Stocks rallied sharply on Wednesday 6th November 2024, with major indices hitting record highs, as Donald Trump won the 2024 presidential election.
It looks like the Trump rally has already begun.
The Dow Jones Industrial Average surged 1,508.05 points to a record close of 43,729.93. The last time the Dow jumped more than 1,000 points in a single day was in November 2022.
The S&P 500 also hit an all-time high, soaring to 5,929.04. The Nasdaq Composite climbed to a record of its own too of 18,983.47.
Dow Jones one-year chart as of 6th November 2024
Dow Jones one-year chart as of 6th November 2024
S&P 500 one-year chart as of 6th November 2024
S&P 500 one-year chart as of 6th November 2024
Nasdaq Composite one-year chart as of 6th November 2024
Nasdaq Composite one-year chart as of 6th November 2024
After losing the re-election to President Joe Biden in 2020, Donald Trump, the 45th president, has now been elected as the 47th.
Trump’s victory sets several historic records. At the age of 78, he becomes the oldest individual to win a U.S. presidential election. He is the first president to serve two nonconsecutive terms since Grover Cleveland 132 years ago, and his win comes from what is likely the costliest presidential race in history.
Also, he is reportedly the first president, whether in office or former, to have been convicted of crimes. He is also the first president to be impeached twice and then reclaim the presidency. Additionally, he is the first to assume office while actively facing criminal charges in both federal and state courts.
This victory for Trump prevents Vice President Harris from achieving what would have been a historic feat: becoming the first female president of the United States.
As Trump secures win stock markets react positively as Dow and S&P 500 futures rise to touch new all-time highs!
Abraham Lincoln, the 16th President of the United States, led the nation through the Civil War and played a crucial role in the abolition of slavery. He is remembered for his leadership, eloquence, and dedication to preserving the Union.
Abraham Lincoln was assassinated on 14th April 1865. He was shot in the back of the head by John Wilkes Booth while attending a play at Ford’s Theatre in Washington, D.C. Lincoln succumbed to his injuries the following morning.
It was a tragic end to the life of a remarkable leader.
A recent study by the University of Leeds, in collaboration with Primark, found that a pair of women’s jeans costing just £15 were more durable than a pair costing £150.
The research tested 65 clothing items, including jeans, hoodies, and T-shirts, to set standards on how long clothing should last. They used equipment that can simulate years of wear and tear in a matter of hours.
Interestingly, the study revealed no correlation between price and durability. This means that higher-priced items aren’t necessarily more durable than cheaper ones. Primark plans to use these findings to improve the durability of their products and provide better value for customers.
So, for durability… buy the cheaper option. I have no idea about the design and style though.
Switzerland may be at risk of entering deflationary territory in 2025 due to the strengthening of the Swiss franc, which is challenging policymakers’ control over price growth.
The Swiss National Bank has lowered interest rates three times this year as of September, attributing the country’s declining inflation rate to the robustness of the safe-haven currency, as well as to falling oil and electricity prices.
Analysts increasingly believe that the Swiss National Bank may need to engage in foreign currency intervention to avert a deflationary scenario.
Furthermore, the central bank has adjusted its forecasts downward, setting the average annual inflation rate for 2024 at 1.2%, down from 1.3%, and anticipating a price growth of 0.6% in 2025, a decrease from the previously forecasted 1.1%.
Nvidia is set to replace its rival chipmaker Intel in the Dow Jones Industrial Average, signifying a significant change in the blue-chip index that highlights the surge in artificial intelligence and a substantial shift within the semiconductor industry.
Intel’s shares fell by 1% in extended trading on Friday 1st November 2024, while Nvidia’s shares increased by 1%. Intel has now lost over half its value.
The update will take place on 8th November 2024. Also, Sherwin Williams will replace Dow Inc. in the index, the S&P and Dow Jones said in a statement.
Nvidia‘s shares have surged over 170% in 2024, following a roughly 240% increase last year, as investors flock to the AI chipmaker. Nvidia’s market capitalisation has expanded to $3.3 trillion, ranking it second only to Apple among publicly traded companies.
