IntaCapital Swiss, Author at IntaCapitalSwiss SA

Trump Tariff Update February 2025

Written by IntaCapital Swiss on February 10, 2025. Posted in News & Reports. Leave a Comment

On Sunday 11^th February 2025, President Trump, whilst aboard Airforce One, announced to reporters that he would be applying tariffs of 25% on ALL imports of aluminium and steel widening the spread of tariffs to some of the United States’ top trading partners. Such partners include Canada and Mexico with whom he announced a moratorium on tariffs for one month, however the President did not specify when these new import duties will take effect.

President Trump, keeping to his word and pre-election promises also stated that the week starting 10^th February 2025 he would announce penalty or reciprocal tariffs on those countries that currently tax/tariff imports from the United States. He went on to say that once these reciprocal import duties had been announced such actions would be implemented almost immediately.

However, financial markets (that have recently been rattled by an unpredictable President regarding tariffs), where he has announced tariffs on both Mexico and Canada then he put them on hold, whilst at the same time carried out his threat of 10% import duties on all imports from China, who’s retaliatory tariffs come into effect today 10^th February. However, these current import levies are in part to help protect those domestic industries without whose help, President Trump may not have won those essential battleground states being fought over in last year’s presidential election.

According to experts in the ferrous arena, the United States has a vast demand for aluminium and in 2023 net imports were above 80% from countries such as Mexico, Canada, and the UAE (United Arab Emirates). Steel imports, whilst smaller in consumption to that of aluminium, are vital for areas manufacturing, aerospace, and in both green/renewable energy sectors and the fossil fuel sectors. During President Donald Trump’s first term some oil companies won exclusion from tariffs, so it will be interesting to see if such concessions are awarded in the second presidency.

Such announcements have put the executive arm for trading for the European Union on red alert, but they have announced that they will wait on further details before responding to the threat of these new tariffs. However, a spokesperson did go on to say that “the imposition of these new duties would be unlawful and economically counterproductive”. Elsewhere in Asia, South Korea which exports both steel and aluminium to the United States are already expediting searches for new markets, especially as by value the USA is the largest destination their of steel exports.

Some analysts have pointed out that due to high costs steel mills in the United States are already running at less than full capacity due to high costs, and now they would have to either whirr up production to compensate for lower imports putting prices up to their customers. President Trump has put tariffs front and centre in his bid to rebuild the US economy, but how many of these tariffs will be used as just a threat for him to get his own way in other areas?.

Bank of England Cuts Interest March 2025

Written by IntaCapital Swiss on February 10, 2025. Posted in News & Reports. Leave a Comment

On Thursday 7^th February 2025 the BOE (Bank Of England) cut interest rates by 25 basis from 4.75% to 4.5% with the MPC (Monetary Policy Committee) voting 7 to 2 in favour of the cut. The two dissenting external policymakers Swati Dhingra and Catherina Mann (she has been the most hawkish member of the MPC), voted for a full ½% or 50 basis point cut, whilst the remaining members voted for the smaller cut. The signals coming out of Threadneedle Street were that of a more careful and gradual approach to future rate cuts with suggestions they needed only two more rate reductions to reach their benchmark target of 2% inflation.

However, in yet another blow to the somewhat beleaguered Chancellor Of the Exchequer the BOE has halved its projections for growth in 2025 to 0.75% citing the impact of the 2024 Autumn Budget, which will reflect weaker consumer and business sentiment and increased sluggishness in growth. In further bad news for the Chancellor, policymakers advised the possibility of a stagnating economy and rising unemployment thanks to a GBP40 billion tax raid that will hit the lower paid workers the hardest. If that was not enough, the BOE also advised that later this year inflation will rise to 3.7% compared with the projection of 2.8%.

Due to these latest projections the Chairman of the Bank of England reaffirmed “The importance of taking a gradual approach to the withdrawal of monetary policy restrictiveness”. Despite the short-term increase in inflation policymakers still anticipate two further reductions in interest rates though financial markets have, according to experts,factored in three rate cuts for 2025. Yet despite on-going inflationary pressures, comments from the MPC suggest a deteriorating job market and weakening growth means inflation should recede in the future but it won’t be until 2027 that the benchmark target figure of 2% will be reached.

