Digital currencies were in choppy waters this week. The value of bitcoin surged above $11,000 for the first time, before dipping by around 16% on Thursday. Such volatility is not unusual in the world of cryptocurrencies, however. While bitcoin and its peers can be used for online transactions, most holders use them to trade against other currencies, rather than to make purchases. But bitcoin’s characteristics – its decentralised nature and comparative lack of regulation – can lead to sharp price swings. On Wednesday, the deputy governor of the Bank of England warned that investors should “do their homework” before becoming involved.
Some more traditional asset classes also crested new highs. In the US, both the S&P 500 and Dow Jones Industrial Average indices hit record levels. The Dow moved above the 24,000 mark for the first time, boosted by investors’ hopes that President Trump’s promised tax cuts were coming closer to fruition.
Wishy-washy week for the FTSE
By contrast, the main index of large UK companies, the FTSE 100, fell 1.12% over the week to Thursday’s close. Sterling rose against the US dollar and the euro on hopes that the UK government is making progress with Brexit-related difficulties. A rising pound can have negative implications for large UK companies that make a significant amount of their profits overseas because their goods and services become more expensive for international customers.
Other UK corporate news was mixed. Thames Water, the utility company responsible for the water supply in Greater London and much of southern England, announced plans to clean up its act. Earlier this year, the company was fined £20 million by the industry’s regulator for polluting the River Thames. Thames Water says it will only increase prices half as much as had been planned in 2018 and that it will turn off the tap on dividends to external shareholders.
Meanwhile, there were worries that the UK’s network of local bank branches may be floundering. Royal Bank of Scotland (RBS), which had to be bailed out by the government during the financial crisis, said it would close a quarter of its existing branches, shedding almost 700 jobs. The bank attributed the cuts to the rising tide of online banking. Rival banking group Lloyds is also set to shut down 49 branches. Earlier in the week, RBS said it was closing the “bad bank” that had been set up during the crisis in order to manage its toxic assets. The unit recorded cumulative losses of £50 billion and its closure was viewed as an important milestone in RBS’s post-crisis recovery.
Oil on troubled waters?
Oil producers moved a step closer to dealing with the world’s current glut of the commodity, when both OPEC (Organization of the Petroleum Exporting Countries) and non-OPEC members agreed to extend output cuts until the end of next year. The price of Brent crude remained relatively steady, closing at $63.80 per barrel on Thursday. But one of the world’s largest oil producers made headlines for failing to bridge a significant divide – between the pay of its male and female employees. On average, men employed by Shell in the UK earn 22% more than women. The company attributed the difference to a skills gap, saying that it employed fewer women in senior leadership roles.
It’s no picnic when a child’s favourite toy is mislaid. Luckily for the parents of one little girl, an airline stepped in to save the day when she accidentally left her best friend behind at Edinburgh Airport. Four-year old Summer was preparing to board a flight to Orkney when she failed to put “Teddy” back in her bag after security checks. A member of Loganair staff spotted a social media post from Summer’s mum detailing the family’s predicament, however, and stepped in to send him back to Orkney. Teddy was given first-class treatment on his flight home to Kirkwall Airport: photos show him lounging on a roomy seat and enjoying a caramel wafer, a traditional Scottish snack. Sounds like he got much more than the bear necessities?