By DUNCAN SCOTT 10/09/2010
A round up of the latest major economic news and developments from the last week.
Interest Rates held at record lows
The Bank of England’s Monetary Policy Committee (MPC) held rates at record lows of 0.5% for a consecutive 18th Month. Continued and expected fragility in the economic recovery has meant almost unanimous conviction in retaining the interest rates at their historic low rate; the single dissenter on the MPC being Andrew Sentence for the third month in a row. The uncertainty surrounding the economic recovery is further underlined by continued strength in UK Government gilts and the corresponding Yields hitting their lowest levels in 20 Years.
The downfall of Connaught
This Week saw the demise of Connaught (the property services behemoth) in the biggest UK casualty of the recession since Woolworths. There was, however, a small silver lining as the £28m sale of Connaught’s social housing unit to Morgan Sindall as it looks to have saved 2,500 jobs from its 10,000 strong workforce. The primary causes of the downfall appear to be numerous loss-making service contracts and the austerity measures taken by the coalition government. The company issued a stark profits warning in June on the back of the deferral of 31 contracts due to government cuts, prompting a 90% drop in the share price to-date and its subsequent downfall.
Barclays appoint a new CEO
Bob Diamond’s appointment as the new Barclays Chief Executive this week has prompted fears of a return to a pre-crisis “casino style” banking culture owing to his previous position as Head of BarCap (Barclays Investment Banking Division). Diamond has been described by Peter Mandelson as “the unacceptable face of banking”. However, his deal making influence over the bank may be somewhat tempered by the appointment of a stronger board of directors; at the behest of large Institutional Investors, the Telegraph reports. Bob Diamond’s penchant for deal making led him to orchestrate Barclays purchase of Lehman Assets post-administration which has been roundly hailed as a shrewd investment in the city and his appointment has been generally well received.
And Finally,
German officials took to raising awareness of unhealthy eating in a new bizarre way this week. They are concerned by the level of obesity stemming from the fast food Currywurst (curried sausage) and have this week opened a 1.5 mile long labyrinth in the shape of the popular sausage to educate people on the ingredients used and its effects. Visitors are asked questions along the way and led down wrong paths if they answer incorrectly, presumably doubling up as an exercise workout.