Daily Brief – UK Growth

UK Growth

The UK economy expanded 0.4% in May after 0% growth in April and at double the pace expected. GBP was perky on this, or maybe it was the unusual amount of sunshine on offer yesterday afternoon that lifted the spirits of British pound traders. The reason is that this surprisingly good picture(the growth as well as the sunshine) meant that the chances of the Bank of England cutting UK interest rates in August reduced which made GBP and the UK in its post election honeymoon and in its newly minted Euro finalist state look remarkably attractive.

GBP/EUR 1.1882.

US Employment

With stubborn inflation not yet vanquished in the USA, the market is waking up to and fretting over a new risk: rising unemployment caused by the economy beginning to falter under the burden of interest rates that have remained higher for longer. The Rahm Rule means that when the 3 month moving average of unemployment moves above the 3 month average unemployment rate by more than 0.50%, it will trigger a recession and this week people who had never hear of the Rahm Rule are spouting it authoritatively-present company excepted.

EUR/USD 1.0877.

A Proper Wedding

Everyone has their own idea of what this constitutes but for the richest man in Asia, Mukesh Ambani, Chairman of Reliance Industries the world will find out what he defines as a proper wedding this weekend when his youngest son Anant marries Radikha Merchant daughter of the pharma tycoon Viren Merchant. There has been a four month program of pre-wedding celebrations including a 3 day party in Jamnagar, Gujarat, India for 1200 guests which Mark Zuckerberg and Bill Gates attended among many other rich and famous and where Rihanna sang for the guests; there has been a cruise in the Mediterranean that has offended the sensibilities of visitors to Rome, Portofino, Genoa and Cannes but presumably not the shopkeepers, hoteliers and restaurateurs. The party goers were entertained by Katy Perry, the Backstreet Boys and Andrea Bocelli and instructed on dress code in a comprehensive 10 page guide. This weekend is the culmination of these rolling celebrations when Mukesh Ambani shows just what a Big Fat Indian Wedding looks like.

GBP/USD 1.2926.

Four Day Week

Despite all the evidence to the contrary of it being of benefit to any economy and particularly the UK economy that desperately needs a lift in productivity, there is now an official UK Four Day Week Campaign sponsored among others by Cambridge University and the Unison union. The aim of the six month study is to explore how this different work life balance will affect productivity and worker wellbeing. Not much mention of the subtext which is that employers will pay the same wages for a 20% reduction in work nor that the workforce over time will be less experienced, knowledgeable and valuable by the same 20%. EUR/JPY 172.50

It’s Still Rock and Roll To Me

This song written and sung by US star Billy Joel was the best selling single in 1980 and was released this day 44 years ago  on its way to turning platinum which for a single means sales in excess of 2 million versus 1 million for an album.

What’s the matter with the clothes I’m wearing?
Can’t you tell that your tie’s too wide?
Maybe I should buy some old tab collars?
Welcome back to the age of jive

Where have you been hiding out lately, honey?
You can’t dress trashy ’til you spend a lot of money

Everybody’s talking ’bout the new sound
Funny, but it’s still rock and roll to me

What’s the matter with the car I’m driving?
Can’t you tell that it’s out of style?
Should I get a set of whitewall tires?
Are you gonna cruise the miracle mile?

Nowadays you can’t be too sentimental
Your best bet’s a true baby blue Continental

Hot funk, cool punk, even if it’s old junk
It’s still rock and roll to me

Oh, it doesn’t matter what they say in the papers
Cause it’s always been the same old scene
There’s a new band in town but you can’t get the sound
From a story in a magazine
Aimed at your average teen

How about a pair of pink sidewinders
And a bright orange pair of pants?
You could really be a Beau Brummel baby
If you just give it half a chance

Have a Great Weekend!

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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