Below are our top 10 stories that you need to know about. Be sure to check our twitter page for regular posts of important headlines. Click on the links below for full stories.
Opinion articles of the week:
Global debt is so high that some analysts believe that the global economy could be stuck in a ritual of fiscal measures by central banks for the foreseeable future. Click here to find out more.
Dutch Scientists have found a way to replace non-biodegradable conventional plastic with a fungus, which analysts believe is the next major threat to oil companies. To find out more about “bioplastics” click here.
Hitachi boss deemed that a “Brexit” is “ridiculous”. Click here to find out why.
1. VOLKSWAGEN WOES
It has been a tumultuous week for German car manufacturer Volkswagen, to say the least. Their woes began when it transpired that 11 million vehicles manufactured by Volkswagen had been fitted with a “defeat device”. These devices essentially allowed them to cheat on diesel emission tests. The emissions of their affected diesel cars are significantly higher than the levels found in the tests and the levels of emissions advertised. (RT)
On Wednesday, former CEO Martin Winterkorn resigned and on Friday Matthias Mueller was named as Volkswagen chief executive (BBC News). He hopes to improve the transparency within Volkswagen. The scandal has led to a 34% fall in Volkswagen share prices. Additionally, this fall has cost Saudi Arabian sovereign wealth fund Qatar Holdings $3.3 billion who hold 17% of Volkswagen shares. (The Telegraph). Furthermore, other car manufacturers have also come under scrutiny as a result. BMW’s share prices rose however, when they announced that their emission test results were in fact accurate (Business Insider). The legal issues to be faced by Volkswagen in the coming months will be substantial, click here to find out more.
2. ALEXIS TSIPRAS WINS GREEK ELECTION
Greek Prime Minister Alexis Tsipras, leader of the left-wing Syzria party was re-elected on Monday. The Syzria party gained 35% of the votes, short of a majority, so it will renew its coalition with the nationalist Independent Greeks who gained 28% of the votes. The austerity measures imposed on Greece as part of a number of bailout agreements arranged earlier this year to prevent a “Grexit” made him unpopular with some of his left-wing MP’s and associates. He initially rose to power with an anti-austerity mandate before he was required to agree to stringent bailout terms for Greece earlier this year. (BBC News) For more on the election and Tspiras’ plans click here.
3. UK GUARANTEES £2 BILLION NUCLEAR DEAL WITH CHINA
The UK has announced its deal with China for a £2 billion investment in Hinkley Point nuclear power station. The project is managed by EDF who delayed the construction earlier this year due to financial reasons but has welcomed the new investment. George Osborne claims it would also enable greater collaboration between Britain and China on the construction of nuclear plants. For more on the deal and the economics of nuclear power click here. (BBC News)
4. EU PLEDGES ONE BILLION EURO TO UN AGENCIES
The European Council has pledged €1 billion to UN agencies to help set up camps for Syrian refugees in order to ease the flow of immigrants into the EU. The money will go towards creating “hotspots” which will be special receptions for immigrants at the EU’s external borders. Although it is good that the European Union has recognised that the level of immigration into Europe is unsustainable, many analysts claim that this does not even begin to address the fundamental issues that force immigrants to seek asylum in Europe. (RT)
5. GOVERNMENT SELLS OFF LLOYDS SHARES
George Osborne announced that the government has sold a percent of its shares in Lloyds Banking Group. This reduced the governments share in Lloyds to under 12%. The sell-off began last December and has raised £15 billion. The government provided £20.5 billion worth of tax payers’ money to bail out Lloyds during the financial crisis of 2008. Lloyds’ shares rose by 1.3% as the news broke. (City A.M.)
6. LOW OIL PRICES PUT $1.5 TRILLION WORTH OF OIL PROJECTS IN THE RED
A report released by an energy and mining consultancy has stated that the upstream oil and gas sector (exploration and production) needs to become more efficient and hope for a rise in oil prices or else the consequences may be catastrophic. There are over $1.5 trillion of uncommitted spend on new conventional projects that would be unprofitable to continue with at current prices. Oil prices have recently stagnated at around $45-50 a barrel. There is no doubt that oil companies will continue to keep cutting the most inefficient parts of their company which may lead to a substantial number of job cuts (Business Insider). In the UK alone, the fall in oil prices and the drive for greater efficiency has led to over 65,000 job cuts in the oil industry in the last 20 months. (BBC News)
7. RSA ACQUISITION FALLS THROUGH
Swiss Insurance Company Zurich has announced its decision to abandon its plans to acquire Royal Sun Alliance for an estimated £5.6 billion, causing both Zurich and RSA share prices to plummet. Zurich claims it is abandoning the bid after its own performance was affected by a number of issues, including losses associated with the explosions at Tianjin in August this year. (City A.M)
8. OPERATION PRICE FOR MOBILE SERVICE PROVIDERS TRIPLES
The government have increased the amount they will charge mobile service providers to use airwaves space in the UK from £64.4 million a year to £199.6 million a year. Mobile operators are reviewing the plans which will come into full force in October 2016. There is a high chance that this price hike may significantly affect consumer mobile tariffs in coming years. (BBC News)
9. SMALL BUSINESS GROWTH AND OPTIMISM ON THE UP
A recent survey found that 88 per cent of small businesses had grown revenues so far this year – up from 43 per cent last year. (City A.M) There is undoubtedly a growing sense of optimism amongst entrepreneurs, as 44 per cent of the entrepreneurs asked in survey thought now was a better time to start a business in Britain than three years ago. There are a number of reasons for this growth in optimism such as a stronger global economy, increasing consumption and a growing initiative for banks to lend more to SME’S (Small to Medium Enterprises). For example, earlier this year, HSBC announced its plans to set aside £8bn to lend to small and medium-sized businesses in the UK (City A.M.).
10. RENEWABLE ENERGY ON THE RISE
According to a recent study, wind, hydro and solar plants generated 25.3 percent of the country’s power in the three months through June. Although this news is environmentally positive, the UK Energy Secretary Amber Rudd has announced cuts to a number of incentives for renewable energy. Due to unexpectedly high installation levels, the current incentive arrangement would be financially unsustainable in the long run. Despite this however, the government hopes renewable energy will produce over 30% of the country’s power by 2020. (Bloomberg)