Daily Brief – UK Productivity

UK Productivity

The OBR or Office for Budget Responsibility has likely downgraded its forecast for UK Productivity by the time that you are reading this. Despite taking a leaf out of her boss’s PM playbook and jetting off on an overseas business trip when unwelcome economic news is in the offing, for Chancellor Reeves there is no escape. The OBR was expected to reduce its forecast by between 0.1 and 0.2% but it now looks like 0.3%. Each 0.1% represents a hit to the UK’s bottom line of GBP 7 billion in 2029-2030, so that would mean that the Chancellor will be looking to plug a further hole in her future budget of GBP 21 billion.

GBP/USD 1.3317.

US-China Meeting

Ahead of Thursday’s meeting in South Korea between POTUS and President Xi expectations are low for much to come out of it. That, plus the expectation of a cut in US rates, means that the USD is softer. All that of course could change if POTUS pulls a deal out of the bag as he is telling everyone, but as of now that is not the predicted outcome. The other factor is that the European Central bank is not expected to cut EU rates this week which suggests that the EUR will remain firm against USD.

EUR/USD 1.1695.

Messina Bridge

Some readers will recall that we wrote about Italy PM Meloni’s cunning plan to honour Italy’s commitment to Defence spend that all the European leaders pledged to POTUS 3 months ago. The dusting off of the plan that was formally scrapped in 2012 would bring jobs and prosperity to the south of Italy, an area that has suffered from poverty for many decades. More of a push was Giorgia Meloni’s claim that the new bridge spanning the straits of Messina and joining Sicily to the mainland would bolster the strategically important island of Sicily at the very southern extremity (apart from Malta) of the EU. News to many that Libya, Tunisia, and Morocco really pose much of a threat to the EU. It now turns out that in a truly Italian twist to the tale, the tender for the EUR 13.5 billion bridge, that was won by Italian construction company Impregilo, was submitted 20 years ago in 2005, when it was a EUR 3.8 billion project. Worse still that tender was based on studies done in 1997. In further twists worthy of an Italian opera by Giacomo Puccini, Impregilo was taken over by WeBuild in 2014 by which time Impregilo had lodged a EUR 700 million lawsuit for damages against the Italian government for dropping the project in 2012. Behind the scenes in smoke filled rooms, WeBuild recently agreed to drop the EUR 700 million lawsuit if the contract now worth EUR 10.6 billion was once again awarded to them without the pesky nuisance of a further tender process. All was going well with PM Meloni receiving plaudits for spending on what is described as a critical defence asset, until the Italian courts interceded this week demanding a review of the tender, the process and the no small matter of the EUR 10.6 billion going to WeBuild out of the total project cost of EUR 13.5 billion.

GBP/EUR 1.1415.

Coolest Cars of All Time

It’s official the coolest car of all time is the Citroen DS, a car that was manufactured between 1955 and 1975, and is therefore seared into one’s consciousness as being of the time of French President Charles de Gaulle. In fact, most of the Top 25 coolest cars are according to the survey what can only kindly be described as vintage and more accurately as old technology. In the same way, another chart of the 40 greatest albums of all time only manages to have 4 entries from the 1980’s – Prince, U2 Paul Simon, and Peter Gabrieland, all the rest are from the 1960’s and 1970’s, which is rather like the table of the Coolest Cars of all time. So, either nothing much automotively cool nor any great albums has been produced for 50 years or….the compilers of these charts are of a certain vintage with too much time on their hands and their minds glued firmly to the past.

EUR/JPY 177.13.

Brain Itch

This day in 2003 Prof James Kellaris of the University of the Cincinnati College of Business Administration released his research into tunes that get into our minds and which we simply cannot shift – they are sometimes referred to as cognitive itch. Look away now if you don’t want to risk this one from the Baha Men lodging in your frontal lobe:

Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?

Well, the party was nice, the party was pumpin’
Heya, yippie yi yo
And everybody havin’ a ball
Huh, huh, yippie yi yo
I tell the fellas start the name callin’
Yippie yi yo
And the girls respond to the call
I heard a woman shout out

Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?
Who, who, who, who, who?
Who let the dogs out?
Who, who, who, who, who?

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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