Nvidia one-year share price chart
Nvidia one-year share price chart
Major companies such as Microsoft, Meta, Google, and Amazon are acquiring Nvidia’s graphics processing units (GPUs), like the H100, in large quantities to create computer clusters for AI projects. Nvidia’s revenue has more than doubled for five consecutive quarters, with at least a threefold increase in three of those quarters. The company has indicated that the demand for its forthcoming AI GPU, Blackwell, is ‘insane’.
With Nvidia‘s inclusion, four of the six tech companies valued at over a trillion dollars are now part of the index, leaving Alphabet and Meta as the two not listed in the Dow.
In October 2024, non-farm payrolls saw an increase of 12,000, a significant drop from September’s figures and falling short of the 100,000 predicted
The unemployment rate remained steady at 4.1%, meeting expectations.
The rate of job growth in October 2024 was the slowest since the end of 2020, hindered by the effects of storms in the and a considerable labour standoff (strike action), which impacted the overall employment picture.
According to the Bureau of Labor Statistics‘ Friday report, the modest increase in nonfarm payrolls for October, which was already anticipated to be subdued, marked the smallest rise since December 2020.
China’s factory activity jumped back into expansion among smaller manufacturers in October 2024, according to a private survey report released on Friday 1st November 2024.
The index stood at 49.3 in September 2024, 50.4 in August, and 49.8 in July. A PMI figure above 50 signifies an expansion in activity, whereas one below 50 suggests a contraction.
Following the release of the official PMI data on Thursday 31st October 2024, which showed the first expansion in the country’s manufacturing activity since April 2024, the Caixin measure, which typically reflects the performance of exporters and private sector firms, contrasts with the official PMI that includes larger and state-owned enterprises.
Apple’s fourth-quarter results surpassed Wall Street forecasts for revenue and earnings per share. However, net income declined due to a one-time charge related to a tax settlement in Europe.
iPhone sales and overall sales both rose by 6%.
Apple one year stock chart
Amazon
Amazon’s shares soared in after-hours trading following the announcement of earnings and revenue that exceeded expectations. The firm’s cloud services and advertising divisions demonstrated significant expansion.
Amazon one year stock chart
Intel
Intel has reported earnings that surpassed expectations and provided improved guidance. The company is currently undergoing a significant restructuring initiative.
Intel one year stock chart
However, Intel has now lost over half its market value.
Super Micro Computer’s shares dropped 33% in premarket trading 30th October 2024, following the announcement in a regulatory filing that Ernst & Young had stepped down as its accounting firm.
The filing revealed that EY had expressed doubts about the AI server company’s “commitment to integrity and ethical values” during accounting reviews.
Super Micro had been included in the S&P 500 index in March 2004.
Super Micro one month chart snapshot 30th October 2024
Further update – 1st November 2024
Super Micro’s sell-off persisted on Friday, November 1, 2024, with the stock falling an additional 10%, culminating in a 44% loss for the week.
The most significant drop occurred on Wednesday 30th October 2024, following the company’s announcement of losing its second auditor in under two years.
Super Micro, currently behind schedule in submitting its latest annual report, has announced it will deliver a ‘business update’ for the most recent quarter on Tuesday 5th November 2024, coinciding with Election Day in the U.S.
Volkswagen’s operating profit fell to 2.86 billion euros ($3.1 billion), with third-quarter sales revenue experiencing a 0.5% year-on-year decrease to roughly 78.5 billion euros.
These figures come after Volkswagen lowered its annual outlook for 2024 last month, which was the second adjustment within a few months.
The company has recently encountered several challenges, including potential plant closures in Germany and the cancellation of many labour contracts with local workers in September 2024.
According to Volkswagen, vehicle sales reportedly dropped by 8.3% in the third quarter of 2024, compared to the same period the previous year.
Reports indicate that the Volkswagen Group’s net liquidity was negative 160.6 billion euros at the end of September 2024. At the end of 2023, the company’s net liquidity was negative 147.4 billion euros.
