Daily Brief – US Consumer Price Inflation and the UK

US Consumer Price Inflation and the UK

Before you look away, it is worth knowing that the release due out later today will direct if not dictate US interest rate policy and by implication the Rest Of the World even if there is a growing chorus of economists – maybe a clutch is the collective noun – who are salivating of the world’s leading Central Banks following diverging monetary policies with the US and UK broadly holding and the EU and Japan raising interest rates. So far, Sterling has remained within a range while the US market marks time ahead of the CPI release and new UK Prime Minister embarks on his “Listening Tour” of the UK. Despite Andy Burnham’s predecessor Sir Keir Starmer being unceremoniously dumped for “listening” rather than leading, at this point in the midst of yet another record-breaking hot spell, the UK may just be overcome by that heat to question the incoming and unelected new Prime Minister of the United Kingdom of Great Britain and Northern Ireland.

EUR/USD 1.1536.

Oil

There was a feeling albeit briefly that when US Treasury Secretary Scott Bessent previously known for being more of the grown up in the room of the US Administration was reported widely to have said that a US-Iran Gulf peace deal announcement was “imminent”, that it was just that, imminent. More than a week later, it transpires that Secretary Bessent had fallen into the rutted track of making false claims on this score previously trod by Marco Rubio, JD Vance and as pioneered and repeated many times by POTUS himself. The markets have reacted predictably with Brent Oil rising 15% from the time of Scott Bessent’s statement when it stood at USD 78 to its current level of USD 89.72. The language from the White House has been tempered to reflect that an agreement is proving harder to reach due to the list of Iranian demands. No mention of the corresponding US demands for Iranian reparations. So when Secretary Bessent claims that a deal is reaching fruition, it is just not that imminent – apparently.

GBP/USD 1.3503.

Melongate

Thank goodness for the Australian Prime Minister as whenever the dog days of August threaten to reduce newsworthy items to a trickle, up pops PM Anthony Albanese with a well-chosen interview gaffe. This time it was when he was asked about what his counterpart Japanese PM Sanae Takaichi had brought him as a gift he made a poor joke about it being a melon. A Japanese Royal Melon is considered to be a luxury item in Japan and each can cost up to USD 300. Doubling down when asked a supplementary question as to whether Ms Takaichi had smuggled the fruit through the notoriously strict Australian border controls, Anthony Albanese replied, “She came in looking like Pamela Anderson.”

GBP/AUD 1.9133.

Spain-Italy

It is not just in the UK that immigration is if not uppermost close to being at the top of the electorate’s agenda as can be seen by two EU countries that apart from being paid up members of the “Garlic Coast” should be natural allies. The immigrant influx last week into Ceuta has exposed wide and widening policies between Italy and Spain. While more complex than this simplification, the tension arose by Italy imposing immigration controls on travellers arriving in Italy from Spain. Spain has now returned the favour on travellers arriving in Spain from Italy. Spanish PM Sanchez leads a Centre Left Government while Italian PM Georgia Meloni leads a Far Right government. Both countries will have elections next year and both countries will likely veer further Right which while on paper might suggest some kind of rapprochement is not at this stage on the issue of immigration expected to do so.

GBP/EUR 1.1703.

All Night Long

This day in 1984 Lionel Richie closed the Los Angeles Olympics with this Commodores classic which cemented his solo performer pretensions having seared his virtuoso performance into the minds of a global audience. All Night Long for Lionel Richie that evening turned out to be a memorable 9 minutes.

Well, my friends, the time has come
Raise the roof and have some fun
Throw away the work to be done
Let the music play on
Everybody sing, everybody dance
Lose yourself in wild romance

We’re going to party, karamu, fiesta, forever
Come on and sing along
We’re going to party, karamu, fiesta, forever
Come on and sing along

All night long (all night), all night (all night)
All night long (all night), all night (all night)
All night long (all night), all night (all night)
All night long (all night), oh yeah (all night)

People dancing all in the street
See the rhythm all in their feet
Life is good, wild and sweet
Let the music play on
Feel it in your heart and feel it in your soul

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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