Vienna played host to both oil ministers and European Central Bank’s (ECB) delegates for meetings in the Austrian capital this week. In the UK, the upcoming European Union (EU) referendum continues to dominate headlines while BHS and Austin Reed – two long-standing high street retailers – will finally shut their doors to the public after the liquidators are called in.
Slippery slope
The Organization of Petroleum Exporting Nations (OPEC) – the world’s most influential oil producing group – met in Vienna on Thursday. With 13 member states, many of whom have conflicting economic needs, the group is finding it increasingly difficult to agree on a new output ceiling. According to Aberdeen Asset Management Investment Strategist Bob Minter “This should have been an easy meeting to re-establish OPEC relevance but they missed the opportunity.”
Mario holds
The ECB also met in the Austrian capital this week, on one of its ‘away days’ from the usual Frankfurt base. The Bank held interest rates at record lows, while edging European growth forecasts up 0.2% to 1.6% for 2016. Athens has been left frustrated by the decision not to welcome Greek bonds back to the fold, while ECB president Mario Draghi confirmed the Bank will begin purchasing corporate bonds from next week. The bond buying programme is designed to push yields further down, in the hope that this will stimulate both lending and inflation in Europe.
Boris versus Cameron
Boris Johnson and David Cameron continue to battle it out ahead of the UK EU referendum vote on 23 June. The Remain campaign, led by the prime minister, looked to have a significant lead until earlier this week before various opinion polls placed the Leave campaign ahead. The move led to a slump in sterling slump from a one-month high, while bookies have also slashed the odds for Brexit from 4/1 to 11/4. UKIP leader Nigel Farage has also put his money where his mouth is, publicly placing a £1,000 bet on Britain voting to leave.
Farewell to BHS
Department store BHS is set to be wound down after a protracted bidding process for the business ended in failure. Around 11,000 jobs will be lost. The simultaneous demise of suits specialist Austin Reed has led some to question whether the UK high street is in terminal decline.
There is good news though for controversial taxi company Uber. In its quest to build a global empire, Uber – Silicon Valley’s most valuable private business – has turned to the Middle East for its biggest infusion of cash from a single investor. The $3.5 billion it raised from Saudi Arabia’s Public Investment Fund means Uber is now valued at $62.5 billion.
And Finally…
Mark Carney, the Bank of England governor, announced the launch of a brand new plastic £5 note. Beneath the surly wartime portrait of Winston Churchill is the man’s 1940 pledge, promising Britain that “I have nothing to offer but blood, toil, tears and sweat”.
In true Churchillian tradition, Carney praised the note’s ability to “survive a splash of Claret, a flick of cigar ash, the nip of a bulldog, and even a spin in the washing machine afterwards to boot”.
