarding the planet, and shaping new frontiers. This meeting will occur on the anniversary of Covid-19 being detected for the first time in China and since then the pandemic has ravaged – and continues to do so – global economies. It was on 26 March that the same meeting vowed to “spare no efforts” to overcome the pandemic and to look at ways of reviving the global economy. Since then, a combination of global governments and central banks has poured in almost US$ 20 trillion to fight the negative aspects of the pandemic but it does seem that a lot of that has been poured down the global drain.  The measures have helped shore up the world’s banking system, safeguard financial markets and put a floor under the global economy which still seems to be in a perilous state. The end result will be a 4.4% decline in the global economy this year, with a marginal improvement in 2021 and that the world death rate of 1.34 million to date will continue heading upwards.

Unctad expects international FDI flows to decrease by up to 40% this year, from US$ 1.5 trillion in 2019 – the first time this figure has dipped below US$ 1.0 trillion since 2005.  The first six months of the year saw the figure plummet even further to only US$ 399 billion, with developed economies taking the brunt, down 75% to US$ 98 billion. Some industry experts see global foreign direct investment flows in a gradual U-shaped recovery, with pre-pandemic levels returning by 2022. Global FDI is projected to slip by up to 10% next year before the turnaround the following year. The recovery curve will be in contrast to the U-shaped recovery expected for global GDP and trade in 2021. However, the caveat remains unchanged – prospects for recovery depend on the duration of the pandemic and effectiveness of policy response – and this still remains highly uncertain.

House prices in the US reported their biggest annual increase in seven years, with October figures reflecting a 12% jump in prices over the past twelve months. Even with many people struggling with cash flows, (because of the impact of Covid-19, near record low mortgage rates and the rush to the suburbs for extra space, in the era of restrictions and quarantines), an increasing number of buyers are chasing a limited supply of listings. However, as prices continue to head northwards, more and more first-time buyers are being priced out of the home ownership market. According to Freddie Mac, the average rate for a 30-year mortgage stands at 2.84% and that the nationwide median price of a single-family home in the quarter was US$ 313k. Currently, there are 1.47 million previously owned homes available for sale in the country, 19.2% less than a year ago; it would take just 2.7 months to sell those homes at the current rate of deals.

Saudi Arabia’s Crown Prince Mohammed bin Salman has announced that the kingdom’s Public Investment Fund will inject US$ 40 billion, over the next two years, in a move to further boost economic growth; it is known that the Crown Prince is a proponent for greater diversification of the oil-reliant economy, which is a lynchpin of its Vision 2030 strategy. Investments will be made to enhance many economic sectors, including tourism, sports, industry, agriculture, transportation, mining and space. Earlier in the month, the PIF placed US$ 1.3 billion for a 2.04% stake in Mukesh Ambani’s Reliance Retail Ventures, India’s largest retail chain.

The OECD has seen the 37-country bloc’s economic output in Q3 surge an impressive 9.0%, including the likes of France – up 18.2%, following a 13.7% contraction a quarter earlier – Italy, 16.9% higher following a 13.0% Q2 shrinkage, and the UK’s 15.5% hike following a 19.8% fall the previous quarter; other economies moved north, including the euro area and the EU, up 12.6% and 11.6% after Q2 falls of 11.8% and 11.4% respectively. Canada, Germany, the US and Japan all moved higher in Q3 by 10.0%, 8.2%, 7.4% and 5.0% respectively. By the end of September, the cumulative GDP is still 4.3% below the pre-pandemic high. In October, the OECD has warned that the 2020 UK economy was on track to contract by 10%, attributable to the second wave of Covid-19 and a disorderly Brexit from the EU. (Perhaps they have turned a blind eye that the same rationale applies to the EU). On the world stage, the global economy is expected to contract 4.4% this year due to the economic fallout from the coronavirus pandemic, rebounding to 5.2% in 2021. OECD employment, at 64.6%, fell to its lowest level in a decade in Q2, down 34 million, quarter to quarter to 560 million.

The UK inflation rate jumped 0.2%, month on month, to 0.7% in October as bigger than expected rises in the cost of clothing and food helped to push UK inflation higher; second-hand cars and computer games also saw prices move higher whilst there were declines in the cost of energy and holidays. Past history indicates that prices for clothes and shoes traditionally decline over summer before the new autumn ranges come in, with prices edging higher before falling again with the sales season towards the end of the year. However, the future short-term problem will not be inflation but deflation and the only way to deal with this is to introduce fiscal measures to stimulate and fix a much-scarred economy still reeling from the impact of Covid-19. The Bank of England cannot do much more to stimulate the economy and it is up to the Johnson government to do the shovel work from now on in.

One good reason that the UK is better off outside the European bloc came with the announcement this week that two member states, Hungary and Poland, by voting against the resolution, have blocked approval of the EU’s budget over a clause that ties EU funding with adherence to the rule of law. The other twenty-five countries were for passing the US$ 890 billion financial package for a coronavirus recovery fund. It is not the first time that these two former Communist countries have gone against the majority and both are being investigated for undermining the independence of courts, media and non-governmental organisations. Unlike the 2021-2027 budget, that only required a qualified majority, this resolution had to be passed unanimously. Some outsiders may have some sympathy for the Polish Justice Minister Zbigniew Ziobro, who argued that the rule of law issue was “just a pretext” and “it is really an institutional, political enslavement, a radical limitation of sovereignty.”

It cannot be Christmas without fraudsters upping their game and exploiting festive bargain-hunters who have switched to online shopping owing to coronavirus restrictions. A recent UK study notes that those searching for games consoles, bicycles and clothing may be at a higher risk of encountering a scam, and that the average loss could be as high as US$ 1k. UK Finance has noted that social media platforms, online marketplaces and auction websites are being increasingly used by criminals to carry out scams which see a customer paying in advance for goods or services that do not exist and are never received. Once payment has been made, they are taken off the integrated payment platform and are made through a bank transfer instead, meaning those that have been scammed are unlikely to be refunded. Figures from Barclays indicate a 66% hike in fraud attempts in H1, with UK Finance putting losses in the six months at US$ 36 million. With Black Friday one week away, and one month to Christmas, watch out for these scams; for just one such fraud merchant, there will be thousands of victims, many of whom are still reeling from the impact of Covid-19. If in any doubt, do not proceed with that online sale and remember – No Face, No Name, No Number.

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