Week in review: White House meltdownIt’s been an eventful week in the White House. Donald Trump announced that he was disbanding two business councils after a number of chief executives quit over his handling of violent clashes at a far-right rally in Charlottesville, Virginia.
The clashes sparked global uproar after an anti-fascist protestor was killed when a car ploughed into a crowd. Business leaders from companies such as 3M, Campbell Soup, Johnson & Johnson and United Technologies left the American Manufacturing Council in protest at the way Mr Trump reacted to the events in Charlottesville. Towards the end of the week, Apple chief executive Tim Cook attacked the president for drawing “a moral equivalence between white supremacists and Nazis, and those who oppose them by standing up for human rights”. Mr Cook said that Apple would make two donations of $1 million to civil-rights groups.
Meanwhile, the US Federal Reserve (the Fed) will start shrinking its $4.5 trillion balance sheet relatively soon, according to minutes from the last meeting of the central bank’s rate-setting committee. Members argued that the slowdown in inflation warranted caution over the decision of when next to raise interest rates. The Fed expects that it will take longer than previously expected for inflation to move close to its 2% objective.
Spain hit by terror attacks
On Thursday afternoon, we had the grim news of more European terrorist attacks, this time in Barcelona and the Spanish coastal resort of Cambrils. Thirteen people are reported to have died after a van was driven into pedestrians in Barcelona’s Las Ramblas thoroughfare, with more than 100 people injured. In Cambrils, police shot dead five terror suspects; seven other people were hurt.
A combination of market uncertainty over US politics and concern caused by the Fed minutes triggered a downturn in the US dollar. The US stock market declined too, with the S&P 500 down 0.5% at Thursday’s close. Thursday’s fall was the biggest single-day slump for three months. The European and UK markets did better: the FTSE Europe ex UK was up by 1.3% and the FTSE 100 by 1.1%.
The FTSE 100’s outperformance came in a week in which the UK unemployment rate was reported to have fallen by 57,000 in the three months to June, bringing the jobless rate down to 4.4% – its lowest level since 1975. This caused sterling to rebound from its seven-year low against the euro. Damian Hinds, the employment minister, said that “record levels of people are in work across the country and earning a wage”. But although wage growth has picked up slightly, it remains below the rate of inflation, putting a squeeze on living standards.
Papering over the cracks?
It was a case of the ‘holiday blues’ for the UK’s prime minister this week. Theresa May returned from her three-week break to Downing Street on Monday and was thrown right back in at the deep end. This marked the start of a key week in the Brexit negotiations ahead of the next round of talks with the European Union (EU) on 28 August. On Wednesday a ‘position paper’ conceded that EU nationals will be allowed to visit Britain without a visa and food standards will be largely unchanged. The paper also reiterated the government’s commitment to an open border between Northern Ireland and the Republic. It said that a hard approach should be avoided and stressed that there should be no physical infrastructure, such as customs posts and cameras, along the 310-mile border.
The Belgians really know how to have a cracking time. Despite a Europe-wide egg-contamination scare, the eastern Belgian city of Malmedy defied warnings to continue its 22-year-old tradition of cooking a giant omelette. On Tuesday, hundreds of people gathered to sample the 10,000-egg masterpiece whipped up by the World Fraternity of Knights of the Giant Omelette.
The annual egg-stravaganza took on a greater significance this year, as several European countries have reported receiving eggs or egg-related products contaminated by an insecticide called fipronil. A number of Dutch and Belgian poultry producers are under investigation, and the scandal has shaken European consumers. But the Knights of the Giant Omelette were undeterred.
Sounds like a truly egg-cellent day for those that didn’t chicken out!