Ketchup’s Coming Home… What Was That About the Economy?

“Amazon made millions but paid no tax!” You could probably substitute Facebook or Google for Amazon. These days, you could probably substitute “billions” for “millions”, too. But, it remains a story we’ve seen countless times. One of the tech giants has reported bumper profits while managing to pay peanuts in tax. 

Perhaps though, we’ll look back in future years and realise this is the time when that story finally started to change. After all, we have just witnessed the G7 meeting in Cornwall agreeing to plans for a minimum global level of corporation tax. While it’s still early days, a similar agreement with the G20 (including Russia and China) is almost certainly on the cards. But, at least it’s a first step – however small.

Elsewhere, recent times have seen countries yoyo-ing on and off of the UK’s ‘green list’ on an almost daily basis. However, the risk is still apparent, as evidenced by the surge in cases seen amongst Scottish fans who attended the recent game at Wembley. Furthermore, big crowds continue to gather in support of the final Euro 2020 games. Adding to the risk is the fact that Wimbledon is going on at the same time. So, another rise in infections is on the cards.

Will that prompt companies to insist upon proof of vaccination as a prerequisite for returning to the office? Morgan Stanley was one of several household names to suggest that unvaccinated staff wouldn’t be welcomed in “the great return.” 

In terms of the world’s stock markets, June was a relatively quiet month. Two markets in the Far East were marginally down. The rest of the markets covered in this commentary made small gains or finished the month pretty much unchanged. As always, let’s look at the details!


Lately, there has been a fair balance of good and bad news as far as the UK economy has been concerned. But, for June, the glass wasn’t half full: it was brimming over! 

At the start of the month, the Organisation for Economic Co-operation and Development (OECD) forecast economic growth of 7.2% this year and 5.5% next year. However, by the middle of the month, the CBI had upped the ante. It believes that growth of 8.2% is achievable and that the economy would be back to pre-Covid levels by the end of the year.

Continuing with the general mood of positivity, manufacturing growth was reported to be at a 30 year high. Also, over 150,000 new cars were sold in May, up eight times on May 2020 when, of course, lockdown forced the showrooms to close down.

In further good news for the economy, the UK then signed a trade deal with Norway and Iceland. It also agreed “the broad terms” of a deal with Australia, and is reported to be looking to conclude a deal with New Zealand by the end of August. Talks have also opened on the UK becoming a member of the CPTPP – the Pacific trading bloc which takes in 11 countries, including Canada, Japan, Mexico and Singapore. 

As you’ll probably be aware, the so-called ‘Freedom Day’ has been pushed back to 19th July. Yet, consumer confidence remains high. In fact, The Institute of Directors reported that confidence among business leaders was at its highest level since the Brexit vote. Furthermore, the CBI has reported that the private sector is growing at a pace not seen since 2015!

Was it all good news?

We know what you’re thinking! With all this good news, we’re really spoiling you. Alas, no Ferrero Roche just yet! You can always rely on inflation worries to dampen the mood! While we jested about the garden gnome shortages in the ‘And finally…’ section of our last commentary, there is, of course, a serious side to it. A surge in factory prices as firms struggled to source raw materials showed input costs rising at their fastest rate for 13 years, with the Bank of England expecting inflation to overshoot its target and hit 3%.

The high streets also could be relied upon for their now usual sense of foreboding. According to a KPMG survey, demand for workers rose in May at its fastest for 23 years. But, the number of staff available to fill those jobs declined at the steepest rate since 2017! McDonald’s was just one example. The food giant confirmed it wanted to open 50 new restaurants, creating some 20,000 jobs – but with boss Paul Pomroy saying, “it is getting harder and harder to recruit.” 

Where does that leave the likes of Nissan? The Japanese car company announced great news for the UK economy. It has plans to create “thousands of jobs” with a major expansion of its battery plant in the North East. We can only hope they can find the staff…

Despite the overwhelmingly good news, the FTSE 100 index of leading shares remained cautious in June. It rose just 14 points, closing the month at 7,037. The pound dropped 3% against the US dollar and closed the month at $1.3805. 


June was relatively quiet for the European news section of our commentary. However, the worries over inflation in the UK were also echoed across Europe. 

The BBC reported that Eurozone inflation had risen sharply in May to reach 2%. That’s just below the European Central Bank’s target. Prices were forced higher by a strong rise in energy prices, which pushed inflation to heights last seen in October 2018. 

With economic activity increasing as Covid restrictions are scaled back, inflation could emerge as a serious problem through the rest of this year. 

It was Apple’s turn to come under investigation by the German regulators. The Federal Cartel Office have concerns that Apple’s iOS system gave it undue influence “across several markets.” Apple said it looked forward to having an open dialogue with them. Our cynicism and curiosity are looking forward to it too… 

One market where Europe definitely would like “undue influence” is the car battery market. By 2030 40% of all new cars sold are forecast to be electric. There are then hopes that this will rise to 100% by 2040. The latest gigafactory is being built in Sweden on a site as big as 71 football pitches!

It was a fairly unremarkable month for the leading European stock markets. The German and French markets were both gained 1%, ending the month at 15,531 and 6,508 respectively. 


