Weekly Wrap Up: IMF & Selective Criticism

On Thursday, following the publication of the International Monetary Fund’s forecast on global economy, tales of Britain’s economic growth were published on the front pages of the various media outlets, boosting the confidence of politicians and public alike. The UK is expected to grow by 3.2% this year, a figure ahead of all G7 countries, and is the second fastest growing economy on the list. The fund also increased its UK growth forecast for 2015 from 2.5% to 2.7%, compared to original prediction of 2% in October of last year. With the forecast published just seven months before the UK General Election, it will certainly have a strong impact to the dynamics of all forthcoming political campaigns.

Politics aside, the public’s perception of the IMF is also an interesting phenomenon in itself. It is not hard to observe how punishing the media has been on the IMF, following the publication of its most recent forecast. Commentators have emphasised how the IMF is proved “wrong” with current figures, arguing that the UK has made the right choice by avoiding to changing its economic policies accordingly to IMF previous predictions.

Only one year ago, the IMF’s Chief Economist Olivier Blanchard accused George Osborne of “playing with fire” by persisting with austerity. Following the fourth upgrade that the IMF has made on the UK economy since the comment was made, Managing Director of IMF, Christine Lagarde, admitted that the fund had “got it wrong” on the UK.

Scepticism towards the IMF is not unusual. Undeniably, the IMF is one of the most powerful super-governmental bodies in existence, and perhaps not a very well-received one. As a Bretton Woods organisation, the IMF has dictated public spending patterns in the past, and arguably has caused structural changes in some parts of the world, some of which have received strong criticism from the public. Until recently, some of the economic and social consequences caused by the IMF’s induced policies have been repeatedly cited by academics and the media.

On this occasion, however, the public has been largely biased towards the recent IMF forecast, compared to any forecast in the past. The current forecast has even been used as evidence against previous IMF forecasts.

So why has this forecast been so popular? The IMF could be equally as wrong about its predictions now as it was this time a year ago, and yet the public has happened to favour this most recent forecast, portraying it as being more credible than the previous forecast.

There are two explanations for such selective criticism. The first could be a defensive explanation; the UK media has favoured the positive figures which not only prove that the nation can succeed, but which also enhances public spirit. Secondly, the current phenomenon might be a reflection of the rightward lean of the media and its support of the government’s austerity policy.

Image courtesy of Owen Phillips / IMF

Both of these explanations are possible. Either way, the phenomenon reflects how powerful public perception is in determining the way that data is interpreted. This once again indicates the importance of the communications industry in today’s world: in a world where data could only tell so much and the role of the interpreter is critical. Indeed, last week’s news about the IMF could now serve as an example of when perception has triumphed data in deriving conclusions amongst the public.



Is the future bright for solar? This question was considered and debated at another excellent EcoConnect event hosted by environment focused lawyers Pinsent & Masons. The message was that although the sector has potential, it requires greater consistency of policy. We also met with some of the City’s finest accountants at Crowe Clark Whitehill to celebrate Paul Blythe's promotion, as well as exchanging ideas with the team at Shore Capital. This week’s market lunch ran with a China theme; one that proved to be incredibly topical in light of the recent wave of Chinese companies joining the London Stock Exchange. Of course, the London Stock Exchange was well represented at the lunch to share its opinion, with other city advisers.



Law firm Addleshaw Goddard has boosted its real estate practise with the appointment of Stewart Womersley as Partner, who joins from Nabarro. And, as mentioned above, Paul Blythe has been promoted to corporate finance partner at audit, tax and advisory firm Crowe Clark Whitehill. Paul has been at CCW for coming up to 4 years, where he has advised on 35 UK public market transactions.



"Bullish" - expecting the level of economic activity in general to rise



This weekend Japanophiles – yes, that word exists – will once more be celebrating in force this weekend. If you are a fan of the food, culture and music of this amazing country then make your way over to Earls Court for the weekend-long Hyper Japan 2014 festival.

Already feeling nostalgic for Rio? Then relive the Carnival vibes by celebrating the two year anniversary of the London Olympic opening ceremony at the Great British Carnival in the Queen Elizabeth Olympic Park. This feast of colours, costume and music will mark the anniversary of the fantastic display of British local talent.

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Weekly Wrap Up: Federer, Bouchard & Business

The past week has certainly been an eventful one for sports fans. Whilst football is still undeniably dominating the sports scene, many turned their attentions to the Wimbledon finals. This year’s Wimbledon men’s single final was certainly an exciting one for tennis lovers; 17 Grand Slam Champion Roger Federer was again competing in the finals against 27-year old Serbian player Novak Djokovic. The cheering at the venue clearly indicated that many more took side to support Federer. It was as if the crowds wished to see the legendary player winning one more Grand Slam title before his retirement, as opposed to the junior Djokovic with a long career ahead of him.

However, the women’s game was quite a different story, with 21-year old Eugenie Bouchard gaining much attention. The attention was hardly surprising as Bouchard possesses all the qualities to receive the likes of the media; she is exceptionally good looking and she entered the Wimbledon finals after having played in the Grand Slam major draws for just 14 months. The media has even been speculating about the birth of another Maria Sharapova, a woman who just ten years ago defeated Serena Williams at the age of seventeen, laying down her foundation of becoming one of the most discussed sports stars in history.



