Friday 7 October 2016

Business Today


Sterling lost a tenth of its value in minutes on Friday, in what traders said was a "flash crash" driven by computer-initiated sell orders. It left the pound at a fresh 31-year-low and heading for its worst week since January 2009. The pound dived about 10 percent from levels around $1.2600 to $1.1378 GBP=D4 in a matter of minutes in thin early Asian trade, although it has since recovered somewhat. The pound has been under pressure for most of this week as worry grows that Britain will opt for a "hard" exit from the European Union.



Philip Hammond has scrapped plans for a retail sale of the government's remaining stake in Lloyds Bank. He has instead opted for a trading plan which will gradually offload the £3.6bn share over the next year. Mr Hammond said that while he believes that “returning Lloyds to the private sector is in the interests of the bank, taxpayers and the country as a whole”, he had “listened to the experts” and decided that ongoing market volatility meant it was not the right time for a retail offer.



The Office of National Statistics (ONS) says that industrial production fell by 0.4% between July and August, due in part to a decrease in oil and gas production. Manufacturing, however, rose by 0.2&, although this followed a steep fall in July. Separate figures from the ONS showed that the UK's trade deficit widened in August. The widening deficit comes despite hopes that the weaker pound will boost demand for British goods. Exports rose by just £100m, against expectations of a £4bn increase. Imports, however, rose by £2.6bn in August following a slump in July.


Theresa May hinted at a tougher line on immigration in her speech to the Conservative party conference and Amber Rudd incited a backlash from business leaders over proposals to force companies to disclose how many foreign workers they employ. Tom Hadley, policy director of the Recruitment and Employment Confederation (REC), said the government must be mindful that many UK employers were already facing staff shortages. The trade body said that based on a poll of 400 recruitment consultancies, those jobs suffering skills shortages included accountants, care workers, scientists and toolmakers.


The US economy only created 156,000 jobs in September, slightly fewer than expected and lower than the 180,000 average for this year. The unemployment rate rose from 4.9% to 5%, although this was apparently due to more people looking for work. The US Department of Labor said that job gains occurred in professional and business services, and in health care.


In a dramatic reversal of sentiment from July, many UK firms are reporting an increase in optimism about their prospects and the wider economy over the next year. According to an index compiled by YouGov and the Centre for Economics and Business Research (CEBR), business confidence rose to 112.4 in September, up from 105 in July and just shy of June's reading of 112.6. Any number below 100 represents a negative outlook, 100 is neutral, while a figure above 100 is considered positive. This is the first time since the Breixt vote that confidence in businesses have returned to its pre-referendum levels.


Oil futures were little changed on Friday, capping a week of price growth supported by the prospect of a crude production cut by OPEC countries even though doubts lingered over the cartel's ability to wipe out a persistent excess of oil. Brent LCOc1 traded at $52.50 at 1410 BST, a cent lower, while U.S. crude oil futures were a cent up at $50.45. Both futures contracts see-sawed during the European trading day with Brent touching $52.84 earlier, two cents below the 2016 high.

In Other News
Click here to see our membership packages or here to subscribe to our mailing list. Leave a comment below to let us know your opinion on this week's business news or if there are any major stories we missed.


Our next event will be at TateHindle on 12th October. We hope to see you there!
at
Labels: , ,

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)