Traders spared less of their attention to listen to George Osborne's budget than the average backbench MP
High above Broadgate Circle on the cheaper, northern fringe of the City on Wednesday traders spared distinctly less of their attention to listen to George Osborne's budget than the average backbench MP upstream at Westminster.
As a concession to public awareness staff at the TJM Partnership turned the sound up on Sky News as the chancellor rose to speak. But they continued to focus most of their attention on their screens, four each per trader.
Indifference to the common good? Not exactly. Manoj Ladwa, 40, the street-smart Hounslow-to-Broadgate partner who speaks for the firm, explains: " I think George Osborne has to tread a difficult path between stimulating growth and reducing the deficit, trying to do things that don't upset the apple cart and make the Bank of England's job on inflation more difficult."
TJM is a small firm, founded in Cardiff with a modest office on the 12th floor of the Pinsent Masons building alongside other small trading firms, still only eight tieless staff. Apart from those on the dizzy heights of telephone number salaries and bonuses, most City workers have to worry about childcare, pension rules and the chancellor's new cap of £72,000 on personal care bills for their elderly parents. They clock changes – good and bad.
But the day job is about anything that may affect the investments and prospects for the pool of what are known as "high net worth clients" – anyone with liquid, non-property assets above £1m. Analysts, stockbrokers, investment managers, the firm's slogan is "bespoke brokers." "We keep it separate," says Dennis, the 60-something oldest member of the team.
In any case TJM analysts suspected at breakfast that chancellor Osborne's budget wouldn't have much to tell them that hadn't been signalled to the markets – markets which have quite enough shocks to contend with nowadays without avoidable ones. "At the moment everyone is focused on Cyprus," confided Ladwa. Osborne gave Nicosia's bank drama barely a nod, except to stress – as coalition ministers do – that the debilitating eurozone drama compounds the sluggish UK economy's problems.
Modern trading floors, large or small in the silent era of online screen trading, rarely look or sound like Charlie Sheen, the hyper-screaming young trader in Oliver Stone's 1987 film, Wall Street.
"After seeing that film everyone in the City came to work in red braces," recalls Dennis, the only TJM staffer old enough to have seen it at the time. Some colleagues, including Ladwa who read economics at Leicester, are graduates; others came up the hard way – "University of Hoxton," says Dennis.
The fourth Osborne budget was heard in virtual silence. In one corner young Steve the administrator does not glance once at Sky News as he keeps client files in order.
Dennis spends part of the budget making sure that a client's money isn't at risk by way of a stockbroking firm that's just gone bust in the north. "You're protected up to £50,000, just like the banks," he says down the phone. One of his screens sports a Union flag, the only personal detail on view apart from the posh Italian coffee machine. Dennis is the expert.
While Alex, another partner beavers away on screen (actually he's taking in the chancellor's main points) Ladwa takes notes on one sheet of A4. "What the chancellor does doesn't affect us much. We are focused more on the monetary policy committee (MPC) of the Bank of England. Monetary policy seems to be driving markets at the moment." By that he means that low interest rates and the Bank's expansionary commitment to quantitative easing (QE) are propping up the stock market, the bond market for government and corporate debt and – the ultimate hedge – gold.
But Manoj, Alex, cheerful Dennis and silent Jack are also looking for any Treasury policy tweak that might change market sentiment, not towards any one firm, but whole sectors. Banking (for obvious reasons) and mining (too dependent on China) are holding back the stock market rally, but TJM has hopes for the continued recovery of construction. When Osborne got to housing boost Dennis immediately asked Jack if shares in middling builders such as Barratt had reacted. They had indeed, even before that passage of the chancellor's speech. "Someone must have got wind of it," says Jack unaware that on the streets below them the local paper, the Evening Standard had accidentally leaked budget details.
When the chancellor revealed his plans to abolish stamp duty on speculative AIM shares Dennis looks alarmed. But it turns out he is pleased: government have talked about doing this for decades. This time there was no speculation, but it's happened. It won't cost much, adds Manoj. "It's symbolic."
The cut in capital gains tax, the freeze in petrol duty and other changes have been trailed and thus discounted by the markets. The City had also factored that triple-dip recession, says Ladwa, though Osborne specifically denied it amid Labour jeers. The political cut and thrust, the Commons point-scoring leaves TJM staff cold, they barely notice it. The City's attitude to politics was ever thus. It backed parliament, not Charles I, in the civil war because it mistrusted arbitrary Stuart attitudes to high tax and unpaid debt.
The same calculation helped doom James II when the City opted for the boring Hanoverians, though in 1914 chancellor Lloyd George had to explain to banking that it could not be business as usual (as they hoped) with the Kaiser's banks. More recently, they liked Gordon Brown's "light touch" regime until it all went pear-shaped. The FTSE100 index barely twitched for the budget (it did for Cyprus) and City pundits on TV found little to be outraged by.
"Another shock-free dull budget, slightly positive," was Ladwa's low-key verdict on a sombre occasion. Outside fog hovered over the City's buildings. "On a good day you can see Wembley," said someone. Wednesday was not a good day.