The second episode of US political drama The West Wing is entitled Post Hoc, Ergo Propter Hoc – in which smarty-pants President Josiah Bartlet educates his minions on the meaning of the Latin phrase after his unpopularity in Texas is blamed on one of his gags. “After it, therefore because of it,” he puffs. “It means one thing follows the other, therefore it was caused by the other. But it’s not always true. In fact, it’s hardly ever true. We did not lose Texas because of the hat joke.”
The dialogue’s wonderfully self-satisfied, of course, but we could perhaps do with a touch of this kind of rebuttal in real-life politics here. When it comes to Brexit, each side seems to be indulging in the same kind of confirmation bias as Bartlet’s advisers, with each week bringing new economic data that convinces both campaigns they were right.
Last week the economy was shown to be either in rude health or about to crash following June’s vote. Prepare for more of this self-justification this week after the CBI’s “mixed picture” on the economy is published on Sunday, the thinktank NIESR issues an economic update on Wednesday, and the Bank of England has a big statistics day on Thursday.
The numbers will all show that everybody who opined on the referendum was right all along. There will be no exceptions.
Chasing the odds on Ladbrokes and Hill’s
Perhaps the only section of the UK that cannot now claim to have been right about the referendum is the bookmaking industry, which heroically managed to call events even more incorrectly than our opinion pollsters.
No matter, they will be out in force this week, with both Ladbrokes and bitter rival William Hill announcing results – which should be buoyed by decent returns at Euro 2016.
Still, unusually for a bookie, William Hill is in the middle of an unlucky streak that has involved it losing (a) at the Cheltenham festival; (b) its tag as the UK’s best run bookie; and (c) its chief executive, following the departure of James Henderson earlier this month. Hills is also now possibly the subject of a takeover deal involving online gambling group 888 Holdings and bingo hall operator Rank Group – which is a bit humbling: last year William Hill was bidding for 888.
Also up is Ladbrokes, which is about to merge with rival Coral – assuming the pair can sell between 350 and 400 betting shops to get the deal through competition regulators.
The market reckons the likely buyers will be Betfred or, possibly, Boyle Sports. Developing.
Borrowing? The drinks are on NatWest …
The doyen of City journalism, Christopher Fildes, has always been fond of quoting Sibley’s law. Giving capital to a bank (said the worldly banker, Nicholas Sibley) is like giving a gallon of beer to a drunk. You know what will become of it, but you don’t know which wall he will choose.
The financial crisis, of course, proved Sibley’s maxim yet again, but just because his words keep reflecting reality, please don’t think these things are achieved effortlessly: the challenge for bankers is to continue to find new ways of losing other people’s money – and last week they alighted on a gem.
Without a hint of irony, NatWest, part of the bailed-out-by-the-taxpayer Royal Bank of Scotland, paved the way for the introduction of negative interest rates for the first time in Britain. The warning could mean that an account holder with £1,000 in a NatWest account might see that shrink to £999 or less the following year.
Obviously NatWest is blaming extremely low global interest rates for this idea, but expect plenty more questions on the plan during the week, as RBS and rival HSBC report results – while the Bank of England’s monetary policy committee also meets to set interest rates. First question to NatWest: if you charge savers, how much will you pay borrowers?