It is interesting to see how the media’s speculation about the world of technology very much resembles that of the world of sports. Leaders of the largest companies in history, including Facebook’s founder Mark Zuckerberg and the Google brothers Larry Page and Sergey Brin, are still some of the most celebrated personalities in media history. To a certain extent, the popularity of their brands is very often built upon the company and the individual's success, with many die-hard fans caring more about the success of the company in question than with the actual products being sold.

On the other hand, startups are increasingly dominating the media. The success stories of companies who have blossomed out of nowhere are nowadays just as likely, if not more, to receive media attention than the more established companies with steady incomes and long-term customers. In the UK, titles such as “Silicon Roundabout” and “Tech City” have become everyday words for the business press.

This week, for example, Google’s venture funding arm announced that it is setting up a $100m investment fund in London to invest in tech companies in Europe. Despite being incredibly high risk, venture funds have become increasingly active, and this announcement demonstrates the confidence that Google has in the startups of the world. Google was suitable rewarded for its startup focus; the media praise of Google’s risk-taking and “supporting the underdog” was bountiful.

Looking back at the examples of Federer and Bouchard, it is very clear that the press’s favour cannot be predicted or pigeon-holed. Whilst journalists are intrigued and keen to report on the entrepreneurs, innovators and startups of the new world, there is still a great appreciation for the more traditional beasts that time has proven are successful and worthy of praise.



Having made a series of appointments in recent months, Cantor Fitzgerald Europe further boosted its team with the appointment of Eric Bourguignon as Director of Consumer and Retail for its corporate finance division. Meanwhile, Neil Cullum, Head of Banking at the Accountancy and Investment management group at Smith & Williamson is due to retire at the end of this month. He will be replaced by Peter Mitchell, former Chief Executive Officer at CAF Bank. Walker Crips Investment and Wealth management Group also recruited two Barclays Wealth veterans in the form of Steven Moss and Mark Entwistle; both will be stockbrokers.



“A business beast” – A well-established and substantial corporation, possible a business that is steeped in history and tradition.



Missing the adrenaline rush of the annual school sports day’s ‘egg and spoon’ race? Not to fear. Head to Bedford Square for The Chap Olympiad where dapper attire is a must and you can take part in events such as breadbasket ball, passing the port, umbrella jousting, bakewell battles and that old favourite; The Tug Of Hair Competition.

If you are in need of some pre-game sustenance, then we suggest spending your Sunday lunch time at The Truscott Arms in Maida Vale. This Victorian pub not only does a mean Yorkshire Pudding, but they offer a whole Gluten Free roast!

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The A-Z of Generation Y

Recently we’ve seen several press articles on the tastes, working habits and culture of those categorised as ‘Generation Y’. Why all the fuss? Why should we turn our attention to this demanding demographic? At first glance, it just seems experts are advising we change working environments to play to their strengths, and, in many ways, protect businesses from Gen Y’s weaknesses.

Dave Baxter wrote an article in The Business Reporter, distributed by City AM, stating that Generation Y, generally considered those born between 1980 – 1990, are often described as "collaborative, workshy, digitally savvy and anti-authority”. These are, of course, generalisations, but looking around the City, each of these ‘Millennials’ (as they are otherwise known) that I spy undoubtedly demonstrates, at times, most of these characteristics. And the scary bit? In workplaces across the world they are starting to climb the career ladder.

This new workforce breed will undoubtedly affect how companies and leaders operate and manage their teams. Let’s consider what this could mean for employers in the communications industry…

Collaboration

The possibility for collaborative working methodologies is undoubtedly a positive. Working in silos would almost be an oxymoron for any natural-born communications professional. As new sources of information emerge and communications channels constantly evolve, resources need to be pooled to ensure optimal internal communications, in order to deliver the best quality of service to your clients. Collaboration in the workplace also improves the creativity of content, allowing more perspectives to shape the final product. This is essential when vying for column inches or coverage for smaller companies in an increasingly crowded marketplace.


Digitally Savvy

Last week, Morgan Stanley gave the green light to its Brokers to post self-authored content on firm-approved Twitter profiles. The majority of journalists are also active Twitter users. In fact, with hundreds of emails and calls a day, often the most responsive and standout way to get in contact is via the social media platform. If financial journalists and advisors are using it, surely the platform is perceived as influential? Could the content even influence a share price? If communications professionals have grown up using social media, tweeting an equity story is as natural as putting something down the RNS, or indeed arranging a night out. It’s probably therefore a good thing to have Millennials as members of the team

Anti-authority

But let’s not tweet before we can talk. An anti-authoritarian attitude can be difficult to manage and, more importantly, to teach. But for Millennials, it’s more a case of a lack of awareness of authority. Due to the more regimented family lives of generations past, young people were taught, ‘only speak when you are spoken to’. However, due to the flexibility and fluidity of modern family units, relationships are more relaxed at home, which can often translate to the workplace. This modern mentality means that Generation Y simply do not feel constrained or restricted by authority, so are not afraid to voice opinions. Their creative and often well-educated minds are therefore freer to help shape a company’s strategy and business decisions. Maybe that’s not a bad thing?

