I recently had a milestone birthday and a very kind client and friend (thank you Sarah) gifted me a copy of the Financial Times from the day of my birth. For a financial and political geek, it was a fascinating read. The narratives centred around:
- Scrutiny and concern as the UK moved from a
Conservative to Labour Government.
- Concerns regarding the competence of the Republican
US President (Gerald Ford).
- The Israeli Prime Minister (Yitzhak Rabin)
visiting the US to discuss military aid.
- The UK Government meeting with banking
leaders to discuss loosening lending controls.
- UK inflation (16%) and high interest rates
(12%) causing major problems for the economy.
- Significant tensions in the Middles-East
caused by OPEC controlling oil production and prices.
My overwhelming reaction to reading the 50 year
old newspaper (I know, baby faced……doesn’t look old enough……blah, blah) was
that nothing has actually changed. 50 years, countless state leaders and
significant economic / political / humanitarian events and absolutely nothing
has changed. Our world is still dominated by the same core issues and political
sparing. So very sad.
Presumably, everyone was still utterly shocked
back then at how light it was at night after the clocks went forward. It still
gets me every year to be fair.
The Numbers
Two key themes dominated the figures this
month……Trump Tariffs and the Spring Statement.
He has now expanded this further with a
worldwide 25% tariff on all imported cars to the US. A big deal? In
2024, the United States imported approximately 7.68 million cars, with a
total value of $219.49 billion. And for those of you without a
scientific calculator close to hand…… $28,590 per car. It was no surprise that more than £14
billion was wiped off the value of the world’s biggest carmakers as a
consequence.
And now for The Trump contradiction……5 years
ago The Trump visited a car plant in Michigan and called the reformulated US
trade deal he oversaw with Canada and Mexico (the USMCA), “the fairest, most
balanced and beneficial trade agreement we have ever signed into law — it’s the
best agreement we’ve ever made.” Fast forward to this month he said: “Canada is
a tariff abuser, and always has been, but the United States is not going to be
subsidising Canada any longer.” Let’s be clear here……it was his trade deal in
the first place!
Regardless, the fallout from this and further
tariffs is going to be difficult for a short period as we all figure out the
impact. Investment markets will definitely wobble on the back of the
uncertainty.
And then it was the turn of Rachel Jane Reeves
to enthral us with tales of economic doom in her Spring Statement. "The
world has changed" is the mantra we are hearing from the Government and it
is a phrase designed to explain and justify the Chancellor's argument.
The backdrop is pretty bleak. The economy is
flatlining, inflation is up and Government borrowing costs are up.
Then there are the big-picture challenges: the
UK has an ageing population, the benefits bill is going skywards, the dangerous
international picture is demanding more money for defence and the country is
saddled with huge debt, which attracts huge debt interest payments. And that’s
before we throw in the unpredictability of The Trump, the looming prospect of
tariffs and the vast uncertainty over Ukraine's future and European security.
What we do know from the Spring Statement is:
- UK Government debt will hit a near £600
billion interest bill over the next five years amid hundreds of billions of
pounds of new borrowing. Researchers
at the Office for Budget Responsibility (OBR) estimated that the UK’s annual
debt interest spending bill would exceed £100 billion every year until
2030 and warned that the debt pile could come close to eclipsing the size of
the economy.
- The OBR halved its 2025 economic growth
estimate from 2% to 1% and said that inflation would climb to 3.8%
in the summer from 2.8% in February.
- The increased cost of public debt saw the Chancellor
bounce into welfare cuts for the poorest and most vulnerable, raided the
foreign aid budget to fund defence expenditure and has trimmed the already
modest rise in departmental spending to create the needed £9.93 billion.
That may sound like a lot but it's a relatively small amount in an economy that
spends £1 trillion a year and raises around the same in tax.
To put the above a little more succinctly, Rachel
Jane Reeves is running even faster just to stand still.
It was a bleak statement and there is an
increasing likelihood that we will have to raise UK taxes in October’s
Budget……again, just to stand still.
