Every week we bring you the world’s biggest travel, currency, and business stories. This week: higher than expected growth in the US and Canada, Via Rail goes off the rails, Barcelona to regulate tourism, Article 50 is triggered by the UK, and inflation in the EU is lower than expected.
Canada’s economy grew by an annualised rate of 2.3% in January according to Stats Canada, but already some economists believe that the figure should be revised upwards. GDP grew by 0.6% in January, double what the experts had predicted. And Doug Porter told the CBC that he was revising his estimate for the year to 3.5%.
This week Via Rail announced that travellers between the ages of 12 and 25 would be able to travel as much as they wanted for just $150 in the month of July. The promotion proved to be a success and failure in equal measure for the company. The popularity of the campaign meant that Via’s site crashed almost immediately, and realising they had miscalculated, the company decided to limit the number of tickets to 1867. On Facebook and social media many people above the age of 25 also complained that the deal was “ageist”. Via’s popularity has been limited by its high prices which often make travelling by plane, car or bus more affordable.
Two months ago the Barcelona city council passed a motion putting a moratorium on all new future hotels, hostels, and tourist apartments. Now they are implementing a “Strategic Tourism Plan” which will further regulate the industry. Barcelona, a city of just over 1.5 million, sees over 30 million tourists pass through each year. The concern is that Barcelona could become a museum city, full of tourists during the high season, and dead the rest of the year as locals are being priced out of the best neighbourhoods. With no signs that the number of visitors will decrease, expect to pay higher prices in the future to visit Barcelona.
As we covered earlier in the week, Prime Minister Theresa May officially initiated the Brexit process by triggering Article 50 of the Treaty of the European Union. The UK will now have exactly two years to negotiate the exit process. EU officials have also said that once sufficient progress on the exit negotiations has been made, they may be willing to begin negotiating a trade deal. Earlier indications suggested that the EU may force the UK to complete all exit negotiations prior to beginning any trade talks. The GBP reacted far less dramatically to the news than it did to the initial shock vote. An initial dip was quickly followed by a partial recovery which means that the GBP is still much stronger than it was at the beginning of the month.
The US economy grew at an even faster pace than first reported. According to the US department of commerce the US economy grew at a pace of 2.1% up from the previously reported 1.9%. Earlier this month the Federal Reserve elected to raise interest rates in response to healthy economic indicators. Another raise is still a possibility in the near future if positive economic performance continues.
Inflation in the eurozone fell by 0.5% from 2% to 1.5% from February to March. The ECB (European Central Bank) targets inflation at near – but under – 2%. Mario Draghi, head of the ECB, has been under some pressure to tighten the bank’s monetary policy, but this fall in inflation could stave off critics for the time being. Combined with the uncertainty of the impending Brexit negotiations, don’t expect the ECB to raise rates anytime soon. The inflation figures did not impact the euro.
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