At the end of the day, Generation Y is becoming a more senior and dominant demographic in the workplace. Surely it would be better to facilitate their preferences and habits in order to make the most of their strengths? A diversity of skills is an asset to any business. It can lead to the evolution of a new differentiator or USP.

But then again maybe I would say that?

I was born in 1990. Oh and workshy is just a rumour!

Stephanie Watson

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Weekly Wrap Up: EU plays with the News

Google’s domination of the search engine market often makes it seem like it is the only single portal of information. This continually raises controversy over the company’s power and therefore control over online data flow. This week the debate spiked in profile, as Google erased certain links to news articles, blogs and so on from its search results.

This action follows the European court ruling in May that granted individuals the “right to be forgotten” online. The decision, which was fought by Google, asks that the company comply with the law in taking down search results that are deemed “inappropriate, irrelevant, or no longer relevant”. Indeed, it is the search results themselves that are in contention, and not the content of the article or story in question. The ruling will only affect Google searches in Europe, whereas Google.com (in the USA) will remain untouched.

In response to this ruling, earlier this week Google began informing several British news outlets on the deletions that it was having to make. On Wednesday, for example, the BBC’s Robert Peston reported that he had received a ‘notice of removal from Google Search’ relating to a blog that he had written in 2007 on San O’Neal, the former CEO of notorious investment bank Merril Lynch. This removal hit the headlines throughout the course of the week, causing a spike in controversy and, no doubt, a spike in the number of hits that Google received.

A case can be made for the individuals who may deserve to disassociate their name from a story that has forever branded them on the basis of a mistake. However, more can be said and questioned on the wider implications that Google’s filtering could have on censorship and the media industry.

Importantly, should the EU have the right to pass judgment over what is “inappropriate, irrelevant, or no longer relevant”?

Surely this judgement is subjective; by giving search enginges the power to decide what should and shouldn't be removed from our screens are we not posing a great threat to freedom of speech? Written pieces on the questionable actions of those involved in the Financial Crisis of 2007/08 are surely still of significant interest to the public even if they are considered by some to be "no longer relevant". Allowing the wealthy and powerful to conceal their tarnished reputations by simply filing a request of removal to Google is a dangerous path for the company and the EU court to take.

Robert Peston said that Google had “killed” this piece of his journalism. Indeed, in response to Google informing publishers of what stories had been removed, the individuals who filed the complaints have since experienced the complete reverse effect on what the ruling set out to achieve; the publicity surrounding this discussion simply highlighted and re-told the very stories that were asked to be removed. Furthermore, the subject of the deleted article will surely face more questioning from the public as publishers reveal those wanting to hide articles written about their actions.

Between May 29 and June 30, over 70,000 requests of deletions were made to Google. At the core of this debate lies the lack of clarity surrounding Google’s decision making; who can make a request? What are the criteria for deletion? How can journalists respond? The media industry is calling for transparency from Google in order to establish to what extent search filtering will impact the freedom of speech.



Abchaps have been making the most of the fair weather this week by getting out and about with other advisers. We welcomed some of Cenkos’s finest Technology experts to our office for some bubbly, before the invitation was returned by a trip to their Summer part at Coq D’Argent.

Our Market Lunches never fail to stir some great discussions about the capital markets, and a particularly interesting discussion was held at our China focused lunch, relating to the need for further promotion of Chinese companies in the London.



To expand its London corporate practice, Hogan Lovells has added equity capital specialist, Daniel Simons, as a Partner. Meanwhile, Fieldfisher has added Mark Webber as a Technology Partner at its London office, who specialises in technology, digital media, e-commerce, IT law, and IP-related transactions.Crowe Clark Whitehill also promoted Paul Blythe to the role of Corporate Finance Partner. Blythe was previously a director at the firm and has expertise in Natural Resources. He will continue to be based in firm’s London office.



“Google Scrubbing”: The removal of certain results from a Google search.



Thursday saw Dow Jones warming itself up nicely for a record breaking Independence Day. Although we Brits may geographically be a few miles away from the Americas, there is no reason as to why we shouldn’t help celebrate this booming economy. Those wishing to do so can raise a glass tonight at 36 Craven Street, the former home of US founding father Benjamin Franklin, with a historical tour and show.

Care for a more international celebration? City lawyer Jessica Tucker will be serving up a selection of edible treats from across the world with the Urban Food Fest on Saturday 5 July. Taking place in Shoreditch, visitors will “want for nothing” with stalls of pizza, pad thai, halloumi, souvlakia, sushi and much more. This is just another event that proves that you do not have to leave London to escape the City!

Bringing the focus a little closer to home, on Saturday the V&A is launching itself into the 21st century with its “Rapid Response Collecting” exhibition. With a pair of Primark jeans from the Rana Plaza factory disaster and the world’s first 3D printed gun, the V&A is taking a whole new approach to modern art, communicating to the British audience about the interaction between current affairs, architecture, technology and society.

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