Money in The Banana Stand: 10 Things We Learned This Week

A lot has happened since a certain incident at the Oscars at the weekend. We're hear to round it all up for you

Ollie Smith 1 April, 2022 | 11:38AM
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The Oscars Taught Us Another Thing

Having assumed it would be sensible to write my editor’s column about the Oscars last week, my attempts to extract meaningful money lessons from the film industry’s many ups and downs felt rather hollow when, hours later, a certain famous actor hit his comedian contemporary in the face. Thankfully, Smith and Rock have both since apologised and made up, but not before an industry not exactly renowned for law-abiding self-awareness created yet another gut-wrenching moment of embarrassment in front of the whole world.

Inflation is Leaving a Bitter Taste

The last time we were discussing the “downsizification” of confectionary in earnest, it was in the context of Brexit. At the time our focus was on Toblerone, whose ill-fated plan to reduce the number of “peaks” in its mountainous bars was met with backlash from consumers. This time it’s real though, and it’s not Toblerone, it’s Cadbury’s. Owner Mondelez has said it will be reducing the size of its sharing bars, and consumers won’t be charged less for the pleasure. You can expect more of this as inflation, erm, bites.

The Dashboard Has Flashed Red

Lately all eyes have been on the yield curve. At its most basic level, it’s a way of visualising the relationship between yields across different US government bonds. On Thursday this week, the two-year and 10-year Treasury yields inverted for the first time in three years. Typically, such events are an early warning sign for a recession, but at this stage it’s difficult to tell. As economists like to joke, the yield curve has predicted 10 of the last 5 recessions. Read our explainer on matters here.

Two Crucial Elections Are On Their Way

All eyes are still on Ukraine, but there are two major political events on the horizon that will prove crucial litmus tests for sentiment in their respective geographies. France goes to the polls on April 10, and president Macron’s rivals are already covering themselves in controversy. Anti-immigration candidate Éric Zemmour has denied he heard supporters chanting “Macron assassin” at a recent rally. Meanwhile, Brazil is gearing up for elections in October. If Time magazine is to be believed, president Jair Bolsonaro faces an uphill battle in the country, after months of surging inflation, and a Covid-19 death-toll worsened by the former army officer’s “denialist” stance on social distancing and vaccines.

There’s a New Third-Biggest Wealth Manager in Town

Customers of wealth management firm Brewin Dolphin will have some decisions to make after news dropped this week that the company will be bought by Royal Bank of Canada (RBC). RBC’s previous acquisitions include fixed income specialist fund house BlueBay Asset Management, so this latest deal further consolidates its position in the UK wealth market and shows just how valuable scale is to shareholders. Brewin is being snapped up for a cool 515p per share, which means the deal could be worth as much as £1.6bn.

House Prices Are Still Rocketing

UK house prices just saw their biggest annual jump since 2004, according to analysis from Nationwide published this week. The cost of a typical UK home is now at a record high of £265,312, an increase of £33,000 in the last 12 months alone. The news comes despite a growing cost of living crisis, and rising interest rates, which have made home ownership more expensive. According to the Land Registry, the average house in England cost £142,571 in March 2004, back when Peter Andre’s Mysterious Girl, Britney’s Toxic, the Cha Cha Slide, and Usher’s Yeah! were all number one in the charts.

It's Bad to Worse for P&O

Last week ferry operator P&O was in a world of trouble with MPs, but now it’s in trouble with Maritime and Coastguard Agency (MCA) too. The Pride of Kent ferry has been held in port after the MCA found it was short of documentation, working equipment, and properly-trained staff. It’s supposedly one of eight boats that need a sign off before heading back to sea. Naturally, the incident has played almost perfectly into the hands of the RMT Union, which represents transport employees. "It's rare enough for the MCA to impound a ferry but P&O have now had two in a week after the jobs carve-up, which speaks volumes about the dire state of their operation,” it said.

E.on Doesn’t Know How to do Comms

You would hope that energy companies would at least attempt to handle the soaring cost of living with some dignity, but it wasn’t so this week. German energy giant E.on got exceedingly frustrated when the number of callers to its hotline rocketed, as savers attempted to submit gas and energy readings before the price cap on energy costs increased today 1 April. And it’s all Martin Lewis’s fault, apparently. "Unfortunately the website and phone lines of every supplier are being hammered today,” Eon said in a since-deleted Tweet. “Martin has once again created unprecedented demand bringing down Britain.” It’s not really his fault though is it? Stay classy, E.on.

Ukrainian Troops Are Keeping Their Phones Off

Phones have long caused problems for troops. Back in 2014, a Russian soldier caused the Kremlin some serious problems when he appeared to post two Instagram selfies geotagged to a location within Ukraine. At the time, official Russian government policy was to deny the presence of troops within the country's borders. Now the boot is somewhat on the other foot. Ukrainian soldiers are reportedly being warned to keep their phones off, lest Russian drones with so-called “cell-site simulators” track their positions so artillery can do the rest. It’s a dirty digital war.

Neil Woodford Has a New Job

It would appear Neil Woodford has a new job. Having witnessed his planned comeback enter “arrested development” status in 2021, the former equity fund manager has turned to bananas to keep his skin in the game. Fund management can be a lucrative business, but if things don’t go to plan, there’s always money in the banana stand!

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Ollie Smith  is editor of Morningstar UK