It’s the end of the Obama era, as the 44th president of the United States steps aside, making way for a successor whose views and ideals are significantly different to his own. In his final formal meeting with reporters, Obama chose to defend his ‘lame-duck’ decisions on Cuban immigration policy and Chelsea Manning’s prison sentence. He sent a “wake-up call” to Israel to make peace with the Palestinians and cautioned against lifting sanctions against Russia unless it reversed its intervention in Ukraine.
Theresa talks
In the UK, Theresa May gave a speech that provided long-awaited news of the UK’s Brexit plans. The first item on her 12-point list for the divorce talks is a promise that she will provide certainty about the process of leaving the European Union (EU). Mrs May also remarked that the UK would be leaving the European single market, as well as the European Customs Area, but she pledged that the UK would lead the world in free trade after Brexit. While the emphasis was very much on a ‘clean Brexit’ May confirmed that parliament will vote on the final deal, sending the pound soaring. Shares in the UK’s biggest companies, which earn most of their revenues in non-sterling currencies, went in the other direction. On Tuesday the FTSE 100 suffered its worst day since the EU referendum, and it was down 1.76% for the week to Thursday’s close. The FTSE World Europe (ex UK) index declined by 0.93 %.
Meanwhile, the cost of living in the UK reached a two-year high. According to the office for National Statistics the consumer prices index showed that inflation rose to 1.6% last month. In Europe, the European Central Bank kept its key interest rates unchanged at zero for another month, despite its president, Mario Draghi, noting that the Eurozone economy is stronger.
Davos Debates
Business and political leaders from all over the world travelled to Davos for the World Economic Forum. The theme of this year’s meeting has been responsive and responsible leadership, with globalisation also being a key topic throughout the week. Unsurprisingly, Donald Trump’s imminent presidency, Brexit and China have all been near the top of the agenda for discussion. President Xi defended globalisation, drawing upon the need for global economies that share opportunities and interests to achieve win-win outcomes.
Tobacco takeover and return of the mac
British American Tobacco (BAT) has agreed the takeover of Reynolds American in a deal worth $49.4 billion. The acquisition will create the world’s largest listed tobacco group by sales. BAT is looking to return to the US market after more than a decade’s absence. Analysts are speculating over the tax benefits of this deal: if Donald Trump instigates his proposed tax cuts, Reynolds could end up being worth much more than its purchase price.
Burberry’s fortunes have taking a positive turn this week as it has announced a return to growth in Asia. The weakness of sterling has led to exceptional spending in the UK by international tourists. Burberry is also undertaking an important management reshuffle as Marco Gobbetti, the former head of Céline, prepares to move into his role as CEO.
Shares in laptops- to-hydro power giant Toshiba suffered, as the company struggles with losses at its US nuclear power business. The write-down for its US nuclear business is expected to be much greater than initially expected.
And finally…
Workers from Pennsylvania’s Game Commission were faced with an unusual task on Thursday, when they were called out to rescue a deer that had fallen through thin ice. The unfortunate fallow was left floundering in deep, chilly water after her Bambi-esque escapades, with no way to return to the shore. Luckily, she made doe-eyes at her saviours, who donned cold-water suits and plunged into the lake to pull her out. Let’s hope she bucks up her ideas from now on.