The economic outlook is now worse for the United Kingdom since the last full set of figures were announced by the BOE in November 2024. Analysts advise if the forecasts coming out of Threadneedle street if taken at face value suggest that in 2025 there is only room for one rate cut, but as mentioned above the financial markets have taken a differing view. Elsewhere the pound plunged 1.1% against the US Dollar to $1.237 however, by the end of the day it had recovered by 0.6% to trade at $1.244 and against the Euro the pound fell to around 83.74 pence compared to earlier trading of 83.40 pence.

Finally, when asked if the word “careful” which has been added to the BOE’s core guidance for rate cuts in the future reflected uncertainties and questions with regard to the global economy, Chairman Bailey “We live in an uncertain world, and the road ahead will have bumps”. A cautious answer, but perhaps a finger pointed at President Trump and his potential tariffs leading to a trade war.

Those Arguing for Protection for UBS get the Thumbs Down from the Swiss Regulator

Written by IntaCapital Swiss on February 6, 2025. Posted in News & Reports. Leave a Comment

Following the collapse of Credit Suisse AG, Switzerland is currently undergoing a regulatory overhaul, and senior management of UBS (Union Bank of Switzerland AG) plus their lobbyists have been arguing that the bank should be given special treatment allowing the bank to increase its competitiveness on the global financial stage. Executives and lobbyists have been arguing against the likelihood of the Swiss Government raising the capital requirements for UBS, suggesting that this will hurt what they refer to as a “National Champion”.

FINMA (Swiss Financial Market Supervisory Authority), the financial watchdog and regulatory authority of Switzerland has basically given the thumbs down to any special treatment regarding the bank’s competitiveness against rivals in the global financial markets. The CEO of FINMA Stefan Walter was insistent when he said that in order to ensure the Swiss finance sector stays competitive, the best way is to strengthen reputation and stability via the medium of good oversight. He was quoted as saying “A direct mandate to competitiveness opens the door to conflicts of interest, political intervention or excessive lobbying by the supervised parties”. He went on to say, “the regulator should instead focus on the protection of creditors and the functioning of financial markets”.

It is the government’s plan that has brought the lobbyists and executives of UBS out in force which is to increase the capital requirements for UBS (currently Switzerland’s only global player) which may well result in calls for more capital in the region of USD 25 Billion. The CEO of UBS Sergio Ermotti has branded such a plan as “an extreme overreaction” that would effectively increase the costs of banking services and would subsequently damage competitiveness.

However, in May 2024 Stefan Walter said that UBS should provide a 100% backing for its foreign units which then and now aligned with the government’s plan to increase the capital requirements for UBS, a statement reiterated just recently. The reason for this statement is that in March 2023, when Credit Suisse AG failed, the problem was that the parent bank had such a low capital backing for foreign units they were less able to absorb losses. Today, pushing back against FINMA’s recommendations are Swiss business and banking lobbies who also have said that FINMA did not use its powers when Credit Suisse was in crisis.

As far as FINMA is concerned, CEO Walter said that FINMA currently lacks the powers that are currently available to other regulators saying that the Swiss supervisor can only curb or decline bankers’ bonuses if they have first received stabilising funds from the government. He went on to say that FINMA needs the ability to work independently and just as importantly without the pressure that currently comes from the political arena or from the institutions it supervises. FINMA has made its point, but now it is up to the Swiss parliament and the government which will decide the final outcome.

European Union Looking to Avoid a Trade War with the United States

Written by IntaCapital Swiss on February 5, 2025. Posted in News & Reports. Leave a Comment

Ever since Donald Trump was re-elected to the White House on Monday 20^th January 2025, the European Union has been preparing counter measures to the new president’s tariffs, which would mark the beginning of a trade war with the United States. However, with President Trump pulling his tariffs at the last minute with both Canada and Mexico*, the EU has become emboldened and feel that they can come to a negotiated agreement with the Trump administration regarding tariffs.

