October 29, 2007 | posted by Michael Baxter in IABN | comments (0) |

We all know the US housing market is in a state of disarray - but what is unclear is the extent of this mess. Is housing in the US set to fall through the basement? Is a crash already under way, or are we witnessing a temporary slide?

The most often quoted source of information on the US housing market is the National Association of Realtors (NAR). It publishes data on both existing home sales and median price of existing homes, broken down by region. If you listen to some, all hell has already broken loose. One commentator recently said median prices of houses in the US are now 18 per cent down from March of this year. If that is true, then right now the US is in the midst of a horrendous crisis. It’s just that we can find no evidence to support this claim.

In fact, right now, NAR has the median price standing at $211,700, compared to $220,900 a year ago. That’s a fall of 4.2 per cent. Median price peaked in June this year, at $229,200 - that’s 7.64 per cent up on the September price. So all in all, the last three months have been disastrous, but not as bad as some are saying.

Perhaps a more pertinent comparison would be to contrast today’s median price with the price from a few years ago. Back in 2004, the US rate of interest increased from 1 per cent in May to 2.25 per cent in December. So that was the last year in which rock bottom interest rates were available and in that year median house price stood at $195,400 - still 7.11 per cent up on the price seen last month.

This is a significant comparison, because many of the people who bought homes in that year will have seen the cost of repaying the loan escalate over this time period. Should these same people find they also face negative equity, then the implications for the US would appear to be very serious. It seems difficult to imagine how the US could avoid recession, even a nasty recession, when millions of home owners face the double whammy of mortgage payments that have increased severalfold, while their home is worth less than what they paid for it.

Will things get that bad? Here the runes are mixed. In September, sales of existing homes were down 8 per cent, and are now sitting at their lowest level in 9 years. So with sales so low, it seems reasonable to assume prices will fall further. A lot further.

And yet NAR remains quite sanguine. Its chief economist, Lawrence Yun, said, “The good news is that mortgage availability has markedly improved in recent weeks, with interest rates on jumbo loans falling, and more people are applying for safer and conforming FHA mortgage products. Some of the cancelled transactions will move forward as buyers apply for other loans.”

Mr Yun also says the median price has been distorted, because there were fewer transactions at the upper end of the price spectrum.

So maybe things are not quite as bad as the data suggests.

But that’s on a national scale. In some regions, things are a lot worse: in the West, median prices are now 11.49 per cent down on the peak price seen just two months earlier. That’s a massive drop in so short a timeframe. And in the Northeast things are almost as bad, with prices down 10.68 per cent since the June peak.

But, perhaps things are at their most serious in the South. The fall from peak of $189,500 seen in June to $174,400 in September was the equivalent of 5.5 per cent: not as bad as elsewhere, but more seriously in 2004, median price was $170,400, just 2 per cent higher than the price in September just gone.

Of course, in some cities within the region things are much worse.

Hope comes in the shape of the Fed. Later this week Ben Bernanke and his chums at the US central bank will be deciding the rate of interest for the next month. It seems certain rates will be reduced. The debate seems to be over whether we see a quarter or a half per cent cut. If it’s a half per cent, then things will soon get an awful lot easier for mortgage holders.

The snag with all this though is that there seems to be this assumption Stateside that the Fed holds a magic wand. That it can slash interest rates whenever things get tough, and then make things better.

In the short-term there is an element of truth in this, but in the longer-term things are not so clearcut. With inflationary pressures growing worldwide, and with the dollar falling like a rock from the north, there is a real danger that US inflation will build up, and what the Fed does now could come back and haunt the US in the months, and years, ahead.

The falling dollar is helping US competitiveness, although the market is being distorted with Europe feeling the brunt of the dollar’s falls. But, if inflation starts to pick up, then some of the benefits of a lower dollar will be lost.

Perhaps the fundamental point is this. In the UK and Eurozone, central banks’ main responsibility is to keep inflation down. In the US, the Fed has a dual responsibility: it’s to keep inflation and unemployment down. But, many believe, in the longer term keeping inflation down also has the effect of keeping unemployment down. So, it could be argued that the Fed has a short-termist agenda.

Mind you, it is worth putting things in to context. In the US the median price is now $211,700, and mean price $257,800. That’s the equivalent of £103,000 and £126,000. Now, if house prices were that cheap in the UK, things would be very different over here, right now.If you like this article, why not register for our daily newsletter? Or if you already receive the newsletter, then start spreading the news and tell your friends and colleagues. To register visit this link

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October 26, 2007 | posted by Michael Baxter in IABN | comments (0) |

There’s something extra interesting about the latest figures from the British Banking Association.

