Daily Brief – UK Chancellor Market Reaction

UK Chancellor Market Reaction

John Healey’s appointment as Chancellor has broadly been greeted with surprise and relief in the markets. Surprise that it was not Shabana Mahmoud given the systematic leaking last weekend and relief that JH is both a safe pair of hands and on past performance prefers defence spending over ever rising benefits bills. There is further relief over who was not appointed i.e. Ed Miliband. Markets expect John Healey to support Wes Streeting in his new role as Defence Secretary and consequently welcome both appointments and that assumption. Needless to say, the conspiracy theorists are already wondering if the Healey resignation a few weeks ago was part of a deal struck with Andy Burnham since that resignation is considered to be the final nail in Keir Starmer’s coffin of a premiership. Last but definitely not least is the market’s’ concern that Healey’s role will be to mop up after Andy Burnham’s unrehearsed promises such as taking VAT off energy bills which is already suspected of needing to be reversed or qualified since it appears to be unfunded. As such bets are already being made on how long the Burnham Healey pact will last since the latter has resignation form on matters of principle. Hence the selloff in GBP.

GBP/USD 1.3378.

Oil

Nine days of increasingly intense outbreaks of bombing in the Gulf plus the restricted passage through the Strait of Hormuz have been sufficient to drive the Brent Oil price back up to USD90. Those geopolitical tensions accounting for between USD 5 and 15 in the price are offset by supply demand and economic growth considerations which would otherwise suggest a price of USD75-80 at present.

EUR/USD 1.1400.

EU Job Insecurity

The latest report from Eurofound the EU agency “providing knowledge to assist in the development of better social, employment and work-related policies” finds that almost 1in 5 EU jobs fails on at least one of the following and as such is at risk: income inadequacy, employment insecurity and lack of workplace rights. Spain comes off worst with 29% of its jobs thus being at risk with Portugal, Luxembourg, and Italy all at 25%. Some, particularly outside the cosy confines of the EU, might say it were ever thus in the real world of commerce, but the EU is taking it seriously. 

EUR/JPY 186.09.

Route 302

We are now officially in the Silly Season: schools are out and Thames Water has imposed a hosepipe ban on 10 million Londoners most of whom barely look out on a street let alone have gardens. Yet despite the keen competition for ever rising levels of silliness in the “heat dome”, the driver of the North London bus on Route 302 streaked into contention when he found a Marmoset monkey in a laundry bag on his bus when he arrived at Kensal Rise. Apart from being dehydrated and unhappy about being secured in a small metal cage- the monkey not the bus driver- all is well and the marmoset has (provisionally pending proper identification,) been named Oyster. Awww.

EUR/GBP 0.8522.

Tutti Frutti

This hit from 1955 by Little Richard is together with Long Tall Sally (1956) widely considered to be his best songs. Scroll forward to 1979 and Little Richard now known as the Reverend Richard Pennmann preached to his congregation about the evils of rock n’ roll music and said:” If God can save an old homosexual like me, he can save anybody.”

Love, it has so many beautiful faces
Sharing lives and sharing days
My love it had so many empty spaces
I’m sharing a memory now
I hope that’s how it stays

Now I’m deep inside love and still breathing
She is holding my heart in her hand
I’m the closest I’ve been to believing
This could be love forever

All throughout my life
The reasons I’ve demanded
But how can I reason
With the reason I’m a man

Oh, oh-oh-oh-oh yeah
Hmm

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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