*Canada and Mexico – Tariffs of 25% on goods from both counties were due to begin on Tuesday 4^th February 2025, but after conversations between Donald Trump and the President of Mexico Claudia Sheinbaum followed by a conversation with the Prime Minister of Canada Justin Trudeau, President Trump delayed tariffs for one month. Both the leaders of Canada and Mexico agreed to up the ante in fighting migration and the flow of fentanyl into the United States, key demands by the US administration to avoid tariffs.

However, there is, according to person(s) close to the EU’s executive arm in charge of trading, a major stumbling block with the EU’s strategy as they have been unable to establish decent contacts within the new administration, with some key posts still awaiting senate confirmation. Furthermore in March, the exports of steel and aluminium will be discussed, and the EU will look to avoid conflict on this matter which has been brewing for some time. The Eu will also wish to get agreements with the new administration and avoid tariffs, especially as recent increased rhetoric from President Trump aimed directly at the European Union said that due to large trade deficits with the eurozone means that tariffs are definitely on their way.

In view of President Trump’s remarks the President of the European Union Ursula von der Leyen said” When targeted unfairly and arbitrarily, the European Union will respond firmly”. However, what the EU has to take into account is that the angst that President Trump has towards the bloc goes back a long way, so getting agreements on tariffs may prove a lot more difficult.

Furthermore, Germany’s Chancellor Olaf Scholz is currently making a habit of dissing President Trump, plus his pre-election remarks making it quite clear he was voting for Kamala Harris for the White House, will not exactly endear himself to the new president. Germany will also be in President Trump’s crosshairs as they have a massive trade surplus with the USA of in excess of USD 63.3 Billion as of close of business 2023.

Experts are suggesting that if indeed President Trump announces tariffs on the European Union the response may initially be muted along the lines of the Chinese who announced retaliatory tariffs on imports of US oil and Energy among other levies, but which amounted to less than USD 5 Billion. The word on the street is that the EU may feel that President Trump is using tariffs as a diplomatic club or hammer to get his own way on his policies (e.g. Canada and Mexico).

The EU may well have to increase their Defence/NATO spending, an ongoing demand from President Trump, and make concessions regarding the Russia/Ukraine war. No doubt policymakers are well aware of these demands and only time will tell if indeed the USA and the European Union can come to an agreement on tariffs, but with the bloc suffering from a deepening economic and political malaise, President Trump may well hold the winning hand. It must be remembered that at the recent World Economic Forum in Davos the President of the United States was quoted as saying “the EU treats us very very unfairly, very badly”, so Europe has been forewarned.

Trade Tariffs 2025 – Trump Lives up to his Election Promises, However…….

Written by IntaCapital Swiss on February 4, 2025. Posted in News & Reports, Uncategorized. Leave a Comment

On Saturday February 1^st, 2025, President Donald Trump announced sweeping tariffs on imports of goods from China, Mexico, and Canada, with China being hit with 10% above current tariffs and Mexico and Canada being hit with 25% tariffs. Some experts warned that such moves by the US administration could see the start of a trade war that could reignite inflation and negatively impact global growth. The president of the NFTC (National Foreign Trade Council) said that this move “threatened to raise the cost of everything from avocado’s to automobiles” and he hoped a resolution between America, Canada, and Mexico, could be quickly found.

Donald Trump signed three executive orders imposing said tariffs with a starting date of Tuesday 4^th February 2025. The announcement and subsequent executive orders made good on President Trump’s promises during the election campaign despite repeated warnings from renown economists and analysts who advised that a trade war with Mexico and Canada (USA’s top trade partners) would erode growth both globally and in the United States with the result being increased prices for both companies and consumers.

However, before Monday the 3^rdof February ticked round President Trump had already dialled back his plans for tariffs to start on Tuesday 4^th February 2025, having announced a month’s respite for Mexico. President Trump confirmed that during a telephone call with the President of Mexico Claudia Sheinbaum, she confirmed that she would send 10,000 troops to the border to help combat illegal immigration and the flow on fentanyl, which is a key Trump demand to avoid tariffs.

Similarly, on Monday 3^rd February 2025, the Prime Minister of Canada Justin Trudeau announced that President Trump had abandoned the February 4th deadline for tariffs, and like Mexico had agreed to a one month delay providing he took tougher measures to combat drug trafficking and illegal migration across their shared border. The concessions President Trump received from Prime minister Trudeau is the appointment of a new Fentanyl Czar, listing cartels as terrorists and in a joint venture with the United States, create a new strike force that will combat money laundering, organised crime, and drug trafficking.

