Elliot Gulliver-Needham

The BoE is expected to go slow compared with peers the U.S. Federal Reserve and the European Central Bank, which are both forecast to cut rates by a total of 75 basis points this year. The ECB started in June and the Fed is due to start next month.

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OECD has upgraded UK growth more than any other G7 nation, which is good news for Rachel Reeves et al. The sting in the tail is that inflation is stickier here than anywhere in that same G7 gang. UK needs more investment, the Paris-based think says, and a new fiscal arragement could help Story is here https://lnkd.in/gHYa8DGd And further analysis of Reeves' possible fiscal rule changes is here https://lnkd.in/g7B8SuTv

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UK Chancellor Rachel Reeves needs to find a few billion quid after discovering a hole in the public finances. One idea backed by a couple of think tanks and economists is an "exit tax" - effectively CGT on the gains made while the entrepreneur was domiciled in the UK. That would make it a 20% rate in most instances. At the moment, the wealthy can leave Britain and redomicile in a tax haven, where they can realise gains free of any levies. An exit tax would stop the leakage. According to CenTax, about three quarters of the forgone revenue tends to be among a small number of people. Tax experts prefer this proposal, which might raise £500m a year and deter departures, to raising CGT rates. It's already a fairly popular idea. Denmark, Finland, France, Germany, Ireland, Japan, Luxembourg, the Netherlands, Norway, South Africa, Spain, and the US have an exit tax. Within the Group of Seven, Italy is the only other country that doesn’t. https://lnkd.in/ezrFM_5p

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Labour has avoided grand economic plans in this election, despite a huge poll lead, thanks to the long shadow Liz Truss's mini budget crisis. Starmer and co will inherit a tricky bond market situation as it seeks to boost growth: debt issuance is running at the second highest level on record, while estimates of interest cost are bouncing around and can quickly wipe out any 'fiscal headroom'. Yet the Bank of England will soon be cutting interest rates, and investors are showing strong appetite for UK bonds even with borrowing running high. My chart-based piece: https://lnkd.in/eh7Z2x2t

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A few bits and pieces that I've written recently for The Economist: A stocktake on the economic impact of Brexit, and what some viable paths forward for Britain and the EU might look like: https://lnkd.in/ePHuFb-w Why Britain hasn't yet put tariffs on electric cars from China (and why it should stay that way): https://lnkd.in/eaEsFqfG Whether to take seriously the various US recession indicators that are now flashing red: https://lnkd.in/eztng8Kr And finally, a leader on the US economy broadly, making the case not to panic: https://lnkd.in/enzYzZvn

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In the forthcoming budget the UK government needs to set out clear and compelling plans to reduce the record and destabilising level of national debt and borrowing. UK borrowing hits four-year high – what does it mean for the economy? https://lnkd.in/en5zYNhK

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The Bank of England held interest rates last week as inflation remains more persistent than expected. A cautious move to balance inflationary pressures while supporting economic stability 💷📉 https://lnkd.in/e4rku5dr #BankOfEngland #InterestRates #Inflation #Economy #MonetaryPolicy #FinanceNews #UKEconomy #FinancialMarkets #BOE #RateHike #StickyInflation #EconomicOutlook #InterestRateHold #UKInflation #GlobalEconomy #InflationPressure #UKFinance #CentralBank #EconomicPolicy #InflationControl #InvestmentNews #RateDecision #EconomyUpdate #FinancialStability #EconomicTrends

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Investment Week today reported that Hargreaves Lansdown has added Ninety One's Diversified Income, managed by John Stopford and Jason Borbora-Sheen, to its Wealth Shortlist. The Wealth Shortlist is designed by Hargreaves to help #investors build well-balanced and #diversified portfolios. The addition was down to HL's analysts conviction in the management team and their "cautious" but "focused" approach to income investing. https://nty.one/3XEaFVf #multiasset #income #investors

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London Open today 22/10/24: 🎲 Risk sentiment post the 22:00 BST electronic restart overnight (first dotted line) is negative - see S and P Futures (orange line). Furthermore GBPUSD (candlesticks) is drifting higher from that point. ❓ Prior to the London Open at 8:00 BST, my prediction was that the trade to last most of the UK-European morning would be short GBPUSD. And, I further predicted that to accomplish that short trade cable would be bid higher in the very short term from the open, so that selling liquidity at a premium could be activated. ✔️ ❌ Almost right, but not exactly. ✔️ GBPUSD was NOT bid up at the open (middle dotted line). The best it achieved was its level at the London Open, and the circa. 120 level at 8:45 BST (last two dotted lines). Those two levels allowed the shorters of cable to achieve the required size. I suspect the initial level didn't give enough liquidity for a sizeable short, hence the 8:45 BST return (last dotted line). 🎲 At the London Open, UK risk sentiment dominated. The FTSE (blue line) opened lower than the day before (one negative) and sold off from the staring gun (doubly negative), which gave every reason to sell sterling. 🚩 The problem is that selling sterling from the gun potentially scuppers the trade of shorting GBPUSD at a premium with sizeable quantity. It was overcome by the FTSE going bid 8:10 to 8:35 BST, which sent sterling bid to the c.120 level shortly afterwards: that microcosm of FTSE-good news within a bad-news macrocosm sent sterling bid momentarily. Then, at 8:45 BST, the cable short lasting the UK-European morning began. 🔎 A clue for me was the failed upside auction for the FTSE being confirmed at c.8:45 BST: it showed that the sterling and FTSE bid was not sticking. 🕵️ Having an ideal scenario prediction - even if it later needs slight refinement - is better than approaching the London open cold. My basic idea of cable being bid up to later short it at size was right, it's just that it did not get to levels that exceeded its opening price. 📣 My opinion on the US pre-market trade on cable (also a short) - c.13:30 to c. 14:45 BST - was all about the behaviour of pension funds - that's a story for another day! Carry and slightly improving UK risk sentiment in the short term may be a factor 14:45 BST to the present. 👇 My analysis of a previous London Open is in the comment below 👇 #GBPUSD #FTSE #Cable #Sterling #Dollar #inflation #interestrates #interestrate #yields #yieldcurve #yield #economy #bank #bankofengland #unlearn #unlearning #financeeducation #financenews #fx #fxstrategy #fxeducation #trading #tradingstrategy #tradingstrategies #gbp #forex #forexstrategy #forexstrategies #forexeducation #exchangerate #currency #forex #foreignexchange #foreigncurrency #dollars #exchange #finance #money #investing #money #bank #gbp #euro #trading #trade #stocks #financial #stock #dollar #market #passiveincome #metatrade #stocktradings #onlinetrading #globalmarkettrading #pension

