New Chancellor Phillip Hammond delivered his first round up of the economy this week as official figures showed a narrowing deficit. UK retail figures have taken a turn for the worse though, with June delivering the largest month-on-month drop in sales this year. Elsewhere, Easyjet fell to the bottom of the FTSE 100 as sterling turbulence and airport closures take effect.
Brexit blues subside
The FTSE 100 continued its post-Brexit bounce this week, closing above 6,700 points on Wednesday for the first time in 11 months. It was also good news for the more domestically exposed FTSE 250, gaining more than 5% by Thursday’s close.
Strong jobs data played a part in this. The Office for National Statistics reported that the unemployment rate had fallen to 4.9% in the three months between February and May – its lowest level for almost 11 years. During that period, 1.65 million people were out of work – down 54,000 on the preceding three months. The last time the number was that low was in 2008. There was also some encouraging news on wage growth, rising for the first time since February.
Of course, all of this heartening data predates last month’s referendum. But there was some post-Brexit comfort too. A Bank of England (BoE) report issued on Wednesday said that there was “no clear evidence of a sharp general slowing in activity.”
The FTSE 250s’s standout performer was William Hill, jumping more than 10% on Thursday alone as long-term employee and CEO, James Henderson, stepped down. The beleaguered bookmaker has struggled to revive its online business while an exodus of senior staff and profit warnings have shaken investor confidence. Henderson clearly realised the odds were stacked against him; the market evidently agreed.
Keep calm and carry on
After falling heavily at the start of the week, sterling rallied on Wednesday and Thursday, recovering some ground against both the dollar and euro. The pound was helped by Kirstin Forbes, one of the BoE’s rate-setters, who said that she was in no hurry to cut interest rates. “I believe this is a good time to ‘keep calm and carry on’,” she wrote. Theresa May appeared to adopt the same stance as she visited European leaders in her first full week as Prime Minister.
And finally …
Pokemon Go continues to dominate news stories and social media as Nintendo saw its market value soar past Sony this week. Downloads for the game have hit record figures as players around the world have become fixated on catching these virtual creatures.
The phenomenal success of Pokemon Go has also seen Apple benefit. Shares in the company are trading +5% since the release of the game earlier this month, while Wall Street analysts predict the tech giant could generate US$3 billion in revenue over the next 12 to 24 months.
This Pokemon hunting isn’t all fun and games though. Various reports have emerged of voyages to find the elusive Pikachu going wrong, with one American man crashing into the back of a stationary police car after celebrating a catch. Go figure.
Image credit: Bloomberg / Getty Images