Week ended 22 November 2008 – More job losses in an economic slump

Posted by admin on 22 November, 2008 under Weekly business news summary | Be the First to Comment

This week saw Citibank announce 52,000 job losses after reporting a £13.3 billion loss and 10,000 of those will be in London.

The world stock markets saw another turbulent week with the London FTSE 100 down by 10.6% this week and the Dow Jones by 5.3%, although the Dow was saved at the end of the week by a rally on Friday of 6.5% on the news of Barack Obama appointing his treasury secretary Timothy Geithner.

Do you fancy buying a household name for just £1!

This is the price that restructuring specialists Hilco were prepared to pay for Woolworths this week, as we see another household name in trouble. Woolworths is in discussion with its banks to avoid going into receivership after suffering huge losses with first quarter losses extending to over £90 million. Woolworths has been struggling for some time, but with recent economic events and a further downturn on the high street the company has arrived at a tipping point!

Tax cuts now for tax rises in the future!

The UK’s Chancellor, Alistair Darling, is about to announce his tax cutting and public spending increasing budget in order to boost the UK economy. Mr Darling is looking at spending his way out of economic gloom, but the tax cuts will be short-lived and with Government borrowing at extremely high levels and having risen by a further £1.4 billion in October.

Bucking the high street trend

There are two companies that have bucked the trend this week with Mothercare reporting a doubling on profits this week to £9.5 million over the same period last year and GAP have increased net income to $246 million, up from $238 million last year. GAP’s sales were down by 8% though and the net position was improved due to a cost cutting exercise.

Oil remains volatile

The barrel price of oil remains turbulent this week with the price dropping below $50 a barrel this week for the first time since 2005. Opec are looking to make further cuts in oil production in order to shore up the barrel price, as Opec member oil producers are feeling the pinch after seeing the price of oil fall by nearly 66%.

Inflation on its way down

This week saw some good news on the inflation front from the UK after it fell by more than expected to 4.5% from a high of 5.2%. The Bank of England have hinted at further interest rate cuts to the UK’s base rate though and Treasury Select Committee chairman, John McFall has said that banks must start lending or face nationalisation.

End of the week saw:
Stock exchanges:
FTSE 100: 3,781
DOW: 8,046
S&P: 800
Nikkei: 7,911

Currencies
UK Sterling £ to US Dollar $ 1.48129
UK Sterling £ to Euro € 1.18366
UK Sterling £ to Aus $ 2.36933
US Dollar $ to Euro € 0.799070

Commodities
Nymex Crude oil – $50.29
Gold – $801.80