Daily Brief – CBDCs

CBDCs

Coming to your High Street soon: Central Bank Digital Currencies. The largest due to launch next year is the digital Euro. The Bank of England is still looking into it. Given that we have bank transfers, electronic banking, credit and debit cards and multiple payment cards the question is what will be the plus when digital Euro and Sterling (eventually) are available? Take the Bahamas and Jamaica that both launched their own digital currencies, which have been far from being conspicuous successes. Jamaica and The Bahamas put forward the following reasons to launch their own CBDCs: to promote financial inclusion, to stabilise the monetary system and to foster competition. Are these reasons valid in all countries/ economic blocs? In short no. The UK had 1.1 million people as at March 2025 who did not have bank accounts – many one would suspect out of choice but of those many had Post Office accounts so that means that 69 million did: strike one. The argument that the monetary system of the UK would be stabilised by a CBDC is hard to make – maybe that’s the reason for the BoE’s shyness. Strike two. That leaves competition: few if any would contend that the UK does not have both competition and choice for consumers. Strike three. So that leaves anonymity but by its very nature a CBDC means that all transactions are logged on a central ledger. While the fine minds deliberate one could conclude that a CBDC is more of a Central Bank response to the rash of less than stable Stable Coins or tokens that lurk to entrap the financially unaware than a groundbreaking game changer which will revolutionise shopping or paying invoices.

GBP/USD 1.3250.

Tsunami

Fortunately the fears of deadly tsunamis have receded now that what is judged to be sufficient time has elapsed since Wednesday’s 8.8 earthquake in the Kamchatka Peninsula in the Far East of Russia. To put it in perspective, 8.8 is in the top 6 of the most serious earthquakes in recorded history. Looking at the top ten that include the 2004 Indonesia earthquake that measured 9.1 and claimed the lives of 230,000 people with 167,000 in Indonesia alone, it demonstrates that the location of the quake and the resultant shockwaves and tsunamis on low lying land dictate the number of fatalities. Top of the league table is the earthquake in Biobio, Chile in 1960 that claimed the lives of 1600 people and measured 9.5 on the Richter scale.

EUR/GBP 0.8638.

UK Food Price Inflation

In the first 6 months annualised food inflation is +4% and H2 looks like that increasing to 6%. Beef, chicken and tea are up the most and much of the food increases are due to the Chancellor’s ill judged increase in Employers’ Insurance that hits small and medium sized businesses the hardest. Christmas is indeed coming but it will be more expensive.

EUR/JPY 171.06.

Tourism and Ticket Tax

First it was Wales which had the brainwave to introduce a tourist tax despite the conspicuous lack of over tourism due to visitors still not embracing the attractions of leeks, rain and the traditional Welsh antipathy to anyone who is not Welsh. Now it is the turn of London’s Brent Council that includes Wembley Stadium in its borough and is attempting to sting concert goers watching say Sting or Coldplay and sports fans with a GBP1.25 tourism and ticket tax. 

EUR/USD 1.1447.

Concert for Bangladesh

This day in 1971 George Harrison organised and fronted a concert that took place at NYC’s Madison Square Garden concert hall with a myriad of stars including Eric Clapton, Billy Preston, Bob Dylan, Ringo Starr and Ravi Shankar. The concert raised plenty of money for the victims of famine and war in Bangladesh from ticket sales to the 40,000 audience plus the music and film proceeds-vintage readers will recall the orange box that the vinyl came in as well as plenty of sitar music from Ravi Shankar, but the most striking performance was this song written and performed by George Harrison:

My Sweet Lord

My sweet Lord
My Lord
Mmm, my Lord

I really want to see you
Really want to be with you
Really want to see you, Lord
But it takes so long, my Lord

My sweet Lord
My Lord
My Lord

I really want to know you
Really want to go with you
Really want to show you, Lord
But it won’t take long, my Lord (Hallelujah)

My sweet Lord (Hallelujah)
My Lord (Hallelujah)
My sweet Lord (Hallelujah)
 
Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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