In the meantime, China’s response to President Trump’s imposition of tariffs, has been to introduce their own tariffs on a number of US goods and targeting a small number of US companies. On Tuesday 4^th February 2025, China announced an imposition of a 15% levy (under USD5 Billion) on imports of US energy and a 10% levy on US oil and agricultural equipment. The Chinese government also targeted PVH Corp (owner of Tommy Hilfiger, Calvin Klein, Olga and True) and Illumina Inc (a gene sequencing company) putting them on a blacklist.

The Chinese government also imposed stricter controls on the exports of critical metals such as tungsten, used in defence, aviation, and electronic industries. Experts suggest that this is a muted response designed to avoid an all out trade war, but enough to show President Trump that China can hit America where it hurts. The American President wishes to speak to President Xi before their tariffs and export controls take effect on 10^th February 2025, perhaps another reason why China held back on an all-out response.

Elsewhere, President Trump suggested that the eurozone (European Union) could be next in line for tariffs and could happen “pretty soon”. He went on to say that “they don’t take our farm products, they don’t take our cars, they take almost nothing, and we take everything from them. Millions of cars, tremendous amounts of food and farm products”. The European Union initially condemned President Trump for initiating tariffs and advised they will respond in kind if they become a target.

Conclusion

Throughout President Trump’s election campaign the slogan has been “America First”, “Tariffs”, he even said tariffs is his favourite word. Before Donald Trump became President and after he became President he trumpeted tariffs, tariffs, tariffs. We shall bring factories back to America, create more jobs, lower taxes for everyone are the words that have been put forth to the American people. However, is President Trump using tariffs as a diplomatic club to get his way in other areas such as with Mexico and Canada. We shall see what will happen with the United Kingdom and the European Union, but for those American voters waiting on tariffs, they could be sorely disappointed.

The European Central Bank Cuts Interest Rates January 2025

Written by IntaCapital Swiss on February 3, 2025. Posted in News & Reports, Uncategorized. Leave a Comment

For the fifth time since June 2024 on January 30^th, 2025, the ECB (European Central Bank) once again cut interest rates to the key deposit rate by 25 basis points to 2.75%. ECB officials announced that they will continue to describe their stance on monetary policy as restrictive, indicating there are further interest rate cuts to come especially as their target inflation of 2% is within reach. Officials went on to say that disinflation is on track, but services inflation remains sticky at 4% but they expect that to come down during the course of 2025.

The President of the ECB Christine Lagarde advised that the vote by the governing council on cutting interest rates was unanimous, however ECB officials reiterated that they were not pre-committing to a particular rate path. President Lagarde followed up on her officials by saying “We know the direction of travel, and for those who would like to have solid forward guidance, it would be totally unrealistic to do anything of that nature, simply because we are facing significant and probably rising uncertainty at the moment”. Experts suggest that statement may well be directed at President Trump and his tariffs and a possible trade war.

Indeed, the major source of uncertainty at the moment is President Donal Trump’s threats of tariffs and the ensuing trade war. It has been noticed by all in the financial world that the United State’s very own Federal Reserve is already limiting rate cuts until they see the outcome of the new administration’s policies. Sadly the eurozone’s economy is currently in the doldrums and a trade war with the United States could well have a negative impact on inflation.

Currently the prospects for the eurozone’s economy are dim, mainly due to the two powerhouses Germany and France who underpin the economy, are both suffering from political and economic turbulence. Indeed, recently released GDP (Gross Domestic Product) figures showed the eurozone unexpectedly stagnating at the end of 2024 and President Lagarde was noted as saying “Europe’s economy will remain frail in the near term, with risks to the outlook still tilted to the downside due to the possibility of greater global frictions”

Analysts suggest that the restrictive policy wording from the ECB and President Lagarde’s positive words on inflation has encouraged investors to think that there are more interest rate cuts coming in 2025. In the financial markets traders have increased bets on three further interest rate cuts in 2025 at 25 basis points per cut, with experts predicting the first of these at the next policy meeting of the ECB on the 5^thand 6th of March 2025.

