Daily Brief – UK Spend

UK Spend

Given the probable change of 10 Downing Street incumbent and the even more probable identity of the new PM and his promise of change, it is worth looking as to how he could deliver on what are irreconcilable conflicting promises: no (further) tax rises and the continuation of the Triple Lock and a dramatic increase in Defence spending are just a few examples if one discounts the magic money tree assurances – let’s put that down to over enthusiastic Makerfield canvassing. Go back 74 years when WW2 was still uppermost in everyone’s minds and there was a keener appreciation or an understanding of spending what we could afford to spend and concentrating on what was essential. These were the percentages of GDP that the UK spent in 1952: Defence 11.5%, Welfare 2.92%, State Pension 2.18% and Healthcare 3.47%. Contrast that with today: Defence 2.25%, Welfare 5.84%, State Pension 7.4% and Healthcare 9.17%. Given the contortions that current PM has been through to avoid raising defence spending to 3% never mind 3.5% of GDP, people pleaser Andy Burnham will have to shed that moniker in double quick time if he is to effect real and positive change for the UK.

GBP/USD 1.3232.

Michel Barnier

Some readers will remember MB as the EU’s trenchant and hardline Brexit negotiator and very briefly as France’s PM, but after a long period of lying low he popped up over the weekend with a surprisingly positive response to the hectares of newsprint recently devoted to the possibility of the UK rejoining the EU. The ”Special Terms” previously enjoyed by the UK could be on the table including retaining the Pound and maintaining control of our borders(sic) by not being forced to become part of the Schengen passport free area. Has Michel Barnier softened 10 years on? Does he hold any official post in the EU? The answer to the first question is yes if he has been accurately reported and to the second no, Michel Barnier holds no post in the EU and while an influential commentator, it is by no means clear that this entente cordiale is shared by the EU never mind the President of France.

EUR/USD 1.1471.

Money Never Sleeps

Project Sunrise is the name of the study that Qantas commissioned ahead of the introduction of its London-Sydney non-stop 20 hour plus service. Professor Peter Cistulli of Sydney University has been examining the effects of such a long non-stop flight on the human body and as a result Qantas are introducing the following: wellness zones, extra legroom, specially timed meals and animated lighting. There is of course a hard commercial aspect to all this and much of the planes will be Business Class which will of course more than pay for all the above. First-Class accommodation will feature cabins with beds and for those passengers the price of a return ticket is expected to smash through the GBP 20,000 barrier which is quite a premium for getting a full night’s sleep.

EUR/GBP 0.8667.

European Sizzle

As the UK battles with much higher than usual temperatures in the next days, people can take note that in Southern Spain, temperatures are higher still at 40c plus. Portugal is about the same as the UK this week. South West France and Florence, Italy are also set to be part of the 40c club. The high temperatures in the UK will provoke dress code challenges for wage slaves and will doubtless reveal body parts not normally exposed to their colleagues’ gazes such as men’s knees.

EUR/JPY 185.17.

Golden Brown

Bad boy punk band the Stranglers brought out this relatively innocuous sounding number in 1981 which is sometimes somewhat euphemistically described as a waltz. The mellow nature of the song had not however prevented a year earlier the whole band being arrested this day in 1980 by Nice’s finest for allegedly inciting a riot at Nice University.

Golden brown, texture like sun
Lays me down, with my mind she runs
Throughout the night
No need to fight
Never a frown with golden brown

Every time just like the last
On her ship, tied to the mast
To distant lands
Takes both my hands
Never a frown with golden brown

Golden brown, finer temptress
Through the ages she’s heading west
From far away
Stays for a day
Never a frown with golden brown

Never a frown (never a frown)
(Never a frown) with golden brown (with golden brown)
(With golden brown) never a frown (never a frown)
(Never a frown) with golden brown (with golden brown)
(With golden brown) never a frown (never a frown)

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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