Coronavirus, Huawei, HS2: your commercial news round-up

With the decisive 2019 general election already feeling like a distant memory, the focus of business has turned away from crunch votes and frantic parliamentary wrangling over Brexit to the many other tricky decisions and geopolitical issues that Boris Johnson’s government must now carefully navigate. Our weekly round-ups from the business world are designed to help you develop and maintain your commercial awareness – and these latest stories show that building this vital skill is just as much about following mainstream news and current affairs, and their impact on the business world.

• The FTSE 100 has fallen sharply in response to the coronavirus outbreak in China which has tragically caused the deaths of 170 people, with the number of confirmed cases now higher than the Sars outbreak of 2002.  “With concerns about the economic impact of the coronavirus rising unabated, risk aversion has again dominated,” said Chris Scicluna of Daiwa Capital Markets.
   
• Controversy continues over the government’s ‘compromise’ decision to let Chinese firm Huawei be involved in the development of the UK’s 5G network, with BT the latest firm to criticise the deal, stating that limiting Huawei’s involvement will cost the telecoms group £500 million. Some of the UK’s allies, led by the US, have forcefully lobbied against Huawei’s involvement on security and intelligence sharing grounds, as the company has links to the ruling Chinese Communist Party. Meanwhile, supporters of Huawei’s involvement argue that the US is simply trying to negate Huawei’s commercial edge in 5G technology over American firms, while the government’s deal with Huawei will supposedly limit the company’s involvement to ‘non-core’ parts of the network.
   
• The government is navigating yet more controversy over whether to continue with the HS2 rail project, with all eyes on Johnson as the prime minister considers his decision. The project has received a boost from the Chancellor, Sajid Javid, who appears to have thrown his support behind it. HS2 – the biggest UK peacetime infrastructure project in history – is mired in controversy over the cost of delivering the project compared to the benefits it will bring to Northern England, with some Northern Conservative MPs calling for the project to be scrapped in favour of strengthening local rail infrastructure.
   
• In other rail infrastructure news, troubled operator Northern has been stripped of its franchise, with the government now acting as an “operator of last resort” and Arriva Rail North set to take over the running of train services from March.
   
• UK car manufacturing declined to its lowest level since 2010 last year, according to data released by the Society of Motor Manufacturers and Traders. Brexit uncertainty and reduced exports to major markets appear to have impacted consumer confidence in the industry.
   
• City economists have urged the Bank of England to avoid making a cut to interest rates, citing an increase in business confidence and output since the 2019 general election. But as the Guardian’s economics editor Larry Elliott observes, the Bank’s decision is finely balanced.

Be sure to check the News every Thursday for this weekly commercial news round-up. Follow @LawCareersNetUK on Twitter and like us on Facebook for instant business news updates.