On a different note, whilst President Trump is pro-Bitcoin and crypto in general, ECB President Lagarde rejected the idea of incorporating Bitcoin into European reserves on the basis that it is too volatile and associated with anti-money laundering. She went on to say that “Reserves have to be liquid, reserves have to be secure, they have to be safe, they should not be plagued by the suspicion of money laundering or other criminal activities.”.

Federal Reserve Holds Interest Rates Steady January 2025

Written by IntaCapital Swiss on February 3, 2025. Posted in News & Reports. Leave a Comment

On Wednesday 29^th January 2025, the Federal Reserve announced that after lowering interest rates by 100 basis points in the last few months of 2024, they were holding interest rates steady in a range of 4.25% – 4.50%. The FOMC (Federal Open Market Committee) had no dissenting voters as they agreed unanimously to press the hold button on interest rates. The Chairman of the Federal Reserve said “We do not need to be in a hurry to adjust our policy stance” adding that the Federal Reserve was pausing interest rates in order to see further progress on inflation which currently remains somewhat elevated but has moved closer to the goal of 2%.

Currently some analysts are saying that the US economic landscape appears stable but at the same time wildly uncertain especially as recent macroeconomic fundamentals have been unchanged and healthy. However, with the elevation of Donald Trump to the White House Chairman Powell noted “Federal Officials are waiting to see what policies are enacted” and what effect such policies (tariffs, taxes, immigration) will have on inflation. Experts have said that the prospects of tariffs on Mexico and Canada, who are two key trading partners with the United States, have cast a shadow over the economy of the United States.

Following the announcement that the Federal Reserve were holding interest rates, President Donald Trump renewed his attack on the central bank saying they had “failed to stop the problem they created with inflation”. Previously, President Trump had demanded that interest rates come down further, but Chairman Powell, who is doing his best to keep himself and the Federal Reserve above political machinations noted that keeping interest rates on hold was not political despite the fact it may look that way. The president also went on to say that the Federal Reserve has “done a terrible job on bank regulation” and insisted he will put this responsibility solely within the purview of the Treasury Department. However, some legal experts have said that this would be against the law.

In December 2024 Federal Officials advised that they expected only two rate cuts throughout the whole of 2025, which was a reduction in policy that had not been previously anticipated by the financial markets. Recent data released showed that in December 2024, an underlying measure of consumer prices rose by less than anticipated being the first decrease since June 2024. Analysts have looked back at President Trump’s first stint in the White House where he promised more tariffs on countries exporting to America, taxes on workers and companies will come down, and a massive number of jobs and factories will come home. In the end the exact opposite happened, and the Federal Reserve faced a slowing economy led by factories announcing many redundancies. So perhaps Chairman Powell and his officials can feel somewhat vindicated by keeping rates on hold.

Dispersion Trades Come into their Own Amid Sell-off in Tech Stocks

Written by IntaCapital Swiss on February 3, 2025. Posted in News & Reports. Leave a Comment

On Monday 27^th January 2025 global investors dumped tech stock as a new player from China called DeepSeek, emerged in the AI (artificial intelligence market) threatening the dominance of the United States as companies such as Nvidia had a record one day loss of circa USD593 Billion. Other major shares tumbled such as chipmaker Broadcom down 17.4%, Alphabet fell 4.2%, and Marvel Technology fell by 19.1% to mention but a few. The catalyst for this fall was DeepSeeks AI model named RI which by all accounts uses less data at a fraction of the cost compared to that of the competition.

Many hedge fund traders saw an opening for dispersion trades which buys options in single stocks and sells contracts on an index and as such this trade had its best day since 2020 as fears for A! spread through the market like wildfire. The dispersion trade therefore is a bet on an index remaining calmer than its individual stocks. Once the domain of the hedge funds, the dispersion trade is now offered by banks to their clients which they have packaged into easy to access swaps. The Cboe S&P 500 Dispersion index* enjoyed its biggest gain since 2022.

