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- Business and finance update 26th August 2024
Business and finance update 26th August 2024
McDonald’s expansion
Good morning. Today we're talking about McDonald’s UK expansion, gold’s new record and energy bills on the rise.
Big Stories
McDonald’s expansion
McDonald's has announced plans to expand its presence in the UK and Ireland. The fast-food giant will invest £1bn to open over 200 new restaurants in the next four years. This expansion is expected to create more than 24,000 new jobs and increase the company's footprint in the region by 14%. The news comes as McDonald’s celebrates 50 years since it opened its first UK store in Woolwich, south London. The new restaurants will feature a variety of formats, including smaller stores and "drive to" restaurants, to cater to different customer preferences. This strategic move aligns with the growing demand for takeaway food and the increasing popularity of convenient dining options. The new stores will be opened as part of a target, announced in December, to build 10,000 more restaurants worldwide by the end of 2027, taking the US company’s global footprint to 50,000 stores.
Good as gold
The price of gold has reached a historic milestone, surpassing $1m per bar for the first time. The surge is driven by a range of factors, including falling interest rates, economic uncertainty and a weakening US dollar. As investors anticipate a rate cut by the Federal Reserve, gold's appeal has significantly increased due to its perceived safe-haven status. The decline in interest rates and rising geopolitical tensions have further fueled demand for the precious metal, as investors seek to protect their wealth from potential economic downturns. The weakening dollar has also played a pivotal role in driving up gold prices. As the US dollar loses value relative to other currencies, gold becomes more attractive to foreign investors, increasing demand and pushing prices higher. This record-breaking gold price reflects the growing investor sentiment that the global economy is facing a period of uncertainty. As geopolitical tensions escalate and economic indicators remain volatile, gold's safe-haven status continues to solidify its position as a valuable asset for investors seeking to diversify their portfolios and hedge against potential risks.
Energy bills on the rise
Energy bills for the average UK household will increase by 10% to £1,717 in October, the regulator Ofgem announced. The increase is primarily due to rising wholesale energy prices, driven by factors such as geopolitical tensions and extreme weather events. While the new cap is 6% lower than last year's peak, it remains significantly higher than before Russia’s invasion of Ukraine in 2022 which triggered a global energy market shock. This news comes as a blow to many pensioners, who the new Labour government announced will no longer receive winter fuel payments. The combination of rising energy bills and the removal of this financial support could place a significant burden on older households. Analysts predict that energy bills will continue to increase modestly in the coming months, with a further rise expected in January 2025.
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