Every week we bring you the world’s biggest travel, business and currency exchange news. This week: Fed rate rise in the US (but not the UK), budget flights, Toronto housing, and Canada Goose.
Fed Rate Rise
As expected the US Fed raised its benchmark interest rate on Wednesday by a quarter of a point to a range of 0.75% and 1%. It is the third rate rise since 2015. Raising rates makes borrowing money more expensive, lower rates make borrowing cheaper which boosts the economy. Leaving rates too low for too long can lead to bubbles, or even high inflation (given enough time). Waiting to raise rates would potentially mean having to raise them rapidly and risking a ‘shock’ to the US economy. The rate rise means that the Fed believes the economy is heading in the right direction. Last month the US added 235,000 jobs, and reduced unemployment to just 4.7%. Higher rates also mean a stronger USD.
Barca to Buenos Aires
British Airways is launching a budget airline for long-haul flights based out of Barcelona the flights will arrive in destinations including Los Angeles, Punta Cana, Buenos Aires, the Dominican Republic and Oakland. The airline will use two Airbus A330 plans and use Iberia crews. Fares are expected to cost just 99 EUR each way. Flights begin in June.
UK Interest Rates
The Bank of England did not follow the Fed’s lead, opting instead to keep interest rates at just 0.25%. However one member of the Monetary Policy Committee, Kristin Forbes, did vote to raise rates making it the first non-unanimous decision since last July – indicating a rate rise may be on the cards in the future.
Toronto House Prices
The Canadian Real Estate Association released a report that the average GTA house costs $727,300 as of February – up 23% in the last year. Analysts from both TD and BMO say that the prices are cause for concern as even people with high incomes are being priced out of the city.
One of the biggest stories this week was Canada Goose’s stock market debut. Shares were offered at $17 each in the IPO, launched at $23.86 on the TSX and. In NY shares started at $18 and closed at $16.08. The company, famous for its fur lined hoods is equally popular with people who have to face cold weather, and just cool people. The company has a revenue of $290.8 million and a net income of $26.5 million as of 2016.
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