Morning Brief – UK report card as at end of 2023

UK report card as at end of 2023

As we embark on a new calendar year, it is timely to take a snapshot of where the UK stands economically and also where it is versus other G7 countries.
Inflation
UK 3.9% versus EU at 3.1% and USA 2.1%
Interest rates
UK 5.25% versus EU at 4.50% and USA 5.50%
Growth between Q4 2019 and Q3 2023
UK +1.4% versus Germany +0.3% and USA +7.4%
Unemployment
UK 4.2% versus France 7% and USA 3.9%
Tax revenue as a %age of GDP
UK 35.3% versus Germany 39.3% and USA 27.7%

GBP/EUR 1.1590.

US Employment

A “careful and data dependent approach to making monetary policy decisions” in Federal Reserve speak is blunt speaking. For mere mortals that translates as mind your eye if you think that US interest rates are going to be cut as much and as quickly as the market expected just 10 short days ago. Yesterday’s strong employment numbers reinforced that and dutifully the 10 year US Government Bond rose 8bps and is now yielding a whisker below 4%.

EUR/USD 1.0955.

Oil

When something looks suspicious in markets, it generally is….just that. 34 of the finest economists have just been polled and none save 1 saw Brent prices above $84 and that sole analyst saw it as $90. Oil volatility on the back of the Red Sea Houthi action, the war in Gaza and not forgetting Ukraine does not sound as if those are being correctly priced in-certainly at least by those economists.

Brent $76.79.

Copper

Price per ton for Copper stands at $8,475. March 2023 saw an all time high of $10,730. Forecasts for this year are for Copper to reach that level once again. However for 2025 on the back of demand, a weaker USD and the ongoing Green movement, prices are seen as reaching $15,000. That would, if correct, show a Copper investor a return of 75%.

In The Air Tonight

This song from Phil Collins’ debut album Face Value released this day in 1981 was a smash. Previously known as the guy who played the drums at the back for Genesis, at a stroke or possibly a drumbeat, PC became known as that singer who used to play the drums at the back for Genesis. That’s what fame does.
 
I can feel it coming in the air tonight, oh, lord
And I’ve been waiting for this moment, for all my life, oh, lord
Can you feel it coming in the air tonight, oh, lord, oh, lord

Well, if you told me you were drowning
I would not lend a hand
I’ve seen your face before my friend
But I don’t know if you know who I am

Well, I was there and I saw what you did
I saw it with my own two eyes
So you can wipe off that grin, I know where you’ve been
It’s all been a pack of lies

And I can feel it coming in the air tonight, oh, lord
Well, I’ve been waiting for this moment for all my life, oh, lord
I can feel it coming in the air tonight, oh, lord
Well, I’ve been waiting for this moment for all my life, oh, lord, oh, lord

Well, I remember, I remember don’t worry
How could I ever forget?
It’s the first time, the last time we ever met
But I know the reason why you keep this silence up
No, you don’t fool me
The hurt doesn’t show, but the pain still grows
It’s no stranger to you and me

And I can feel it coming in the air tonight, oh, lord
Well, I’ve been waiting for this moment for all my life, oh, lord
I can feel it in the air tonight, oh, lord, oh, lord
Well, I’ve been waiting for this moment for all my life, oh, lord

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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