Britain and the Consequences of Bolting

Plus: Is Putin Catherine the Great 2.0? [Bloomberg](  This is Bloomberg Opinion Today, a spring bouquet of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Must-Reads - KKR’s big [bike bust](. - The Global South wants to be heard on [Gaza](. - Uh-oh, [Ohtani](. - The [urge to merge]( is not always a winning instinct. - The energy [plagues of Egypt]( aren’t over. If You Brexit, You Buy It I know it’s finally spring in London but I’m in a “Call me Ishmael” mood. You know, “Whenever it is a damp, drizzly November in my soul ...” Unlike the Moby Dick character, however, I don’t take to the sea. Instead, I walk through Gough Square and the house of Samuel Johnson, the great 18th-century essayist, lexicographer and wit. Dr. Johnson — as he is traditionally known — had the great buck-up quote about the city where I now live. “When a man is tired of London, he is tired of life; for there is in London all that life can afford.” It’s a heartening and hopeful reminder because the state of the United Kingdom is damp and drizzly. The Tories are disemboweling themselves; sterling rallies only to remain in a constricted band; new trade agreements can’t replace old commerce with the European Union; the House of Windsor keeps turning and turning in a social media gyre. Things fall apart. As Matt Winkler reminded us this week, [much of this discontent stems from Brexit](. “For most of this century,” he writes, “the UK was the biggest beneficiary among the 27 countries in the EU. Measured by gross domestic product, GDP per capita growth, unemployment and superior debt, equity and currency valuations, Britain was the perennial leader.” All that ended with the results of the June 2016 referendum. “The EU since then outperforms the UK, whose listless economy is now little more than an also-ran.” Other colleagues have recently recorded the decline of British fortunes. Chris Hughes has [lamented]( the slump of Canary Wharf, which had become the symbol of London as an ever-expanding financial giant under Margaret Thatcher. Matthew Brooker has examined British [ineptitude at delivering showcase infrastructure]( on time and on budget. Adrian Wooldridge [has said](, considering the catastrophic pile-ups the ruling Conservative party so effortlessly accumulates, a prospective Labour Party administration would be celebrated for offering “more mundane things.” The UK pales in comparison to the EU, says Matt: “British GDP is forecast to increase 0.4% this year and 1.2% in 2025, inferior rates of growth compared with 24 of the 27 EU countries.” That goes for political leadership too. “The EU, which soon gets the chance to re-elect Ursula von der Leyen to five more years as president of the European Commission, is at its highest valuation relative to the UK since she began her initial term as its leader in 2019 based on publicly-traded equities,” he says. [In his latest column](, Adrian points out that there is one positive development: the increasingly diverse leadership of the country’s political parties, particularly with this week’s ascension of Zambian-born Vaughan Gething as Welsh Labour leader. “The very notion of ‘Britishness’ is almost as much the creation of immigrants as it is of native-born Britons,” says Adrian. Just from the standpoint of literary contributions, he says, there is Joseph Conrad (a Pole born in what is now Ukraine), T.S. Eliot (the US), Tom Stoppard (Czech Republic), Salman Rushdie (India), Kazuo Ishiguro (Japan) and “that master of English curmudgeonliness, V.S. Naipaul” (Trinidad and Tobago). As a foreign-born British resident, I’m happy for this. Perhaps more immigrants — even from my discordant American homeland — can see the UK through to sunnier days. In Gough Square Photograph by Howard Chua-Eoan/Bloomberg But back to Gough Square. Directly across from Dr. Johnson’s house is a pedestal with a statue of his cat: Hodge, the feline owned by the compiler of the groundbreaking Dictionary of the English Language. I take Dr. Johnson’s point and am not getting tired of London. However, Britain’s many ills can still be dispiriting. Many things here seem to feel like a high-stakes gamble. If I got a cat today, I might name it “Hedge.” Meanwhile, Russia Has a New Catherine the Great All the handwringing over how badly the UK is doing vis à vis the EU shouldn’t distract both from the looming threat of Russia. Indeed, Vladimir Putin’s 87% margin of victory at the polls last weekend is a particularly bad omen. The Russian president, [says]( Marc