Daily Brief – UK Borrowing

Humphrey Percy
Chairman and Founder
Mon 22 Jul 2024

UK Borrowing

The Office of Budget Responsibility predicted that the UK would borrow GBP11.6 billion in June. As it turned out the UK did in fact borrow GBP 14.5 billion in June. All sorts of questions arise about the OBR and just how such a large overshoot in borrowing could occur given the already eye wateringly high level of UK indebtedness at 99.5% of GDP. However the plans to nationalize the railways will cost significant amounts although they may be exactly what is required, but the liabilities and costs of assuming responsibility for the UK’s railways will doubtless send borrowing up versus Chancellor Reeves’ pledge to reduce borrowing.

GBP/USD 1.2914.

Alternative Investment

For many years there have been efforts made to standardize and commoditize investment in fine arts. In the USA there is a company called Masterworks in which one can do just that by buying and (maybe) selling shares. All an investor requires is a minimum stake of USD 15,000 and a strong stomach. The marketing blurb does contain risk warnings and at the same time extols the virtues of diversification in one’s investment portfolio provided it involves buying into Masterworks. There is some stuff about illiquidity but as any seasoned investor knows, illiquidity implies a temporary lack of liquidity rather than a more permanent one. The problem with fine art is that it is by definition fashionable and when falling out of fashion the bid offer spread on art could well be more of a gulf than a chasm. Just think of those pictures of fox hunting scenes of yesteryear.

GBP/EUR 1.1868.

Watch Charts Overall Market Index

This is the index that charts a basket of 60 luxury Swiss watches across 10 brands in the secondhand market. In Q2 2024 it fell for the ninth straight quarter. Positively if one can describe such a performance as such, it fell by only 2.1% and year on year by 1.2%. Investors will have to console themselves with enjoying wearing their declining watch investments but for buyers of second hand watches, the news is bright. Maybe that is why retailers such as Watches Of Switzerland have set up second hand sales operations. So if you hanker after a Rolex, you will find it down over 7% in the past year and as for an Audemars Piguet, those models have fallen by over 12%. You might also find those somewhat superior sales people in Watches of Switzerland rather more anxious to please these days.

EUR/USD 1.0882.

Fernando Botero

Devotees of Colombian artist Fernando Botero renowned for the Boterismo style who died last year can go and enjoy an exhibition in Rome, Italy on there until October 1. There they can feast their eyes on the people, animals and objects that Botero styled in caricaturesque bloated, exaggerated ways. Then they can go and feast on the culinary delights of Roman food and emulate his human models when it comes to bloatedness.

USD/JPY 157.48.

If Ever I see You Again

This day in 1978 American R&B, Soul and Pop singer Roberta Flack stormed to the top of the charts with this number where she clung like a limpet for three weeks. Still going strong but retired and now aged 87 RF can look back on a long successful career and being influential on multiple generations of younger singers.

I’ve wondered all my life
How I could ever let you go?
There’s not a lot of change in my life
But one thing that I know

If ever I see you again
Maybe this time it’ll work out alright
Maybe this time we won’t say goodbye but only goodnight
With a love that won’t end
If ever I see you again

Warm, sleepy morning waking up next to you
Feeling you close by my side
Nothing on earth has ever felt better
Then the feelings I’ve felt deep inside

Sometimes it seems that I never lost you
And that you’re not really gone
‘Cause I had this dream
This wonderful dream
And it just goes on and goes on

And If ever I see you again
Maybe this time it’ll work out alright
Maybe this time we won’t say goodbye but only goodnight

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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