The Land of Make Believe!                                                               11 February 2022

Yesterday, Thursday 10 February 2022, Dubai Land Department recorded a total of 309 real estate and properties transactions, with a gross value of US$ 266 million. It confirmed that 259 villas/apartments were sold for US$ 168 million, and 50 plots for US$ 98 million, on the day. Mortgaged properties totalled US$ 125 million – including 77 villas and apartments, worth US$ 48 million, and 13 land plots, valued at US$ 77million, bringing the total realty transactions to over US$ 409 million. Fourteen properties were granted between first-degree relatives worth US$ 18 million.

Following the success of its two 2021 launches – Murooj Al Furjan and Murooj Al Furjan West – Nakheel has started the year releasing Tilal Al Furjan, a new collection of 220 luxury 4 B/R– 5 B/R villas. The developer noted that the villas were the best in quality materials and finishing for the ultimate in luxury living, and will include features such as solar water heaters, fresh air heat exchangers, that resist humidity, and an electric car charging point. Al Furjan has become home to over 30k residents and is already one of the emirate’s biggest and most popular mixed-use developments. Encompassing 560 hectares, and located close to Ibn Battuta Mall, Al Furjan has its own Dubai Metro station, two retail pavilions, a community club house and schools.

Spain’s loss may be Dubai’s gain, as many UK families have cancelled their mid-term Iberian break because their under twelve children need to be double vaccinated. Not surprising, the country’s hospitality sector is far from pleased,  with their potential loss running into millions of dollars. For example, Jorge Marichal, president of the Tenerife Hoteliers Association, estimated that “the loss could be nearly Eur 400 million in the Canary Islands. That’s only talking about the hotels – if we take into account the restaurant economy (too) it is a huge impact. For us the British market is the biggest one. We have more than 2.5 million British citizens coming to Tenerife every normal year. For us this part of the year is one of the most important. All these profits will be lost”. It is thought more than eighty global holiday destinations still require travellers from the UK to take a pre-departure PCR test before entering, and this presents Dubai a huge opportunity to take up the slack.

Citing the fact that ‘”in Europe, companies have been paying up to 51% corporate tax. With 9% corporate tax, the UAE will remain one of the most competitive markets of the world,” Swiss entrepreneur, Alaine Borle, is planning to move his 72-year old company headquarters to Dubai. Pac Team, known for designing and manufacturing exhibition booths, window display stands, settings, boutique interior designs and shop-in-shops for major international brands, will utilise its new location to boost its presence in the MENA and sub-continent markets. Pac Team has ten subsidiaries. The chief executive also noted that the move was also motivated because “Dubai has emerged as a global business hub because of its successful strategy to handle pandemic without closing its doors for businesses and compromising individual’s life”. The Swiss company will also benefit from the fact that it will garner a lot of new business because the emirate is forecasting that it will host 400 global economic events by 2025, compared to 2021’s 120 events. Currently, its international business turns over US$ 100 million. The Swiss company, which will invest millions of dollars in this venture, using the same business model it introduced in China at the turn of the century which has seen 1k jobs being created, is one of the first international entities to move to Dubai following the new tax regulations – it will not be the last. 

To support the country’s efforts to achieve carbon neutrality by 2050, the Dubai Supreme Council of Energy has approved updated plans to reduce carbon emissions by 30% before the end of 2030. Over the next thirty years, and to achieve Dubai Net Zero Carbon Emissions by 2050, the UAE will invest US$ 163.5 billion to ensure that the country’s energy needs will be serviced by 100% clean sources. The fifth phase of Dubai’s 5k megawatt Mohammed bin Rashid Al Maktoum Solar Park, the world’s largest single-site solar park, is 60% complete. At this week’s meeting, the Dubai Carbon Abatement Strategy 2030, in line with the UAE’s vision for carbon neutrality, was approved and last year’s successful launch of DEWA’s Space-D programme was discussed; DEWA is the first utility in the world to use satellites in its operations, with the aims of improving the operations, maintenance and planning of its networks.

