Brexit may blind us to BHS’s bankers

Goldman Sachs was one of the big backers of the failed campaign to stay in the EU but some of its bankers might just be relieved the UK voted for Brexit next week.

In a rare public outing for the US investment bank’s top operators, MPs will question Michael Sherwood, Goldman’s top man in London, and two colleagues about their role in the sale of BHS before it collapsed. When he appeared before MPs two weeks ago, Sir Philip Green said he wouldn’t have sold BHS to the former bankrupt Dominic Chappell if Goldman hadn’t said Chappell was credible. “We wouldn’t be sitting here. Absolutely not… We 1,000,000% would not have done business with him,” Green said.

How that leaves relations between Sherwood, Green’s main adviser at Goldman, and the retail tycoon is their business, but the MPs will be eager to make life uncomfortable for Sherwood and to expose disagreements between them. However, Brexit and its implications are likely to dominate the news all week, providing some cover for the Goldman men, who might otherwise have found themselves leading the bulletins.

Still, it should be gripping viewing for those who like this kind of thing – if the MPs don’t fluff their chance. Also look out for Neville Kahn, Green’s main man at Deloitte, who gives evidence on Tuesday.

After Morrisons, Ocado is still not going places

Ocado reports first-half results on Tuesday with investors still waiting for news of a deal to sign up an overseas user of the online retailer’s much-vaunted stock systems. When Ocado agreed to handle Morrisons’ internet business in 2013, optimistic investors decided Ocado was a technology company with countless potential customers round the world rather than an online grocer in an increasingly crowded market.

Tim Steiner, the chief executive, promised an agreement by the end of last year but none came. In February the former Goldman Sachs banker said talks with some retailers were “very advanced” but admitted his team hadn’t anticipated the obstacles to wrapping up an agreement.

What effect might Brexit have on his chances? The pound’s plunge could be good news because Ocado is exporting a service whose cost has fallen. On the other hand, a retailer worried about economic Armageddon could simply decide to conserve its cash. Steiner, who was awarded an OBE this month, will also face questions about how Ocado will compete with the might of Amazon, which started delivering fresh food this month.

Go figure: surveys become instant history

Amid the post-Brexit chaos, spare a thought for the compilers of economic surveys to be released this week whose work has been rendered virtually redundant. Among UK economic releases normally in the “closely watched” category are Tuesday’s CBI distributive trades survey of the high street, the Bank of England’s mortgage and consumer credit data on Wednesday and the GFK consumer confidence numbers on Thursday. Will anyone even read the economic wellbeing figures from the Office for National Statistics? The surveys were conducted before Thursday’s vote, leaving economists scratching for morsels that can be interpreted in the transformed economic climate.

The balance of payments figures for the first quarter may well make sober reading on Thursday, but the final calculation of GDP for the same period will read like ancient history. Eurozone inflation and unemployment numbers will also need to be assessed in the context of Brexit and its impact on the struggling single currency bloc.

When senior economists gave evidence to MPs on the likely impact of leaving the EU back in October they agreed both sides’ arguments were distorted and meaningless. After months of empty threats and promises, nothing is much clearer.

Powered by article was written by Sean Farrell, for The Observer on Sunday 26th June 2016 07.00 Europe/London © Guardian News and Media Limited 2010


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