Oil cuts
Spending threat
The precipitous oil price slide has shown no sign of slowing this week, raising fears of a clampdown on spending by the industry. With the price of a barrel of oil falling below the $50 level this week, a recovery to levels seen just six months ago looks increasingly distant. With this in mind, Moody's this week predicted that US oil exploration and production companies are likely to slash their spending by up to 40 per cent in the coming year with similar operators outside the US likely to cut spending by up to 20 per cent.
UK slowing?
Services hit
It may not be what the chancellor wants to hear, but the UK economy may be showing the first signs of slowing growth. The dominant services sector's pace of expansion slowed in December to its lowest level since the middle of 2013, registering its sharpest slowdown in three years and undershooting every analyst's forecasts. The Services Purchasing Managers Index fell from 58.6 in November to 55.8 in December. Meanwhile, the construction sector suffered a similar reversal, falling back to expansion levels last seen in July 2013 and coming in below expectations.
EU deflating
Bazooka time?
The dreaded deflation has arrived in the eurozone. Although a first fall in consumer prices since 2009 was widely expected the inflation figure of -0.2 per cent for the year to December was worse than most analysts expected and a further fall is expected next month as the effect of recent oil price falls kicks in. With concerns rising about the renewed potential for Greece exiting the eurozone should the left wing Syrzia coalition win elections there later this month, pressure will intensify on European Central Bank chief Mario Draghi to deploy the 'big bazooka' of full blown quantitative easing with the buying of sovereign debt, possibly as soon as the end of this month.
Rolling on
Strong sales
High rollers are clearly reviving their love of the Rolls-Royce. Last year the BMW-owned luxury car marque recorded its best ever sales figures when it delivered 4,063 cars, 12 per cent higher than the previous year and an impressive fifth straight year of growing sales. The US is Rolls' biggest market, followed by China, the United Arab Emirates, the UK and Saudi Arabia. Meanwhile, over the pond, the more affordable car brands have also enjoyed a revival with General Motors, Ford and Fiat Chrysler all reporting strong end of year sales. Notably, SUVs are back on the consumer's wish list in the US where lower oil prices are tempting people back to gas guzzlers with the light trucks segment outselling cars in every month during 2014. In the UK, new car registrations rose to a 10-year high of 2.5m last year.
Housing droop
2015 fears
The UK's soaraway housing market could come down to earth with a bump in 2015. Research from the Centre for Economics and Business Research this week predicted that UK house prices will fall by 0.6 per cent over the next year as greater supply, less foreign buyers and uncertainty around the general election are all likely to weigh on the market. Once again, London is likely to lead the way with a fall of 3.3 per cent predicted after 2014's 16.8 per cent gain. Weak mortgage data of late would seem to back up the CEBR's claims although other commentators are preferring to call a calming of the market rather than outright reversals in property value.
Retail retreat
Sellers rule
UK retail investor confidence in equities slumped during the final months of 2014 as investors became net sellers in numbers not seen for years. According to Capita Registrars £9.1bn worth of equity sales were recorded in the final quarter of the year with reversals across all stock market sectors with overall turnover at its highest in three years. Private investor share holdings fell by £17.7bn between September and November to £224.2bn, reducing the proportion of the UK market in private hands from 11.5 per cent to 11 per cent.
