Every week at the Current we collect the biggest business stories. This week: Standard Chartered Bank cuts jobs, Canadian dollar is up – but so is unemployment, Labatt acquires Mill Street, German exports are down, the pound is up, and Canadian pensions suffer from low rates.
Standard Chartered jobs cut
London based lender Standard Chartered bank may cut up to 1 000 jobs. An internal memo indicated that senior staff could be cut by 25%. The bank earns most of its profits in Asia which has been hit by economic uncertainty following China’s slowdown.
Canadian dollar up
Strengthening oil prices and a weaker greenback have boosted the Canadian dollar up to 77.37 cents USD. West Texas Intermediate crude is edging upwards as a result of turmoil in oil producing regions. News of Russia’s airstrikes in Syria earlier this week was followed by a boost in oil prices.
Mill street bought
Toronto based Mill Street Brewery has been acquired by brewing giant Labatt which is itself owned by Belgian conglomerate Anheuser-Busch. Mill Street began as a modest brew pub but has since become one of the fastest growing breweries in Canada, posting growth of up to 15% annually. Labatts acquisition for an undisclosed price will expand Mill Street’s distribution network (including to Quebec where it is currently unavailable) as well as a $10 million investment into the company.
Canada unemployment up
Canada’s economy added 12 000 jobs last month but the unemployment rate still rose to 7.1%. The rise is a result of more Canadians looking for work (unemployed people who are not working are not counted when calculating the unemployment rate). Most of the jobs created in September were part time. 62 000 full time jobs were lost while 74 000 part time jobs were created.
Bank Of England holds low rates
The Bank Of England yet again elected to hold interest rates at record low levels. The Monetary Policy Committee voted 8-1 to hold rates at 0.5%. Slow growth and a beleaguered labour market influenced the decision. Inflation is also low and not expected to reach 1% until spring 2016, far below the Bank’s 2% target.
Last week the pound rose to $1.53 USD on the back of promising economic data. Manufacturing in the UK rose by 0.5% in August following disappointing performance the previous month.
German Exports down
German exports fell by the largest margin since the financial crisis in 2009. Exports fell 5.2% in August to €97.7bn. Imports also fell by 3.1% over the same time period, the largest drop in almost three years. Uncertainty still reigns in Europe due to Greece’s economic situation, while Germany has also vowed to take in almost a million refugees.
Low Pension Returns
Pension funds and savings accounts will likely post low returns over the medium term. Low economic growth, low interest rates and demographic changes mean that Canadian low risk investments like bonds will be limited to 1% returns. For larger returns Canadians may begin to look at potentially more lucrative options that also carry also greater risk; like currency, commodities and stocks.
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