*Cboe S&P Dispersion Index – This index may provide an indication of the markets perception of the near-term diversification or equivalently, an indication of the markets perception of the near-term of idiosyncratic risk in the S&P 500’s constituents. In simple terms dispersion refers to the range or spread of individual stock returns around the index’s average return.

Essentially dispersion trading is a form of arbitrage, specifically volatility arbitrage which as mentioned above is betting on the volatility of individual stocks against a more placid index where the stocks are quoted. A simple explanation of arbitrage is the selling and buying of the same stock, currency, or commodity at the same time in two different markets but where there is a small price differential. The profit between buying at the lower price in one market and selling at the higher price in another market is known as arbitrage trading.

Elsewhere, the sell off in tech stocks benefited a number of quant trades where the trading model is going long on some stocks and short on others. This is a strategy that buys steady stocks and sells the opposite (in this case tech stocks) which according to analysts jumped the most since 2020. Again, when the two positions are traded out the profit (or loss) is the arbitrage from the two trades.

Trump, Tariffs, BRICS, and Artificial Intelligence

Written by IntaCapital Swiss on January 29, 2025. Posted in News & Reports. Leave a Comment

In his latest pronouncements on tariffs, President Trump announced that he would enact cross-border tariffs higher than 2.5%, a figure apparently propounded by the incoming Treasury Secretary, Scott Bessent. The President told reporters aboard Air Force One that “I have in mind what it’s going to be, but I won’t be setting it yet, but it’ll be enough to protect our country”. This is yet another signal from the President that he is prepared to reshape supply chains through the introduction of tariffs in order to put “America First”.

President Trump went to tell reporters that he would be using tariffs to target specific sectors such as aluminium, copper, pharmaceuticals, semiconductors, and steel. He also advised that he may well target Mexico and Canada with tariffs on their automobile exports to the United States, the same countries that he has already targeted with tariffs of 25% on all exports to the USA (to be imposed on 1^st February 2025). President Trump’s underlying belief is that tariffs on countries exporting to the United States will increase the number of jobs at home, bring factories back, and taxes on businesses and individuals will come down.

Interestingly, the threat of tariffs on the semiconductor sector came shortly after the Chinese start-up on AI (artificial intelligence) DeepSeek* not only worried investors but erased billions from the market capitalisation of Nvidia Corp**. It appears the DeepSeek model can be as effective as other well-known AI models but at a fraction of the cost. This has translated into less data centres signing up to the likes of Nvidia, as DeepSeek can drive down the consumption of electricity, and they now challenge the assumption that the United States hold dominance in the AI market.

*DeepSeek – Until very recently, DeepSeek was a little known Chinese start-up, but has sent shockwaves through the tech market having released an AI model named RI that can outperform leading developers from the United States such as Nvidia, OpenAI, and Google. Is reported that DeepSeek only had a USD 6 Million budget to produce RI, as opposed to the multibillion dollar budgets employed by their US counterparts.

**Nvidia – Is famous for accelerated computing to tackle challenges no-one else can and their work on AI and digital twins is transforming the world’s largest industries. Their work on AI using a GPU (graphics processing unit as opposed to a CPU – central processing unit) allows them to crunch massive amounts of data for AI much faster. When RI cast doubt on the supremacy on of US tech firms, Nvidia shed circa USD590 Billion in market value which was the biggest fall in US stock market history.

President Trump said of DeepSeek, “The release of DeepSeek should be a wake up call for our industries and that we need to be laser-focused on competing to win”. On Monday 27^th January 2025, there was a major market fall-out regarding DeepSeek, with technology stocks in Europe and the United States falling by circa USD1 Trillion, with investors now questioning the spending plans of some of the biggest companies in the USA.

On the tariffs front, experts are saying this economic tool will not just be used against those countries with just a trade surplus with the United States. Indeed, President Trump will use tariffs in other areas such as the recent spat with Colombia, where the country’s President Gustavo Petro barred and refused landing rights to two military flights from the United States carrying deported Colombians. President Trump threatened punitive tariffs of 25% on Colombian exports to the USA unless the Colombian acquiesced, and despite counter tariffs being threatened, President Petro agreed to accept migrants (including those arriving on military aircraft) without limitation, hindrance or delay.

