Daily Brief – Independent Central Banks

Independent Central Banks

To continue the recent debate about how worried we should be (very) about the loss of independence of the USA’s Federal Reserve, the respected ex Deutsche Bank and HSBC Financial Times columnist Stuart Kirk, posited at the weekend that the answer should be, not very worried at all. SK arrived at this conclusion by pointing to previous eras when the USA and the UK had differing amounts of central bank independence and the economic output between the two countries differed by a mere 0.3%. All well and good at one level, but the market’s anxiety not to mention the other Central Bank governors led by the ECB’s Lagarde and the BoE’s Bailey, is surely predicated on the current intervention prone POTUS and his lack of economic credentials. Meanwhile, Goldman Sachs have taken rather a different line to Stuart Kirk, putting out a note this weekend that that loss of Fed independence will lead to higher inflation, loss of the USD’s reserve currency status, lower equity prices and lower bond prices i.e. higher yields.

EUR/USD 1.1717

Daniel Zeichner

In case you missed it on Saturday afternoon some time between your post prandial nap and your tea time jammy dodgers, the UK PM sacked the Farming Minister, Daniel Zeichner, the architect of the inheritance tax limit on farmers. Maybe by the time you are reading this, the PM will also have taken steps to reverse that tax decision which has resulted in the Labour Government having literally zero support from the farming community. We could make snide remarks about DZ buying the farm or taking farming rather than gardening leave, but let’s leave it as the ex Farming Minister having the well earned chance to spend more time with his family.

GBP/USD 1.3509.

Ursula Von der Leyen

Fresh back from the summer break, the EU Commission President was doubtless hoping that the controversy earlier in the summer surrounding her policies and in particular her EU Budget would have gone away. Not a bit of it: the radical Left and the far Right patriots for Europe are both mounting a challenge and collecting votes for a No Confidence motion against UvdL. On top of the French political storm swirling around President Macron and his latest PM Francois Bayrou, there will be some Autumn squalls in Euroland and the EUR in the next weeks.

EUR/GBP 0.8664.

Mounjaro

A tale for our times, 64 year old UK Labour MP Carolyn Harris endured unpleasant online trolling abuse so decided to do something about her 19 stone or 120KG size 24 frame by taking the drug Mounjaro. A year later her dress size is a respectable 10 and she has lost 8 stone or 51 kg.
Carolyn Harris claims to have spent GBP150 per month on her 15mg doses but has appealed to Health Secretary Wes Streeting to subsidise people like her as her dose has gone up in price to £429 per month due to US drug maker Eli Lilly raising its prices 170% last month.

EUR/JPY 172.74.

Blaze of Glory

This day in 1990 Jon Bon Jovi broke through as a solo artist with this number that went to Number One:

I wake up in the morning

And I raise my weary head
I got an old coat for a pillow
And the earth was last night’s bed

I don’t know where I’m goin’
Only God knows where I’ve been
I’m a devil on the run
A six gun lover
A candle in the wind, yeah

You’re brought into this world
But they say you’re born in sin
Well at least they’ve given me something
I didn’t have to steal or have to win
Well, they tell me that I’m wanted

Yeah I’m a wanted man
I’m colt in your stable
I’m what Cain was to Able
Mister catch me if you can

I’m goin’ down in a blaze of glory
Take me now but know the truth
I’m goin’ down in a blaze of glory
Lord I never drew first
But I drew first blood
I’m no one’s son
Call me young gun

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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