Starting from 01 July, an US$ 0.068 (25 fils) tariff will be imposed on every single-use plastic bag used for carrying goods – and it will be implemented in all stores across the emirate.  The Executive Council of Dubai approved the measure this week, in line with enhancing environmental sustainability and encouraging individuals to reduce the excessive use of plastics. The ruling is not restricted to just supermarkets but covers all stores as well as online and e-commerce deliveries. It is just the start of a strategy that will see single-use carrier bags completely banned by 2024. The aim of the exercise is to strengthen Dubai’s sustainability objectives, in line with global best practices and to ensure the emirate as a place for a sustainable and high quality of life. To date, the tariff on single-use bags is currently in effect in over thirty countries, and a partial or complete ban has been implemented in more than ninety nations.

At a recent virtual meeting of the Dubai International Chamber’s board of directors, a new three-year strategy was approved, with targets of positioning Dubai’s as a global trade hub, attracting multinational companies to the emirate and supporting local companies with international expansion. The foci of the strategy include attracting fifty multinational companies to Dubai within three years, supporting the external overseas expansion of one hundred Dubai companies by 2024, and improving the business environment in the emirate. Furthermore, it will support and motivate multinational companies to list on the DFM, and also complement the five-year plan, announced by HH Sheikh Mohammed bin Rashid Al Maktoum, to boost Dubai’s non-oil foreign trade to US$ 545 billion.

The 13^th 2022 Agility Emerging Markets Logistics Index placed the UAE third in its most competitive emerging markets, behind the two superpowers USA and China. The country led all fifty countries surveyed when it came to creating the best business conditions and in digital readiness; it also led the field in business fundamentals. The Index ranks countries for overall competitiveness based on their logistics strengths, business climates and, for the first time, their digital readiness – factors that make them attractive to logistics providers, freight forwarders, air and ocean carriers, distributors and investors. Most of the 756 industry professionals surveyed thought that cargo rates will be lower by year end, as port bottlenecks, air capacity shortages and trucking issues ease; in addition, they noted that they considered there was little chance of a recession this year and the industry will see moderate-to-strong economic growth; they could be wrong.

Having announced its intentions last July to set up three Spacs, (Spac being a vehicle, with no commercial operations, formed with the sole intention of raising funds through an IPO and then acquiring an existing company), Shuaa has filed a request with the US Securities and Exchange Commission to launch one, with a value of up to US$ 200 million. The Dubai-based investment bank, listed on the DFM and with nearly US$ 14 billion under management, confirmed that it is going through the final regulatory approvals, but it has not indicated when the IPO will be launched, or which sector the planned Spac will target. Last year, the number of Spacs on Nasdaq increased by 91%, to a record 613, raising US$ 145 billion. In 2010, only two SPACs came to the market. It is estimated, by Boardroom Alpha, that almost six hundred SPACs have been left with about US$ 160 billion in trust waiting for something to buy as the popularity for speculative stocks fades. Most SPACs have a lifespan of up to eighteen months, and once that time period expires, the money is returned to the initial investors; it is thought that eighty-eight SPACVs will expire this year, with a further 318 running out of time by H1 2023.  Over the past year, it is reported that just 20% of Spacs listed on the de-Spacs index were profitable and forecasts indicate only 28% will make money in the year ahead.

Mainly because of higher revenue and non-recurring income, as mobile services grow, Emirates Integrated Telecommunications Company, du, posted a Q4 sixfold rise, compared to a year earlier, to US$ 87 million, with revenue moving up 12.0% to US$ 817 million, of which US$ 381 million was from its mobile services. Last year, although du reported a 24.0% hike in revenueto US$ 3.18 billion, its profit slumped 24.0% to US$ 302 million. Over the year, its customer base rose 8.9% to 7.3 millionsubscribers, with post-paid customers ending the year with a total of 1.3 million, on the back of strong consumer and enterprise segments. With the board recommending a US$ 0.057 dividend, shares closed at  US$ 1.80  by the end of Friday’s trading session.

