Morning Brief – UK Cost of Government Debt

Humphrey Percy
Chairman and Founder
Wed 26 Jul 2023

UK Cost of Government Debt

For 2022 the UK has achieved the dubious distinction of being the leading developed nation when it comes to the costs of servicing its debt at GBP 110 billion or 10.4% of government revenues. To give an idea of the perils of group think on boom bust and by implication inflation being a thing of the past, that Gordon Brown stated belief was instilled so thoroughly in the UK Treasury that 25% of its debt is linked to inflation. The result is clear for all to see. To give further amplification that model of financial probity Italy is the next developed nation to be in the most exposed to inflation linked debt category and they have only managed to link 12% of their government debt to inflation. The UK plans to issue GBP 241 billion of gilts or government securities in the current financial year a marked increase from the £139.2 billion issued last year. So at least the government has an all too rare shared belief with the electorate: get inflation and interest rates down.

GBP/USD 1.2825.

International Monetary Fund

The IMF is holding firm on its economic forecasts for the UK with 0.4% growth in 2023 and 1% in 2024. While not exactly vibrant, the good news is that this further corroborates that the UK has managed to avoid a recession- just.

GBP/EUR 1.1605.

ESO 383-76 supergiant elliptical galaxy

This for the non astronomers among us is the largest galaxy in the universe. Apart from the Earth, Moon, Sun and the other planets and stars, there are hundreds of millions of galaxies made up of dust, rocks and black holes. Until recently the number of galaxies was thought to be 200 million but that has now gone up to two trillion. However the catchily named galaxy above is 654 million light years away, so Earthlings are dependent on powerful telescopes and mathematical astronomers to know just what is out there in the furthest reaches of outer space. Or maybe Elon Musk.

USA: Survey of Working Arrangements and Attitudes

Published in the Wall Street Journal are the results of a survey of American adults in May. No surprises that there is a difference in working practices between actually being at work and working from home. For example working at home allows more gym time , dog walking, school runs, running personal errands and doing chores. Apart from management to manage employees there is also the peer group pressure at work. No such obstructions at home!

USD/JPY 141.35.

Piano Man

This day in 1987 US singer Billy Joel played a concert in Leningrad USSR and at the end he was carried out of the theatre on the shoulders of his fans presumably as a sign of appreciation rather than the opposite given the paucity of Western rock entertainment in those pre glasnost and perestroika days behind the Iron Curtain.
It’s nine o’clock on a Saturday
The regular crowd shuffles in
There’s an old man sittin’ next to me
Makin’ love to his tonic and gin

He says, “Son can you play me a memory?
I’m not really sure how it goes
But it’s sad and it’s sweet and I knew it complete
When I wore a younger man’s clothes”

La, la-la, di-di-da
La-la di-di-da da-dum

Sing us a song, you’re the piano man
Sing us a song tonight
Well, we’re all in the mood for a melody
And you’ve got us feelin’ alright

Now John at the bar is a friend of mine
He gets me my drinks for free
And he’s quick with a joke, or to light up your smoke
But there’s some place that he’d rather be

He says, “Bill, I believe this is killing me”
As a smile ran away from his face
“Well, I’m sure that I could be a movie star
If I could get out of this place”

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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