Your weekly economic update from the team at FXD Capital


Revolut is now valued at approximately £24 billion ($33 billion) after a recent fundraising round injected $800 million. Its valuation is an increase of 6x over where it was a year ago, elevating it above Natwest in terms of market capitalisation.

The typical refrain with Revolut is to use its value as an example of a world gone mad for an app used for cheap holiday FX. While to some degree, that argument has a point: its banking license is in Lithuania, and its userbase is potentially a long tail of dormant accounts enticed by customer acquisition tactics. Yet, on the other hand, investors like what they see, especially when you look at what was perceived as a “travel correlated” business defying the Covid narrative and increasing in value by 6x.

The reason Revolut is worth more than a storied bank like Natwest is due to flexibility. In a world where omnichannel financial services and hard assets bring restrictions: either in terms of flexibility to downsize, manage capital and pivot on a whim, Revolut is resolutely greased up. It’s a new form of banking – embedded finance – where you sell picks to the miners instead of gold bars. The business works as a marketplace: linking market makers of crypto, equities, loan providers and insurers to its users. It acts as a conduit, picking up a riskless commission and not encumbering its balance sheet with any complications.

The thesis of such a model is that Revolut’s investors believe it could expand anywhere systematically because its marketplace model would not carry the same burden as if it were a “traditional” bank. Moreover, by also allowing other commercial entities – like e-commerce and travel operators – to tap into its services on a white-label basis, it puts itself in a position of accelerating its growth by allowing such providers to act as surrogate distributors for its service. Case in point: Buy now pay later providers like Klarna are not lenders: the retailer provides the credit to users as an account receivable, priced up as marketing spend.

So while Natwest must rely on its own marketing channels, fintech’s like Revolut grow in a hive mentality: offer the marketplace ecosystem out as a service and let the end provider do the marketing.

All in all, it sounds like a great business model. However, in my personal opinion, there is a mix of hype and hubris with Revolut. To truly embed yourself in a user’s life, you need their current account or pension – and a Lithuanian banking license will only go so far.

Fintech’s offer a great lesson to banks in terms of marketing, UX, and listening to customers, but there is an idiosyncratic nature to money that’s different from ordering a pizza: sometimes people want to maintain the status quo, especially if past experiences have been safe.

But in a week where restrictions on bank dividends lifted, with institutions now free to resume forsaking opportunities to invest in their future, you wonder if Revolut is banking more on the competition impairing itself first?


The House of Lords economic affairs committee called out the Bank of England for failing to justify the QE policy to which it has “become addicted”. However, some may argue that this observation has come about ten years too late.

The impetus for the remarks is the persistence of increased inflation, which hit 2.5% in June, leading the committee to state that the BoE is failing to justify its transitionary nature. Lord Michael Forsyth of Drumlean was particularly acerbic in comments, dryly noting that all QE has seemed to help inflate is house prices.

UK inflation is now afflicted by those pernicious second-hand cars. As per the States, used vehicles are accelerating in price due to a chip shortage, reducing the rollout of new cars. Indications this week from Taiwan Semiconductor point towards a light at the end of the tunnel for chip supply resuming regular service soon.


Consumer prices rose 5.4% in June compared to 2020, again, the fastest pace since 2008. However, Jay Powell continued his poker-faced strategy of calling it transitionary when probed about prices in testimony this week.

A carbon border tax from polluting countries is mooted as a makeweight to pay for a new $3.5 trillion government spending package. This follows similar patterns seen in Europe, where carbon emissions have become intertwined with monetary policy. Such policies also seem like an obfuscated way of placing tariffs on non-allied nations and comes off the back of increased tensions with China. Recent events surrounding Chinese IPOs and doing business with Hong Kong show that pressure is ratcheting up between the two giants.

All the best for the week ahead



Our weekly column is written by Alex Graham, Economic Advisor to FXD Capital. Originally a bank treasurer, Alex’s weekly roundup intends to provide a conversational, top-down view of what is going on in world macroeconomics and how it impacts business on the ground level.

Would you like to receive FXD Capital’s Insights directly to your mail inbox? Click the button to subscribe to our email newsletters.

Subscribe to our weekly economic update


This document should be considered a marketing communication for the purposes of the FCA rules. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and it is not subject to any prohibition on dealing ahead of the dissemination of investment research.  The information given in this document is for information purposes only and is not a solicitation, or an offer to buy or sell any security or any other investment or banking product. It does not constitute investment, legal, accounting or tax advice, or a representation that any investment or service is suitable or appropriate to your individual circumstances.

You should seek professional advice before making any investment decision. The value of investments and the income from them can fall as well as rise. An investor may not get back the amount of money invested. Past performance is not a reliable indicator of future results. Investment returns may increase or decrease as a result of currency fluctuations.

The facts and opinions expressed are those of the author of the document, as of the date of writing and are liable to change without notice. We do not make any representations as to the accuracy or completeness of the material and do not accept liability for any loss arising from the use hereof. We are under no obligation to ensure that updates to the document are brought to the attention of any recipient of this material. Please note that this commentary may not be reproduced, distributed, disseminated, broadcasted, sold, published or circulated without prior consent from FXD Capital Limited.

FXD Capital Limited is registered in England & Wales (No. 11397216) with its registered office at 3 Lloyds Avenue, London, EC3N 3DS. FXD Markets Limited is registered in England & Wales (No. 11876665). FXD Markets is an FCA registered trading name of Kyte Broking Limited. Kyte Broking Limited registered in England & Wales (No. 02781314) is authorised and regulated by the Financial Conduct Authority (“FCA”) under FRN: 174863 with its registered office at 55 Baker Street, London, W1U 8EW. Kyte Broking Limited is a member of the National Futures Association (“NFA”) under NFA ID: 0288293.