It’s jolly competitive in consumer telecoms. You’ve seen the ads. Free broadband! Well, free apart from the £16.99 a month line rental. Oh, and it’s only free for six months, and it doesn’t include those old-fashioned phone calls. After 18 months, you’ll be paying £34.50. Add on the VAT, and it’s almost £500 a year, even if BT doesn’t raise its charges.

Still, never mind, you’ll be getting free football. Put another way, you’ll be pushing even more money into the pockets of the well-rewarded stars of the premier league, as BT scraps with Sky for the broadcast rights. Our obsession with the beautiful game is the chosen battleground for the anticipated convergence of fixed line, mobile, internet and tv, and it’s driving the telecoms analysts into a frenzy of speculation perming any two from BT, Sky, Vodafone, EE and O2. It’s propelled the whole sector onto giddy ratings, despite dismal growth prospects.

It seems that every mobile company wants to get into fixed, while BT is convinced that it must get back into mobile. The trend towards offering both is much further advanced in some of the operators’ continental European markets. However, it’s far from clear that the putative mega-deals would benefit anyone other than the usual suspects in the investment banks.

Not so long ago, the clearing banks decided that current account holders would buy anything, from household and holiday cover to policy protection insurance. Cross-selling simply made the customers cross, while the bills for mis-selling PPI are still coming in.

It may be fanciful to imagine the telecom companies being punished for mis-selling. However Ofcom, the industry regulator, is already looking at the giddy price British viewers pay for football, and the complexity of teaser deals has served to disguise just how expensive our internet hobby really is.

Should the orgy of mergers in anticipation of fourplay actually happen, the providers might be forced into clear, honest pricing. Alternatively, as Nomura put it: “Consolidated markets should drive more disciplined pricing for the medium term.” In other words, we might be forced to pay up and accept “free” wall-to-wall footy whether we like it or not.

No more war

When there was no longer a place for the price of War Loan in the new look FT, it was the beginning of the end. Now George Osborne has decided to redeem the irredeemable, and pay it back at par, or £100. War loan was never quite irredeemable, merely marked “1952 or after” when the coupon was effectively cut from 5 per cent to 3 1/2 per cent in 1932.

When issued in 1917, it prompted one Labour politician to remark that “no foreign conqueror could have devised a more complete robbery and enslavement of the British nation.” The lenders (or their descendants) who are finally to get their money back might disagree. £100 then had the purchasing power of  £4,280 today, or if you prefer, the real value of £100 has dwindled to £2.34.

That the state can save money redeeming an undated stock with a 3 1/2 per cent coupon shows how times have changed. Mr Osborne claimed the credit for today’s ultra-low gilt yields, but everyone else has them too. Spain’s bond yields.for example, are even lower.

The bond vigilantes at M&G muse whether this is telling us something more than expectations for inflation. They find a strong, long-term correlation between bond yields and (nominal) GDP growth, and conclude that it’s the poor outlook for growth that has pushed the yields down so far.

Well, maybe. In 1976 war loan fell to the point where the yield mirrored the price. At £18.70 the yield was 18.7 per cent, as inflation destroyed fixed interest bonds. That rang the bell for the bottom of the market. Perhaps George’s gesture has rung it for the top.

Crude love

Deflation is bad for you, ergo cheaper oil is bad for the EU. “It is scarcely possible to exaggerate how crude and wrong-headed this line of argument is” says the normally restrained Stephen Lewis of ADM. He points out that the drop to $70 saves the eurozone $145bn a year, or 0.9 per cent of GDP, even before the knock-on effects. As he (nearly) says: enjoy it.

This is my FT column from Saturday

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