Daily Brief – British Pound

British Pound

Instead of a 0.1% contraction in growth the UK economy managed a 0.1% growth in Q4 2024. And that was enough to send the British Pound sharply up yesterday. Maybe it was or maybe the credit should go to the Daily Telegraph which carried a bullish article which can be summarised as cheer up things in the UK economy are much much better than everyone is giving it credit for. Whatever, GBP managed to reach the best level of recent times against USD.

GBP/USD 1.2545.

Clean Transport in the EU

In case it has escaped you the target for %age of clean transport EU wide is 29% by 2030. Only one country has hit the target so far: Sweden with 33.7% largely due to its affection for EVs. The next country is Finland with 20% with Netherlands and Austria both on 13%. However beneath the surface a problem lies in that Sweden has achieved its laudable position largely due to the use of biofuels i.e. animal fats that are used to the extent that other industries are being pushed towards less eco worthy fuels such as Palm Oil which is concerning green campaigners. 

EUR/GBP 0.8327.

US Inflation

For keen students of the dismal science of economics the best indicator for inflation is the 5 year breakeven inflation rate rather than Consumer Price Inflation. The breakeven rate is best described as the average expected rate of inflation over the medium term. Penn Mutual Asset Management certainly subscribe to this school of thought. By their reckoning the current 5 year break even rate of US inflation of 2.6% means that inflation will remain above the target 2% for the foreseeable future.

USD/JPY 152.93.

UK Fishing Rights

The re-set with the EU trumpeted by Sir Keir Starmer looks as if it may be harder than he and his cabinet colleagues believed. Unsurprisingly the EU are extracting maximum mileage and leverage on the UK’s PM by making the re-establishment of pre Brexit North Sea fishing rights for French, Danish and Dutch fishermen as one of their top 3 wants. Without that key concession from the UK there will not even be a sit down with the EU on trade which is of course what Sir Keir is after. Nothing is more emotive in the UK than foreign fishermen plying their trade in UK waters as Sir Keir would do well to remember.

EUR/USD 1.0445.

Black Sabbath

This day in 2005 Kerrang! Magazine conducted a readers’ poll for the best rock album ever. Although by no means definitive since it would be a push to describe the readers of Kerrang! as the foremost authority on such significant matters, it was nevertheless instructive to note that the lads from Birmingham led by Ozzy Osbourne whom I memorably visited at his home some years later had not one but two albums in the Top Five: Black Sabbath and Paranoid.

Finished with my woman ’cause
She couldn’t help me with my mind
People think I’m insane because
I am frowning all the time

All day long I think of things
But nothing seems to satisfy
Think I’ll lose my mind
If I don’t find something to pacify

Can you help me
Occupy my brain?
Oh yeah

I need someone to show me
The things in life that I can’t find
I can’t see the things that make
True happiness, I must be blindMake a joke and I will sigh
And you will laugh and I will cry
Happiness I cannot feel
And love to me is so unreal

Have a Great Weekend! 

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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