LSBF Blog - Global Matters

UK retail prices report biggest fall since 2006

July 10 ,2014 | by Sarah Parkin

British retailers have reported their biggest annual decline in prices since June 2006, according to a new survey.

The British Retail Consortium (BRC) revealed that overall shop prices experienced deflation for the 14th consecutive month, falling by 1.8 per cent last month, the “deepest” since its index came into existence.

Another record was achieved with food inflation, which fell to an astonishing 0.6 per cent in June. Meanwhile, non-food items experienced a quickening in deflation, recording 3.4 per cent last month (it was 2.8 per cent in May).

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Euro strength needs to be reduced, ECB told

July 10 ,2014 | by Sarah Parkin

The European Central Bank (ECB) is being urged to make a concerted effort to reduce the strength of the euro.

Fabrice Bregier, president and chief executive officer of Airbus, believes that an increasingly strong euro is hampering the ability of the eurozone to grow and thrive.

In an interview with the Financial Times, he called on decision makers within the European Central Bank to focus their attention on cutting the “crazy” strength of the euro.

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India's economy to grow by 6% in 2014-15

July 10 ,2014 | by Hari Sri

India’s economy is projected to grow by as much as six per cent this financial year, according to new analysis.

The India Economy Survey revealed that the emerging economic giant is likely to experience GDP growth in the value of between 5.4 per cent and 5.9 per cent in 2014/15.

Tabled by Arun Jaitley, India’s finance minister, the survey casts the subcontinent in a very strong position, with plenty of potential for investors home and abroad.

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British Chambers of Commerce warn against hasty interest rate rises

The Bank of England has been advised by the British Chambers of Commerce to approach interest rate increases with caution.

In its Quarterly Economic Survey for Q2 2014, the British Chambers of Commerce (BCC) advised the Bank to refrain from “hasty decisions”, arguing that it could limit economic development.

John Longworth, director of the BCC, said that a premature hike in interest rates would potentially hamper the growth of firms that the nation is “counting on to drive the recovery”.

Canvassing the opinions of 7,000 UK businesses, researchers found that growth in certain industries has slowed between April and June. However, the economy is in robust health, showing positive signs and clearly “moving in the right direction”.

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Graduate recruitment in UK returns to pre-recession high

July 09 ,2014 | by Sarah Parkin

A new report from research firm High Fliers shows that the graduate recruitment market has returned to pre-recession levels.

Graduates have faced some fairly testing times in the years since the financial crisis took hold. Employment prospects slackened for a while, but a recent flurry of positive data has suggested that the market is getting back on its feet. In fact, a new report from research company High Fliers shows that the UK’s graduate job market is actually back at its pre-recession peak.

The Graduate Market in 2014 shows that organisations that appeared in The Times Top 100 Graduate Employers rose by 2.5 per cent in 2013 from the previous year. That more than reversed the 0.8 per cent decline seen in 2012 and left graduate opportunities performing strongly overall.

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VIDEO: ‘Great Minds’ Series – Former UK PM Sir John Major speaks on the value of education

July 07 ,2014 | by LSBF Blog Staff

Education helps equip students with the tools necessary to shatter the glass ceiling on what they could achieve, believes Sir John Major, former Prime Minister of the UK.

We recently spoke to Sir John as part of the LSBF ‘Great Minds’ series. Watch our interview of Sir John here, conducted by former UK Home Secretary and Education Secretary, David Blunkett.

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Germany introduces new national minimum wage

July 07 ,2014 | by Hari Sri

Germany has introduced a minimum wage for the first time in the country’s history.

Members of the German parliament approved plans to set the least amount of money a person can earn at €8.50 (£6.80) an hour. The Christian Democrats, led by chancellor Angela Merkel, will work alongside the Social Democratic Party (SPD) in a power-sharing deal to place this new policy in place.

Nations such as the UK and US already have a minimum wage in place but Germany’s €8.50 an hour rate is higher than both of these countries. The UK’s rate was revised in 2013 to £6.31 an hour while the US’ Federal government set the nation’s lowest minimum wage at $7.25 (£4.22) an hour. However, a large number of states including California, Florida and New York have a much higher rate.

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Obama criticises Wall Street’s ‘big bonuses for bankers’ culture

United States President Barack Obama has attacked the risk-taking, big bonus culture of Wall Street, claiming that it poses a threat to the economic security of the country.

Speaking in an interview with the radio programme Marketplace, he promised that he would do everything in his power to make the financial world more transparent.

Mr Obama said that while a lot had been done in the way of improvements, following on from the credit crunch of 2008, there was still “unfinished business” – the system requires further and deeper reforms.