Mortgage borrowing is down - way down. There is no surprise there of course. When we tell you that there were 12.1 per cent less mortgages approved in September just gone than in the same month last year, you will no doubt think that was entirely predictable.

When you hear that mortgage approvals for house purchase were 27 per cent down on a year ago by number, and 21 per cent by value, you are hardly likely to be shocked.

Even the news that the number of mortgage approvals for house purchase were at their lowest level since 2000, is still unlikely to elicit many cries of surprise.

But what we think deserves a bit more attention is this. If absolute mortgage levels are falling less slowly than mortgages for house purchase, that suggests people are still quite happily taking out mortgages for other things - funding that holiday, for example, or paying off that credit card debt.

It’s that available luxury, for people to be able to top up their mortgage, to prop up their profligate ways, that has surely been a major source of funding for the UK’s consumer boom. How else do you explain the UK’s low savings ratio - according to the National Institute of Economic and Social Research, the savings ratio, excluding change in net equity of households in pension funds, has been negative for two quarters in a row.

A real problem could emerge, if the current liquidity crisis suddenly makes it a lot harder to top up your mortgage. Or if slowing house price inflation means that many householders do not have sufficient spare equity in their home to top up their mortgage.

If the credit crunch starts having an impact on these top up mortgages, then the consequences could be very serious. If you like this article, why not register for our daily newsletter? Or if you already receive the newsletter, then start spreading the news and tell your friends and colleagues. To register visit this link

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October 26, 2007 | posted by Michael Baxter in IABN | comments (0) |

One of the problems plaguing the UK is our relatively low level of productivity per person. Some put the blame on education and say that the UK simply doesn’t spend enough money on our kids and then on training.

Employers complain about the lamentable standard of grammar and spelling from school leavers; as for maths, well they are putting 2 and 2 together, and concluding we need to do a whole lot better.

But here is a study to make you think. Maybe a partial solution could be to split the school year into two, one sub-set year for those born from September to February, and another for those born in the next six months.

At least, research from the Institute of Fiscal Studies has found kids born towards the end of the school year are at a big disadvantage.

The good news is that the gap narrows as the children age. But even when it comes to A-levels there’s still a noticeable difference.

Apparently, in recent key stage 1 tests - that’s for age 7 - 80.1 per cent of girls born in September reached the expected level, but only 53 per cent of girls born in August did.

By the time it comes to GCSEs, 50.3 per cent of boys born in September reached their expected grade, but only 44.2 per cent born in August did.

And finally, at A-level, 42.5 per cent of girls born in September reached their expected level, compared to 40.05 per cent born in August.

It’s all very unfair. It means school leavers, especially 16-year-old school leavers born in August, are at a big disadvantage.

The IFS said “Worryingly, we also find evidence that teachers and / or parents seem to be mistaking poorer performance as a result of age, for special educational needs: at age 11, August-born girls are 72 per cent more likely than September-born girls to be recorded as having non-statemented (less severe) special educational needs, and 25 per cent more likely to be recorded as having statemented (more severe) special educational needs. For boys, these figures are 46 per cent and 14 per cent respectively.

Claire Crawford, one of the authors of the report, said, “This report highlights the penalty that August-born children face, simply because they are unlucky enough to have been born late in the school year. This cannot be acceptable on either equity or efficiency grounds, and urgent steps must be taken to eliminate this inequity.”

IFS’s remedy is to either ensure tests take account of the child’s age, or allow greater flexibility in entry and progression, perhaps making it quite common for children to re-sit a year. If you like this article, why not register for our daily newsletter? Or if you already receive the newsletter, then start spreading the news and tell your friends and colleagues. To register visit this link

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October 26, 2007 | posted by Michael Baxter in IABN | comments (0) |

Here is some really depressing news - but for once it has a happy ending.

Apparently, 16 per cent of all adults in the UK suffer from a diagnosable condition of clinical depression or anxiety. And according to a report published yesterday by the National Institute of Economic and Social Research, (NIESR) mental illness causes as much misery in Britain as poverty.

