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OPINION

SEVEN DAYS

SEVEN DAYS
March 20, 2014
SEVEN DAYS

Bank rejig

Two new deputies

The Bank of England's Monetary Policy Committee will welcome two new members, including its first female member since Kate Barker left her post almost four years ago in the form of Egyptian-born economist and current deputy managing director fo the International Monetary Fund Nemat Shafik. Ms Shafik and current MPC member Ben Broadbent will both become deputy governors later this summer. With a reputation for being a 'world citizen' after long experience at the World Bank and IMF, Ms Shafik will be responsible for markets and banking in her new role at the Bank of England.

Crimea annexed

Putin acts fast

Russia has acted rapidly to annexe the Crimea region of Ukraine, where the bulk of its Black Sea fleet is based. Just weeks after pro-EU Ukrainians ousted president Viktor Yanukovich for his Russian leanings, the Russians concluded their lightening campaign of propaganda and subtle military cocercion to bring Crimea, where there is a small majority of ethnic Russians, back into the Russian Federation. A snap referendum was conducted over the weekend, which was worded heavily in favour of Crimea's immediate annexation by Russia. Vladimir Putin followed this up by signing a treaty with Crimea's 'leaders' as soon as Tuesday to rubber stamp the move.

Open Sesame

Alibaba coming

Chinese e-commerce giant Alibaba has finally ended months of speculation as to where and when it would move for a public listing by announcing that it has chosen to float in New York in a transaction that could raise up to $15bn and value the company at around $100bn. The news is a coup for New York and promises to be its biggest float since Facebook. For Alibaba it will enhance its profile outside China. The business started as a way of connecting Chinese businesses with buyers outside the country but has since developed its own retail sales business and is said to turn over $150bn-worth of merchandise a year.

Sainsbury slips

Discount threat

Supermarket giant Sainsbury laid bare the scale of the slowdown in the UK grocery sector this week when it revealed its first quarterly reversal in like for like sales for nine years, and it is considered to be doing the best out of the 'big four' mid market supermarket groups. Following on from woeful trading statements by Morrison and Tesco recently, Sainsbury put its performance down to the fact the UK grocery market is growing at its slowest rate since 2005, not helped by the late scheduling of Easter this year and compounded by the rising presence of discounters such as Aldi and Lidl.

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IPO watch

More lined up

Another raft of companies have announced their intention to float in London, marking what looks like being the strongest opening quarter to a year for initial public offerings since the onset of the global financial crisis. Among the latest to put their heads above the parapet is online takeaway service provider Justeat.co.uk, which wants to raise £100m from investors and is seeking a market capitalisation of somewhere between £600m and £900m. Others to announce their intention to float include online payment processing specialist Safecharge, plastic pipe maker Polypipe and behavioural health services provider Cambian.

UK uplift

Jobs steady

The chancellor received a pre-Budget boost with figures that showed average earnings are beginning to pick up and numbers claiming unemployment benefit are falling, although the jobless rate was unmoved at 7.2 per cent and young people continue to be disproportionately affected by unemployment with youth unemployment running at 19.8 per cent. Meanwhile, average earnings are up by 1.4 per cent on a year ago, which beat analysts expectations and suggests that wage growth will continue to close the gap with inflation, currently at 1.9 per cent. Indeed, wage growth for January was 1.7 per cent which suggests that the long running squeeze on wages could finally be coming to an end.