Just as the European economy is gradually re-opening, so too is that of the US. Yet despite this, the US economy added fewer jobs than expected. Analysts had been hoping for a figure in the region of 675,000. But, in the event, employers created just 559,000 jobs. On the positive side, this was still enough to lower the unemployment rate down. It is now 5.8%, down from the 6.1% experienced in April. 

Despite the modest increase, President Biden remained optimistic. Describing the figures as “great news,” he went on to expand the investment ban on Chinese firms. Currently, Americans are prevented from investing in dozens of Chinese firms with alleged military ties. That done, he promptly reversed Donald Trump’s ban on Tik-Tok! 

As alluded to in the introduction, the debate on compulsory vaccinations is ongoing. Goldman Sachs has demanded its staff disclose their vaccination status. Meanwhile – according to an internal memo reported by the FT – Morgan Stanley will ban unvaccinated staff from entering its New York office. Unsurprisingly the Federal Reserve stated the obvious. Namely, that the future upward or downward trajectory of the US economy would depend “significantly” on the course of the virus. 

One company where the path remains steadily ascending is Facebook. The social media platform ended the month with a $1tn valuation for the first time in its history. The Dow Jones index didn’t take much notice, though. It closed June unchanged in percentage terms, down 26 points at 34,503. The more broadly based S&P 500 index fared better, rising 2% to close at 4,301. 

Far East 

We made mention of the G7 meeting above. One of the outcomes of that meeting was an agreement between the UK and the US. So going forward, there would be closer ties between the two in science and technological innovation. And particularly in the face of growing competition from China. 

This undoubtedly means bad news for Huawei, whose revenue for its UK subsidiary dropped 27.5% in 2020 to £913m, with pre-tax profits down from £48m to £36.5m. 

In other news, many of us will be familiar with China’s notorious “one-child policy.” Enforced until late 2015, it was upgraded to a ‘two children policy’ in 2016. Yet, the move failed to produce a sustained increase in birth rates. So, in June, we finally saw a major shift in policy! Xi Jinping confirmed that couples would now be allowed to have three children! But, unfortunately, the cost of raising children in Chinese cities has – so far – deterred many couples from having more than one child. 

Meanwhile, China’s ongoing battle against the pro-democracy movement in Hong Kong continued. As it did so, the pro-democracy newspaper Apple Daily was forced to close after 26 years. Regulators also had Bitcoin in their sights, ordering banks not to support digital currency transactions. The move sent the virtual currency below $30,000. 

In terms of the markets, China’s Shanghai Composite index ended the month down 1% at 3,591. The Hong Kong market similarly fell to 28,812. Meanwhile, Japan’s Nikkei Dow index fell just 68 points at 28,792. In contrast, the South Korean economy saw signs of improvement – it’s Index rose 3% to end June at 3,297. 

Emerging Markets 

There wasn’t too much to report from our emerging markets this month. However, there were some interesting snippets of news. First, Australia’s economy continued its rapid rebound. Boosted by soaring demand for commodities, it grew 1.8% in the first quarter of the year. The GDP is now bigger than it was before the pandemic! 

If Australia was rooted in the old economy, El Salvador was firmly in the new. It announced that it would accept Bitcoin as legal tender. However, the World Bank had grave concerns. They subsequently refused to help the country implement the move over worries over transparency and the environmental impact of Bitcoin mining. 

Sadly, Brazil passed the 500,000 marker for Covid deaths. And, in Russia, a court banned political organisations linked to jailed Kremlin critic Alexei Navalny, classifying them as “extremist.” 

The Russian stock market rose 3% in June to close at 3,842. The Indian market also saw gains – albeit by only 1%. It closed at 52,483 while the Brazilian stock market remained unchanged in percentage terms, closing the month at 126,802. 

And finally…

Are you a fan of beef burgers? Then it was a real good news/bad news start to the month for you. 

June opened with exciting news! Kraft Heinz unveiled plans to invest £140m to enable tomato ketchup – along with mayonnaise and salad cream – to once again be made in the UK. Hurrah! Clearly, it wasn’t just football that was ‘coming home’ in June… 

But a day later came the bad news. JBS, the world’s largest meat supplier, was hit by a sophisticated ransomware attack. Anxious burger-lovers (and the FBI) quickly pointed the finger at criminal gangs in Russia. As a result, the future of barbecues remains unknown.

It’s a sadness that continues a steady stream of shortages reported in our’ And finally’ section over the past few months. Garden gnomes. Pet Food Pouches. Chocolate flakes. And now, garden furniture. 

Richard told the BBC he was “very upset” that his corner sofa, glass top table and three stools were in a shipping container somewhere and not in his back garden. Let’s hope Richard wasn’t looking forward to a burger at his new glass top table, too.

An unnamed millionaire (possibly billionaire) is also hoping for a purchase of theirs to prove worth it. They paid $28m for a seat on Amazon founder Jeff Bezos’s first crewed spaceflight by his Blue Origin company. The winning bid was made at an auction, with the winner joining Mr Bezos, his brother and Wally Funk on the spaceflight. Here’s hoping it goes well. 

“My holiday? Not bad, I suppose. Spacecraft was three weeks late taking off – weather or something – and I was stuck in a compartment with a bloke who just talked about how little tax his company paid. The view was alright, though.’