Microsoft’s significant investment in OpenAI is impacting its earnings – 30th October 2024
The company reportedly indicated, following the quarterly earnings report, that Microsoft anticipates a $1.5 billion reduction in income for the current period, primarily due to projected losses from OpenAI.
Microsoft’s nearly $14 billion investment in OpenAI, the creator of the widely popular ChatGPT assistant, has catalysed the emergence of the generative artificial intelligence industry, leading to billions in new revenue for Microsoft.
Despite this, OpenAI is experiencing substantial financial losses. It is projected to incur $5 billion in losses this year, excluding stock-based compensation, against $4 billion in revenue, according to reports from earlier this month.
The company’s revenue reportedly increased by 16% in the fiscal first quarter, outpacing analyst predictions.
Earnings from Azure and other cloud services reportedly rose by 33%, exceeding forecasts.
Nevertheless, the projected revenue growth did not meet analyst expectations.
Meta
Meta’s third-quarter earnings report, released on Wednesday 30th October 2024, disclosed user numbers that fell short of expectations.
The company reported $3.29 billion daily active users for the quarter, marking a 5% increase from the previous year but still below the anticipated $3.31 billion by analysts.
Meta also projected a substantial increase in capital expenditures for 2025.
Additionally, Meta indicated a significant rise in AI spending for 2025.
Inflation saw a modest rise in September 2024, edging closer to the Federal Reserve’s target, as reported by the Commerce Department on Thursday 31st October 2024.
The personal consumption expenditures (PCE) price index recorded a seasonally adjusted increase of 0.2% for the month, and the year-over-year inflation rate stood at 2.1%, aligning with predictions. The PCE index is the Fed’s preferred inflation measure, although officials monitor various other indicators as well.
The Fed aims for a 2% yearly inflation rate, a benchmark not met since February 2021.
Despite the main figure indicating that the central bank is approaching its objective, the inflation rate, excluding food and energy, was at 2.7%. This core inflation metric rose by 0.3% monthly, with the annual rate exceeding expectations by 0.1 percentage points.
This report arrives as markets strongly anticipate the Fed will reduce its benchmark short-term interest rate at the upcoming meeting. In September 2024, the Fed made a significant half-percentage-point rate cut, a rare action during an economic upturn.
Officials remain optimistic that inflation will realign with their target, yet they are wary about the labour market’s condition, even as most data suggests steady hiring and low layoff rates.
Inflation in the euro zone increased from 1.7% to 2% in October 2024, according to latest figures released on Thursday 31st October 2024, exceeding the forecast of 1.9%. weakening case for jumbo rate cut
Both core inflation and services inflation reportedly remained the same as the previous month.
The markets are anticipating a 0.25% reduction in interest rates by the European Central Bank in December 2024, while analysts have suggested that the latest figures could sway the argument against a more substantial cut.
A reduction of 0.5% has been muted but is now less likely.
In October 2024, Germany’s inflation rate rose to 2.4%, as per the preliminary figures from the Federal Statistical Office, Destatis
This increase defied the expectations of analysts, who had predicted a 0.1% decrease, thus narrowly preventing Germany from entering a technical recession, defined by two successive quarters of economic decline.
The inflation rate is adjusted for consistency across the eurozone.
Following this, Destatis released a preliminary report earlier on Wednesday 30th October 2024 showing that Germany’s GDP grew by 0.2% in the third quarter, in comparison to the preceding three months.
The U.S. economy experienced another growth spurt, albeit slightly underwhelming, growth period in the third quarter, driven by strong consumer spending that has surpassed slowdown expectations
The gross domestic product (GDP), which gauges all goods and services produced from July through September 2024, rose at a 2.8% annualised pace, as per the inflation and seasonality-adjusted Commerce Department report released Wednesday 30th October 2024.
This report verifies that the U.S. growth persists, notwithstanding high interest rates and persistent concerns that the surge of fiscal and monetary stimulus, which supported the economy during the Covid crisis, might not suffice to maintain growth.
