Greece lightening
Shares slump
After several months out of the limelight, Greece has come crashing back to the fore this week. Greek equities shed more than 10 per cent of their value in the opening minutes of trading on Tuesday and Greek government bond price spiked back upwards after prime minister Antonis Samaras called a snap presidential election. On Monday evening Greece won a two-month extension from creditors for its plans to exit its bailout programme but markets were spooked by the prospect of radical left wing party Syrzia gaining power, or at least more political influence. It is on record as opposing any more EU-inflicted austerity and is keen to withdraw Greece from the EU, or at least completely renegotiate its membership.
Germany grinds on
Activity slows
The gears of the German economy are grinding as it struggles to gather momentum. Imports into the German economy dipped by 3.1 per cent month on month in October after a 5.4 per cent rise in September, marking the sharpest decline in imports for two years. Meanwhile, German industrial output expanded only marginally, by 0.2 per cent, in October, coming in slightly below consensus forecasts and providing little cheer for those looking for a rebound in German activity after a disappointing third-quarter performance. Germany is currently giving out mixed messages with recent confidence surveys suggesting that business owners believe a rebound is around the corner but hard figures suggesting otherwise.
Retail therapy
Friday feeling
The Black Friday shopping phenomenon looks to have carved itself a permanent place in the UK consumer's psyche. Despite the unseemly scenes of shoppers grappling over televisions at knock down prices in various parts of the country, it worked for retailers in terms of eking more pounds out of consumers' pockets. After a downbeat autumn trading season, Black Friday saw an uplift in online sales especially, up 37.5 per cent on the same day last year. This helped overall November retail sales rise by 2.2 per cent or 0.9 per cent on a like-for-like basis.
Mortgage mayhem
Bank warning
Despite the recovery economy and the buoyant housing market, a significant number of the UK's home owners are still clinging on by their fingernails. That is the conclusion that can be drawn from a Bank of England warning this week that up to 480,000 home owners are at risk of falling into arrears when interest rates begin to rise. The Bank warned that a 2 per cent rise in interest rates would see the number of households struggling to afford repayments rise by a third.
Oil slick
Further falls
The oil price is showing little sign of staging a sustained recovery. This week it dipped again to near-five year lows around the $65 a barrel level for brent crude and $63 a barrel for West Texas Intermediate. And the effects are beginning to ripple through the oil and gas sector with takeover deals being pulled and companies paring back spending plans. This week BP said it would book a $1bn charge against restructuring its operations to reflect the lower oil price environment. Research this week suggested that if oil prices remain subdued almost 1.5bn barrels worth of projects planned for the next two years will be vulnerable due to being uneconomic at current prices.
Happy Christmas
Prices down
The low inflation environment is likely to provide some relief for UK consumers putting together the ingredients for their Christmas dinner this year. Helped by the supermarket pricing war, and benign inflation, the cost of many of the elements that make up Christmas dinner are lower this year that they have been for some time with a survey by Goodhousekeeping.com suggesting a Christmas meal can be produced for £2.66 per person this year. Meanwhile commodities data firm Mintec this week calculated that the ingredients of a turkey dinner have fallen in price by 5 per cent this year after a good year for crop production worldwide.
