The Week that Was: 28th November - 4th December

Arguably the biggest economic headline this week has been OPEC’s decision to cut oil supply for the first time in 8 years. Starting from January the organisation will reduce production by 1.2 million barrels a day. Following the announcement, the price of oil soared by 8.8% on Wednesday with the IEA predicting the price will rise 75% by 2020. This should help to ease low inflation worries as the world market moves from the current oil surplus to a potential oil deficit.

The entire UK population is familiar with Article 50 but Article 127, which has this week has become widespread talk, is confusing many. Article 127 will trigger a country’s exit from the European Economic Area (EEA) which extends tariff-free trade no non-EU countries such as Iceland and Norway. The question is now, will a withdrawal from the EU mean a withdrawal from the EEA too? This just adds to another thing the government will have to grapple with when trying to execute Brexit.

Also in the UK, a petition to readdress the production of the new £5 note has reached over 100,000 signatures. The petition was founded over the objection to tallow (which is derived from animal waste products) being used to produce the note leading the Bank of England to issue a statement saying they will look into this further. Conversely, an article produced by digital media production company Vice estimates that the ‘traces’ of tallow in every new £5 note in circulation amounts to less than one cow, bringing into question how warranted the campaign is.

Elsewhere, it was announced that the US unemployment rate had fallen to a nine-year low in November. The US economy created around 178,000 jobs leading to a jobless rate of 4.6%, a 0.3% fall from October. Consequently, this and the recovering health of the economy means it is anticipated that the Federal Reserve will raise US interest rates later this month.

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