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IPOs in European stock markets begin to lose steam

A flurry of high-value IPOs have kept Europe’s markets busy recently, but it seems interest is cooling off.

European markets have seen a rush of high-value initial public offerings (IPOs) in the past few months. London alone has been a hive of flotation activity, but Paris and Frankfurt have also been attractive locations.

On 3 July, ING floated its insurance arm NN Group on the Amsterdam stock exchange in the largest IPO of the year, which valued the company at €7 billion.

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Escalating house prices ‘a risk to UK economy’

July 03 ,2014 | by Sarah Parkin

Sir Jon Cunliffe has warned that the biggest risk to the UK is the housing market, claiming that rising prices, which are escalating upwards faster than people’s incomes, is a particular cause for concern.

The Bank of England’s deputy governor told BBC Radio 5 Live that such a situation is problematic because it leads to “a big increase in the amount of debt in the economy” and equally, the “amount of debt that mortgage holders have”.

Therefore, if left unchecked, it could create the conditions necessary for a financial crisis to unfold, which would be hugely damaging to the UK and, in turn, the rest of the world.

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20 years of Brazilian Real – why do countries launch new currencies?

July 03 ,2014 | by Sarah Parkin

Brazil introduced the real two decades ago as part of a bid to beat inflation. But, why do countries launch new currencies?

On 1 July, Brazil celebrated the 20th anniversary of introducing a new currency. The real made a massive difference to the nation’s economy, and it is not surprising that many Brazilians look back negatively on the time before the currency was in use.

But why do countries introduce new currencies, and does it make a difference?

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Victory for consumers as roaming charges fall across EU

July 03 ,2014 | by Hari Sri

Roaming fees around the European Union are set to fall as new price caps take effect.

European Union (EU) price caps have now come into force that could cut data roaming fees in half.

Phone users travelling around the bloc often disable their mobile data to minimise costs, or even invest in a smaller, cheaper feature phone that they can take with them and only pay for what they use. But the European Commission is planning to eventually phase out the high costs associated with roaming.

The first staging post was a 1 July move to reduce the existing price cap for downloading data from 45 cents (36p) per megabyte to 20 cents, while the maximum fee for making calls has dropped from 24 to 19 cents.

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BNP Paribas to pay record $8.9 billion fine

French bank BNP Paribas has been fined $8.9 billion after it admitted helping clients to breach global sanctions.

French banking giant BNP Paribas has agreed a huge settlement that will see it pay a record $8.9 billion (£5.2 billion) fine, after it admitted helping clients to violate economic sanctions.

The bank has acknowledged widespread wrongdoing which saw the bank disguising transactions for clients in Sudan, Iran and Cuba, even though those countries are subject to sanctions. Prosecutors said that executives in some of the most senior levels of the bank had been aware of the practice, but it continued from 2004 to as late as 2012.

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UK businesses told to adjust to flexible working hours

July 02 ,2014 | by Sarah Parkin

Every employee in the UK now has the right to request flexible working, and staff and businesses alike are having to adapt.

As workforce demographics change and technology makes it easier to work in different ways, more and more employers have allowed some level of flexibility for their staff.

But on 30 June, the right to formally request flexible working was extended to every employee in the UK, instead of just those with caring responsibilities. That means 20 million more people can now ask for the opportunity to work flexibly, and their request must be considered in a “reasonable” manner. Only one request can be made in any 12-month period.

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Africa firm on its way to meet economic promise

July 02 ,2014 | by Hari Sri

Africa is only just beginning to fulfil its economic potential as its economies show signs of strong growth.

When Nigeria rebased its economy in April it became the 26th largest economy in the world. Last month Kenya raised $2 billion (£1.18 billion) from institutional investors in its first offering on the sovereign bond market. Angola has even offered financial aid to Portugal as the European country struggles with its debts.

The past year has seen Africa truly arrive on the global economic stage.

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Barclays faces charges for alleged “dark pool” fraud

Barclays will be subject to a fraud lawsuit filed by the New York attorney general.

New York’s attorney general has filed a lawsuit against Barclays over alleged fraud related to “dark pool” operations – where clients trade big blocks of shares while keeping prices private.

According to a statement from Eric Schneiderman’s office, Barclays is accused of boosting its dark pool’s market share by making false claims about its operations. Rather than safeguarding clients from “aggressive” high-speed traders as it has claimed, the bank allegedly ran its dark pool so that it favoured them. The rest of the charges also look very serious.

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Global M&A deals hit 7-year peak

July 01 ,2014 | by Sarah Parkin

Mergers and acquisitions deals volumes at a global level are at a seven-year peak.

