Hard Brexit? Sell Sterling!

Hard Brexit? Sell Sterling!

Davis and Fox; Brexit Hawks If anyone in the U.K. didn’t believe that Brexit was going to happen, they should have had their eyes very firmly opened on 20th July. The first joint Press Conference given by the major Protagonists, Michel Barnier and David Davis since negotiations began in earnest brought clarity to the task that lies ahead. Barnier finds it very difficult to hide his frustration at what he sees as the intransigence of the U.K.’s bargaining position. In a very European/EU/Brussels way, he clearly feels that the U.K. is arguing over points of law such as who protects the rights of the EU citizens remaining in the U.K. post-Brexit. Davis, on the other hand is displaying a very 21st century British approach like a Blair/Farage caricature. He seems to either not be listening when Barnier speaks or not taking the whole thing particularly seriously. It has now been revealed that such meetings will take place for four days a month. That leaves...
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Central Banks and Inflation; A difficult relationship

Central Banks and Inflation; A difficult relationship

What else matters? Inflation, if you want to know how serious it is; ask a Zimbabwean! The U.S. released inflation data for June on Friday and whether it is the brilliant job being done by the FOMC in raising interest rates, “global factors” a weak housing market or some other reason, there is no question that inflation is barely a factor in the U.S. economy. Consumer prices rose by 1.6% in June falling from 1.9% in May. The average of the data over the past year is 1.88%. It is true that around the turn of the year, inflation was consistently above the 2% target set by the Administration. The average for 2017 has been 2.21% so purely on that measure a proactive Fed has acted wisely. The rest of the G7 Central Banks have their own inflation concerns but they vary wildly. In Japan, on the one hand, inflation has averaged 0.34% so far in 2017. Lack of inflation has been the...
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MPC Facing Critical Vote

MPC Facing Critical Vote

Damned if they do, Damned if they don’t... There are three weeks until the next MPC meeting in the U.K. but traders will already have the date circled in red on their calendars. A one-month break in meetings should have given MPC members more time to come to a considered judgement but conflicting requirements and even more conflicting data have led to a situation where previous votes and announcements of voting intentions will count for nothing! Take a look at the MPC’s mandate. The Bank’s monetary policy objective is to deliver price stability, low inflation and, subject to that, to support the Government’s economic objectives including those for growth and employment. Price stability is defined by the Government’s inflation target of 2%. So, it’s clear then we can expect a hike on August 3rd. Or can we? Governor facing a credibility issue. Governor Carney has flip-flopped about a rate hike. A couple of weeks ago in the Mansion House Speech, he said that now is not...
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Qatar and 2022 World Cup: Get the ball rolling…

Qatar and 2022 World Cup: Get the ball rolling…

Unless you’ve been living under a rock for the last few years, you will probably know by now that the Middle-East’s very first FIFA World Cup tournament will be hosted by the Gulf state of Qatar in 2022; just five short years from today. Now I’m going out on a limb by assuming that between Trump, Kim Jong-un and the Kardashians, we will actually make it to 2022, so in that spirit of unbridled optimism, let’s explore some of the opportunities that this world-class event presents for British companies, large and small. Firstly, a little about Qatar. Geographically the State of Qatar sits on the Qatar Peninsula on the north-eastern coast of the Arabian Peninsula and sticks out proudly into the Persian Gulf, or Arabian Gulf as it’s known in the Arab world (remember this if ever you visit). Its only land border is with Saudi Arabia in the south. In terms of land mass, Qatar is not much larger than...
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Relationship building, post Brexit

Relationship building, post Brexit

Thomas Jefferson said “Peace, commerce, and honest friendship with all nations...entangling alliances with none”. How do we apply this to the impending Brexit issues? Apposite for these challenging and uncertain times post the Brexit referendum. So what should UK traders be doing right now? I think we reinforce our current relationships and broker new ones. Our brave new world will be different but what I have learnt is that we do business with people we know and like. If you have good relationship with a client, nurture them. If you are looking wider than current markets then use this time to find new buyers and forge new relationships....
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The divide – campaigning and debate…

The divide – campaigning and debate…

As the debate and campaigning surrounding Brexit gets exceedingly nasty over which statistic/fact or forecast is right or wrong, I have been thinking about the cost to UK from the schism’s that are appearing between party members. Until now we generally saw a great respect by party members for each other’s contribution to the economy and social wellbeing of our country.  Yet what we are seeing is a divide in opinions through this debate that will have a profound effect on the future of this country, whatever the result of the poll. There are countless examples of peoples living in unity and then being torn apart by strong beliefs, a continuing theme of present day conflicts.  We in the UK though have always prided ourselves on our pragmatism, our ‘Englishness’ and our rule of law - a solidity broken only by the occasional scandal or emotive social issues. So how will the scars of strongly opposing views affect our future governance?  I do...
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