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November 1, 2016

Pegler’s market report – 01.11.16: Apple products just got more expensive in the UK


in Insights Press Releases

As published in the Brighton Argus (01.11.16) Business on page 21 under the title Pegler’s Market Report:

Pegler's Market Report

Apple products just got more expensive in the UK  

Last week Apple quietly hiked the price of some of its products in the UK in what is regarded as a response to the pound’s collapse in the wake of the vote to leave the European Union. The iPhone maker raised the price of its laptops and desktop computers by as much as 20pc as it unveiled a new range of MacBook Pro laptops at an event in California. Apple’s laptops have always been a premium product and are renowned for being more expensive in the UK and Europe than they are in the US. But the latest price rise means that the price of an entry level MacBook is now £200 more expensive than it was previously.

Uber was in the news as a British tribunal ruled that the company should no longer treat its drivers as self-employed, in a decision which threatens the taxi app’s business model by forcing it to pay the minimum wage and offer holiday entitlement.

Consumer spending still supported the US economy in the third quarter, even as the pace slowed from the second quarter’s robust 4.3pc. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased at 2.1pc. Though the Federal Reserve is mostly focused on employment and inflation, signs of economic strength would be supportive of an interest rate hike in December. The US central bank raised its benchmark overnight interest rate last December for the first time in nearly a decade.

Yields on benchmark bonds were pushed higher, as strong growth numbers out of Britain prompted the worst selloff in gilts for months and expectations eased for a Bank of England interest rate cut. Official data showed that Britain’s economy slowed only slightly in the three months after it voted to exit the European Union. It grew by 0.5pc between July and September, a touch less than the second quarter’s 0.7pc, but tempering fears about an immediate economic impact following the Brexit decision.

‘Love it or hate it’, Marmite, was back in the news when Morrisons became the first supermarket to raise the price of the popular food brand since a row broke out between the product’s maker Unilever and rival chain Tesco two weeks ago. Morrisons has put up the price of the spread by 12.5pc, which is more than the 10pc price hike Unilever demanded of Tesco.

Away from Marmite and economic data, Twitter has confirmed a large number of job cuts. It announced that it will cut 9pc of its global workforce after its quarterly revenue growth slowed sharply. Revenue rose about 8pc to $616m, above the average analyst estimate of $606m but below the 20pc rise in the previous quarter. The social network said its restructuring plans would focus on reorganising the company’s partnerships and marketing efforts.

By David Pegler, Brighton Capital Management

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