Oil's slick
New lows
Oil has plumbed new depths in its slide this week after dipping below the $60 a barrel level in intraday trading on Tuesday. This has fuelled the doom merchants, who are beginning to suggest oil is on its way back down as low as $40 a barrel, a level which would place serious strain on a number of economies should the prophecies of doom be fulfilled. On the flipside, the low oil price is a boon for those economies that are net importers of the black stuff, and should also provide a boost for consumers as it feeds through to cheaper prices.
Tesco relief
No longer worst
After its annus horribilis, Tesco's fortunes may finally be turning, at least in the war of attrition still raging in the aisles of the UK's supermarkets. The latest Kantar Worldpanel data for the sector suggests that Tesco has been usurped as the worst performing supermarket, indeed the giant put in its best performance in the second half of 2014 in the most recent period covered by Kantar data. Tesco sales dipped by 2.7 per cent in the 12 weeks to 7 December, improving from its 3.7 per cent slide the previous month. Morrison has taken on the mantle of weakest supermarket, having seen its sales slide by 3.2 per cent. Aldi and Lidl's combined market share has risen to 8.6 per cent as their rapid growth continues.
Deflation threat?
Another fall
The slump in the oil price is having a profound effect on inflation around the world, none more so than in the UK. The annual rate of inflation fell to 1 per cent last month, undershooting expectations that it would dip to 1.2 per cent and exactly half the level of the Bank of England's target rate. This represents the lowest level of inflation the UK has seen for 12 years and recent forecasts from the Bank of England suggest it will dip below the 1 per cent level early next year, especially if the lowly oil price persists.
Stressed out
Co-op fails
If you thought the UK's banking sector was well on the road to recovery, think again. That was the message from stress test results published on the UK banking sector this week. But the Bank of England's tests were particularly harsh, scenarios included a 35 per cent slump in house prices, the pound falling 30 per cent, unemployment doubling and inflation surging out to 6.6 per cent, and also took a snapshot of bank balance sheets from the end of last year, there have been 12 months of further repair to bank finances since then. Even then, only the Co-op Bank failed the tests outright, although RBS and Lloyds could hardly have been said to have passed with flying colours.
Aiming high
New floats
Right at the death, the Alternative Investment Market (Aim), looks set to confirm the float of the biggest company to come to the junior market this year. Market Tech, the property company owned by Israeli entrepreneur Teddy Sagi, which holds significant proportions of Camden Market, raised £100m from investors this week. This will give the company a market value of £750m when it starts trading next week. Despite a disappointing year in terms of the wider Aim index's returns, the flow of new companies joining Aim has remained pretty healthy and, with 75 new entrants at the time of going to press, has surpassed last year's efforts.
See page 10
Wage relief
Hope for 2015
The combination of a sliding inflation rate and recovering economy means that UK workers could finally be heading for a sustained period of wage growth. The chancellor would have been privately celebrating this week on news that real wages rose by 1.6 per cent in the three months to October compared with a year earlier, with a 1.8 per cent rise in October itself. With inflation dipping to 1.3 per cent in the same time period, wages have finally surpassed inflation after many years of shrinking real pay packets. With inflation forecast to moderate further in the coming months, this could finally prove to be the turning point for UK workers.