Of course, economic statistics don’t tend to allow for happiness or satisfaction - the assumption is that there is a direct correlation with GDP per capita. So, in the interests of economics, let’s forget about the benefits of easing mental disorder from a social perspective, and just consider the economic benefits - and here is the real reason to celebrate. According to the NIESR study, the benefits to the economy of providing psychological therapy could actually be greater than the costs.

Right now, there are not enough therapists to treat the six-million people who are suffering from clinical depression or anxiety disorders. And yet, it is estimated that the cost of successfully treating patients is quite low. Therapy usually costs around £750 per person, and recovery rates usually run at around 50 per cent.

And yet, unemployment amongst those with mental disorders is high. According to the Psychiatric Morbidity Survey, employment amongst people who are mentally ill is 51 per cent, compared to 74 per cent amongst those who are well.

Using data produced by NICE (National Institute of Health and Excellence), the NIESR reckons that treatment will mean the average person with mental illness, would work an extra 6.49 months over 2 years, and 13.08 months over 5 years.

Getting its slide rule out, NIESR reckons the cost of treatment is £750, but that within two years society as a whole would have enjoyed £1,100 more output.

And then there’s the cost to government. Incapacity benefit costs are around £750 per month; throw in savings on income support and housing and council tax benefit, and a £300 saving in medical costs, and the NIESR reckons the government will enjoy £1,200 in savings within two years of providing therapy. So that’s £750 more costs, £1,200 less cost; it makes good economic sense.

But supposing you really could put a value on the resulting reduction in suffering. Let’s assume that each quality life year is worth around £30,000. NIESR did some quick sums, and found that within two years, society would see a benefit worth £3,300 within two years, just through a reduction in suffering.

So the bottom line is this. The NHS should take on an extra 8,000 extra psychological therapists over the next six years. If you like this article, why not register for our daily newsletter? Or if you already receive the newsletter, then start spreading the news and tell your friends and colleagues. To register visit this link

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October 26, 2007 | posted by Michael Baxter in IABN | comments (0) |

“To be honest, we find it hard to explain the oil prices. At the end of the day you don’t see anybody queuing for gasoline, or any shortages. Inventories are well supplied and refining margins have been lower, which is an indication of a well-supplied market.” And with those words, Peter Voser, Chief Financial Officer for Royal Dutch Shell hit the nail on the head.

Oil surged again yesterday, this time passing $90, and then some. When we took our daily reading from the New York Mercantile Exchange, the black stuff was just one cent short of $91. That’s almost $40 up on the year-low, seen in January. And yet, many in the oil industry are perplexed. Why is it so high?

Mr Voser says this price seems to be driven by speculation, and also has a political premium in it.

The oil industry insists there is plenty of oil out there lurking in the ground, and sooner or later prices will plummet. No doubt they are right to assume falling oil prices; any prudent business model, has worse case scenarios - (are you listening, banks). But the oil firms do seem quite definite in their prediction of lower oil prices in the years ahead - this is no worse case scenario - it’s what they expect.

Then again, maybe the oil companies are not quite as switched on to these things as they should be. After all, profits from Royal Dutch Shell and BP, at a time when they should be raking in the bucks, have been a big disappointment.

Yesterday, Shell revealed its profits - and they were nowhere near as good as you would have expected, considering. Sure, at $6.92 billion, net profits were up 16 per cent on last year. But they were a tad lucky. The price of oil shot up at just that stage in the quarter, so that the company benefited from the price hikes at the time of sales, but did not pay the extra price at the time the oil was pumped out. If you measure profits based on the current cost of supply, then actually profits were down by around 6 per cent on a year ago.

It’s all down to higher costs of supply and what the company calls “weaker refining margins,” which it says are currently a problem across the industry.

And just at the time when oil was breaking new records, the company’s production of oil and gas was falling - down 3.4 per cent.

Mind you, things were a whole lot worse at BP. In fact right now, bad news seems to be gushing forth from the pipelines of BP’s PR machine.

Profits in its third quarter were down a horrific 45 per cent - with oil and gas production 4 per cent down on the same period a year ago. Then on Wednesday it announced plans to cut 350 jobs from its North Sea headquarters in Aberdeen. Okay, the job cuts were all about the company trying to streamline the business, making it more efficient and then profitable. Even so, they illustrated how bloated the company’s management structure had become.

Then yesterday, it emerged the US government, via its Department of Justice, is to fine the company $373 million. The fine related to the fire in Texas, which claimed 15 lives.