DP World posted that, in Q4, it handled 19.6 million TEUs (20’ equivalent units), up 2.6% year-on-year on a reported basis and up 2.3% on a like-for-like basis, and 77.9 million, and on an annual basis, figures were 9.4% higher on a reported basis and up 8.9% on a like-for-like basis; the return was above the global average of 6.5%. Growth was broadly based across its sectors, with key driving regions being India, Asia Pacific, MEA, Europe, Australia and Americas regions. Last year, home base Jebel Ali recorded a 1.9% increase to 13.7 million TEUs. Q4 growth levels were subdued because of the impact of the new Omicron variant, along with rising inflation and supply chain bottlenecks.

Deyaar Development, majority owned by the UAE’s biggest Sharia-compliant lender Dubai Islamic Bank, posted a US$ 14 million profit, compared to a US$ 59 million loss a year earlier, as revenue jumped 22.0% to US$ 138 million, driven by new project launches amid continuing recovery in Dubai’s property market. The Dubai-based developer, listed on the DFM, reported a doubling of operatingprofit to US$ 17 million and its improvement was also attributable to the fact that, last year, the value of property deals in Dubai more than doubled, breaking a 12-year record in terms of real estate sales transactions. Last year, the company sold all units in its Regalia project, a luxury residential tower in Business Bay, and is set to launch several projects this year in JVC, Al Furjan and at its Midtown master development in Dubai Production City. Financing of these will be via a mixof debt and equity, as well as proceeds from sales.

Dubai Islamic Bank closed a US$ 750 million, five-year Sukuk, at a 2.74% profit rate, which was 2.5 times oversubscribed; it will be listed on Euronext Dublin and Nasdaq Dubai, with the funds being used for expansion purposes. Despite the current volatile market, the final pricing was at 95 bp over the five-year US Treasury. The lender had posted a 33% hike in 2021 net profit to US$ 1.20 billion, driven by a marked 46% decline in impairment charges, to US$ 665 million, and income from investment properties more than doubling to US$ 61 million.

Commercial Bank of Dubai posted a 29.5% rise in 2021 net profit, to US$ 395 million, driven by improved net interest income, stable non-funded income and lower than expected credit losses. Annual operating income was 6.9% higher, at US$ 866 million, mainly from higher net interest income of 10.1%, and lower funding costs. Operating expenses headed north – up 7.2% to US$ 236 million, whilst the cost-to-income ratio remained at 27.2%. With loans jumping 17% on the year, CBD hit a record US$ 31.1 billion in assets.

DFM-listed Aramex recorded a 21% decline in Q4 net income to US$ 13 million, despite revenue nudging 1% higher to US$ 44 million, as higher operating costs and the continued negative impacts of Covid dented profitability. ME’s biggest courier company saw its operating profit fall 33% to US$ 16 million. Revenue at its courier business, which includes its domestic and international express operations as well as business-to-business and e-commerce offerings, dipped 12% to US$ 272 million in Q4., but grew 5% on the year to US$ 1.12 billion.  Although 2021 revenue jumped 10%, to a record US$ 1.65 billion, its annual net profit fell 15% on an annual basis to US$ 61 million, with higher costs dragging operating profit 23% lower to US$ 84 million. Its chief executive, Othman Aljeda, noted that “our margins remain under pressure,” and that the company is having to absorb a higher cost of doing business to maintain standards and its customer base.

The DFM opened on Monday, 07 February, 49 points (1.5%) lower on the previous week, gained 86 points (2.7%) to close the week, on Friday 11 February, at 3,258. Emaar Properties, US$ 0.05 lower the previous week, regained US$ 0.05 to close on US$ 1.24 Emirates NBD, DIB and DFM started the previous week on US$ 3.69, US$ 1.55 and US$ 0.60 and closed on US$ 3.69, US$ 1.55 and US$ 0.65. On 11 February, trading was at 159 million shares, with a value of US$ 66 million, compared to 44 million shares, with a value of US$ 23 million, on 04 February 2022.

