Friday May 30, 04:45 PM
Things You May Have Missed This Week
By Padraig O'Hannelly
The big news this morning is that the last of the business-class-only airlines, Silverjet (LSE: SIL.L - news) (LSE: SIL), has suspended operations having run out of funds. Trading in the shares had already been suspended last Friday.
The
problems at Silverjet were well known, and were discussed in previous Motley Fool articles. Unlike rival MAXjet (LSE: MAXJ), which closed its doors earlier this year, there is still some hope that a rescue package can be arranged, but in the current climate I wouldn't be too hopeful.
One of the main problems for airlines at the moment, of course, is the price of oil. Over the past week, however, the price has fallen from over $135 a barrel to under $126 a barrel -- still far higher than businesses will have budgeted for, but at least going in the right direction. Earlier this week, Prime Minister Gordon Brown appealed to North Sea oil producers to increase output, and gave them some tax breaks to encourage production in more marginal oilfields.
Energy prices are contributing to higher inflation, and figures out this morning show Eurozone inflation running at 3.6% in May, up from 3.3% in April, and matching the previous high in March. This reduces the likelihood of a cut in Eurozone interest rates, which have been steady at 4% for the past year.
The current strong Euro is good for British exporters, so maintaining the interest rate would be good news for them. However, a weakening German economy may cause the Euro to fall; latest figures show a significant drop in German retail sales.
Closer to home, sales were also down at fashion retailer Laura Ashley (LSE: ALY), which reported a drop in like-for-like sales of 7.6% for the four months from February to May. Laura Ashley's increasing shareholding in Moss Bros (LSE: MOSB) was enough to fend off a bid by Iceland's Baugur on Tuesday. Baugur acquired House of Fraser in 2006, and was looking to increase its exposure to British fashion retail. Shares in Moss Bros are down 10% on the week.
Finally, the Consumer Protection Regulations 2008 came into effect this week, giving effect to an EU directive banning certain types of unfair or misleading selling. From now on, "closing down sales" have to be genuine, competitions have to be fair, and the authorities have greater powers to prosecute rogue traders. Nice (Milan: NICE.MI - news) to see some good news for consumers!
More: This Week's Market Movers
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