By Michael Every of Rabobank
Markets were briefly roiled yesterday by the Fed’s Evans being misquoted in suggesting that the Fed might do the complete opposite of what it has just pledged to stick with – not doing anything for years and years and years, almost regardless of what inflation (doesn’t) do for years and years and years.
Further roiling can be expected in the UK as the same government who weeks ago was telling people “Go back to the office or risk losing your job,” is now telling them they will be working from home for the next six months, and that restrictions could get tighter yet. For example, only being able to drink until 9pm not 10pm?
Apart from the obvious “whocouldadnooed?” incompetence, it is stunning that a British government misunderstands its own people so badly. The infamous UK ‘closing time’ was only introduced around a century ago in 1914‘s Defence of the Realm Act to try to ensure that WW1 munitions workers would not be so hung-over that they couldn’t work the next day. Back then, it was 10.30pm and “Last orders!” or “Time, ladies and gentlemen, please!” needed to win the war. Now it’s 10pm, apparently.
The key point (or pint) is that British culture just adapted to drinking the same quantity of alcohol as before, but in a shorter time: sobriety was notably not increased. Hangovers were not decreased. Quite the opposite in fact.
The fact pubs are closing an hour earlier for six months was literally all the UK news was talking about last night: Donald Trump and Xi Jinping’s clashing speeches at the UN hardly got a look in. One would think politicians, who are not afraid of the odd drink –they have a subsidised bar, after all– would know this.
(Adrian Edmondson): “One thousand, five hundred and seventy four gin and tonics, please, Monica.”
(Rik Mayall): “LARGE ones.” .
‘Mr. Jolly Lives Next Door’ (1988)
As a co-worker in New York put it yesterday, one would think perhaps the UK is one giant pub. Indeed, perhaps it always was. This certainly isn’t the first time UK politicians have put the ideal ahead of the real and the drinking culture at the heart of UK identity.
Tony Blair –who I suddenly picture with a Campari and soda or a Babycham, trying to fit in at a rough 1980’s northern Working Men’s Club where Bernard Manning is on the week after– massively liberalised the Licensing Laws in the 2000s. Suddenly, pubs could stay open until 1 or 2am or later. “Ah-ha!” cried the Blairites. “Brits will now sup their drinks slowly until the wee hours in outside pavement cafes while discussing arthouse cinema and Sartre, and we will have turned the UK into continental Europe.”
That was the plan.
What actually happened in many locations was a get-‘em-in-let’s-have-another-I-love-you-you-know-did-you-spill-my-pint-vomit-and-blood-and-tears-and-half-a-kebab-down-the-shirt-broken-beer-bottle-in-the-face-where’s-my-taxi-here-come-the-rozzas nightly apocalypse that started at 7pm and went on well until dawn. Good job there wasn’t a war on.
In other words, Brexit was perhaps always inevitable if politicians understood UK drinking habits – though to be fair the Scandinavians, who are capable of some pretty epic drinking of their own, somehow manage to do so without trying to fight everyone in the EU shirtless.
One will certainly need a stiff drink in the next few months, however, if the British government’s claim that 7,000 trucks a day could be stuck in lines at the port of Dover in a “reasonable worst case” if it exits the EU without better customs preparation, and that traders should prepare for January. (The people doing that prep are apparently the same ones doing the UK’s Covid testing and the track and trace system.) That would mean an 80% decline in normal goods flow, and so an 80% decline in imported goods on shelves.
You want a UK pub-style apocalypse all day long? Try all that drinking on an empty stomach – or less of the drinking too if it is imported booze you are after.
In short, both the EU and the UK are negotiating over Brexit trade terms, but the latter seems to, again, be shirtless and shouting “Come and have a go if you think you’re hard enough!” while swaying from side to side.
There are of course other global parallels with well-intended effects to try to corral liquidity: which brings us back to the Fed, the ECB, the BOJ, the BOE, the BOC, the RBA, the RBNZ (who just left rates on hold), the PBOC, etc., etc., and the mother of all hangovers that looms at some point.
(Policeman): “Are you drunk, sir?”
(Adrian Edmondson): “Of course I am, I’m out of my bloody mind. I’ve just spent three thousand quid in there.”
‘Mr Jolly Lives Next Door’ (1988)
What is the crumpled what-you-hope is money you want to be drunkenly fumbling for in your pocket when the bills for all of this come due?
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