Daily Brief – UK Mortgage Rates

UK Mortgage Rates

In a further widening of his very own credibility gap, UK PM Starmer denied that the recent Budget was responsible for the rises in UK mortgage rates from most of the High Street banks in the past two weeks as markets factored in higher inflation due to the measures announced by Chancellor Reeves and economic growth figures disappointed. Chief Secretary to the Treasury Darren Jones further furrowed City brows when he pronounced that the increase in UK Government Bond Yields following the Budget was rather due to the markets suffering from Post Traumatic Stress Syndrome following Liz Truss’ Budget. The reason for that brow furrowing was that Liz Truss came and went together with her ill fated Chancellor Kwasi Kwarteng more than 2 years ago in September 2022. Still, it’s the way you tell ‘em.

GBP/USD 1.2635.

Safe Haven Assets

Yesterday was a day for if not a flight, certainly an orderly move towards safe haven assets with US Treasury Bond Yields falling 5bps and the Japanese Yen rallying over 0.5%. Hardly surprising on the back of the UN Security Council’s meeting with a session on Ukraine led by the UK’s Foreign secretary David Lammy which was no coincidence on a day where host the USA announced its permission for Ukraine to use long range missiles against Russia. Neither of these events reassured markets and Gold duly rose almost 1% after the setbacks of last week when Bitcoin took centre stage.

Gold USD 2639.

Governor Bailey

In a further example of independence Bank of England Governor Bailey contradicted both the Prime Minister and also the Chancellor in his appearance at the Treasury Select Committee. The Governor warned that there could well be job losses as a result of the Budget. Secondly he stated that the reason for UK Mortgage Rates rising (see above) was that it was partly due to US political uncertainty ahead of the US Election but also the UK Budget.

EUR/GBP 0.8357.

Olive Oil

As we have highlighted before, and if you had not noticed, olive oil has rocketed in price in the past 3 years. In the EU prices were up 50% this year and in the UK olive oil is up 150% since 2021. From USD3500 per metric ton in 2021 to the current USD8,900 olive oil and particularly the more refined end of that market has become a luxury item. However good news is around the corner according to Spain’s Deoleo the maker of Bertoli and other brands; the past two years’ droughts should not be repeated in the 2024/5 season and prices will halve. That of course is from the perspective of Spain which is the largest maker of olive oil with a market share of 50%+; at the other end of the Mediterranean in both Greece and Turkey that more cheerful outlook is not (yet) shared.

EUR/JPY 162.47.

Annuity Income

This day in 1979 Paul McCartney released his all time cheesiest ever song (and that’s saying something) Wonderful Christmastime on which he plays all of the instruments himself. Although it only rose as far as Number 6 and failed to get onto the Billboard Hot 100, it reputedly reliably makes Macca USD 400,000 a year… every year which means after 45 years… cheesy or not it’s earned him a lot of cheese: USD18,000,000.

The mood is right
The spirits up
We’re here tonight
And that’s enough

Simply having a wonderful Christmas time
Simple having a wonderful Christmas time

The party’s on
The feeling’s here
That only comes
This time of year

Simply having a wonderful Christmas time
Simply having a wonderful Christmas time

The choir of children sing their song
Ding dong, ding dong
Ding dong, ding ohhhh
Ohhhhhhh

Simply having a wonderful Christmas time
Simply having a wonderful Christmas time

The word is out
About the town
To lift a glass
Ahhh don’t look down

Discussion and Analysis by Humphrey Percy, Chairman and Founder

Click Here to Subscribe to the SGM-FX Newsletter