Appetite for striking huge corporate deals is returning, as it has emerged that international mergers and acquisitions (M&A) deals are at their highest level for seven years.

The value of M&A deals around the world in the first half of 2014 stood at $1.75 trillion – an impressive 75 per cent increase on the same period last year, and the highest level in seven years. Yet the actual number of deals actually fell slightly, indicating a rise in the prices being set on target companies.

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From the world of business: June 2014 highlights

July 01 ,2014 | by Thiago Kiwi

Here’s our guide to all the major business news from June.

Welcome to our business news round-up for June 2014. In this round-up of the most important business news stories from around the world, we point you to some of the biggest news stories that have had people talking during the past month.

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India’s startup leaders turn into angel investors

July 01 ,2014 | by Hari Sri

An increasing number of entrepreneurs in India are acting as angel investors for new companies.

India’s recent emergence as a major economic power has been accompanied by the success of a number of exciting startups that are now worth billions. But the entrepreneurs behind these firms are now using their success to give a boost to younger businesses and talent.

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Every FTSE 100 board now includes a woman after Glencore appointment

June 30 ,2014 | by Sarah Parkin

Topic: News

Glencore has become the last FTSE 100 company to finally add a woman to its board.

Patrice Merrin’s appointment to the board of Glencore Plc may not have meant much on its own, but in the wider context of the struggle to improve female representation in the business world, it marks a watershed moment.

On 26 June, the mining company finally bowed to years of pressure when it appointed Ms Merrin, who becomes the first woman to sit on the company’s board. In doing so, it brought in a new era in which every single company in the FTSE 100 now has at least one woman at the top.

It says something about how far the campaign for female representation has come that Glencore had acquired a bad reputation for its male-dominated management structure.

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London Stock Exchange confirms $2.7 billion Russell Investments deal

Russell Investments is about to be acquired by the London Stock Exchange for $2.7 billion.

The London Stock Exchange Group has finally agreed to acquire Russell Investments in a huge $2.7 billion (£1.59 billion) deal, subject to shareholder and regulatory approval.

On 26 June, the exchange said it was planning to carry out the major deal with assistance from a $1.6 billion rights issue as part of a plan to break into the huge US capital markets, taking over Russell from life insurer Northwestern Mutual.

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UK consumer morale hits nine-year high

June 30 ,2014 | by Sarah Parkin

Morale among UK consumers is at a new record high, according to a GfK poll.

Consumer morale in the UK is at its highest level in nine years, a new poll from research company GfK has found.

Its monthly consumer confidence index rose to +1 in June, up from zero in in the previous month and the highest rate since March 2005. A Reuters poll forecast suggested the figure could have been as high as +2, but the figures continue an upward trend that points towards growing confidence in the UK economy.

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Relationships between businesses key to success, says report

Businesses need to form relationships effectively if they are to succeed, according to a new report.

Strong links between organisations have often been seen as an important element of successful partnerships. But according to a new report, effective relationships between individuals within companies are a vital element of success in modern business.

The Tomorrow’s Relationships report has been compiled by business thinktank Tomorrow’s Company in partnership with KPMG, Linklaters, the Chartered Institute of Management Accountants and Chartered Institute of Professional Development (CIPD).

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Business magnate Warren Buffett ‘not buying Coca-Cola’

June 26 ,2014 | by Hari Sri

A brief flurry of concern emerged when rumours suggested that Warren Buffett could buy out Coca-Cola, but he claims not to be interested.

Warren Buffett has an established reputation as a major investor, and he isn’t new to going after large targets. But when Coca-Cola shareholder David Winters said last week that he was concerned Mr Buffett would mount a takeover bid for the giant company, more than a few eyebrows were raised among analysts.

The rumours emerged last week when Mr Winters told Fox Business Network that he suspected Mr Buffett, whose investment company Berkshire Hathaway owns nine per cent of the drinks giant, and 3G Capital might work together to take Coca-Cola private. He added that he had written a letter to the board warning them off such a move, reminding them that they have a “duty to all shareholders”.

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Climate change could cost US businesses billions every year

June 26 ,2014 | by Hari Sri

A new report has set out the potential negative business consequences of climate change in the US.

Climate change has been a difficult issue for many businesses, caught between a dependence on fossil fuels and the demand for more sustainable ways of operating. A new report compiled by political and business figures from the US has highlighted the potential cost to companies of failing to take action.

The bipartisan Risky Business report uses what it describes as a “standard risk-assessment approach” to identify the potential consequences of inaction on key areas. It focuses on damage to coastal areas from increased storm surge and rising sea levels, changes to agricultural production that will come from an altered climate, and how higher temperatures will affect public health and the productivity of the US workforce.

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