Friday 16 November 2012

Abchat Weekly Wrap-Up: Peaks and troughs, it's the economy...

Output forecasts are back to being gloomy according to Sir Mervyn King, when he gave the Bank of England’s Q3 Inflation Report on Wednesday 14 November. The rate of inflation will remain above the Bank’s target of 2% meaning our growth will remain sluggish for the foreseeable future. Mr King’s prognosis was that of an unpredictable situation where by the zigs will not be as positive as some say, and the zags not as bad as others say.

GDP in Britain actually grew 1% in the three months through to September, but Mr King said this was owing to the Olympic Games in the Summer which cannot be used as a reliable economic indication. The Country is certainly feeling the post-Olympic slump right now!

Also as mentioned above, inflation had not slowed as much as the Bank of England had hoped, making recovery more difficult. Higher prices, pay freezes and tighter lending have squeezed the British household’s wallet to spending less. This is in part due to the uncertainty of the state of the European economic situation, our biggest export market, meaning companies are unwilling to invest more and  less willing to pay more to their staff, meaning the British public has less to spend… You can see the trend here!?!?!

Mr King has left the door open to more quantitative easing; the BoE’s stimulus which included buying bonds to inject some capital in the economy. He also alluded to the fact the Bank will not be increasing its benchmark interest rate, currently at an all time low of 0.5%, as it would definitely slow recovery.

Mr King is not know to be a mindless optimist, in fact he is far more of a pessimist, so yesterday’s findings and forecasts can be viewed as reasonably encouraging as he was not predicting us to fall further into the economic and political abyss.

The unpredictability of the UK and World economy at the moment is quite daunting, but one thing that can be guaranteed is the British will maintain their stiff upper lip throughout.

  • HSBC, Britain’s biggest bank and the world’s ‘local bank’, have become one of the latest victims of whistleblowing. The UK’s tax authorities HMRC have obtained details of all of the bank’s 4,388 Jersey customers. The Telegraph suggests the list is to be heavily dominated by senior City figures and include celebrities such as James Blunt.

  • October figures reveal a surprising jump in UK inflation. With the rate rising to 2.7%, it marks a 5 month high, with increases in foot prices and tuition fees assisting the sharp increase.
  • The big six energy giants have come under fire this week as allegations emerge over price-rigging the wholesale gas market. Following the information supplied by a whistleblower, the FSA and energy regulator Ofgem have launched an official investigation.

  • STOCKWATCH: As Vodafone revealed their half year results on Tuesday morning, their shares took a 4.5% tumble. The Company reported disappointing figures for the first half of 2013, blaming a weakening in the macroeconomic environment. However, despite the decrease, the Company maintained its pledge to lift dividend payout.

Abchurch hosted the launch of the FSE Group and Social Finance’s Social Impact VCT, featuring keynote speaker Wol Kolade of ISIS Equity Partners. See our Social Impact VCT Launch event review for more.

Abchaps hosted three Market Lunches this week, two in London, one focused on Digital Media and the other on Cleantech, and the third by our office in Leeds.

ur team caught up with finnCap at their drinks reception, and with Smith & Willamson at their evening reception for up and coming young professionals.

WH Ireland has announced that it has appointed Richard William Killingbeck as an Executive Director, with effect from 1st December.

The merger of Singer Capital Markets and N+1 Brewin has now been completed and the combined N+1 Singer team recently moved into their new offices at One Bartholomew Lane. We look forward to catching up with the team.

"Tombstone" A newspaper or magazine advertisement showing the parties involved in an acquisition, merger, new issue, large syndicated loan, or other major financial deal

Somerset House ice rink opens this evening for it’s winter season. The stunning 900m rink will be open until 6th January 2013. Tonight Dimitri From Paris & Ministry of Sounds residents Cosmonauts are kicking off the festivities.

The Christmas Market on the Southbank also opened today, showcasing German handicrafts and fare.

The London Jazz Festival ends on Sunday. See some of the best Jazz acts in the world with over 250 shows across London.

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