By Friday 11 February 2022, Brent, US$ 16.36 (23.7%) higher the previous seven weeks, continued its mega run and gained a further US$ 3.05 (3.3%), to close on US$ 94.99. Gold, US$ 19 (1.1%) higher the previous week, gained a further US$ 52 (2.9%), to close Friday 11 February on US$ 1,861. 

The International Energy Agency is concerned that an oil supply shortfall could result in prices heading even higher, as demand continues to grow, whilst supply could become  an even bigger issue because of the inability of some Opec member countries to quickly ramp up production due to ongoing underinvestment in the industry, 23% lower last year at US$ 341 billion – and well short of the annual US$ 600 million needed to keep abreast of rising demand. Furthermore, rising geopolitical tensions over Ukraine have also boosted prices, with Brent, the global benchmark for over 66% of the world’s oil, was trading at $94.99 per barrel at close of trading on Friday. It would be no surprise to see prices rising more than 30%, to US$ 120 bpd, before 30 June.

According to a New Climate Institute report, covering Maersk, Apple, Sony, Vodafone, Amazon, Deutsche Telekom, Enel, GlaxoSmithKline, Google, Hitachi, Ikea, Vale, Volkswagen, Walmart, Accenture, BMW Group, Carrefour, CVS Health, Deutsche Post DHL, E.On SE, JBS, Nestle, Novartis, Saint-Gobain and Unilever, many of the twenty five listed companies are failing to meet their own targets on tackling climate change. It appears that some routinely exaggerate or misreport their progress, and that the headline climate pledges of these companies only commit to reduce their emissions by 40% on average, not 100% as suggested by their “net zero” and “carbon neutral” claims. Only one company’s net zero pledge was evaluated as having “reasonable integrity”; three with “moderate”, ten with “low” and the remaining twelve were rated as having “very low” integrity. For the minority of the evaluated twenty-five companies, their headline pledges serve as a useful long-term vision, and are substantiated by specific short term emission reduction targets. While none of the pledges have a high degree of integrity overall, Maersk came out on top, with reasonable integrity, followed by Apple, Sony and Vodafone with moderate integrity. However, most of the companies with net zero or carbon neutrality pledges fail to put forward ambitious targets. Many company pledges are undermined by contentious plans to reduce emissions elsewhere, hidden critical information and accounting tricks, with the headline pledges of the remaining companies having low (ten companies) or very low integrity (eleven). Thirteen of the twenty-five survey companies, that have backed their net zero headline pledges with explicit emission reduction commitments, commit, on average, to reduce their full value chain emissions from 2019 by only 40%, with the remainder having no specific emissions reduction commitments for their net zero target year. It is about time large corporations realise that setting vague targets and greenwashing are no longer acceptable and can only further mislead the public; the time for positive action is now and all companies should start scaling up and bringing in best practices.

On what BP call underlying replacement cost profit, net earnings were up 31.5%, quarter on quarter, at US$ 4.1 billion, but would been even higher if it were not for weaker oil trading results and the impact of higher energy costs on operations such as refining. With Shell’s 2021 profit almost quadrupling to US$ 19.3 billion, there are many calling for a windfall tax on energy companies, as UK households, already battered by skyrocketing fuel prices, look forward, with some trepidation, to see their energy prices rise more than 50% in April.

Chief executive Guillaume Faury has indicated that Airbus may make its own engines for its hydrogen-fuelled planes, with plans to develop the world’s first zero-emission hydrogen-fuelled commercial aircraft by 2035.  For that to happen, the plane-maker will need government support and the back-up of regulators because hydrogen needs to be “at the right time, at the right place, at the right price and that is not something that aviation can manage alone.”  Sabine Klauke, Airbus’s CTO, warned that hydrogen, which has an energy density three times that of kerosene, needs to be liquefied and stored at -253°C, and that the double-skinned tanks required to contain the substance are four times the size of conventional fuel storage.

