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16 November 2015 |
The tragic events of Friday’s terrorist attack in Paris have been at the forefront of conversations as the world remains in a state of shock. Here at the City Careers team we would like to pass our condolences onto all those who have been affected by these events.
After outlining his demands from the European Union last week, one of the major topics David Cameron chose to discuss is the issue of immigration. The six-page letter to the European council’s President Donald Tusk, outlines the immigration issue when stating that, ‘The UK believes in an open economy. But we have not got to be able to cope with all the pressures that free movement can bring- on our schools, our hospitals and our public services. Right now, the pressures are too great.’ Actions regarding European immigration with demands from all corners of Europe still remain to be seen and properly discussed; it will no doubt form a major topic of discussion at the December meeting in a few weeks.
In other news, the fallout of Friday’s tragic events in Paris has resulted in much speculation regarding migrants into the country. France who declared a state of emergency on Friday following the attacks has tightened its border controls and it remains to be known when these restrictions will be lifted. The Economist reports Bavarian Prime Minister Mr Seehofer’s non-surprising comments stating that ‘stronger control of Europe’s external borders, but also of national borders’ were needed as a matter ‘of restoring law and order in Europe’ as he remains a supporter of tighter border controls.
European growth has once again slowed since quarter 2 of 2015 to 0.3%, an overall weaker outcome than the predicted 0.4%. The Economist predicts that when the ECB meet in a few weeks, that the bank’s President Mario Draghi and the council will not only loosen policy in December but also ‘do more to enhance and activity and to revive inflation.’ This now brings into question as to how much the European Central Bank can do to revive growth as conditions within the Eurozone have not been that challenging. The recent months have seen low energy prices, tax cuts and cheap lending through low interest rates in addition to the depreciated Euro which has generally helped with exports from the single currency market. It remains to be seen firstly what further action can be taken from the ECB and whether this will be affective or will the Eurozone fall once again into a recession?
In other news this week the long awaited demands from David Cameron regarding the EU reformation have been announced. The Guardian reporter Ian Traynor comments that the ‘Prime Minister is likely to be successful on sovereignty and competitiveness, but immigration and welfare will be the toughest nut to crack.’ It will be interesting to see the European Union’s response in December to Cameron’s demands; in the meantime the fate of the UK and the European Union still remains questionable.
The name ‘Northern Rock’, one which filled much of the public with fear after being the first bank to fall in 2007 marking the beginning of the recession, has hit the headlines again this week after ‘the government has sold £13bn of former Northern Rock mortgages that taxpayers acquired during the financial crisis’ reports the BBC. The deal according to the BBC is the ‘largest financial asset sale’ to date by a European Government after US investment firm Cerberus bought the assets. For more information on the government’s assets and Northern Rock see further reading.
In other business news, the Marriott International and Starwood Hotels have merged after Marriot acquired the American hotel and Leisure Company for 12.2 billion dollars, the largest hotel company deal on record. According to the BBC the combined firms ‘have more than 5,500 hotels with 1.1 million rooms and $2.7bn in revenue.’ For more information on this deal please see the further reading.
The FTSE 100 closed at a six week low on Friday according to the BBC which reports that it ‘closed down a further 60.40 points or 0.98%.’ The BBC analyses the market activity focusing on Rolls-Royce and the mining industry. See further reading for more information on this story.
Speculation over the housing market has received much attention this week as it remains debated as to whether high house prices are sustainable. Bloomberg comments that ‘U.K. house prices dipped in November as the market began to cool before Christmas, though gains will resume as real wage growth continues and borrowing costs stay low, according to Rightmove Plc.’ On the other hand, The Bank of England’s Chief economist Andrew Haldane commented according to the Daily Mail at the Trade Union Congress that ‘'The housing market is broken. There is a chronic and accumulated imbalance between demand and supply, and it is that which is sending skyward - and has sent skyward - house prices.’ It will be interesting to see what the New Year brings in concern to house prices and whether in particular the South East of England are living in a price bubble.
Since Friday the media has been exploring many different avenues with regard to the Paris Terrorist attacks with immigration already mentioned in today’s headlines. Another major issue that the events have given discussion over is the new methods that the Islamic State is using and whether countries have the means to protect themselves. Moreover, as countries have expressed their condolences and support for France it remains questioned whether military support will be given in Syria following Friday’s attack in particular from Britain.
In other global news, Japan’s economy has entered recession again after it shrank by 0.8% in quarter three according to the Economist. This has led to criticism of Abenombics, the economy policy adopted by Japan which the Economist explains has ‘three “arrows”…fiscal pump-priming, monetary easing and structural reform—have missed the mark: this is the second recession of his tenure, which isn’t three years old’, as this is the second time that the policy has failed. With both Japan falling into recession, European growth falling once again and China’s economy slowing, optimistic prospects for the world economy are questionable.