The euro zone’s economy expanded by 0.4% in the third quarter, according to flash figures released by the European Union’s statistics office (Eurostat) on Wednesday 30th October 2024.
Economists had anticipated a growth of 0.2%, following a 0.3% increase in the second quarter.
Analysts predict that euro zone growth may pick up cautiously in the upcoming months, in light of lower interest rates and subsiding inflation.
The ECB pointed to sustained indications of sluggish activity in the euro area as a significant reason for the rate cut in October.
Markets have completely factored in another 0.25% reduction by the ECB for its final meeting of the year in December 2024.
Germany, the largest economy in the euro zone, reported an unexpected 0.2% growth in the third quarter, as per figures released on Wednesday 30th October 2024. This growth helped the country steer clear of the recession predicted by some economists.
Elon Musk, the billionaire entrepreneur and CEO of Tesla and SpaceX, has recently made headlines in the U.S. with his stark predictions about the potential economic fallout if Donald Trump wins the upcoming presidential election.
This is unusual, as you are more likely to hear these proposals in a crisis, when desperate times demand desperate measures, but not leading up to a presential election and especially not from an opposition vying to take control of the U.S. presidency.
Musk’s comments have sparked widespread debate and concern, as he foresees significant economic turmoil and a stock market crash in the event of a Trump victory.
Musk’s predictions are deep-rooted in his belief that Trump’s proposed economic policies, including drastic cuts to federal spending and mass deportations, will lead to severe short-term economic disruptions.
Musk emphasised the need to reduce government spending to live within the country’s means, even if it involves temporary hardship.
He reportedly argued that such measures are necessary for long-term prosperity but acknowledged that they would likely cause an initial severe overreaction in the economy
Comments Elon Musk made
Billionaire Musk, Trump’s would-be government budget-cutting and ‘efficiency’ adviser, also says there will be “no special cases” and “no exceptions” when he starts slashing federal spending after Trump takes office.
With just a week until the presidential election, Donald Trump’s ally and influential economic adviser Elon Musk is warning people to expect economic chaos, a crashing stock market and financial “hardship” – albeit only “temporary” – if Trump wins.
“We have to reduce spending to live within our means,” Musk said. “That necessarily involves some temporary hardship, but it will ensure long-term prosperity.”
Describing government spending as “a room full of targets,” Musk said: “Like, you can’t miss. Fire in any direction and you’re going to hit a target.”
He reportedly said, “I think once the election takes place we’ll immediately begin looking at where to take the most immediate action.”
And he reportedly added, “obviously a lot of people who are taking advantage of the government are going to be upset about that. I’ll probably need a lot of security.”
“Everyone,” he reportedly said, will be taking a “haircut.”
The Tesla CEO went further and agreed with a supporter who predicted “an initial severe overreaction in the economy” and that “Markets will tumble.”
“Sounds about right,” Musk replied.
Trump has already reportedly said he wants Musk to head up a commission of government efficiency. Trump says the billionaire tech entrepreneur would be his “Secretary of Budget-Cutting,” implying a possible Cabinet position.
Musk himself has described his new role as running a “Department of Government Efficiency,” though he admits the title is an inside joke – the acronym spells DOGE, the name of a cryptocurrency.
Musk speech highlights
One of the key points Musk highlighted is the potential impact of Trump’s policies on the stock market. He agreed with a social media post suggesting that the combination of mass deportations and significant government spending cuts would lead to a sharp decline in market values.
Musk’s agreement with this assessment has raised alarms among investors and economists, who fear that such a scenario could trigger a financial crisis.
Musk’s concerns are not without precedent. The stock market is highly sensitive to political and economic uncertainties, and drastic policy changes can lead to volatility and investor panic.
The prospect of mass deportations, in particular, could disrupt labour markets and consumer spending, further exacerbating economic instability. Additionally, significant cuts to federal spending could lead to job losses and reduced public services, compounding the economic challenges.
Unusual comments leading up to an election
Musk reportedly told supporters that the measures were needed because of the crisis of the skyrocketing federal debt.
This is not the usual picture when a politician and his campaign promise austerity, hardship, deep budget cuts, a likely economic “overreaction” and a slump in the stock market.
