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UK Investment Markets: Weekly Update – June 3rd 2019

Trump’s UK State Visit Sends Sparks Flying

Donald Trump is making a much-delayed state visit to Britain this week after spending the weekend causing controversy with remarks that overstepped diplomatic boundaries. Over three days the US president will be hosted by royalty and politicians. He will also take part in commemorations to mark the 75th anniversary of the D-Day landings.

Trump and First Lady Melania are set to be greeted by large numbers of protesters and the infamous “Baby Trump” blimp, despite calls for respectful observance of a deeply significant historic event for both the UK and US. However, it is impossible to deny that the pageantry belies policy differences that divide Britain and the United States.

There are some major diplomatic issues Trump is expected to navigate poorly:

Royalty

State visits are primarily royal affairs, with the emphasis as much on ceremony as politics. But even so, the potential for slip-ups is huge. Donald Trump made a mistake last year when he turned his back on the Queen and walked in front of her while inspecting the guard at Windsor Castle.

This time there will be the tricky moment when he gives a speech at the state banquet at Buckingham Palace. Will he address the Queen correctly? Recently the White House mistakenly referred to her as “Her Royal Majesty”. (Those who deal regularly with royalty would know that it should just be “Her Majesty”).

The president has no incentive to mess things up – he clearly likes the pomp and pageantry of royalty and will want the pictures to look good back home ahead of his re-election campaign. But there remains the question of how much advice he will take from his protocol team.

The biggest potential flashpoint – in theory – could be the Duchess of Sussex who, in her past, pre-regal life, expressed opposition to Mr Trump’s views. The US president told The Sun newspaper he was surprised Meghan had been so “nasty” about him. Indeed, Trump is due to land within hours of writing and an announcement has just been made that he will be met by Prince Harry, without Meghan accompanying him. Perhaps fortuitously, the Duchess is still on maternity leave and will play no part in the visit.

But it will not have gone unnoticed that an American citizen who only recently married into the British royal family – and thus epitomizes the close relationship between both countries – will not be part of the team welcoming her president to these shores.

Brexit

Trump’s visit comes at a tricky time politically for Britain. He will be visiting the lamest of lame duck prime ministers in the form of Theresa May who is standing down as Conservative leader at the end of the week. Britain is still gripped by the dread hand of the Brexit debate. In his Sun interview, the president criticised Mrs May for allowing the EU “to have all the cards” in the negotiations.

And, in an interview published a day later, he told the Sunday Times the government should bring in Nigel Farage – an arch critic of Mrs May – to help the Brexit negotiations. Mr Trump had already expressed his support for Nigel Farage, saying the leader of the newly-formed Brexit Party was his friend, a “big power” in the UK and someone for whom he had a lot of respect. Will Mr Trump find time to meet Mr Farage?

Downing Street has rejected the idea of there being an official meeting between the two, but might there be time for a quick cup of tea at Winfield House, the London residence of the US ambassador? Neither side is ruling it out. Although this would be considered to be going against protocol, Trump is known to make a point of associating with like-minded politicians, even if only to emphasize the success of his own political style.

One thing is for sure, President Trump will absolutely not mind that the two main opposition party leaders – Jeremy Corbyn and Sir Vince Cable – have refused their invitations to dine with him at the state banquet.

Conservative Leadership

Mr Trump also arrives in the middle of the Conservative leadership contest that will determine the next prime minister of the UK. He has already backed one candidate, the front-runner, Boris Johnson. The president told The Sun the former foreign secretary would be an excellent prime minister who would do “a very good job”.

On one hand, there will be some Conservative MPs and party members who will be impressed by this, welcoming the idea that a potential future prime minister already has a good relationship with a close ally. On the other, there may be some MPs who believe the unofficial endorsement from an unpopular US president might not endear Mr Johnson to the wider British electorate, which has more mixed feelings about Mr Trump.

Equally interesting would be any remarks Mr Trump chooses to make about the Labour leader, Mr Corbyn, who could one day be the person he meets for lunch in Downing Street, a leader who has made no secret of his hostility towards many US policies. Mr Trump told The Sun he was “not offended” by Mr Corbyn’s refusal to attend the state banquet, saying: “He is probably making a mistake because I think he would want to get along with the United States.”

How to Keep your Savings and Investments Safe Whatever Happens

Investor Live was founded with the mission of providing information and resources to help normal people save and invest their money wisely. Retail investors are fortunate to have the opportunity to invest in big assets without taking all the risk on themselves as sole owners.

We always recommend products that give you fixed returns which is never more important than when financial markets are shaky. Although you won’t earn the returns you will for a high-risk opportunity, you at least know you are not likely to lose all your money.

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About the Author

Amanda Wright is a former risk analyst at Bankers Trust, with specific experience of mergers & acquisitions and corporate finance. As a contributor to Investor Live, Amanda provides valuable insights into the technicalities of fundamental analysis in a way that is easy to understand, to provide retail investors with the tools to make considered investment choices.