So, all in all, then, the two oil giants need to thank their lucky stars oil is so high.

Many believe it’s inevitable that oil will fall in price soon. If you look at the history of oil prices, whenever it has shot up in price it has fallen quite rapidly soon after. There is, in effect, a natural cycle. When the price is high, exploration rises, causing an increase in production down the line. At the same time the high price of oil causes the global economy to slow.

Just when higher oil supply kicks in, global demand has often started to fall, because of the high prices causing economic difficulties, so suddenly the world goes into reverse, and the price of oil falls - sometimes like a lead balloon. Production costs are cut, until the world finds itself booming again, thanks to cheaper oil, and the cycle starts all over again.

But this time things are very different.

The rise of China and India seems set to continue - demand for oil is set to rise year in year out. And despite the oil industry making noises about how there’s lots of oil out there, so far, it has not done so well in finding it.

Earlier this week, Germany’s Energy Watch Group released a report suggesting that oil production has already peaked. The report said that oil production will fall by 7 per cent a year from now on.

Right now, the global economy is experiencing a remarkable change - as the two most populous countries on the planet slowly join the ranks of the developed economies. Meanwhile, year in year out, we continue to drag out from the earth the product of billions of years of formation. It has been estimated that every year, we consume a million years of production. Imagine the earth’s natural resources are allowed for in a balance sheet. The rate at which our natural assets are being formed is running at 0.0001 per cent the rate of our consumption, or so it would appear.

Maybe oil will fall back, and tumble to the kind of lows seen a few years ago, but to assume that the oil price cycle will continue for very much longer seems na#35;1111;ve in the extreme. If you like this article, why not register for our daily newsletter? Or if you already receive the newsletter, then start spreading the news and tell your friends and colleagues. To register visit this link

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October 25, 2007 | posted by Michael Baxter in IABN | comments (0) |

And so the stakes get even bigger. Now Microsoft has outbid Google for buying a stake in social networking site, Facebook.

The figures involved are simply staggering.

Microsoft forked out $240 million, and for its money acquired a tiny 1.6 per cent stake. To put that in context, when Rupert Murdoch bought MySpace two years or so ago, he spent $580 million - and for that he got the entire shooting match.

As of today, Facebook is yet to make a profit.

It’s not even number one in its market of speciality. MySpace, with 107 million users, has more than twice as many users. But then Facebook is growing faster - it expanded its user numbers by 6 per cent in September, compared with just 1 per cent for MySpace.

Even so, Microsoft’s move seems to be built on a wing and a prayer.

Microsoft, Google and little Yahoo are clambering over each other to grab a bigger slice of the advertising cake. Social networking is the next thing. None of the big boys seem to know how to originate a product that can compete in this market - so they are buying-in, making very rich men of the social networking pioneers, people like Mark Zuckerberg, who set up Facebook as a wheeze to fund a holiday for himself and his mates.

For Microsoft, this is a massive challenge. Google funds everything with advertising - Microsoft has been built on the foundation of charging for its software. It is being forced to change track. Over the next few years it is quite possible that its established revenue model will implode - will it be able to adjust?

Buying a 1.6 per cent stake in Facebook seems to be little more than the faintest whistle in the wind of change. That it forked out just shy of a quarter of a billion dollars, shows how desperate it is.

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October 25, 2007 | posted by Michael Baxter in IABN | comments (0) |

Computer games are, as you know, for boys. By boys, of course, we include males in their 20s, or even older; but ask any woman - the female of the species is far too sensible to waste her time on computer games. At least that has been the long-held wisdom. But if that’s true, explain this. According to Nintendo, 51 per cent of all users of its Wii are female. The Nintendo DS is even more popular with females, who make up 53 per cent of its user total.

Perhaps Nintendo really have found the magic formula - and it’s all down to innovation and a willingness to think outside the box.

Yesterday, the games console company announced its latest results. Half-yearly operating profit was Y188.8bn, which is £810 million, from just Y67 billion last year. So that’s a near trebling in profits in 12 months.

The company is now the third-largest firm in Japan by market capitalisation - with only Toyota and the Mitsubishi UFJ Financial Group bigger. And right now, Sony is eating dust in Nintendo’s wake.

And yet, it is not all bad news at Sony. In its latest quarter, profits at Sony soared to 73.72 billion yen ($646.7 million, from 1.68 billion yen in the same quarter a year ago.

