World Bank news puts shares in the doldrums
The World Bank has revised its forecast for the global economy from 3.2% in January to 2.8% based on the slow start to the year, dashing Australia’s hopes of a domestic bounce from foreign economies. Although the forecast has been downgraded, the Bank says that there are good signs of economies picking up, and has therefore not revised its predictions for 2015 and 2016, but for now it’s not the news the Sydney share market wanted to hear. Elsewhere, it was a similar story with US and Europe trading lower; the latter also affected by disruption in the aviation industry. Read the full story.
Joe Hockey hits back
Joe Hockey has hit back at criticism of the budget saying that welfare reform is necessary and stating that the average Australian works for one month of the year just to pay for the welfare of another Australian. “Is this fair?” asked Mr Hockey. Speaking at the Sydney Institute, he said that his budget hasn’t ended universal healthcare or free higher education because they ended decades ago. The Treasurer said that at the moment “payments are too broadly available to too many people” Read the full story
Consumer confidence still flagging
Consumer confidence is not seeing much recovery with many Australian’s viewing the news they have been hearing as largely bad. Despite some encouraging growth figures for the start of the year, Joe Hockey’s first budget appears to have added to the low economic expectations of the average person and this is likely to signal further bad news for retailers. Read the full story.
Australian housing – too expensive, says the IMF
The International Monetary Fund says that Australia’s houses are among the most expensive in the world when incomes and rents are compared. With a number of economies including the UK and Canada sharing the danger of a housing bubble, the IMF has published data showing income to house prices and house prices to rent ratios. Australia’s houses are well above their historic levels. The IMF is advising governments to curb excessively risky bank lending. Read the full story.
Coles growing financial services
Coles is planning to increase the financial services it offers to create stronger loyalty to its stores. The company is developing a strategy to roll out new services from its financial arm, which has been in place since 2007. Coles recently announced that it will be offering life insurance and although plans for more products are top secret; even from most of its own head office staff; it is likely to include banking. The strategy of stores offering banking has worked well elsewhere, especially in the UK where leading retailers Tesco, Sainsbury's and Marks and Spencer all offer banking services. Read the full story.
Now, for some good news….
Commsec analysts have put Australia at the top of a league of nations in an economic World Cup. While consumer confidence may be low, the fantasy football style study shows that low government debt, strong growth and controlled inflation would beat the likes of Brazil, the US and Japan. Read the full story.
World Bank news not what Australia hoped for... Joe Hockey hits back at budget criticism... consumer confidence not bouncing back... Coles to offer banking products... and Australia wins the World Cup...