This week inflation started to increase on both sides of the Atlantic, Toshiba was thrown into turmoil and Karpekin got his car crushed... twice in one day.
Inflation is back. Figures released this week on both sides of the Atlantic painted a picture of rising prices - and the possibility of an end to the days of ultra-low price increases. The UK's consumer prices index was 1.8% in January - its highest level since June 2014. Meanwhile, a larger-than-expected jump in U.S. consumer prices pushed U.S. inflation to a five-year high of 2.5%.
In both cases, a major factor has been the upsurge in energy prices. But in the UK, there has also been a big slowdown in the fall in food prices. Fierce competition between supermarkets has put a lid on the price of food and non-alcoholic drinks, which are 6% lower than they were three years ago. But the resolve of UK retailers to continue their price wars may be wavering in the face of sterling weakness, which has pushed up the cost of imports. The pound is down sharply since last year's referendum decision to leave the European Union, and the pressure to pass on higher costs to consumers may prove too strong to resist. While UK inflation is still lower than the Bank of England's target figure of 2%, that figure is expected to be breached later this year.
The Bank's monetary policy committee is unlikely to raise interest rates in the near future, though, believing that the inflation spike is a temporary effect caused by sterling's fall in value. However, in the U.S., rates are set to resume their upward path, having been raised for only the second time in a decade in December. U.S. Federal Reserve Chair Janet Yellen told senators on Tuesday that the U.S. economy faces an uncertain path under the Trump administration, adding that it would be unwise for the central bank to increase rates too slowly.
Over the week to Thursday's close, the FTSE 100 Index was largely unchanged, up just 0.26%. The FTSE World Europe ex UK Index was ahead 0.97%, while in the U.S., the S&P 500 Index was up 1.34%.
U.S. carmaker General Motors is expected to sell its struggling European operations - which include the Vauxhall and Opel marques - to PSA Peugeot Citroen, in a deal which could leave the merged entity with around 16% of the European car market. Shares in PSA were up more than 5% as details of a proposed deal were published.
Carlos Tavares was hired as PSA's chief executive officer in 2014 to turn around the fortunes of the Paris-based carmaker, and he has acquired a reputation as a ruthless cost-cutter. At the same time, the French state took a 7% stake in the company, pledging to protect French jobs. Most analysts consider that there is massive overcapacity in European car production, and concern is now mounting elsewhere in Europe about the effects of any merger on the workforce. As many as 15,000 jobs at Opel headquarters in Germany could be at risk, and in the UK there are fears for the futures of Vauxhall's plants in northwest England and Luton.
Toshiba was thrown into turmoil this week as the Japanese industrial giant revealed a $6.3 billion write-down to reflect massive cost overruns in Westinghouse, the U.S. nuclear business it bought in 2006. The company's shares nosedived amid fears it could be delisted from the Tokyo Stock Exchange. Toshiba now anticipates a full-year loss of ¥390 billion (US$3.5 billion) for the year to March 31, compared to a previously forecast profit of ¥145 billion (US$1.3 billion), and its chairman Shigenori Shiga is to resign.
If you've ever had the feeling that it just wasn't your day, spare a thought for Georgiy Karpekin. When strong winds swept over America's West Coast, he was happy to be indoors at Sacramento City College. But when he arrived at the parking lot later that afternoon, he made an unwelcome discovery. "My truck was taco'd around a tree." A large eucalyptus had collapsed onto his pick-up truck. After hitching a lift home, he was confronted with unfortunate incident number two. Another tree had fallen on two vehicles in front of his house, one of them his own. His cars may have been crushed, but how about his spirit? Not a bit of it. "I feel like I'm the luckiest guy," drawled the chilled-out Californian. "Why? I came out alive. Everything is fine. My insurance is covering it. There's no other way to look at it, right?"
"You know, life's full of peaks and valleys, man," he added.
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