Daily Brief – UK Government Borrowing

UK Government Borrowing

Borrowing for September was reported yesterday by the Office of national Statistics or ONS to be GBP 20.2 billion, up by GBP 1.6 billion from the same month in 2024. What that means is that public spending exceeded tax income by that amount. That takes borrowing for the first 6 months of the financial year to GBP 99.8 billion, of which GBP 9.7 billion is central government debt interest. Despite brave statements from the government claiming that they would never play fast and loose with the finances of the UK, the fact remains that like all households that have a budget and tailor their expenditures accordingly, the UK government needs to do the same. And therein lies the problem as even with a stonking parliamentary majority, when it comes to curtailing public expenditure, that majority dwindles to virtually nothing and ironically spending cuts are more likely to be supported by HM Opposition parties than HM’s Government.

GBP/USD 1.3390.

Rare Earths

In a bid to escape from the vice like grip that China exerts on the RE market, POTUS has signed an agreement with Australia to pursue joint ventures to develop RE businesses. REs are principally used in technology, energy, defence, and the auto industries and as an added curb on China, POTUS is advocating minimum price levels to prevent China from manipulating the market. The agreement signed on Monday was enough to send RE stock prices soaring and an outbreak of further insider trading accusations against the US administration.

EUR/USD 1.1618.

UK National Minimum Wage

Bandied around loosely, the NMW is a term mainly applied to hourly or seasonal workers that unsurprisingly is fuzzy to most adults since it applies to 16-20 year olds and has 2 bands 16-18 and 18-20. Assuming that most readers do not fall into those age brackets, it is the National Living Wage that applies to all those of 21+. That incidentally is not a typo: in April 2024 that was reduced from 23+. The NLW now stands at GBP 12.21 and employers who do not pay that minimum are at risk of prosecution.

EUR/GBP 0.8677.

Reading Habits

As we know adolescents and young adults in the UK have lost the habit of reading and there is a drive to reconnect them with books. Admittedly, coming from a different generation but ex president Nicholas Sarkozy having said farewell to his model/pop star wife Carla Bruni at the gates of the prison, where he began his 5 year sentence yesterday, took few possessions inside with him but they included 3 books and one was… Alexandre Dumas’ “The Count of Monte Christo”. Those who have read it will remember that it is the tale of a man who was unjustly imprisoned and plots his revenge against those who betrayed him. Watch this space.

EUR/JPY 176.52.

My Generation

This day in 1964 The Who auditioned for the record label. EMI. Despite their then name which surely smacked of hubris, The High Numbers were turned down flat. Never mind: Roger Daltrey, Pete Townsend, John Entwistle, and Keith Moon went on to achieve legend status for wrecking American hotel rooms, driving a Lincoln town car into a swimming pool, much other bad boy rock and roll behaviour and of course, some Foot stomping anthems such as this one:

People try to put us d-down (Talkin’ ’bout my generation)
Just because we get around (Talkin’ ’bout my generation)
Things they do look awful c-c-cold (Talkin’ ’bout my generation)
I hope I die before I get old (Talkin’ ’bout my generation)
This is my generation
This is my generation, baby

Why don’t you all f-fade away (Talkin’ ’bout my generation)
And don’t try to dig what we all s-s-say (Talkin’ ’bout my generation)
I’m not trying to cause a big s-s-sensation (Talkin’ ’bout my generation)
I’m just talkin’ ’bout my g-g-g-generation (Talkin’ ’bout my generation)
This is my generation
This is my generation, baby

My, my, my generation

Why don’t you all f-fade away (Talkin’ ’bout my generation)

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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