Davos dichotomy
The Davos meeting of the great and the good of the global political and financial worlds kicked off this week with a huge dump of snow greeting world leaders as they arrived in the Swiss mountains. The meeting occurred amid conflicting narratives. The Davos organiser, the World Economic Forum, warned that a fixation with GDP growth among global leaders was harming attempts to address inequality within the global economy. This was backed by Oxfam reporting that just 42 of the wealthiest people in the world hold as much wealth as 3.7bn people, or half the global population. At the same time, global leaders were expressing their delight at the International Monetary Fund upgrading global GDP growth forecasts for this year to 3.9 per cent on the back of the “broadest synchronised global growth upswing since 2010”.
Pets at Home purrs
Despite closure news
Pets at Home was popular with investors this week despite news that it was closing down its upmarket dog grooming business, Barkers, at a cost of £2m. The Barkers brand, which encompasses seven stores, launched just four years ago but the cost of renting often pricey high-street shops means it remains unprofitable. The 55 staff will be offered roles within the rest of the Petsat Home business. Meanwhile, the rest of Pets at Home is performing well, with like-for-like sales up 7.2 per cent in the12 weeks to 4 January.
easyJet soars
Monarch bounce
Budget airline easyJet had been suspiciously quiet on the effect of the collapse of rival Monarch last autumn, but it appears that the suspected bounce in passenger numbers has come through after all. The three months to December 2017 produced a 14 per cent bounce in sales at easyJet as it transported 18.8m passengers, up 8 per cent against the same period a year earlier. Last year was a difficult one for rivals as Monarch went bust, Alitalia also finally entered bankruptcy and Ryanair suffered due to a high-profile pilots strike, while Air Berlin also went under – with easyJet snapping up some of its operations.
Sterling strengthens
US governmentshutdown helps
With Brexit still adding to uncertainty over the UK’s future economic direction, it is slightly surprising that sterling has proved to be among the strongest performing currencies since the turn of the year. In the past few days it has regained its long-standing ‘floor’ level against the US dollar of $1.40, helped by ongoing weakness in the greenback which was exacerbated by the brief shutdown of the US Federal government this week when budget talks failed.
Sky sale scuppered
Plurality concerns
The Competition and Markets Authority (CMA) highlighted media plurality concerns this week when it delivered its provisional findings on Rupert Murdoch’s attempt to bring 100 per cent of Sky under the 21st Century Fox umbrella. The regulator said the proposed deal was “not in the public interest” given the strong position it would give the company in the UK news market and that the Murdoch Family Trust would have “too much control over news providers in the UK across all platforms” should the deal complete. The CMA did suggest remedies such as the sale of the Sky News operation, which may sway its judgement, but the final say lies with culture secretary Matt Hancock.
Supermarkets slash jobs
Tesco, Sainsbury cuts
Despite signs of significant improvement in trading conditions for the UK’s grocery sector over recent months, two of its biggest players have this week announced significant job losses as they continue to strive for lean and efficient operating models. Tesco, as part of chief executive ‘drastic’ Dave Lewis’s £1.5bn cost-saving drive, stripped out a layer of management roles, which could amount to 1,700 job losses.
Tesla tie-in
Musk incentivised
Elon Musk, the high-profile chief executive of US electric car giant Tesla, is set to be awarded a new pay deal that will reward him handsomely – but only if he manages to keep the business on a parabolic upwards path. Mr Musk’s last pay deal was predicated on meeting ambitious production figures for its cars, although the latest quarterly output figures for its Model 3 proved disappointing. Now the company looks set to hand Mr Musk some equally demanding revenue and profit targets with a 10-year deal in which he will receive no pay. But if he remains in an executive position and increases the market cap of Tesla from £50bn now to £650bn over that time, he will receive a bonus worth $55.8bn.
UK employment rose to its highest level since records began during the three months to November.
There were 32.21m people in work, 102,000 more than for June to August 2017 and 415,000 more than for a year earlier. That meant the UK employment rate – the proportion of those aged between 16 and 64 who were in work – stood at 75.3 per cent.
The number of people unemployed remained at a similar level to the prior quarter at 1.44m, but this was a reduction on the same time the previous year.
