Daily Brief – UK Growth

UK Growth

The beginning of 2025 marked 0.7% growth in Q1 and the expectation for Q2 was for the UK economy to flatline, so when growth came in at 0.3%, which is exactly the same as France, Germany, and Italy, it prompted the more impressionable market commentators to dust off their forecasts and start talking about revising the 2025 outlook. Two conclusions can be more sanguinely drawn: the first is that Q3 will show further slowing as tariffs bite, and second that further interest rate cuts in the short term look more unlikely. But let’s not rain on the UK’s sunshine soaked parade on the day that the FTSE went through 9000.

EUR/USD 1.1690.

Global Wealth

With all this chat about the mostly minuses rather than the sparsity of pluses of a wealth tax, the UBS Wealth Report is a timely reference document. Global wealth adds up to USD 471 Trillion and 54% of that big number is in the USA (35%) and China (19%). The next biggest repository is Japan with 4.5% which is a relatively small margin ahead of each of the UK, Germany, and France. Europe, comprising the EU, UK, Switzerland, Norway, and Turkey accounts for 22%. So as ever, wealth is concentrated with 80% of the world’s wealth divided between the USA, China, Europe, and Japan.

GBP/USD 1.3577.

US Interest Rates

It is not only market participants who are tipping a 50bp cut in US interest rates in September, but US Treasury Secretary Scott Bessent is also pontificating on such a cut next month and voicing his disquiet that US interest rates are not 150-175bps lower already. No pressure at all on Fed Reserve Chair Powell given that Secretary Bessent is also talking about defenestrating the long suffering Jerome Powell whose term is due to expire in May next year and openly speculating about suitable replacement candidates that he might like to see in his stead in the post.

USD/JPY 146.50.

UK Fat Tax

With sugary canned drinks and food with a high degree of saturated fat including sweets and chocolate being subject to VAT unlike most healthier foods, there is effectively a fat tax in the UK. However, once more generously proportioned devotees of such foods have passed on and gone to the confectioners in the sky, they become free from fat tax. Until now. At a cemetery in Tettenhall, Wolverhampton the charge has increased to GBP2,700 for a 6ft wide burial plot which is a 20% uplift on the standard 5 ft burial plot. Not an unreasonable premium one might think given the commensurate increase in the plot size, but prospective customers and their heirs are up in arms if not yet turning in their graves about the price hike, which is also being adopted in other parts of the Midlands. Wolverhampton has an obesity rate of 33.3%, well above the UK average of 25.9%, according to a 2021 survey. There would seem to be two budget burial options available to the 33.3% fuller figured section of the Wolverhampton population: the first is to slim down and become part of the slimmer 66.7%; the other option open to their heirs after the event as it were, would be to make a change in the departure point from the cemetery to the crematorium.

GBP/EUR 1.1613.

I Just Can’t Stop Loving You

This is definitely one for the advanced pub quiz: the singer was of course Michael Jackson who released this ballad this day in 1987. But who was his fellow singer? Not Barbra Streisand nor Whitney Houston who were both in the frame to but session singer Siedah Garrett. Any the wiser? No, me neither.

Each time the wind blows
I hear your voice so
I call your name
Whispers at morning
Our love is dawning
Heaven’s glad you came

You know how I feel
This thing can’t go wrong
I’m so proud to say i love you
Your love’s got me high
I long to get by
This time is forever
Love is the answer

I hear your voice now
You are my choice now
The love you bring
Heaven’s in my heart
At your call
I hear harps
And angels sing

You know how I feel
This thing can’t go wrong
I can’t live my life
Without you

I just can’t hold on
I feel we belong
My life ain’t worth living
If I can’t be with you

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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