Economics professor Costas Milas has spotted something interesting about the pound (still trading at a seven-month high against the US dollar this afternoon).

Web searches for Boris Johnson used to rise when the pound was becoming more volatile -- but currently, the reverse is true.

He writes:

You are pointing out that sterling hit 1.31 vs the dollar. What has arguably received less attention is the fact that financial markets (in addition to the Canadian Prime Minister) appear to have been“two-faced ”. Academic research has already established that Google search activity predicts financial markets. The popularity of Boris Johnson (proxied by Google searches on the web) coincides with a surge in sterling’s volatility from early 2016 up to and including the summer of 2019. That is, when Boris (first as a Foreign Secretary, then as a backbencher and then as a new Prime Minister) acted as the leading Brexiteer.

Since the beginning of autumn, however, financial markets appear to have changed their mind. Indeed, as the prospect of a new general election together with the prospect of Boris Johnson winning next week’s elections and “getting Brexit done” (despite the very tight deadline of December 2020) increased, the rise in Johnson’s popularity appears to have reduced sterling’s volatility...

Shares in Glencore are on track to close at their lowest level since October 2016.

The Resolution Foundation think tank have now issued a report into UK wealth, based on this morning’s ONS data.

Called “Who owns all the pie?”, it shows clearly how wealth inequality has risen in recent years, as the wealthiest people have benefitted most from higher asset prices.

They also show that it’s very hard to simply work your way to wealth, rather than inheriting it:

Fifty years ago, someone with a good salary could save enough over the course of their lives to retire with a good amount of wealth to live off. For many people today this is a distant dream: what matters more is the wealth you inherit or marry in to, rather than the income you can set aside over a working lifetime.

A middle income family on just over £26,000, for example, would have to save everything for 96 years if they were to reach the wealth of a household in the top 10 per cent of the wealth distribution (whose average wealth is £2.5 million). Even a family just inside the top tenth of the income distribution would have to save for 50 years, making it unrealistic that even the highest-paid can accumulate large amounts of wealth without windfalls from outside.

Glencore (-7.4%) is helping to drag the UK’s FTSE 100 down.

The blue-chip index has now lost 45 points, or 0.65% today, to 7142. That’s also due to the stronger pound, which is weighing on exporters.

Glencore, which is headquartered in Baar, Switzerland, is often described as the “most powerful company you’ve never heard of”.

Valued at £31bn, Glencore is the world’s largest mining company by revenue, providing more zinc and cobalt than any other firms, and is also a huge trader of commodities such as oil.

It was founded in 1974 as Marc Rich and Co. Rich – a former child refugee who became a naturalised American citizen after fleeing Nazi-occupied Belgium with his family.

Here’s more details:

Back in 2017, the Paradise Papers investigation explained how Glencore had secretly loaned $45m to Israeli billionaire Dan Gertler, after enlisting him to secure a controversial mining agreement in the Democratic Republic of the Congo.

We reported that:

..In 2009, Glencore loaned Gertler $45m with the caveat that it would be repayable if agreement with DRC authorities was not reached to secure a mining contract for a company linked to Glencore.

Gertler’s notoriety in the resource-rich but conflict-riven and corrupt DRC spans nearly two decades.

He was cited by a 2001 UN investigation that said he had given the DRC president, Joseph Kabila, $20m to buy weapons to equip his army against rebel groups in exchange for a monopoly on the country’s diamonds, and a 2013 Africa Progress Panel report said a string of mining deals struck by companies linked to him had deprived the country of more than $1.3bn in potential revenue.

Gertler has firmly denied these allegations, and denies there was anything improper about the $45m loan. Here’s the story:

In January 2018, it emerged that the US Department of Justice was investigating allegations that Gertler has bribed top officials in the Congo to secure mining rights.

The SFO’s inquiry adds to Glencore’s problems, says Bloomberg:

The announcement worsens the legal troubles at the company, which is already being investigated by the U.S. Department of Justice for possible corruption and money-laundering in Venezuela, Nigeria and the Democratic Republic of Congo.

Today’s report also shows that poorer families are more likely to hold financial debt -- as they turn to hire-purchase schemes and credit cards to survive.

The ONS says:

The least wealthy 50% of households held 36% of total household debt in April 2016 to March 2018, but whilst they held less debt their total debt was a relatively large proportion of their total wealth, with less wealthy households being more likely to have financial debt.

Richer households, though, are (obviously) more likely to hold substantial mortgage debt as this chart shows:

Torsten Bell of the Resolution Foundation has tweeted about the rise in UK wealth, and wealth inequality:

There is also a remarkable divergence in wealth growth across the UK in the last decade.

London has seen a huge jump in wealth, but the North East and the East Midlands have both suffered falling wealth.

How has the average Londoner become so wealthy? Over to the ONS....

For London, median total wealth has increased in each of the survey periods since July 2006 to June 2008. Between July 2006 to June 2008 and April 2016 to March 2018, median total wealth in London has increased by 78% to £356,400. Changes in net property and pension wealth are the major factors driving changes to total wealth.

For London, median net property wealth has increased by 51% since July 2006 to June 2008, to £410,000 in April 2016 to March 2018. Pension wealth has increased by 47% to £102,200.

Richard Falkenhäll, senior FX strategist at Nordic bank SEB, reckons sterling’s recovery could be short-lived.