With the industry badly impacted by the global semiconductor shortage, Toyota pasted a 21% fall in Q4 profits to US$ 6.8 billion. The world’s leading carmaker has also had to cut annual production by 5.6%, from 9.0 million vehicles to 8.5 million, as manufacturers around the world struggle to find enough microprocessors for their products. Only last September, Toyota had cut production by 40%, mainly because of the chip shortage, and over recent months announced a number of production suspensions due to a lack of parts, as the pandemic hits supply chains. However, the Japanese car maker lags many of its rivals when it comes to EVs, as it has probably focussed too much on hybrids. It will have to invest a lot more in the new technology, and/or partner with an appropriate tech-related company, to maintain its number one position. 

With a current 9% share of the global market, the EV market saw sales more than double to 6.6 million last year, compared to 2020, 2019 and 2012 figures of 3 million, 2.2 million and 130k electric vehicles; research firm Gartner expects 2022 EV sales to be 35% higher on the year. This comes as an increasing number is opting for eco-friendly alternatives. The marked improvement in sales comes at a time when the sector faced several challenges including a semiconductor shortage and supply chain bottleneck problems. The increased popularity of EVs is driving legacy carmakers to invest more money into EVs and so ramping up competition in the sector. The leading EV manufacturer saw an 87.4% rise in production to 936k that resulted in Tesla’s profit jumping an incredible 760% to US$ 2.3 billion – US$ 700 million more than its 2020 turnover figure.

In Europe, Norway and Iceland lead the race to become the first nation to end petrol car sales. Last year, 62% of all cars on Norwegian roads were electric and it seems highly likely that by 2025, all vehicles will be powered by batteries. It is estimated that about 9% of new cars in the EU, which has a proposed 2035 cut-off, were electric and that  only eight other countries in the bloc have more than 10% of their cars, non-petrol – Iceland (33%), Netherlands (20%), Sweden (19%), Austria (14%), Germany (14%), Denmark (13%), Switzerland (13%) and Luxembourg (10%); 11% of UK cars are electric vehicles. Germany reported the most production of EVs, in the EU bloc, with a 2021 total of 350k. At the other end of the line are the likes of the Czech Republic and Slovakia, along with other fossil fuel-heavy countries in Eastern Europe, with very few registered EVs.

Uber reported Q4 net income of US$ 892 million, compared to a quarterly loss of US$ 968 million a year earlier, as it bounced back from the latest impact of the Omicron. Revenue climbed 83%, on the year, and 20%, on the quarter, to US$ 5.8 billion. The company’s annual net loss narrowed down by 93% to US$ 496 million, compared to its 2020 loss of US$ 6.7 billion, helped by a 57% hike in revenue to US$ 17.5 billion. Uber’s Q4 gross bookings surged 51% on the year to more than US$ 25.8 billion – US$ 2.8 billion (12%) higher on a quarterly basis. Last month, an addition to its portfolio came with the acquisition of Australia’s ‘Car Next Door’ – a peer to peer car sharing platform for an unknown sum.

In Q4, Twitter posted an 18.2% decline on the year in net profit, to US$ 182 million, as the company missed analysts’ estimates on sales and user growth; however, on the quarter, it was an improvement on Q3’s loss of US$ 537 million. Q4 revenue was 21.5% higher, at US$ 1.57 billion, with advertising contributing to 90% of the total turnover, equating to US$ 1.41 billion; data licensing and other revenue, 15% higher on the year, added US$ 154 million to the top line. In Q4, Twitter posted a 13.0% increase in the number of monetisable daily active users, with average numbers topping 217 million. It has also authorised a new US$ 4 billion share repurchase programme, effective immediately – US$ 2 billion will be repurchased by the company over the time along with a US$ 2 billion accelerated share repurchase scheme.

