Every week we bring you the world’s biggest business, currency, and travel stories. This week: Uber will begin testing driverless cars, the Bank of England’s bond buying program is back on track, oil prices could rise thanks to newly proposed talks, inflation in Canada falls short of expectations, and real estate sales are down – but prices continue to rise.
Uber intends to begin testing self-driving cars in Pittsburg in the coming weeks. Each car will have a backup human driver and any passengers that volunteer for the program will be rewarded with a free ride. Ford also announced that it was in the process of developing a fleet of automated vehicles for a new ride-hailing fleet in 2021.
BoE Back on Track
Last week the Bank of England struggled to reach its bond buying target for the first time in almost 8 years. This week’s round of quantitative easing (QE) was far more successful. The British central bank hit all of its targets, and the program looks to be back on course. Whether the expanded QE program will be enough to offset the economic damage of Brexit remains to be seen. QE, combined with low interest rates, could boost the British economy but also devalue the pound in the process.
Saudi Arabia has hinted that it may seek to renew discussions with non-OPEC oil producers to slow or freeze output in order to raise prices. Low oil prices have expanded the market share of countries with oil reserves that are cheap to exploit, but seriously hurt countries that rely on more costly oil extraction techniques. Canada in particular has been hit hard by low oil prices. A similar discussion which would have included Saudi Arabia’s regional rival Iran failed to reach an agreement in April. Iran, which is heavily reliant on oil, refused to agree to cut production.
Inflation in Canada fell to 1.3% last month, down from 1.5% in June according to Statistics Canada. Economists had predicted a drop of about 0.1% to 1.4% inflation, but weaker than expected retail purchases depressed prices. Gas prices also fell by 5.6% in July, down 14% year on year. High inflation lowers the value of currency, but low inflation can be a sign of a stagnant economy. The goldilocks figure is usually considered to be around 2%.
Sales down, prices up
Home sales in Canada fell in July for the 3rd month in succession. According to the Canadian Real Estate Association, home sales dropped by 1.3% from June to July, while the number of houses on the market rose by 1.2%. Year on year house sales are down 2.9%. In Greater Vancouver sales have fallen 21.5% since hitting a crescendo in February. Despite falling demand, prices are up 32.6% year on year. On August 2nd Vancouver implemented a new controversial 15% foreign home buyers tax to make housing more affordable – but it is too soon to tell what impact the tax will have on the housing market.
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