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Watch this space: H2O Asset Management revealed in its annual report for 2020 that it was under investigation from the FCA. We're now in 2024 and it looks like British market regulators are about to conclude their case. There's talk of a pot of money to compensate investors - who would be offered to take a deal - and of the FCA considering whether a fine would be appropriate. https://lnkd.in/d7uxKDyi

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Pension megafunds on the way. Consolidation coming for LGPS and DC. Government leaning to a range between £25bn and £50bn. Says there are more benefits when AUM is greater than £50bn. For LGPS: Looking to go for a handful of megafunds "run by professional fund managers". Suggesting a 5 per cent allocation to allow for local growth. For DC: The government will consult on setting minimum size requirements and will put in place legislation allowing fund managers to move savers "more easily" from schemes which are performing poorly.

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There is a general establishment consensus establishing itself that ⁦‪@RachelReevesMP‬⁩ should in the Budget change ⁦‪@hmtreasury‬⁩ rules so more money can be borrowed. The UK is already saddled with historic levels of debt and borrowing. More of either would be a mistake. UK confronts massive funding gap to tackle crumbling infrastructure

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The Financial Conduct Authority has confirmed what we already knew: digital assets are mainstream. With clients KR1 plc and CryptoUK in the media, here are some elements from the FCA research which stuck out: + 12% of UK adults now hold cryptocurrencies (that’s 7m people) + 93% of adults have heard of crypto + Many consider crypto as part of a wider investment portfolio This is good news for the U.K. since we’re so well suited to becoming a global crypto hub. The US is surging ahead, and it will only speed up under Trump and the new SEC leadership. The next year is going to be critical for the industry. The sector wants a regulatory framework and more certainty from policymakers

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Relativism is not only a cultural problem. It is also rife in finance, economics and politics. We are bombarded with comparisons which make no sense at all. Take the news that the UK plans to increase its defence budget to 2.5 per cent of GDP by the end of the decade. What on earth does military spending have to do with the final value of goods and services produced in a country in one year? Even Nato believes its 2 per cent of GDP guideline “serves as an indicator of a country’s political will to contribute”. No it doesn’t — the denominator has nothing to do with politics. If anything should be calculated bottom-up on an absolute basis it’s national defence, assessing risk versus capability. In any rational world, how many 155mm artillery shells are needed should be independent of consumer confidence (the biggest driver of GDP). Carbon intensity metrics are another example of relative hogwash. Our atmosphere needs lower emissions, period — not having them increase less than revenues. Plus you can end up with a ridiculous situation in which companies are praised when sales outpace emissions solely because of inflation. The hot topic of unemployment also suffers from wayward denominators. America has its jobless claims data, but the rest of the world rarely mentions the actual number of real human beings out of work. Mostly we talk about the unemployment rate, expressed as a percentage. But these are a fiction — usually dividing an arbitrary definition of unemployment by a worse estimate of the number of people who are economically active. And therein lies the appeal of ratios and percentages, I suppose. They are one step removed from having to face unpalatable truths in either the numerator (how many tanks do we actually have compared with Russia) or the denominator (better optics on defence spending is merely due to a recession). You may think markets are above spurious relativities. And to their credit they often are. For example, no one cared that Amazon or Tesla had negative margins for years. That said, investors still do things every bit as silly as comparing defence budgets to national incomes. We rank companies by their price to earnings ratios, say, despite the fact every company and sector measures their net profits differently. Strategist reports are also devoured. These mostly consist of charts of variables which seem to move together. Causation is claimed when the two numbers are merely correlated — if even that. Perhaps our most common investment mistake is comparing today with the past. Sure there are ratios which do revert to a mean. But extrapolating historical relationships is often ruinous, as many a failed hedge fund will admit. Absolute numbers can mislead as well, of course. But we must all be more careful not to take relative facts as given. The are especially dangerous as inaccuracies can lurk in two numbers. And very often these shouldn’t even be compared at all. #investing #Tesla #Amazon #Strategy #Russia

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The UK is going to the polls this Thursday. According to YouGov's latest estimates, the Labour Party is projected to win 37% of the vote, while the Conservatives stand at 20%. Energy policies have been at the heart of the campaign across the spectrum. So, if come Friday morning projections are proven correct, what would a Labour government mean for the energy transition industry? Labour pledges and Labour challenges are the focus of my Monthly Market Thoughts Editorial for inspiratia #election #UK #Labour #Conservatives #energy #energytransition #netzero #challenges #opportunities

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