Christmas can prove to be the season for coughs and colds rather than festive cheer. How refreshing it is then, that although immunity from such afflictions has yet to be discovered, Mrs May is at least now immune from something a lot worse, an ousting from her own party.
Coming in the form of support towards her leadership of the Conservative Party, by 200 votes to 117, Theresa May received immunity from any would be conservative rivals for at least another year. Despite the result showing that 63% of Conservative MPs still back her, certain critics have said that losing the support of a third of her MPs was “devastating” and she should still relinquish the reigns.
Although May’s victory by no means ensures stability in government, the relief around Westminster and the City was palpable. Sterling, which had declined towards $1.25 versus the US dollar on the news that 48 signatures needed for a vote of no confidence had been amassed, jumped over 1% as it became clear victory was in sight for May on Wednesday afternoon. More domestically orientated UK mid cap equities also jumped during Wednesday; the FTSE 250 rising 1.9%, with renewed hope that some stability would return to proceedings.
The picture for equities was also rosier on the international stage, rebounding from the heavy losses endured the previous Friday. In an interview with Reuters on Tuesday, US president Donald Trump said trade talks with China were progressing well and more meetings were to come between the two countries. He commented that he would intervene in the US Justice Department’s case against Huawei’s top executive if it helped to close a trade deal. In return, China made its first US Soybean purchase in more than six months. Large cap multinationals, more tuned into the global economy, were buoyed most from the sudden burst of goodwill between the two nations, making solid gains throughout the week.
On the economic data front this week, there was more cause for cheer on domestic shores as average hourly earnings figures showed that wages are increasing at their highest level for nearly a decade. Compared with a year earlier, wages excluding bonuses were up by 3.3% in October, the largest rise since November 2008 and now well above inflation levels. The numbers are significant as workers, on average, are now earning more in real terms than they have for a while, in theory enabling them to spend more freely.