Daily Brief – EU Interest Rates

EU Interest Rates

As expected the ECB held interest rates yesterday. Unsurprising, given the August 1 deadline on the US tariffs that might see a punitive tariff rate of 30% on the EU, although talks are meant to be getting closer to a 15% rate and in sight of the finishing tape. That means that the market is now pencilling in another and probably the last rate cut in September which will be the 9^th since June 2024. Meanwhile the stated ECB determination is to maintain an iron grip on the control of inflation which flared up post 2022 and the Ukraine invasion and is now threatened by tariffs.

EUR/USD 1.1735.

UK Heavy Weight Economists Wanted

After a year of telling the UK that she, the Chancellor Rachel Reeves, knows best and will with one mega Budget in Autumn 2024 fix the hole in the UK’s funding and it now being clear that she has failed, the call has gone out for some Big Name Heavy Weight UK economists to both reassure the Chancellor that she is on the right track and to tell the UK that further tough love medicine is in order. So progress of a kind in that the Chancellor has realised that her job is a bit harder than she thought, but the fact remains that her job still needs doing.

GBP/USD 1.3540.

India/UK Trade Deal

No sooner was the ink drying on the UK/India trade agreement signed yesterday than UK PM Sir Keir proclaimed the GBP 6 billion trade deal as “the biggest and most economically significant”  trade deal entered into by the UK since Brexit. Since it covers UK made cars and Whisky to India and textiles and jewellery to the UK, that has puzzled some if not most observers. As a reminder India accounts for 1.9% of the UK’s exports and 1.8% of the UK’s imports. Just to remind the PM, the USA accounts for 16.2% of the UK’s exports and 9.7% of the UK’s imports, but that trade deal was signed on June 30^th, so presumably, in all the India excitement Sir Keir has forgotten it.

GBP/EUR 1.1530.

Cockapoo

The rich well that is Wales and its news continues to shed joy, this time the breaking news is from Pontypridd, where post Covid a lady adopted a rescue dog when it was a puppy and as a Cockapoo the mutt was expected to grow to a max of 11kg.  Four years later, the “Cockapoo” has grown to 45kg, is the size of a teenage boy and after a DNA test has been declared to have plenty of Bernese mountain dog. As has previously been intimated, not too much happens in parts of Wales which is why Bobby the Cockapoo (not) has made the news.

EUR/JPY 172.29.

Get it On

This day in 1971 T.Rex the abbreviated Tyrannosaurus Rex band led by pop pixie Marc Bolan were at Number One with this number their second chart topper. Getting it on while entirely understood by T.Rex’s bell bottomed flares and scoop cheesecloth shirted UK fan base as in American parlance being the equivalent of hooking up was lost in translation in the USA so it was released there as Bang a Gong. In US street slang we now learn that bang a gong can either denote smoking opium through a bong or during sex penetrating deeply enough to hit the cervix. Alternatively and far more likely in those distant and more innocent 1971 days it might have meant simply banging a gong.

Well you’re dirty and sweet, clad in black
Don’t look back and I love you
You’re dirty and sweet, oh yeah
Well you’re slim and you’re weak
You’ve got the teeth of a hydra upon you
You’re dirty sweet and you’re my girl

Get it on, bang the gong, get it on
Get it on, bang the gong, get it on

You’re built like a car,
You’ve got a hub cap diamond star halo
You’re built like a car, oh yeah
You’re an untamed youth that’s the truth
With your cloak full of eagles
You’re dirty sweet and you’re my girl

Get it on, bang the gong, get it on
Get it on, bang the gong, get it on

You’re windy and wild,
You’ve got the blues in your shoes and your stockings
You’re windy and wild, oh yeah
You’re built like a car,
You’ve got a hub cap diamond star halo
You’re dirty sweet and you’re my girl

Get it on, bang the gong, get it on

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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