Morning Brief – Central Bank Consensus

Humphrey Percy
Chairman and Founder
Fri 16 Dec 2022

Central Bank Consensus

As expected both the Bank of England and the European Central Bank came in to join the US Federal Reserve with 50bp hikes. Not surprisingly the Bank of England’s Monetary Policy Committee is split 3 ways with outliers voting for either lower or higher rises than what was decided given the high stakes nature of trying to achieve the Goldilocks scenario of not too cold and not too hot economically. Worth listening to the mood music from the ECB however: rates need to go much higher over time (to counteract inflation). President Lagarde’s press conference moved the FX market much more than the announcement itself with her sounding much more hawkish than she has sounded ever before. As a result of her higher and more medicine to address her interest rate prognosis EUR strengthened markedly moving through EUR/USD 1.07 before giving up a bit of ground.

German Growth

Kiel based economic institute IFW yesterday changed direction from its previous forecasts of German economic contraction to one of 0.3% growth in 2023. Predicting that inflation will fall to 5.4% on the back of falling energy prices and state aid, the path towards growth of 1.4% in 2024 according to IFW is, if not assured, certainly their firm view. That does of course largely rest on the main plank of their assumption on energy prices falling and remaining lower. EUR/USD 1.0670.

French Gas

Utility GRTgaz France’s grid operator has come out with an on the face of it surprising statistic which is that French gas consumption has fallen 10.5% in the period between August and December. Further investigation reveals that that fall is compared to the same period in 2018 ie pre pandemic. Given that company consumption has fallen 22%, that tells the story more clearly: apart from the eyewatering energy costs that have driven companies to make economies, the fact is that with more people working from home and some offices having shut or shrunk, it is hardly surprising that business consumption will have fallen. The last part of the release is more opaque: it claims that domestic consumption has also fallen which is harder to reconcile with a 22% fall in business consumption and a 10.5% fall overall. But that is the joy of French economics: arbitrary choice of observation period and selective sector samples to drive the required answers. 

Beer Authenticity

Czech lager Budweiser Budvar is brewed in the Czech Republic and according to Budvar Head Brewer Adam Broz, it always will be. Traditions and authenticity are key corporate watchwords at Budvar where Adam Broz is only the 10th person to hold the post in the brewery’s 127 year history. However looking at the UK, it is a completely different story: of the top 10 selling beers, 8 are foreign and brewed under license in the UK. Here they are: Birra Moretti (Italy) , Carling (Canada), Coors (USA), Stella Artois (Belgium), Fosters (Australia), Carlsberg (Denmark), San Miguel (Spain) and Amstel (Netherlands).

GBP/EUR 1.1490.


It was of course Beyonce who enjoyed 10 weeks at Number One with this number starting on this day in 2007. Known for her “boundary pushing artistry and vocals” Beyonce has been named as the most influential female singer of the 21st century.

To the left, to the left
To the left, to the left
To the left, to the left

Everything you own in the box to the left
In the closet that’s my stuff, yes
If I bought it please don’t touch

And keep talking that mess, that’s fine
But could you walk and talk at the same time?
And it’s my mine name that is on that tag
So remove your bags let me call you a cab

Standing in the front yard telling me
How I’m such a fool, talking about
How I’ll never ever find a man like you
You got me twisted

You must not know ’bout me
You must not know ’bout me
I could have another you in a minute
Matter fact he’ll be here in a minute, baby

You must not know ’bout me
You must not know ’bout me
I can have another you by tomorrow
So don’t you ever for a second get
To thinking you’re irreplaceable

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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