And the bleakness continued as we hit April,
with 7 bills all going up:
- Water
- Energy
- Council Tax
- Car Tax
- Broadband / Phone
- TV licence
- Stamp Duty
My favourite number of the month……4……not
quite the ‘1’ we were hoping for but finishing 4th in the national
netball finals was still an amazing achievement.
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Trump of the Month
Aside from using the White House as a Tesla
showroom to promote his mate’s cars and slapping tariffs on everything except
Budweiser, The Trump has been remarkably quiet……well, by his standards.
My personal favourite this month was The Trumps
announcement that the US was placing a 200% tariff on all wines, champagnes and
alcoholic products coming out of France. “This will be great for the champagne
businesses in the US,” declared The Trump.
Why did none of his advisers explain to him
that the US legally CANNOT produce its own Champagne? American Champagne isn’t
a thing……it’s called US sparkling wine. He literally threatened tariffs to
boost an industry that simply doesn’t exist. Peak Trump economics. Priceless!
Anyway, a quieter Trump very much left the gate
open for some new candidates to be considered for services to madness and lunacy
this month.
The company behind HS2 (creatively named HS2
Ltd - as creative as their logo!) has revealed that they spent £20,000 on a Lego model of one of its
proposed stations that was “about the size of a kitchen table.” For any parent,
there is one thing that really stands out in this story……this is the only part
of the HS2 project they actually got value on. Back when the little lady was hooked
on Frozen Lego, I recall spending roughly that amount on a model of the Frozen
Palace, complete with central characters. It was barely the size of a shoebox.
Maybe HS2 Ltd should have built the whole
network out of Lego……repeatedly stepping on sharp pieces of Lego in their bare
feet would have given the company a fair sense of how the project was going to
go down with the public.
Seriously though, £20,000? Absolute lunacy.
Then there was Doug Ford who dared to
take on The Trump. The leader of Canada’s most populous province, Ontario Premier
Doug Ford, threatened to cut off power to 1.5 million Americans “with a smile
on my face” in response to The Trump’s import duties. Red rag to an orange
bull……what was he thinking? Nutter.
Cop 30 will be held in Brazil in November in
which the Brazilian President (Luiz Inácio Lula da Silva) has banged the
drum about an historic summit because it is "a COP in the Amazon, not a
COP about the Amazon".
Lula has been promoting the meeting of 50,000
environmental leaders will provide an opportunity to focus on the needs of the
Amazon, show the forest to the world and present what the federal government
has done to protect it.
What Lula has failed to promote is the new
four-lane, 8 mile long highway cutting through tens of thousands of acres of
protected Amazon rainforest being built to transport the attendees. Madness.
Keir Rodney Starmer made another return as
a worthy candidate. Responding to the threat of The Trump's tariffs, he said "all
options are on the table." Presumably that was everything from “keeping
quiet”, to “doing nothing”, to “keeping quiet and doing nothing.” Spineless
stuff.
All worthy candidates but The Trump of the
Month for March 2025 is……Michael George Glen Waltz
I am not sure what is worse……the most paranoid
nation on earth that will spend $850 billion on defence in 2025 using WhatsApp
to strategically mastermind its military attacks……or the lack of security
protocol in adding randoms to group chats……or Pete Hegseth (US Defence
Secretary) labelling Europe “a pathetic bunch of freeloaders looking for Trump
to bail them out” when discussing the bombing.
Actually, I do know what is worse……The Trump trying
to distance himself from an embarrassing intelligence leak by claiming "I
don't know anything about it", which is one of the few things completely believable
when it comes to The Trump and 'intelligence'.
The US bombing the Iranian backed Houthis
rebels that can only cause significant tensions with a dangerous middle east
enemy……why would The Trump know anything about it!
The irony is that the most well-informed,
intellectually competent person on the chat was the one that wasn’t supposed to
be there.
Presumably a ‘Dummies Guide To WhatsApp’ is on
its way to Waltz.
Absolutely crazy on every level.
Trump Lunacy Rating: 10 / 10
And Finally……
“If you accept the institutional lunacy,
then the policies are rational."
Noam Chomsky
