Dow sold off down to 25,673 and FTSE flat at 7196. Oil WTI at $56. Gold unchanged at $1303.
GBP slipping lower every day on increasingly likely chance of NoDeal Brexit. USD marginally weaker. Today it’s ECB watch day- watch out for them moving growth forecasts lower. OECD is now forecasting global growth at 3.3%.
Following the stories of what happens in the case of a cliff edge Brexit ie the UK exits the UK with No Deal to food supplies in the UK, it is worthwhile to focus on a very small number of statistics rather than becoming blinded by science. Firstly the UK imports 30% of its food from the EU and 10% from the Rest of the World. Put it another way, 60% is produced inside the UK. What about seasonal shifts or when food is out of season? I hear you say. The answer is that in March for example 90% of lettuces, 80% of tomatoes and 60% of soft fruit comes from Southern Europe. What might be the impact on food prices of a Deal/No Deal scenario? Prices will be driven by 3 main factors: Tariffs, GBP strength or Weakness and lastly Time(Additional border checks costs time which as we know is money) If the Prime Minister’s deal goes through(and admittedly it’s a big if) there will be no change for a 21 month interim period to tariffs. GBP will strengthen and no change to border checks, so in that case imported food will probably reduce in cost. If there is NoDeal and increased costs to those imported foods, the impact will of course be muted by canny shoppers tightening their belts and reducing consumption of more expensive imported foodstuffs plus, there will be a shift towards greater consumption of domestically produced fruit and vegetables when they are in season. So reduced avocado spend and greater interest in excellent English apples.
Discussion and Analysis by Humphrey Percy, Chairman and Founder
Bank of England As expected the BoE cut interest rates by 25bps yesterday. So far so good but then the BoE departed from the script. Flat economic growth up until the end of 2024 was less of a surprise but then a new forecast for inflation +3.7% and 2025 economic growth slashed from 1.5% to […]
Not another headline Markets have either grown complacent or are reading beyond Trump’s headline statements. Over the past week markets have been presented with the challenge of fresh tariffs on China with retaliatory tariffs on the US also due to come into force in just under a week. In addition to that they have the […]
German Election With just 18 days to go to the German election, tensions are building. The centre right CDU whose leader Friedrich Merz is likely to be the next Chancellor is under fire for proposing a tougher immigration policy. That says his critics is similar to the far right AFD and verboten given the antipathy […]