Daily Brief – British Pound

British Pound

While inflation at 2.8% and the prospect of a peace deal were cited as reasons to leave UK interest rates unchanged given the fall in Oil prices with Brent at USD 78.58, the effect on Sterling as we suggested earlier in the week was immediate: it fell sharply. That was before the result of the most closely watched UK by-election in a long time became clear, not to mention the probable political fallout: if Labour win as seems most likely, that will not only precipitate a leadership contest but will expose the various factions within the Labour party. At the same time, it will, depending on the scale of a Reform defeat, call into question the impact of the growing popularity of the on-line savvy Restore party which threatens to take important percentage point votes from Reform. More will become clear on these points today as the market processes the result of the Makerfield by-election, but Sterling looks fragile based on the view of the near- and medium-term political horizon.

GBP/USD 1.3183.

EU Mortgage Rates

A timely reminder that while the EU has monetary union, it does not have financial union despite having a Central Bank dictating a single EU monetary policy: EU mortgage rates do not just diverge by a few basis points, there is a marked difference between the different countries with a rough rule being that the further South you go in the EU, the cheaper the mortgage rates. At the top end are Latvia and Estonia at over 4% which are followed by Lithuania, Germany, the Netherlands, and Belgium all between 3.50 and 3.88%. For buyers of homes in the Mediterranean region, it is a different story with Spain, Portugal, Slovenia, and Croatia all between 2.80 and 3.00%. But for a real mortgage bargain, Malta wins the crown at 2.08% because of cutthroat competition and a building boom plus plenty of deposits.  Overall, the northern most economies have a much higher proportion of floating or variable rate mortgages, but this generalisation does not apply to Malta where fixed and variable are 60 and 40% respectively. Not only that, the average age of first time borrowers in the EU is 31 while the lowest age is… Malta at 28. In summary, Latvian borrowers pay twice as much for mortgages as Maltese borrowers; so more a case of young people filling their boots on the sunshine isle and less of Maltese being cross about borrowing costs. Boom boom.

EUR/USD 1.1425.

Smart Glasses

Snapchat’s parent Snap has launched its smart glasses offering on the market this week at a cost of USD 2195 or GBP 1636 for delivery this Autumn with a pre-purchase deposit required of USD 200. That compares with Apple’s USD 3499 and Meta’s USD 499 versions. For that USD 2195, wearers will be able to get directions, ask questions about objects they see, watch videos, browse the web, play AR games, and record. If all that sounds a bit sad and solitary, it is the record bit that continues to cause controversy due to inappropriate unsolicited use in private places-go figure; however, Snap has an answer to that: a glowing light on the specs that shows when recording. Work to do on the marketing and convincing analysts clearly as Snap Inc’s shares fell 9% on the launch announcement – so not that smart then and next time you see someone with glowing glasses in a public convenience, it’s probably worth pepper-spraying them.

EUR/JPY 184.35.

Dunroamin

Once one has travelled the world, an offbeat port of call might be Dundonald, Northern Ireland where Lidl has elected to enter the pub trade with its first in the world Middle Ale venture and where the people of Dundonald will be able to buy German and Belgian beer as well as exploring Lidl’s famous bargain Middle Aisle. According to the BBC, the beer drinkers of Dundonald are excited at this retail and drinking development in their community. A cursory examination of what happens in Dundonald turns up a visit by the King but not so much since,…… and that was King John in 1210 AD.

EUR/GBP 0.8669.

21 Seconds

This of course is the best known song by London Battersea band So Solid Crew and is described somewhat surprisingly to some at least as the best example of a musical bridge between garage and grime. The genius of the song lies in the 10 21-second rapid fire verses.  Unfortunately band member G Man extended his approach to the rapid fire part by carrying a loaded gun plus possessing 11 bullets that were found in his home.  All of which G Man denied possessing despite being arrested with the gun after a police car chase and his DNA being on the bullets. Sentenced to 4 years this day in 2003 G Man has not been heard of since, having presumably taken a different career path from that of the garage-grime world. There’s plenty more of 21 seconds but this soupcon below covers the thrust of the oeuvre.

Ha, ha, ha, whatcha laughin’ at?
Ha, ha, ha, ha, ha, ha
Ha, ha, ha, whatcha laughin’ at?

Megaman up first and he won’t second no shit
I ain’t got the time to smoke this, hold this
Yo G, roll by in a blacked out TT, Megaman carry two gats easy
Seeing stars, and a mister wanna jack me
Jack me say come step to me
The last thing that you saw was icy, bitch
Say n**** wanna see Mega get rich
But n***** don’t really want Mega to be rich
Say n**** wanna see Mega get rich
But n***** don’t really want Mega to be rich

Asher D’s never fading
Strugglin’ stay strong ’til I’m bathin’
The A to the D’s never phasing
I run a drum of enemies if you’re racing (chasing)
So Solid are amazing
An’ Guccis we’re bound to be lacing
Addicted to this life that we’re tastin’
You blame me for the life you been wasting
Your hating, but there’s money to be making
Actor, MC and now I’m rakin’
Smoking mad G’s like a Jamaican
So when you’re looking at me you start takin’, creating

Thug of the family, who could I be?
M with the A to the C that’s me
Thug of the family, who could I be?
M with the A to the C that’s me
M-A-C still thuggin’

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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