Top 10 Stories of the Week! 11/01/16

Below are our top 10 stories that you need to know about. Be sure to check our twitter page for regular posts of important headlines. Click on the links for full stories.

Opinion articles of the week:

The Economist has a look at the strengths and weaknesses of the EU referendum arguments. Click here for the debate.

If the stock markets are crashing, will the economy follow? Click here for a short video and a link to Bloomberg’s Benchmark Podcast on the debate.

Sugar tax: could this be the solution to the obesity crisis? Chris Snowdon, a director of lifestyle economics at the Institute of Economic Affairs, thinks not! Click here to find out why he believes that sugar taxes don’t work.


The Bank of England has left the interest rate on hold as it cut its forecasts for UK economic growth. Members of the Bank’s Monetary Policy Committee (MPC) voted 8-1 to leave the base rate at 0.5% where they have remained for nearly seven years.

The decision was widely expected amid mounting gloom over the global economy and the latest downward revisions to official UK gross domestic product (GDP) data as well as a mixed picture from more recent unofficial figures. In the US, the Federal Reserve raised rates for the first time last month since they were slashed to near-zero during the financial crisis in 2008 but the Bank of England is yet to show any signs of being ready to follow suit. (Sky News)

These low interest rates, both in the UK and the US, have partly led to unprecedented levels of investment into tech start-up companies. As of October 2015 there were 141 unicorns (tech companies valued over $1bn) worth a combined $504 billion globally, up from eight unicorns worth $21 billion in 2010. Click here for more. (The Economist)


International sanctions on Iran have been lifted after a watchdog confirmed it had complied with a deal designed to prevent it developing nuclear weapons. The EU foreign policy chief, Federica Mogherini, said the deal would contribute to improved regional and international peace and security. The landmark deal between Iran and world powers was agreed last July.

Lifting the sanctions will unfreeze billions of dollars of assets and allow Iran’s oil to be sold internationally. The international nuclear watchdog, the IAEA, said its inspectors had verified that Tehran had taken the required steps. (BBC News)

Click here for all the key details about the deal.

Have a look at what analysts feel the lifting of the sanctions means for the global markets. (BBC News)

On Sunday however, the US imposed fresh sanctions on Iranian companies and individuals over a recent ballistic missile test. The new sanctions prevent 11 entities and individuals linked to the missile programme from using the US banking system. (BBC News)


Oil prices have briefly fallen below $30 a barrel on international markets for the first time since April 2004, before recovering again. Brent crude, used as an international benchmark, fell as low as $29.96, but bounced back to trade at $30.22. Oil prices have fallen by 70% in the past 15 months. (BBC News)

This was largely a result of a market response to the prospect of an end to the Iranian oil export ban. Click on the link for more on the effects of low oil prices. (BBC News)

Click here for more information about the nuclear deal leading to the lifting of the Iranian oil export ban. (BBC News)

Oil companies continue to suffer as this week as BP announced that it is cutting one in five jobs at its North Sea operations as oil prices continue to tumble. The British oil and gas group is laying off 600 people in Scotland in a cost-cutting drive that will involve 4,000 employees axed worldwide. (The Guardian)

The Financial Times asks just how low can oil prices go? Click here for the debate.


BT Group’s takeover of mobile phone network EE has been given final clearance by the Competition and Markets Authority (CMA). The £12.5bn deal brings together the UK’s largest fixed-line business and the largest mobile telecoms business. The deal creates a communications giant covering fixed-line phones, broadband, mobile and TV. The CMA said it was unlikely to harm competition as BT was “smaller in mobile” and EE a “minor player” in broadband. But rival Vodafone said it still had “wider market concerns”.

BT has around 88,000 employees in 61 countries, with 72,000 of those working in the UK. It controls 31% of the UK fixed-broadband market, according to Ofcom, and has a 37.6% share of the market for UK home phone traffic. The deal would add EE’s 33.8% mobile market share to BT’s portfolio.

For more analysis on the deal click here. (BBC News)

Is the BT-EE merger too big? Rival companies have expressed disappointment at the merger saying that it puts too much power in one company and will stifle competition. This 4 minute BBC Radio 4 recording discusses some of the issues at hand.


