Morning Brief – UK Pay

Humphrey Percy
Chairman and Founder
Wed 15 May 2024

UK Pay

With unemployment at its highest since last year with the Q1 rate at 4.3%, it would look safe to assume that the Bank of England would be encouraged to cut UK interest rates sooner rather than later; however with wage growth at 6% providing the counter argument to sooner, the first cut may not be until August despite the market choosing to ignore that for the moment.

GBP/USD 1.2555

EU Migration and Asylum

The change to the EU policy has been in the too difficult in tray for the past four years but yesterday, the clouds parted and a change in the policy was approved despite, Poland and Hungary voting against it plus Slovakia and Czech republic abstaining on large parts of the amendment and Austria voting against Crisis Regulation. The way that despite this opposition the day was won was to change the requirement from consensus to having a Qualified Majority in the voting. Bingo. Last year the EU had 1.17 million legal applications for asylum and 400,000 illegal border crossings which suggests that the new policy will face significant ongoing challenges.

EUR/JPY 169.14

US EV Tariffs

That will sort out all those cheap Electric Vehicle imports into the USA: raising the import tariffs from 25% to 100%. Solar panels, cranes, medical gloves, aluminium products and the list goes on that President Biden has chosen for increased tariffs to protect American jobs and in fairness, mostly his own job ahead of the November election.

EUR/USD 1.0802

UK Brexit Freedom

This is defined in the wine world as being due to occur on September 19 a mere 127 days away when 1 pint bottles will be legally available-also catchily called 568ml. Small bottles are already legally on sale in 200 and 500 ml sizes so this marks a real advance. The last time that Champagne was sold in pint bottles was in 1973 so it has been quite a long wait for those who have been missing that. Last year a Government consultation found that 98.7% of respondents were in favour of retaining metric units when it comes to wine. So here’s to this freedom and the 1.3% of drinkers who will doubtlessly be celebrating it come 19th September. Hic.

GBP/EUR 1.1618

Fool to Cry

This day in 1976 the Rolling Stones saw their album Black and Blue soar to Number One as Ronnie Wood replaced Mick Taylor who had just been summarily defenestrated by the band on grounds of incompatibility. Apparently the origin of the song was that things were not going well on the wife/daughter/girlfriend front for Mick Jagger ( it’s all relative) when he wrote this song. Keith Richard had the last word or rather snore when he fell asleep playing it in 1976 while the band was on tour in Germany.

When I come home baby
And I’ve been working all night long
I put my daughter on my knee, and she says
Daddy what’s wrong?
She whispers in my ear so sweet
You know what she says, she says
Ooh, daddy you’re a fool to cry
You’re a fool to cry
And it makes me wonder why

Daddy you’re a fool
You know, I got a woman (daddy you’re a fool)
And she lives in the poor part of town
And I go see her sometimes
And we make love, so fine
I put my head on her shoulder
She says, tell me all your troubles
You know what she says?
She says, ooh, daddy you’re a fool to cry
You’re a fool to cry
And it makes me wonder why

Daddy you’re a fool to cry
Yeah, she says
Oh, Daddy you’re a fool to cry
You’re a fool to cry
And it makes me wonder why

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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