He fears another cliff-edge Brexit crisis in a year’s time following a Conservative victory, as it will be very hard to agree a new free trade deal quickly.

Falkenhäll writes:

“The pound continues to gain on the back of opinion polls showing a stable lead for the Conservative party, and markets are now probably almost fully discounting a Tory majority in UK Parliament after the general election.

“While this would create some certainty around Brexit in the short term as the UK will then leave the withdrawal period and move into the transition period in January 2020, a Conservative win will in fact increase the risk of the UK falling out of the EU without a trade deal by the end of next year (2020). It might be that the GBP recovery could turn out to be quite short-lived.”

Earlier today, chancellor Sajid Javid said he was confident that the UK and EU could agree a future relationship before the end of the withdrawal agreement in December 2020.

But there’s considerable scepticism about this.....

Our Politics Live blog is tracking all the latest general election latest - including some interesting defections from the Brexit party today:

Willem Klijnstra, currency analyst at Legal & General Investment Management, has told the Financial Times that a Johnson win next week is ‘baked in’ to the pound’s current valuation.

He says:

A Tory-led government is baked in today. The tail risk is that doesn’t happen.”

Klijnstra also points out that a Conservative win would take attention “straight back to Brexit” -- both the withdrawal from the EU by 31 January and the trade talks.

Trade experts doubt the government claim that it can agree a comprehensive deal by the end of 2020, so further tensions next year would weigh on UK assets.

The pound has dipped a little since the UK car figures came out, but is still at a 31-month high against the euro at €1.184.

That’s its highest level since Theresa May held her ill-fated snap general election, when opinion polls predicted a solid Conservative win.

Investors seem to believe the pollsters are doing a better job this time.

As Jim Reid of Deutsche Bank told clients today:

Sterling has been supported by investor hopes that a Conservative majority at the election will support a smooth ratification of the Withdrawal Agreement through Parliament, taking away some of the short-term uncertainty over the Brexit process.

The sole poll yesterday came last night and showed a 10pt lead for the Tories - unchanged from the previous poll and in-line with the poll of polls.

Next week’s general election hasn’t helped the car industry, says Ian Plummer, commercial director at Auto Trader.

Here’s his take on the drop in car sales last month:

“Manufacturers are coming up against unprecedented cost hurdles as they take the journey towards the electrification of their fleet and also fight to hit the stringent new CO2 emissions regulations next year. Some of the biggest industry stalwarts have recently announced job losses as they look to refocus their businesses to deal with these issues. Compounding that, issues caused by Brexit continue to hinder the industry too; the unsteady value of the pound, consumer uncertainty and the ambiguity around future trading regulations only serve to amplify the enormous pressure manufacturers are under. And in the short term, both the manufacturers and their franchised retailers, still have ambitious targets to meet to reach despite these wider economic challenges.

“Brexit, and now the election, is also further dampening consumer buying confidence, making it ever-harder to sell cars.

Although electric car sales have risen steadily this year, they only make up a small proportion of the market.

Nearly two-thirds of consumers are still plumping for a petrol engine, as this chart shows.

That’s why the SMMT are calling for cash incentives, and more electric charging point to encourage customers to switch.

A survey earlier this year showed that electric cars are now more affordable than petrol in some countries, as lower taxes, fuel costs and subsidies makes up for a higher purchase price.

But some consumers could be put off by the range provided by current models. MG’s ZS EV (£26,995), for example, promises a range of 163 miles on a single charge.

Political uncertainty is deterring consumers from buying a new car, says Mike Hawes, the SMMT’s chief executive.

He’s also calling for more government support for electric cars.

“These are challenging times for the UK new car market, with another fall in November reflecting the current climate of uncertainty. It’s good news, however, to see registrations of electrified cars surging again, and 2020 will see manufacturers introduce plenty of new, exciting models to give buyers even more choice.

Nevertheless, there is still a long way to go for these vehicles to become mainstream and, to grow uptake further, we need fiscal incentives, investment in charging infrastructure and a more confident consumer.”

Over in Germany, the factory slump continues to drag on.

German industrial orders fell unexpectedly in October, by 0.4% month-on-month, new government data shows.

That means orders are 5.5% lower than a year ago, as the ongoing US-China trade war and slowing global growth hits Europe’s largest economy.

The pound was the biggest mover in the foreign exchange market yesterday, as it rallied against other major currencies.

With fresh gains this morning, forecasts of a Conservative win next week are lifting the currency, explains Lee Hardman of Japanese bank MUFG:

With only a week to go until the UK election, the Tory party still hold a sizeable lead of around 10 percentage points over Labour. It has made market participants increasingly confident to price in a Tory majority and an end to the deadlock in parliament.

Boris Johnson set out his agenda yesterday for the first 100 days of a Conservative government. He pledged that legislation to implement his EU withdrawal agreement will be put back before parliament ahead of Christmas as he aims to take the UK out of the EU by the end of January. There are also plans for a February budget which would quickly implement plans to begin raising the threshold for paying national insurance tax.

With the pound increasingly pricing in a Tory election victory ahead of the event, there is some risk of “buy the rumour sell the fact” price action following the announcement of the election result even if the Tories secure a majority as expected. Pound price action would be much more volatile if the opinion polls were to prove misleading.

Currency expert Kit Juckes of Societe Generale writes:

Sterling rallied on continued optimism about a Conservative win in the General Election and, as one wag put it, an absence of gaffes from Boris Johnson.