Last year, Sanjeev Gupta’s GFG Alliance, the owner of Liberty Steel, was forced into a financial restructuring because of the demise of Greensill Capital, its key lender. This week saw the issuance of a winding up petition, by HRMC, against Speciality Steel UK Limited, a division of Liberty Steel; the subsidiary, employing 2k, operates from sites in Stocksbridge and Rotherham and it is not yet clear whether one or both sites will be impacted. Like other steel firms, GFG Alliance noted it was operating against a “very challenging” backdrop, as record high energy prices drove up its overheads, but that it was in continuous dialogue with its creditors, including HMRC, to find an “amicable solution” that was in the best interests of all stakeholders. It seems that steel producers in the UK are hard done by, with little government help available. This is  in comparison to most of its European competitors such as France, where “the industry is supported with energy subsidies and trade protections, and Germany as “heavy energy users in industry get big rebates”.

Yesterday, the Financial Reporting Council announced it was investigating HW Fisher, the auditor to Liberty Commodities, which is another of Mr Gupta’s businesses, and more specifically its financial statements for the year to 31 March 2020. Meanwhile, since May 2020, the Senior Fraud Office has been investigating “suspected fraud, fraudulent trading and money laundering in relation to the financing and conduct of the business of companies within the Gupta Family Group Alliance”.

In September 2020, SoftBank announced it was planning to divest its UK microchip designer Arm to US technology group Nvidia in a US$ 40 billion deal. This week, the Japanese conglomerate called off the planned sale and indicated that it now wishes to float the shares, by the end of next month, on a global stock market, details of which have not been made public. Both parties agreed to end the agreement, but “because of significant regulatory challenges preventing the consummation of the transaction, despite good faith efforts by the parties;” the deal had faced numerous regulatory hurdles in the UK, USA and the EU.   In line with the initial 2020 agreement, SoftBank will keep the US$ 1.25 billion non-refundable deposit paid by Nvidia.

A New York couple, (Ilya “Dutch” Lichtenstein, a citizen of Russia and the United States, and his wife, Heather Morgan), who, in 2016, allegedly hacked 120 Bitcoins, then valued at US$ 71 million, and now worth more than five times as much, from the virtual currency exchange Bitfinex, are being charged, not for the hacking offence, but for conspiring to launder billions of dollars, utilising the stolen cryptocurrency. It is reported that much of the laundering occurred through accounts on AlphaBay, a dark web site, since shut down, with the laundered bitcoin being used to purchase gold, NFTS and gift cards. The Justice Department has seized US$ 3.6 billion of stolen funds – its largest ever financial seizure – and accused them of relying on various sophisticated techniques to launder the stolen money and conceal the transactions.

It has not been a good start to 2021 for Marc Zuckerberg’s Meta, the company formerly known as Facebook, with its shares plunging 12.2% on Monday, continuing last week’s declines and down 34% since the beginning of the year. The fall has been fuelled by concerns including privacy changes to Apple products, that make it harder for advertisers to see how their ads work on Facebook, concerns over data privacy and weaker than expected earnings; its Q4 net profit dipped 8% to US$ 10.2 billion, whilst it lost daily active users for the first time in its 18-year history. Meta, which also owns Instagram, is also involved with numerous altercations with various global regulatory authorities.

Pfizer more than quadrupled its Q4 net profit from US$ 847 million to US$ 4.4 billion on the back of US$ 12.5 billion worth of sales of its Covid-19 vaccine, as 2021 profit rose 140% to US$ 22.0 billion. Year on year, revenue more than doubled to US$ 23.8 billion, but down 58.3% on a quarterly basis, and by 95% to US$ 81.3 billion or the year. Having invested billions of dollars in research for manufacturing a vaccine against the Covid-19 virus, the pharmaceutical company has managed to deliver both the first FDA-authorised vaccine against Covid-19, with its partner, BioNTech, and the first FDA-authorised oral treatment for Covid-19, both within the period of just two years. In 2021, it manufactured three billion doses of Covid-19 vaccines. Higher earnings have prompted the drug maker to raise its 2022 revenue forecast to between US$ 98 billion and US$ 102 billion and adjusted diluted earnings per share of US$ 6.3 to US$ 6.5. Although its share value had risen 43.3%, over the past twelve months, it shed 6.2% to US$ 49.9 in Monday’s trading, following the earnings announcement.