Moving forward, it expects to make a profit of 330 billion yen this year - that’s $2.98 billion, compared to Nintendo’s projections of 420 billion yen.

And yet, while Nintendo boasts the higher valuation and profits, Sony enjoys much greater turnover. In the quarter just gone, sales hit 2.083 trillion yen, whereas Nintendo is forecasting sales of just 1.55 trillion yen for the entire year.

Not only is Nintendo’s Wii outselling the PlayStation 3, Nintendo enjoys much higher margins on its product too.

But Sony is not just a games company. And in the latest quarter, it was good news from sales of LCD TVs and digital cameras that helped boost the bottom line. But then again, both these markets are becoming very competitive - we have said before that many expect a market crash in consumer electronics soon - as manufacturers keep trying to upgrade us from the previous generation of hardware, but in the process seem to be becoming ever more-reliant on early adopters.

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October 25, 2007 | posted by Michael Baxter in IABN | comments (0) |

So if the results from Merrill Lynch might have shareholders in banks making for the nearest tall building from which to jump, wait until you hear the latest news on the US housing market.

According to the National Association of Realtors, sales of existing homes in the US fell again in September. This time, annualised sales came in at 5.04 million units, from 5.48 million in August. In all, annual sales were down 8 per cent, and are now sitting at the lowest level in 9 years.

There are now enough houses for sale in the US to meet demand for 10.5 months, and the supply of single family homes jumped to a 22-year high of 10.2, from 9.3.

Capital Economics put it this way. The data suggests, “There is massive downward pressure on median home prices, which already fell by 4.2 per cent over the year to September.” Its US economist Paul Ashworth, said, “The recent credit crunch has clearly had a devastating impact on an already-weak housing market. This is worse than even housing bears like ourselves thought it would get, surely much worse than the more lackadaisical Fed thought it would get. The bottom line is that we are now certain to see a sizeable decline in house prices, which will have a big restraining effect on consumption growth.”

Those are bearish words indeed, but alas, if anything, we fear that Mr Ashworth’s warning might be understating the danger.

Right now, median house prices are down 4.5 per cent. It’s not unreasonable to assume this fall is set to grow, quite significantly. This will in turn leave millions of Americans with negative equity.

For years, analysts who predicted the end of the US consumer boom were left with egg on their faces. But don’t fall into the trap of thinking that just because these predictions have been proven wrong up to now, the US consumption boom can last forever. It will end eventually. And when it does end, the US economy will hit recession - with a nasty jolt.

How the global economy, for so longer propped up by the borrowings of the US citizen, will cope with a major slowdown in the US, remains to be seen.

And right now, the US consumer is facing the biggest test yet.

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October 25, 2007 | posted by Michael Baxter in IABN | comments (0) |

Only one word can do justice to the latest set of results revealed by US banking giant Merrill Lynch yesterday: disastrous.

The bank made a net loss of $2.3 billion in its third quarter - that was the biggest loss ever announced by the bank. So that was pretty disastrous.

The bank also announced write-down of $7.9 billion, after it wrongly called the market for Collateralized Debt Obligations (CDOs). As you no doubt know, CDOs are the financial instruments behind the credit crisis. These CDOs are little more than a brew of simmering debt. Banks slice up the loans they make, and these slices are then stirred in with slices of other debt, then sold in chunks on the open market. Merrill was a great advocate of CDOs, pushing these financial instruments hard.

For a while, it seemed the strategy of aggressively moving into CDOs was working, and the US bank enjoyed $800 million in CDO underwriting fees - more than any other bank, or so says data from Thomson Financial/Freeman. But then, with the credit crisis, this policy backfired, and the brew of CDOs turned out to be poison, with the bank forced to make this massive write-down.

So while the loss was bad, the write-down seems even more troubling.

But, be warned, there’s worse to follow. When the writing appeared there on the wall in massive letters, Merrill was looking the other way. According to Reuters, as recently as last December the bank was busy forking out $1.3 billion for subprime lender First Franklin Financial Corp.

This tale of woe should have the hairs standing on the back of your neck by now, but here is the real blow, we haven’t even told the worst bit yet.

The truly awful news is this. Just three weeks ago the bank was projecting a write-down of $4.5 billion. In just 20 days, the company found another $3.4 billion in losses. How could it have got the sums so wrong?