Elsewhere on the Trump/Tariff radar, Europe and the EU bloc has been threatened with tariffs regarding those countries with trade surpluses and those countries (just about all of them) which President Trump believes aren’t paying enough on defence. Also on the radar are the BRICS* nations, who Trump has promised to impose 100% tariffs on should they try and create a rival currency to the US Dollar. Leading politicians within the BRICS have already floated the idea of a rival currency.

*BRICS – is recognised as a group of emerging market countries and the acronym stands for Brazil, Russia, India, China, and South Africa. Originally the acronym was BRIC (as South Africa was not part of the founding members) and was coined in 2001 by a Goldman Sachs economist Jim O’Neill. On January 1^st, 2024, Egypt, Ethiopia, Iran, and the United Arab Emirates joined BRICS, who also announced that their newest member is Saudi Arabia, but the United Kingdom has yet to put pen to paper so as yet have not officially joined

Over the last 24 years, BRICS has grown into what is effectively a world club comprising of ten member states, some of whom are major energy producers such as the United Aram Emirates, whilst others are recognised as the largest consumers amongst the emerging or developing economies. Many western commentators feel that BRICS, led by China, are an anti-western organisation and have ambitions to have their own currency moving away from global reliance on the US Dollar.

Many experts feel that President Trump will stay true to his word and invoke tariffs on many countries, including America’s allies. He is especially adamant about those countries he feels will do the United States harm and he has named Brazil, India, and China in that bracket. How far the President will go with tariffs we will have to wait and see, but with China upending the Artificial Intelligence sector, it looks like certain countries are in for a bumpy ride.

The United Kingdom Becomes Europe’s Top Destination for Investment

Written by IntaCapital Swiss on January 27, 2025. Posted in News & Reports. Leave a Comment

Despite much rancour regarding the Chancellor of the Exchequer’s budget on 30^th October 2024, PWC’s annual CEO survey has shown that the United Kingdom has leapfrogged Germany to become Europe’s top investment spot, and has claimed second spot behind the United States in the global rankings. Indeed, the survey of circa 5,000 chief executive officers put the United Kingdom ahead of China, Germany, and India, with such news no doubt coming as a relief to the somewhat embattled chancellor Rachael Reeves, especially after recent turmoil in the UK government bond market.

The Chancellor has been quoted as saying “These latest results show global CEO’s are backing Britain as the UK is one of the most attractive destinations for international investment, and it’s this investment that will help economic growth and improve living standards across the UK”. The senior partner of PwC UK Marco Amitrano was also quoted as saying “ “a vote of confidence in the UK as a place for business and investment”. The cabinet is united in the fact that the government has a safe and secure majority which, unlike some of the larger EU economies that face both economic and political instability, will encourage investors to use the United Kingdom as a safe haven for investments.

However, experts suggest that this labour government should not become complacent, as putting the United Kingdom back at front and centre of the global stage requires a realisable path towards growth and a government that has an approach that is consistent towards investment and business. Currently, the Chancellor is attending the Davos summit in Switzerland where she will highlight the United Kingdom as a safe and politically stable investment partner. She will be emboldened by the fact that first data released by the IMF (International Monetary Fund) last week upgraded its forecast growth in the United Kingdom from 1.5% to 1.6%, and second figures released at the end of last week show lower than expected inflation figures paving the way for a rate reduction by the Bank of England.

Recent data released by the ONS (Office of National Statistics) showed inflation for December 2024 slowing to 2.5% down from the November figure of 2.6% a surprise for many analysts who had predicted inflation either holding steady or rising to 2.7%. The biggest drivers in December’s inflation figures were the easing of tobacco costs and the easing restaurant and hotel costs, and whilst still rising, they reflect the slowest pace since July 2021. Experts now suggest these latest inflation figures have opened the way to cut interest rates by 25 basis points to 4.75% in February. However, despite December’s drop in inflation, experts have warned it could rise again in the coming months fuelled by rising energy bills. Still, the Chancellor will be buoyed by the fact that inflation is down, rates could well come down, the United Kingdom is top of the investment tree in Europe and second in the world, a turnaround from the financial machinations of last week.

Author: IntaCapital Swiss