Peloton was one company that benefitted from the pandemic which saw sales of its exercise bikes and treadmills soaring, as people started, by necessity, exercising from home. In 2020, the company market value was estimated at over US$ 50 billion but now that has slumped by around 80%, for a variety of reasons. They include people returning to work out in gyms, now that lockdowns gave been eased, and recent PR disasters, the most infamous being the television drama, ‘Sex and the City’ revival, ‘And Just Like That’, featuring a story line in which the leading character suffered a fatal heart attack while using a Peloton bike. In 2021, the US Department of Justice and the Department of Homeland Security said they were investigating the company after a child was pulled under one of its treadmills and killed, while other customers had reported injuries. Six months ago, Peloton announced that because revenue growth had slowed, it was slashing the price of its flagship bike by 20% to US$ 1.5k, and in November posted that it expected 2022 revenue to slow. It is highly likely that corporate vultures (including the likes of Amazon, Apple, Disney, Nike and Sony) are circling overhead knowing that Peloton would be a beneficial addition to boost their presence in the home, health and wellness and media spaces. Last Friday, its shares jumped 30% on news that Amazon is showing interest. Mainly because of investor-based criticism, co-founder and CEO John Foley will be immediately replaced by the former CFO of Spotify and Netflix, Barry McCarthy. Peloton will also cut about 2.8k jobs, as the exercise bike maker looks to revive sagging turnover numbers and to regain investor confidence.

Global markets will continue to be volatile for numerous reasons including the crisis in the Ukraine – even without this major incident, they were set for a correction which may now arrive a lot earlier. Today, it is reported that the Russians have all their troops, along with air and naval assets, in place, with many analysts now indicating that an invasion is all but inevitable. Some governments, including the US and the UK, have warned their nationals to leave Ukraine, with US National Security Adviser Jake Sullivan noting “we are in the window when an invasion could begin at any time, should President Vladimir Putin decide to order it.” If that were to happen over the weekend, Monday could prove to be an economic and financial St Valentine’s Day Massacre, as global indices crash.

Having slumped 9.4% in 2020, the UK economy turned from zero to hero, as last year its economy rebounded 7.5% – its fastest pace in eighty years and it is now the fastest growing economy in the G7 group of nations. However, it must be remembered that this rise comes from a low base and that the economy is still slightly smaller than it was at the end of December 2019. In December and January, the Omicron virus slowed growth somewhat but a bigger problem, notwithstanding a potential Ukraine catastrophe, is the energy crisis which could wreak economic havoc over the coming weeks.

There is no doubt that Andrew Bailey lives in ‘Cuckoo Land’. The BoE governor, with an annual emolument of US$ 779k, 18.4 times that of the median annual pay for full-time UK employees, has advised UK workers, “don’t ask for big pay rises”. This comes at a time when inflation is forecast to top 7.5% in April, (the BoE’s target remains unchanged at just 2%) the energy price cap has rocketed 54% and a tax rise is on the horizon; Assosia noted the average cost of food items, at the Big 4 UK supermarkets, had risen by more than 8% over the past twelve months, with more on the way. Most analysts see incomes falling 2% this year and that the UK populace is facing the biggest squeeze on their incomes in thirty years. With the ‘Spring of Discontent’ fast approaching and many facing major struggles to pay basic food bills, rising energy costs, rent/mortgage etc, the advice from Mr Bailey to workers is not to ask for big pay rises, to help stop prices rising out of control. His remarks show how much the BoE is out of touch particularly because he should have directed remedial action once his 2% inflation target was breached earlier last year. It is a worry that some of the banking mandarins in Threadneedle Street seem to be living in The Land of Make Believe.