Well, there has been a change in personnel. The man in charge of fixed income has changed. And with the new regime, came a new more conservative way of valuing assets - hence the further write-down. But, let us remind you, this happened in just three weeks - imagine what must have been going on behind closed doors at the bank over the last few weeks.

But, and this is the truly worrying bit, what emerged from the Merrill Lynch press conference held yesterday is how subjective the valuation of these assets is. The bank isn’t saying the previous projections are wrong - as such, rather that they have now adopted a more conservative valuation methodology.

When a bank changes its mind on the size of its write-downs to the tune of $3.4 billion, it makes you wonder how accurate the figures are. Is this loss really the product of finger-in-the-air valuation?

And what about the methodology employed by other banks to value their write-downs? Is it more or less conservative?

The truly worrying implication of this Merrill Lynch change in methodology seen in the last three weeks, and that was so publicly aired - is that it leaves you wondering how much you can trust results stated by other banks. And when analysts lose that faith in reporting, uncertainty can take on a life of its own.

That’s why the results from Merrill Lynch are not just disastrous for the bank and its shareholders - maybe they are disastrous for the entire banking sector too - don’t be surprised if this story returns to haunt the markets over the next few weeks.

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October 24, 2007 | posted by Michael Baxter in IABN | comments (0) |

Well, last year there were 60.6 million of us. Not so long ago there was a feeling that the UK’s population growth would peter out, but several revisions of the official data since, and the thinking right now couldn’t be more different. As for the demographic time bomb, well, maybe it will be more of a demographic time whimper.

According to the Office for National Statistics, the UK’s population is likely to grow by 0.7 per cent a year for the foreseeable future.

It’s not just down to immigration. The average family size has grown, with your average woman now having 1.84 children, and we are living longer. A boy born today can expect to live until he is 77.2, and a boy born in 2031 can expect to live until he is 81.5, says the ONS. As for girls, it’s 82.7 and 86.2, respectively. So that means your average girl born in 2031 will die in the mid 2120s. Clever aren’t they, those statisticians? They are so clever that they are able to factor in future developments in medicine, future wars, and the effect of global warming and come up with figures of such precision.

Their cleverness applies to working out the flow of immigration too. The ONS now says there will be 190,000 net migrants a year. That’s a remarkably round figure isn’t it? It’s a remarkable jump on the ONS’s previous estimate too. When it last estimated immigration, the ONS said the UK flow was 145,000. Still, they must know what they are talking about.

Actually, the ONS figures for immigration don’t take into account migrants who are here for less than a year. Never fear, our official compiler of statistics will be unveiling its calculation for this measure on Thursday. No doubt it will put a lot of effort into quantifying it, give all kinds of reasons for the estimate, and then change it by a massive amount six months later.

The ONS data does, however, reveal interesting projections. In 2016 it reckons there will be 65 million of us, and by 2050 there will be more Brits than Germans, with our total population coming in at 77 million.

In 2006, there were 3.3 people of working age for every person of State pensionable age. 2010 is the year that the planned pensionable age for women will rise and, taking that into account, the ONS reckons the ratio of working population to retired will fall to 3.20 in 2011, but rise to 3.23 in 2016. But beyond 2016, the ratio will steadily fall, dropping to 2.9 in 2031. As we said above, in terms of impact on our pensions, that’s more of a demographic time whimper then. The ratio of working population to retired will be much lower throughout most of Europe - in Italy and Germany, for example, while the ratio is set to decline much faster in Eastern Europe and Russia.

Capital Economics has been busy getting all its economists to start counting up on their fingers what this means for economic growth. If you assume productivity growth is 2 per cent, and population growth is 0.7 per cent, then the economy should expand by 2.7 per cent a year.

Unfortunately, the ONS was unable to quantify whether a greater population would mean greater sporting success for our national teams. We predict that if our population will match Germany’s by 2050, then by the mid-point of this century, England, might win the World Cup. Except of course, that after deducting the population of Scotland, Wales and Northern Ireland from the total, the demographic advantage will still be with Germany. Maybe the 2070s will be England’s decade on the football pitch. We can’t wait.

PS. If you want to be a little more precise on the implications for our football team, bear this in mind. Many of the migrants who are boosting the UK population will play for or support their country of origin. Cristiano Ronaldo plays for Portugal, Roman Abramovich supports Russia. On the other hand, the German population will be much older, which will help our chances. It’s all irrelevant, of course. It seems likely the second half of this century will be dominated by football teams from Africa.

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