You usually hear these things proposed in a crisis, when desperate times supposedly demand desperate measures.
Are desperate times coming, maybe they are already here?
Optimism
Despite the grim outlook, Musk remains optimistic about the long-term benefits of these policies. He believes that once the initial shock subsides, the economy will recover and emerge stronger and more sustainable.
However, this perspective is not universally shared. Many economists argue that the risks associated with such drastic measures outweigh the potential benefits, and that a more balanced approach is needed to address the country’s economic challenges.
Musk’s predictions have also drawn criticism from those who view them as politically motivated. As a prominent supporter of Trump, Musk’s comments have been interpreted by some as an attempt to rally support for the former president’s economic agenda. Critics argue that Musk’s focus on austerity measures and government efficiency overlooks the broader social and economic implications of such policies.
Conclusion
Elon Musk’s predictions of economic hardship and a stock market crash if Trump wins the election have sparked significant debate and concern.
While Musk believes that these measures are necessary for long-term prosperity, the potential short-term disruptions and risks cannot be ignored. As the election approaches, investors and policymakers will be closely watching the developments and preparing for the potential economic fallout.
Whether Musk’s predictions come to pass remains to be seen, but his comments have undoubtedly added to the uncertainty and complexity of the current economic landscape and the never-ending ‘commentary surrounding the U.S. election.
Benjamin Disraeli was a British statesman, Conservative politician and writer who twice served as Prime Minister of the United Kingdom.
One of the most resonant inspirational quotes on bullying, attributed to Benjamin Disraeli: “Courage is fire, and bullying is smoke.”
This quote succinctly captures the essential attitude for those confronting bullying, highlighting that real strength lies in courage, whereas bullying is merely a facade of power.
Putting it another way, this quote encapsulates an important mindset to remember for those who face bullying, which is that there is true strength in being courageous, while bullying is simply the illusion of strength.
Apple has returned to the top five smartphone vendors in China’s market during the third quarter, lifted by the release of the iPhone 16, according to data.
Apple’s shipment growth remained steady year-on-year in the Q2, securing the company a second-place rank by market share in Q3.
Following Apple, Huawei held the third position with a 15.3% market share, as per reported data. Despite this, Huawei’s smartphone shipments in China saw a significant increase of 42% year-on-year.
In September 2024, China’s industrial profits fell at the fastest rate since the pandemic of 2020 began, according to China’s National Bureau of Statistics
Following a 17.8% decrease in August 2024, profits in September 2024 plummeted by 27.1% from the previous year, reportedly the most significant drop since the 34.9% decline in March 2020, according to analysis.
In response, Chinese officials have intensified efforts to stimulate growth.
On Friday 25th October 2024, Russia’s central bank increased its key interest rate by 2% (200 basis points) to 21%, attributing the decision to consumer price increases significantly exceeding its projections and cautioning about persistent high inflation risks in the medium term
This rate hike surpasses the 1% (100 basis-point) rise anticipated by analysts and sets the bank’s benchmark rate at its highest level since February 2003, as reported by analysts.
Previously, the key rate had been raised by 1% (100 basis points) to 19% in September 2024.
It was reported that the annual seasonally adjusted inflation hit an average of 9.8% in September 2024, up from 7.5% in August 2024.
It is now anticipated the rate will stick at around the 8.0% – 8.5% range for the remainder of 2024. This is running above a July 2024 forecast of around 6.5% – 7.0%.
The Nasdaq Composite climbed to an all-time high on Friday 25th October 2024, boosted by BIG tech stocks.
The tech-heavy index rose 0.56% to 18,518.61
The tech-heavy Nasdaq Composite index rose 0.56% to 18,518.61
Tech stocks boosted the market ahead of their upcoming earnings. Nvidia added 0.8%, and shares of Meta Platforms, Amazon and Microsoft were also higher.
Some analysts are suggesting it may be time to short Amazon and Apple as they head into earnings season? Let’s see.
