Morning Brief – UK Interest Rates

UK Interest Rates

This comes under the heading of do not shoot the messenger: the market believes that rates will/should be cut sooner rather than later. The Bank of England is making it clear that its Monetary Policy Committee will not be so easily swayed. Why? If you have not spotted it, it is largely down to stubborn inflation and in particular wage inflation. Today newspapers will doubtlessly be full of self congratulatory market cooling prose about how at 7.3% it is lower than expected. Very simply, wage inflation at 7.3% with year on year inflation rate at 4.6% is unsustainable not to mention that UK growth to end September is at a below anaemic rate of 0.00%. Therefore on this occasion at least best to listen to Governor Bailey and his colleagues on the MPC.

GBP/EUR 1.1635.

The City of Light

At the beginning of the 19th century Paris was named the City of Light after becoming the first city in Europe to adopt gas lighting to brighten its streets. Apart from being the City of Light, Paris has another claim to fame in that it houses no less than 1,100 bakeries. Until last Wednesday that is, when yet another was added to that number from the USA when Krispy Kreme opened its first outlet in France. Queues formed and soon 400 Parisians were waiting for the doors to open. The National Confederation of French Bakeries are unmoved by this doughnut invasion and commented that France has 33,000 artisanal bakeries, so the addition of a single foreign bakery is neither here nor there: pah! KK plan on rolling out 500 KK points of access which means stores, kiosks and vending machines in supermarkets, so watch this space, and also watch this incursion into the land of the Baguette.

EUR/USD 1.0780.

Canadian politics

No, not a contradiction in terms, and before you look away, in brief it looks as if Justin Trudeau’s Liberal Party’s days are done and the Conservatives are all but home and dry with a 97% chance of victory if a general election were to be held today. Succinct but all that you need to know. 

USD/CAD 1.3585.

Record Busting Tuna

Nothing to do with fishing and rather more to do with distribution, although not fish, drugs. The record was in respect of the largest drug haul ever in Galicia, North West Spain when police swooped and seized 7.5 tons of cocaine from South America that had been hidden inside frozen tuna. In the cocaine distribution world, what passes for primitive risk mitigation saw the gang sending the remaining 3.5 tons of the total 11 ton consignment through Valencia, Eastern Spain. As it transpired this ploy did not succeed either with Spain’s finest impounding that cargo too.

EUR/JPY 157.35.

A Hard Day’s Night

Talk about getting it wrong. This day in 1961 a far seeing Decca Records talent spotter named Mike Smith attended a show at Liverpool’s Cavern Club and invited The Beatles to attend a test at Decca’s London HQ on January 1 1962. The result? Head Office supremos at Decca opined:
“The Beatles have no future in show business.”

It’s been a hard day’s night, and I been working like a dog
It’s been a hard day’s night, I should be sleeping like a log
But when I get home to you I’ll find the things that you do
Will make me feel alright
 
You know I work all day to get you money to buy you things
And it’s worth it just to hear you say you’re going to give me everything
So why on earth should I moan, ’cause when I get you alone
You know I feel ok
 
When I’m home everything seems to be right
When I’m home feeling you holding me tight, tight
 
Owww!
So why on earth should I moan, ’cause when I get you alone
You know I feel ok
 
When I’m home everything seems to be right
When I’m home feeling you holding me tight, tight, yeah
 
It’s been a hard day’s night, and I been working like a dog
It’s been a hard day’s night, I should be sleeping like a log
But when I get home to you I’ll find the things that you do
Will make me feel alright
You know I feel alright

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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