Champion, “can now expect at least another six years in office that would make him Russia’s longest-serving leader since Catherine the Great, the empress who first seized the lands Putin is fighting over in Ukraine.” Catherine the Great: Putin’s role model? Bloomberg’s Editorial Board [warns]( that Putin’s continuing belligerence underscores “the need to solidify the defenses of the three Baltic nations — Lithuania, Latvia and Estonia — most vulnerable to Russian coercion.” While  NATO “has gradually built up defenses along its eastern flank, its force capabilities — including combat-ready ground forces, integrated air- and missile-defense systems, and logistics — aren’t yet sufficient to confidently deter or repel a conventional attack.” The prospect is for more military morass — and the potential for cataclysm. As Marc says, “The war is by no means over; the Ukrainians will fight on as long as they can, even without adequate ammunition, and it’s still possible that the US and Europe rediscover their resolve. But failing that, Putin can hope to prevail — in his eyes and those of many others – over the collective might of a wealthy, arrogant and inconstant West.” Telltale Charts “When KKR & Co. acquired Dutch manufacturer Accell Group NV in 2022, the private equity firm must have hoped to cash in on health-conscious consumers parking their cars and hopping on high-priced e-bikes. Instead, the owner of bike brands such as Lapierre, Haibike and Raleigh is burning cash and drowning in inventory, providing a lesson in underestimating headwinds and overpaying in red-hot markets.” — Chris Bryant in “[KKR’s $1.7 Billion Bike Crash Is a Cautionary Tale](.” “A number of academic studies have shown that most wars create many more casualties through hunger and disease than bullets and bombs. The average multiple, according to one of the largest such [surveys]( by the Swiss-based Geneva Declaration, was four indirect deaths for every fatality caused directly by combatants, across 13 conflicts examined.” — Marc Champion in “[Gaza's Famine Warnings Will Test Humanity — and Netanyahu](.” Further Reading Electricity [pylons](need your love. — Lara Williams [The rain in Spain]( isn’t enough. — Rachel Sanderson Cathay Pacific is Hong Kong’s [least bad](. — Tim Culpan India’s regulatory credibility gap. — Andy Mukherjee Uranium is [AI’s secret link](. — Merryn Somerset Webb Worried about [private credit](? You should be. — Shuli Ren Walk of the Town: The Return of a Familiar Space Apropos of the first item in the newsletter, I finally visited one of the epicenters of the last golden age of London. That would be 20 Arlington Street, which used to be called Le Caprice and now goes by Arlington. Beginning in 1981 — the third year of Margaret Thatcher’s premiership —  it became the haunt of bold-faced names, from Elizabeth Taylor to Mick Jagger to Princess Diana. The paparazzi awaited outside its doors for the famous to emerge. By the window, the corner where Diana liked to sit at Arlington, FKA Le Caprice Photograph by Howard Chua-Eoan/Bloomberg Le Caprice was buoyed by the bottomless expense accounts of the day — from bankers to journalists. If you worked at the old headquarters of The Economist on Ryder Street, you could cross St. James’s to Park Place, find the tucked-away staircase in an alleyway that led to Arlington Street and the restaurant in all of five minutes. After changing hands in 2005, it is back under the management of Jeremy King, who’d set the restaurant on its celebrity-filled trajectory back in 1981 and is a stately, welcoming presence today. He’s lovingly recreated the look of the original — according to friends of mine who were regulars there — down to the art deco, standing ice buckets and the black-and-white David Bailey photographs of celebrities on the wall. The menu, too, retains many dishes that former customers are nostalgic for. Of course, you don’t just go for the food — but to see those who want to be seen. It’s a gorgeous reminder of what London was like when it was brash and cool and vibrant. I wish the rest of the economy could be as giddy again. Drawdown It’s been magical having you around. Don’t take a powder. ”What do you mean you’ll make me disappear? I’m the sorcerer here.” Illustration by Howard Chua-Eoan/Bloomberg Notes: Please send hungry dragons away but feedback to Howard Chua-Eoan at hchuaeoan@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. Follow Us Like getting this newsletter? 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