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Thursday briefing: Pound down as markets factor in a hard Brexit

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Theresa May woos Brexiter base over Chequers plan … rents climb amid shortage of homes for let … and the case for a nationalising our schools

Top story: No-deal fears worsen exchange rate

Hello, it’s Warren Murray with the news in a hurry.

The pound has fallen to its lowest level this year against the dollar and the euro as mounting fears of a no-deal Brexit prompt a sell-off on global financial markets. Analysts say sterling’s slide – which makes imports and foreign travel more expensive, but UK exports cheaper – could push up inflation and lead to a renewed squeeze on living standards. The pound dropped below $1.29 in overnight trading. “What we are seeing is broad sterling weakness, a very aggressive weakening trend,” said Peter Kinsella, a strategist at Commonwealth Bank of Australia. Morgan Stanley, though, says it expects Britain to secure a deal by early 2019 and the pound to strengthen accordingly.

Theresa May has sought to calm Tory grassroots activists angry with her Chequers Brexit plan, writing individual members a lengthy letter endorsed by sceptical cabinet Brexiters including Andrea Leadsom and Liam Fox. May acknowledges the “strong feelings members of our party have on this important national issue” but argues her plan protects sovereignty and a proposed “common rulebook” with the EU will not stop the UK doing deals with other countries. A handful of party members posted pictures on social media of themselves discarding May’s letter or tearing it up. Polling by the ConservativeHome website has found members bitterly opposed to the Chequers proposal – while Boris Johnson has soared to the top of members’ preferences for next Tory leader, at the same time as the party machine faces pressure to discipline him for insulting women who wear burqas.


Cave boys get Thai papers – Three of the “Wild Boar” soccer boys and their coach who were trapped in a cave for almost three weeks have been granted Thai citizenship. The boys had been stateless, despite being born in Thailand, and unable to travel outside of Chiang Rai province, which is home to ethnic minorities from neighbouring Myanmar.

Officials said the change of status was not because of the cave ordeal – the boys had all properly applied for their citizenship beforehand. Still, the event was advertised on the local government’s Facebook page with the words: “Wild Boars revel! Got Thai citizenship.”


Salisbury sanctions – The United States is to restrict the export of sensitive technology to Russia over the novichok poisonings in Salisbury. The new sanctions provide that if Moscow does not meet a 90-day deadline to renounce chemical and biological weapons and let in inspectors, President Donald Trump is obliged to impose broader sanctions. It is the latest in a string of instances where the Russia policy of the Trump administration as a whole appears tougher than the president’s personal approach. At the July summit in Helsinki he appeared cowed alongside Vladimir Putin.


Rents going up – UK rents are expected to climb by 15% over the next five years, including 2% within the next 12 months, as the supply of lettings dwindles but demand from tenants continues to grow. Small landlords are selling up because of tax changes, while more people unable to afford a home are forced to remain as tenants. The Royal Institution of Chartered Surveyors (Rics) has reported the eighth consecutive quarterly fall in the number of rental properties on the market across the country. Home sales remain flat – though Scotland, Northern Ireland, much of northern England, the Midlands and Wales have recorded more transactions and price rises. In London, the south-east and East Anglia prices have continued to fall.


Tesla fallout – Elon Musk might find himself in trouble with regulators after his announcement about taking Tesla private sent its stock price soaring. It was “highly unprecedented” that Musk did it during trading, said Harvey Pitt, former chairman of the US Securities and Exchange Commission (SEC) whose rules Musk may have broken. “Announcements of this kind move markets as we saw and they are made either before the opening of the market or after the close. He did not do that.” Corporate governance expert Charles Elson said: “I do not believe this is the appropriate way to suggest going private.” Tesla short-sellers – Musk’s sworn enemies – may have lost more than $800m, according to estimates, while his 20% stake reportedly gained $851m. Tesla’s directors say they had been aware of Musk’s proposal before he tweeted it.


Aim high, Cupid – Men and women using online dating sites tend to chase potential partners who are about 25% more “desirable” than themselves, a study has found. And men become more desirable until they hit 50 but women are deemed steadily less so. Researchers at the University of Michigan ranked people on a US free dating site for desirability based on how many people initiated contact with them, and how popular those sending the initial message were. If settling down and starting a family is part of the agenda, a preference for boxer shorts might have to be factored into the desirability rankings: wearing them boosts sperm count, according to a separate study.

Lunchtime read: Why we need to nationalise education

“Let’s ditch, once and for all, the idea that selective schools are an inspiring model for, rather than a major block to, high-quality public education, and start to talk seriously about how to create a common system.”

Today, schools campaigner Melissa Benn makes the case for a national education service as the only way to fix a broken system. Academies have not proven to be the answer and “it is clear that the Tories have run out of ideas, bar the expansion of grammars”, she writes. Labour is to publish plans for a universal system of education. Benn writes. “Time to learn the lessons of our global neighbours and phase out selection, reform unfair school admissions, and bring education back into public hands.”

Sport

Kepa Arrizabalaga has become the world’s most expensive goalkeeper after completing a £71.6m move from Athletic Bilbao to Chelsea. Chris Woakes or Moeen Ali could step in for England for the second Test against India, whose bowlers contributed hugely to the drama at Edgbaston and who may opt for a second spinner at Lord’s.

Great Britain has a vision of a sprint “golden generation” after Dina Asher-Smith and Zharnel Hughes took both 100m titles at the European championships. Red faces were the order of the day at the European Tour after it emerged winnings due to Tommy Fleetwood for a 12th-placed finish at The Open were paid to another individual, Thomas Fleetwood, a teaching professional based in Florida. And Shaun Edwards will return to rugby league in 2020 as the Wigan head coach after fulfilling his commitments with Wales rugby union side following the World Cup next year.

Business

Amid all the carnage with sterling, bad blood continues to build between the US and China about trade. State newspaper China Daily has said the conflict is “likely to escalate into more than just a scuffle if the US administration cannot marshal its mobster mentality”. Beijing had the means to fight back if the US continued to demand “protection money”, it added. Tough talk, but investors were not unduly spooked and Asian stocks mostly up overnight. The FTSE 100 is set to rise around 0.4% later today (remember the weak pound is good for the many multinationals on the index that count their earnings in dollars).

The papers

The Guardian’s splash today is “Pound slides as no-deal Brexit fears prompt global selloff”. The Times has “US to sanction Russia over Skirpal poisoning” and the FT says: “Riyadh dumps Canadian assets in fury at attack over activist’s arrest”. The Express is leading with “Energy bill hike will put lives at risk”. The Sun has “Midwife accused beaten up in jail”.

Several papers have the fallout from Boris Johnson’s comments about burqas as their lead stories. The Mirror labels Johnson as “The pariah”. The Telegraph has comments from Ruth Davidson, head of Scottish conservatives: “Burkas no different to wearing a crucifix”. The i says “Tory civil war at prospect of Johnson in No 10” and the Mail splash is “Tories at war over Burka row Boris”.

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