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On Thursday, UK Prime Minister Theresa May travelled to Brussels to plead with European Union (EU) leaders for an extension to the UK’s departure date. After eight hours of talks, EU leaders struck a deal to delay Brexit until 22 May – conditional on Westminster approving Mrs May’s deal next week.
Should this deal fail in parliament (yet again) then 12th April is the date the UK would exit without a deal, but as with the rest of the Brexit process, a further twist cannot be ruled out (and indeed should perhaps be expected!)
Amid the continued uncertainty, the Bank of England announced that interest rates would remain on hold at 0.75%. It also affirmed that the economic outlook would continue to depend “significantly on the nature and timing of EU withdrawal”. Currency traders were spooked, and the pound fell 1% against the euro and US dollar; the market having been more positive on the currency in recent weeks suddenly realised that buying downside protection was a wise idea. On Thursday, sterling slipped as low as $1.30, after having rallied to a nine-month high last week, just shy of $1.34. This resulted in the FTSE 100 closing 1.8% ahead over the week to the close on Thursday. Shares in some of the large global companies in the index performed well, as a fall in the value of sterling makes their products cheaper overseas. The more domestically-focused FTSE All-Share closed up 1.3%.
The dollar also weakened against most major currencies. This was in the wake of the US Federal Reserve’s (Fed) announcement that it was unlikely to raise interest rates this year. Previously, the Fed had guided towards two increases in 2019. The 10-year US Treasury yield moved to 2.5%, its lowest level in more than a year. Meanwhile, the S&P 500 was 1.2% ahead.
Google – the favourite rule breaker
The EU hit Google with a £1.28 billion fine this week, the third time EU regulators have penalised the IT behemoth in two years. Margarethe Vestager, European Council commissioner, said Google had breached EU anti-trust rules. Regulators found that the global search giant had restricted third-party rivals from displaying search ads between 2006 and 2016.
Falling founders
Julian Dunkerton was thwarted in his ambition to return to the board of Superdry. Bosses at the Japanese-styled (but Cheltenham-based) fashion chain rejected a detailed plan by the company’s co-founder to ‘Supercharge Superdry’. Dunkerton, who has an 18% share of the business, stepped down from its board a year ago. He is battling to return after seeing a precipitous 75% fall in the company’s share price. While a shareholder vote is being held on 2 April, leading advisory group ISS has recommended that his return should not be supported.
It was more bad news for Ted Baker this week, with the retailer reporting a 26.1% drop in full-year profits. The disappointing figures follow hard on the heels of a widely-publicised scandal which ultimately resulted in the resignation of its founder. The company blamed difficult trading conditions, consumer uncertainty and unseasonal weather in North America for the slump. Ted Baker shares fell by 5.6% in the aftermath.
And finally…
St Patrick’s Day is always a good excuse for shenanigans, on both sides of the Atlantic. The town of Elmira in New York State had an extra reason to raise a glass of the black stuff this year after locals decided they would take on a long-standing record for the largest human shamrock.
The townsfolk, adorned in shamrock-shaded ponchos, arranged themselves in the shape of Ireland’s national emblem and had to stand motionless for five minutes for the record to stand. The record, at 851, was previously set by students in Dublin, who are now presumably green with envy.
