Market Loop - Brexit debate reignites

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22nd November 2022

Bite-sized business news from the UK and beyond

Good morning Yesterday Cristiano Ronaldo became the first person to reach 500m followers on Instagram. The Portuguese footballer reached the milestone after posting a Louis Vuitton ad featuring himself and fellow football player - and Instagram's second most followed person - Lionel Messi.

Today's stories

Brexit debate reignites
Disney’s surprise sequel

ECONOMY
Brexit debate reignites

What happened?
Yesterday the prime minister Rishi Sunak shutdown rumours that the UK could be seeking closer ties to the EU, six years after the country voted to leave the union that allowed the free movement of goods and people across 27 countries.

How did we get here?
Over the weekend there was speculation that the UK might look for a Swiss-style relationship with the EU. Switzerland isn’t in the EU but does allows EU citizens to live and work in the country. It also has agreements with the trading bloc meaning it can access the single market without trade barriers for many industries. It does however also make payments into the EU budget.

For Brexit supporters, this type of relationship would go against the reasons they voted to leave the EU.

Speaking at a business conference yesterday the PM squashed the speculation saying "I voted for Brexit, I believe in Brexit.” Adding that the UK wouldn’t pursue a relationship with the EU "that relies on alignment with EU laws".

Sunak said that instead of a closer relationship with the EU, the UK would target trade deals with "the world's fastest-growing economies".

Zooming out: Brexit is becoming part of the national conversation again as many question whether the UK’s current gloomy economic picture was made worse by leaving the EU. The exodus of EU workers post-Brexit has been cited as one of the reasons for labour shortages. Bloomberg estimate that there would have been £31bn more investment in the UK had pre-Brexit trends continued.

Other stories to keep you in the loop

British office space plummets by a record amount
Tesco joins Asda and Lidl in rationing eggs over supply issues
Penguin scraps $2.2bn deal to buy rival publisher
Catering giant Compass reports a recovery that beats expectations
Bitcoin tumbles as FTX turmoil continues
Virgin Atlantic withdraws support for Heathrow third runway
Virgin Money staff get 10% pay rise as profits jump

MEDIA
Disney’s surprise sequel

What happened?
On Sunday Disney announced that former CEO Bob Iger would be returning to his position, ousting incumbent Bob Chapek less than three years into his tenure.

How did we het here?
When Iger stepped down in February 2020 his successor was always going to have big shoes to fill.

During his 15 years as CEO, Disney reinvented itself by acquiring comic book studio Marvel, the Star Wars franchise and the Pixar animation studio. Also in 2019 Disney paid $71bn for 21st Century Fox assets including The Simpsons.

Chapek was personally chosen by Iger to take over as CEO but he’s struggled to live up to his predecessor’s long run of success with Disney’s share price down 40% this year:

Although the streaming business, which includes Disney+, Hulu and ESPN+, has overtaken Netflix subscriber numbers, it is yet to turn a profit and lost nearly $1.5bn in the three months to September.
Chapek was criticised for initially not coming out forcefully against Florida’s so-called “Don’t Say Gay” law. Then faced another controversy with actor Scarlett Johansson over her compensation for the film Black Widow.

All this led to Chapek losing favour with Disney’s board with Iger drafted in to right the ship. The news was well received by investors with shares jumping 10% on the day.

Zooming out: Bringing on a former CEO to provide stability is not unprecedented in corporate America. The formerly spurned Steve Jobs returned to Apple in 1997, and former Starbucks boss Howard Schultz recently returned to the company as interim CEO.

Stat of the day

US president Joe Biden turned 80 on Sunday, becoming the first octogenarian to occupy the White House

Interesting links from around the web

Lonely Planet’s top 30 destinations for 2023
2022’s most-common passwords
53 easy ways to add cheer to your life as winter looms

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