Tesla helped boost the Nasdaq as its stock climbed to close at a 13-month high, sustaining its rally post-earnings.
Tesla enjoyed its best market day since 2013, the stock rose more than 3% on Friday 25th October 2024, closing at its highest since September 2023.
On Thursday 24th October 2024, Barclays Bank announced a net profit of £1.6 billion ($2 billion) for the third quarter, surpassing expectations
This figure exceeded the anticipated £1.17 billion net profit from analysts and marked a 23% increase from the same quarter in 2023.
The revenue for the quarter was reported at £6.5 billion, just over the predicted £6.39 billion.
Shares of Barclays rose by 3.5% as of 08:45 BST – hitting their highest point since October 2015 according to reports.
Barclays Bank One year share chart
Barclays Bank One year share chart
The bank’s return on tangible equity improved to 12.3% from the previous quarter’s 9.9%, while its CET1 ratio, a key solvency metric, increased to 13.8% from 13.6%.
Barclays had earlier this year unveiled a strategic revamp aimed at reducing expenses (cost cutting), enhancing returns for shareholders, and securing long-term financial stability.
This shift has emphasized domestic lending and scaled back the investment banking division’s costs. Part of this new strategy involved acquiring the retail banking operations of Tesco Bank in the UK.
Common Equity Tier 1 (CET1)?
Common Equity Tier 1 (CET1) is a key element of Tier 1 capital, consisting mainly of common stock held by banks or other financial institutions. Introduced in 2014, CET1 serves as a capital measure designed to safeguard the economy from financial crises. Banks must adhere to the minimum CET1 ratio requirements relative to their risk-weighted assets (RWAs), as specified by their financial regulators.
History lesson
Barclays Bank was formally established on November 17, 1690. It traces back to goldsmith bankers John Freame and Thomas Gould in London.
The name ‘Barclays’ came into the business in 1736 when James Barclay, who married John Freame’s daughter, joined the partnership.
As of September 2024, the UK’s national debt stands at £2,685.6 billion, which is approximately 100% of the country’s GDP. This is the highest level of public sector debt since 1961.
UK debt and its borrowing
As of 2024, the United Kingdom’s national debt has reached a staggering £2,685.6 billion, an amount equivalent to the nation’s GDP. This surge in debt, driven by persistent borrowing, has sparked significant economic and political debate.
Historical context
The UK’s debt levels have fluctuated over time, influenced by wars, recessions, and policy decisions. However, the current debt level marks a significant peak not seen since the early 1960s.
The Financial Crisis of 2008 saw the debt-to-GDP ratio rise sharply as the government borrowed heavily to stabilize the banking sector and stimulate the economy. More recently, the COVID-19 pandemic necessitated extensive government borrowing to fund health services, furlough schemes, and business support measures, exacerbating the debt situation.
Government borrowing
Government borrowing, or public sector net borrowing, is the amount by which government expenditures exceed its revenues. This borrowing is essential for funding various public services, infrastructure projects, and welfare programs.
While borrowing can be a tool for stimulating economic growth, especially during downturns, it also raises concerns about fiscal sustainability and the burden on future generations.
Economic Implications
High levels of national debt can have profound economic implications. On the one hand, government spending can stimulate economic activity, create jobs, and drive growth. However, excessive borrowing can lead to increased interest payments, diverting resources from essential services like healthcare and education.
Additionally, high debt levels can reduce investor confidence, potentially leading to higher borrowing costs for the government and businesses.
Debt management strategies
The UK government employs various strategies to manage its debt. These include issuing government bonds to investors, which provide a relatively low-cost means of borrowing. The Bank of England also plays a crucial role, particularly through its monetary policies, such as setting interest rates and implementing quantitative easing programs.
The government’s fiscal policy, which includes tax and spending measures, is another key component in managing the debt.
The future
Looking ahead, the UK’s debt trajectory will depend on several factors, including economic growth rates, government policy decisions, and global economic conditions.
While reducing the debt burden is a priority, balancing fiscal responsibility with the need for economic stimulus remains a delicate act. Policymakers must navigate this complex landscape to ensure long-term economic stability and prosperity for future generations.
