Daily Brief – UK Markets

UK Markets

UK Growth came in on Friday at a higher level than expected with July up 0.4% and increased hope that the full year forecast of +1.1% might be achieved or even exceeded. Governor Bailey of the Bank of England is not so upbeat however, pointing out that the UK currently commands a risk premium given high and likely rising energy prices. Meanwhile the investment in AI is largely credited with the latest growth figures. Back to Governor Bailey again warning that the market should not assume that the Bank of England will raise interest rates this week. In fact, the market is not assuming that, and is expecting no change until November. So there.

GBP/USD 1.3524.

European Right-Wing Anti-immigration

With Alternative fur Deutschland’s win in Saxony-Anhalt, Germany and Chancellor Merz, the German Christian Democrat Union leader looking weak(er) and seemingly without a gameplan, it is worth a quick glance across other European countries’ and their national proportions of right wing anti-immigration parties. Hungary of course is the leader in class at 40% but France is not far behind at 35% followed by Italy and Poland both with 30%. The Netherlands has 25% while Germany is reported in polling to be on 20% which must now be questionable.

GBP/EUR 1.1651.

Size Matters

After POTUS upset the Icelandics by incorporating their country in a USA territory map along with Mexico, Greenland and Canada, the arguments that strategic geographic location, economic heft and their fishing industries form part of the President’s rationale for territorial aggrandisement all look a bit thin. Rather it would seem that POTUS has taken out his Phillips Atlas or White House equivalent and spotted that in square kilometers Russia has 16.9M and China has 9.4M against the USA’s 10M. Canada is larger than the USA at 10M which must be a source of acute irritation to President Trump. It’s only a matter of time before he looks further south than Venezuela 0.8M to Brazil which enjoys 8.5M and does not-yet appear to have appeared on POTUS’ radar.

EUR/USD 1.1599.

Apple

This past week has seen the launch of two new Apple gadgets: the new iPhone 18 which, while the same size as the predecessor model iPhone 17 has considerably longer battery life, a better(still) camera and the latest and enhanced chip. It also comes in four colours two of which Burgundy and Glacier are new. All that for an increase of just USD 100. The second gadget is the Duo, a foldable phone that when folded is smaller than the current iPhone range but is considerably thicker. When opened however, it sports a much bigger viewable screen that allows two applications or spreadsheets to be open simultaneously and is designed to bridge the gap between an iPhone and the iPad tablet. As new Apple leader John Ternus is rapidly finding out, new is not necessarily well received as there is a growing chorus asking the question as to who will be buying the Duo. That sometimes robotic swan-like calm of his predecessor Tim Cooke clearly disguised considerable below the surface activity which John Ternus would do well to emulate when it comes to the Duo.

Brent Oil USD 104.61.

Communication It’s All Over Now, Baby Blue

This day in 2011 a dumped lovesick male Swedish Bob Dylan fan ( yes, I know, it’s a lot) decided it would be a good way to win back the object of his affections by serenading her with a group of 5 others by singing Bob Dylan songs outside her house. The 50-year-old already the subject of a restraining order on approaching his dumper’s house did not impress his ex, and after she called the police, the impromptu late-night performance ceased and the unlucky singleton was removed by Sweden’s finest.

You must leave now, take what you need, you think will last
But whatever you wish to keep, you better grab it fast
Yonder stands your orphan with his gun
Crying like a fire in the sun
Look out the saints are comin’ through
And it’s all over now, Baby Blue

The highway is for gamblers, better use your sense
Take what you have gathered from coincidence
The empty-handed painter from your streets
Is drawing crazy patterns on your sheets
The sky, too, is folding under you
And it’s all over now, Baby Blue

All your seasick sailors, they are rowing home
Your empty-handed armies are going home
Your lover who just walked out the door
Has taken all his blankets from the floor
The carpet, too, is moving under you
And it’s all over now, Baby Blue

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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