Last week, the European Court of Human Rights (ECHR) said a firm that read a worker’s Yahoo Messenger chats sent while he was at work was within its rights. Judges said he had breached the company’s rules and that his employer had a right to check on his activities. (BBC News)

Despite all the rhetoric, employers cannot read private messages from employees’ personal accounts.

The worker’s Yahoo account was set up to answer clients’ queries, so was not actually a personal account at all. The case is no precedent for the idea that bosses can now monitor employees’ “private messages”.

Furthermore, national courts are bound only to “take into account” Strasbourg case law, under s2 of the Human Rights Act 1998. And, in some cases, the UK seems to have completely ignored them, therefore this ruling may never be applied in UK courts.

For more on this issue, including the full case judgement, click here. (Legal Cheek)


Renault shares plunged 21 percent last week, the most in 17 years after a union said French fraud investigators seized computers from the automaker, apparently as part of a probe into emissions testing.

Agents from the Economy Ministry’s fraud office visited some Renault sites that have to do with standards testing and engine certification. That left the impression that the probe is related to emissions standards in the wake of the Volkswagen AG scandal, he said.

Automakers have been under renewed scrutiny since September, when U.S. regulators said VW cheated to make its diesel cars appear cleaner burning than they are. French authorities started a probe in September into whether VW deceived customers about the emissions levels of its diesel cars and promised to expand the probe to cover all carmakers, including Renault and PSA Peugeot Citroen. (Bloomberg)


Goldman Sachs says it has reached a deal with US authorities over charges that it used fraudulent marketing material to sell mortgage bonds before the financial crisis. The bank agreed to pay $5.1bn (£3.5bn) in civil penalties and consumer relief.

The task force has been investigating how banks advertised risky financial products before the financial crisis. The deal stems from an investigation into Goldman Sachs’ securitisation, underwriting and sale of residential mortgage-backed securities (RMBS) from 2005 to 2007.

Goldman Sachs is one of several banks that have been fined billions of dollars for marketing RMBS as a safe investment in the run-up to the financial crisis. The sale of RMBS played a significant role in the 2008 crisis. US banks have taken much of the blame for granting mortgages to unqualified borrowers, then repackaging those loans as safe investments and selling the risk on to others. (BBC News)

This news come in the same week that Goldman Sachs announced that is preparing to drop up to ten percent of its fixed-income division later this quarter. The layoffs are expected to take place among Goldman’s fixed-income traders and salespeople, and could affect about 250 employees. The fixed-income business has been challenging over the past year, with credit trading especially hard hit.

A number of banks have made significant cuts to their fixed-income divisions, with Goldman Sachs rival Morgan Stanley cutting 25% of staff in its fixed income division late last year. (Business Insider)


Tata Steel will cut 1,050 more UK jobs, with most of the redundancies to be in Port Talbot, the UK’s biggest steelworks. It comes on top of hundreds of cuts announced by Tata last year, which it blamed on plunging steel prices.

Around 750 of the latest job losses are expected in Port Talbot to help save the Welsh site. Port Talbot, which currently employs 4,000 workers, is the biggest steel plant in Britain in terms of workforce and output, but is understood to be losing £1m a day. (BBC News)


Walmart is closing 269 stores, more than half of them in the US and another big chunk in its challenging Brazilian market. The stores being shuttered account for a fraction of the company’s 11,000 stores worldwide and less than 1% of its global revenue, but according to workers’ group Making Change at Walmart, this announcement will affect 10,000 US employees.

The announcement comes three months after Walmart CEO Doug McMillon told investors that the world’s largest retailer would review its fleet of stores with the goal of becoming more nimble in the face of increased competition from all fronts, including from online rival (The Guardian)


Pure Gym, the UK’s largest gym operator, is looking to go public in a float worth in excess of £500m.

Last year, Pure Gym bought rival LA Fitness in a deal estimated to be worth around £70m. The group’s membership grew to 650,000 at the end of last year, with 137 sites. In its last full year results, at the end of March 2015, Pure Gym reported a 49 per cent increase in revenues, to £68.6m, and a 365 per cent jump in profit before tax, from £2.2m to £10m. (City A.M)

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