UK debt in direct relation to UK GDP from 1980 – 2024
Since the 1950s, UK debt has gone through several cycles. Post-World War II, debt was high due to reconstruction efforts.
The 1980s saw a decline in debt, thanks to privatisation and reduced public spending. However, the 2008 financial crisis caused a sharp increase, followed by more borrowing during the COVID-19 pandemic, reaching 100% of GDP in 2024.
UK public sector borrowing
Public sector debt as a proportion of GDP
How does the UK government borrow money?
The government raises funds by issuing financial instruments known as bonds. A bond represents a commitment to repay borrowed money in the future, typically with periodic interest payments until maturity.
UK government bonds, or ‘gilts’ are generally regarded as secure investments, carrying minimal risk of non-repayment. Institutions both within the UK and internationally, including pension funds, investment funds, banks, and insurance companies, are the primary purchasers of gilts.
Additionally, the Bank of England has purchased substantial amounts of government bonds in the past as an economic stimulus measure through a mechanism known as ‘quantitative easing’.
How much is the UK government borrowing?
The government’s borrowing fluctuates monthly. For example, in January, when tax returns are filed, there’s typically a surge in revenue as many pay a significant portion of their taxes at once. Therefore, it’s more informative to consider annual or year-to-date figures.
In the financial year ending March 2024, the government borrowed £121.9 billion. The latest data for September 2024 indicates borrowing at £16.6 billion, up by £2.1 billion compared to September 2023.
The national debt refers to the total amount owed by the government, which stands at approximately £2.8 trillion. This figure is comparable to the gross domestic product (GDP) of the UK, which is the total value of goods and services produced in the country annually.
The current debt level has more than doubled since the period from the 1980s up to the 2008 financial crisis. Factors such as the financial crash and the Covid pandemic have escalated the UK’s debt from its historical lows to where it is now.
However, when considering the economy’s size, the UK’s debt is relatively low compared to much of the previous century and to that of other major economies.
How much money does the UK government pay in interest?
As the national debt increases, so does the interest that the government must pay. This additional cost was manageable when interest rates were low throughout the 2010s, but it became more burdensome after the Bank of England increased interest rates.
The government’s interest payments on the national debt are variable and reached a 20-year peak in early October 2023. Approximately a quarter of the UK’s debt is tied to inflation, meaning that payments increase with rising inflation.
This situation led to a significant rise in the cost of debt service, though these payments have begun to decrease. If the government allocates more funds to debt repayment, it could result in reduced spending on public services, which were the original reason for the borrowing.
In conclusion, while the UK’s debt and borrowing levels present challenges, strategic management and informed policy decisions will be crucial in navigating the path forward.
The UK debt total vs GDP is now as of 2024 all but 100%
Tesla shares climbed 12% in extended trading after the company’s third-quarter earnings beat Wall Street estimates, following a long slump.
However, Tesla’s revenue for that period, up 8% year on year, marginally missed expectations. “Vehicle growth” will hit up to 20%-30% next year, said CEO Elon Musk, thanks to “lower cost vehicles” and the “advent of autonomy.” Apparently, this was presented as a ‘best guess’.
Profit margins reportedly received a boost from $739 million in automotive regulatory credit revenue during the quarter. Automakers must acquire a certain number of regulatory credits annually. Those unable to meet the requirement can buy credits from companies like Tesla, which has a surplus due to its exclusive production of electric vehicles.
Automotive revenue reportedly rose 2% to $20 billion, up from $19.63 billion in the same quarter the previous year, and has remained roughly stable since late 2022. Energy generation and storage revenue reportedly surged 52% to $2.38 billion, while services and other revenue, which includes income from non-warranty Tesla vehicle repairs, increased by 29% to $2.79 billion.
Tesla quarterly revenues by business section
Tesla quarterly revenues by business section
Tesla share price and close and ‘after hours’ trading 23rd October 2024 (09:15 BST)
Tesla share price and close and ‘after hours’ trading 23rd October 2024 (09:15 BST)
