Welcome to our most recent news roundup; covering the stories you may have missed during the month of March 2019. Brexit has dominated the news throughout, as the UK had an official deadline to leave the EU on 29th March. This date, however, has been extended due to the fact a deal could not be agreed in parliament, and more time is needed to find a deal that everyone can agree upon. It seems to be all anyone can talk about, so if you’ve been distracted by Brexit or have avoided the news altogether, here’s our bite-sized summary of what’s been going on over the last month.
UK Money News
Spring Statement 2019
You may have missed the Spring Statement this year, as the news was dominated by other things. In what would have usually been front page news, Philip Hammond, the Chancellor of the Exchequer, delivered his key spending points for the coming months. In his closing speech, he warned against a no deal Brexit, stating that building a stronger country would only be possible by avoiding a no deal.
His top announcements at a glance:
- A three-year spending review is to commence as long as the country does not leave the EU without a deal, to help lift uncertainty.
- The £15.4bn headroom in public finances has increased to 26.6bn, which can be used in a no-deal Brexit scenario if required.
- New investment packages for technology and nuclear research.
- £3bn of funding to help deliver 30,000 affordable homes.
- Free sanitary products available in secondary schools as of September 2019.
- £100m made available for police overtime.
Is cash at risk?
A review by finance experts revealed on 6th March just how precarious our cash-based society is becoming. With the rise in card and digital payments, cash is being used less and less, and even some businesses are becoming cashless in a bid to save time and money. In the report, they state that if nothing is done to mitigate the current decline, cash use would end by 2026.
But where does this leave the 8million people who rely on cash to make payments? Many of the more vulnerable people in society may not have easy access to a bank account and those in rural areas could find it difficult to rely on Wi-Fi to send and receive money, for instance.
It is hoped that this report will motivate banks and payment platforms to consider the issues and risks moving forwards, and make provisions for those who rely on cash.
UK borrowers carry on as Brexit looms
It was reported at the very beginning of March, that Brits are still carrying on as normal as Brexit creates chaos at Westminster. In fact, the appetite for credit such as mortgages and other borrowing increased in January, contrary to forecasts. This is welcome news amidst a slowing economy caused by Brexit woes. Of course, much has happened since January, and this raised interest in consumer lending may be temporary – it’s certainly one to watch as we step further into the unknown.
Finance sector joining the fight against climate change
The Bank of England and the Financial Conduct Authority revealed on the 12th March that four new working groups have been set up to deal with the risks that climate change poses to the UK’s financial system. This includes issues that can arise from government climate policies as we transition to a low-carbon economy, as well as the practical risks associated with extreme weather events.
It was agreed that climate change ‘poses a major threat to the future stability of the financial system’, so it’s more important than ever to have people working towards finding solutions early, before too many unprecedented challenges arise.
Brexit affects gold prices
With the Brexit deal being voted down twice over the course of the month, the pound was, unfortunately, not looking particularly strong on the stock markets. Then, once May’s deal was withdrawn after the third vote, a no deal Brexit became more likely than ever before. This had a knock-on effect on gold prices, and gold stocks rose in the wake of the vote. It’s not just what’s happening to the pound that affects gold prices, of course, and the strengthening dollar caused gold prices to slip back down again. What will happen next is anyone’s guess, but whatever is decided is likely to have a big impact on the price of gold in one way or another. When gold prices go up, it means that the gold you own becomes more valuable and is therefore worth keeping an eye on if you want to sell or pawn your gold jewellery at some point in the near future.
Is there any gold left to find?
Analysts have been talking about the decline of gold this month, not in stock price terms, but in terms of the amounts left in the ground. Some are beginning to believe that we have exhausted all the large gold deposits and there may be very few or no ‘world class’ deposits left to discover. The amount of gold being extracted by mines has been falling over the last 3 decades or so. On average, mines were producing over 10 grams of gold per ton of extracted earth in the early 1970s. Today, the average is just 1.4 grams per ton.
But all is not doom and gloom – over time, this decline in gold mining is expected to push the price of gold up; so much so, that it is hoped more investments will be made in the industry, which would fund exploratory mining and raise the possibility of finding more gold in the future.
Huge diamond found in South African mine
A whopping 425-carat white diamond has been unearthed at the Cullinan mine in South Africa; it was announced on 29th March. If you recognise the name Cullinan, it may be because the largest gem-quality diamond in the world is called the Cullinan diamond. It was found at the very same mine in 1905 and weighed an incredible 3,106.75 carats!
This recent discovery has boosted the shares of the mine’s owner, Petra Diamonds, who have been struggling in recent years due to debts incurred whilst upgrading the mine. This find is a welcome one for the company, as it has been estimated to be worth up to $35 million.