Hello, and HAPPY NEW YEAR. Here's a round up of some recent business and finance news...
Oil prices still falling
Last time I wrote about plunging oil prices, a barrel of
Brent Crude Oil would have set you back $63.56. The current price is $48.87 (20/01/2015). The drop in
price has been described as a ‘giant
tax cut to the economy’, providing a boost to consumer spending. For the
first time in years, motorists have seen sub-£1
petrol (my mum didn’t even mind driving me back to uni after Christmas). In
his Autumn Statement, Chancellor George Osborne predicted that UK GDP would
grow by 2.4%
in 2015, but this has since been revised
to 2.9%.
It’s not all good news though – BP, which
employs 3500 people in the North Sea, has announced 300
job cuts, and Tullow
Oil are expected to follow suit.
Supermarket price war
It’s been a good year for Aldi and Lidl, with
growth of
22.6% and 15.1% respectively. Half
of UK shoppers visited at least one of the two stores over the Christmas
period. Asda
and Tesco
have announced price cuts in a bid to become more competitive and regain market
share. Even Waitrose has got involved, lowering the price of chicken from £4.23
to £2.11, but raising concerns about quality.
Tesco also announced that it will be closing
43 unprofitable stores as it tries to recover from an abysmal
year.
…Contributing to lower inflation
Inflation (the cost of
stuff) fell from 1%
in November to 0.5% in December – its joint lowest
ever figure on record. Inflation is measured by calculating the average
price of a ‘basket’ of goods and services – staples like bread, milk, electricity,
as well as things like cars, and gadgets. The average price is compared
month on month to see if things are getting more or less expensive. Here’s a short video explaining how this works
The Bank of England,
which controls monetary
policy, has a 2% target for inflation. A fall of inflation below 1% triggers a letter of explanation
from the Bank’s governor Mark Carney to the chancellor (George Osborne).
Swiss Franc cap scrapped (try saying that 3 times fast). Chaos
ensues.
The Swiss National
Bank decided last week to abandon it’s cap against the euro. Previously, the
Franc was pegged to the euro, so there was a fixed exchange rate: 1 Euro bought
1.20 Swiss Francs. At one point after the cap was dropped, one euro bought
just 0.85 francs. The value of the euro against the franc is
expected to decline further if the European Central Bank starts quantitative
easing – printing money and buying bonds to push cash
into the eurozone banking system to stimulate a recovery.
The lifting of the cap came as a surprise to
many, including the International Monetary Fund's head, Christine Lagarde. The
sudden rise in the value of the Franc
will make exports more expensive and ski
lift queues shorter. One major reason for the decision to un-peg the franc
is that the falling value of the euro against the dollar dragged down the value
of the franc too.
And finally... Boy, 5, invoiced after birthday party
no-show
Apparently the £15.95 bill
included ‘half an hour on a snow tubing run, three toboggan rides, a
hot meal, ice cream, jelly and balloons’ – pretty decent. Here are some
pictures of said boy and his father looking
devastated (courtesy of the Daily Mail, of course). And here’s a
crash-course on birthday
party etiquette (courtesy of the BBC, of course).
Clive
Coleman, the BBC’s legal correspondent assures us that “for
there to be a contract, there needs to be an intention to create legal
relations. A child's party invitation would not create legal relations with
either the child "guest" or its parents... it is inconceivable
that a five-year-old would be seen by a court as capable of creating legal
relations and entering into a contract with a "no show" charge.” Phew.
Priscilla
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