Daily business and finance update 6th November 2023
UK hosts AI summit
Good morning. Today we're talking about the UK’s landmark AI summit, the Bank of England keeps interest rates unchanged and a shipping giant slashes jobs.
UK hosts AI summit
The UK hosted a landmark AI safety summit, bringing together government officials, tech leaders and experts from around the world to discuss the safe and responsible development of artificial intelligence. The summit was held at Bletchley Park, the historic site where the Enigma code was cracked during World War II. Among the attendees was Tesla CEO and X owner Elon Musk, who sat down for an interview with prime minister Rishi Sunak where he predicted that AI will render most of jobs obsolete. The government then announced the launch of a new UK-based AI safety institute with £20m of funding. The institute will focus on developing new methods for testing and evaluating the safety of AI systems. It will also work to raise awareness of the potential risks of AI and to promote responsible AI development.
Rates hold steady
The Bank of England voted to keep interest rates at 5.25%, the highest level since the 2008 financial crisis. This marked the second straight month that the central bank had held rates steady, following 14 consecutive increases. Bank officials warned that rates are unlikely to fall soon as soaring wages mean the fight against inflation has some ways to go. Wages across the UK are rising at around 8% on average and consumer prices by nearly 7%, much more than the Bank’s 2% inflation target. Economists have warned that if the ongoing Israel-Hamas conflict spreads throughout the Middle East, it could have a knock-on effect on energy prices. The prospect of higher interest rates for longer has put the UK economy at increased risk of a recession in the next year.
Shipping giant cuts back
Maersk, one of the world's largest shipping companies, is cutting at least 10,000 jobs representing 10% of its workforce in the face of overcapacity, rising costs and weaker prices. The Danish company, which controls about one-sixth of global container trade, said the job cuts are necessary to adjust to a "new normal" after shipping companies benefited from sky-high prices during the coronavirus pandemic. Maersk's job cuts come as the global economy slows and inflation soars. The company has already axed 6,500 jobs in 2023 and said it expects global container volumes to fall by up to 2% this year, primarily because of weak consumer demand and destocking by firms. The job cuts will affect all levels and functions of the company, and will be implemented across all regions.
Preparing to go public: Klarna, the buy now, pay later finance giant, is setting up a new British holding company as it clears the path to a stock market flotation that could value it at more than $15bn.
America slowdown: Employers added just 150,000 jobs in the US last month, as the economy slowed under the weight of strikes and high interest rates.
Miami-bound: Amazon founder Jeff Bezos is relocating to Miami from Seattle where he founded the online giant nearly 30 years ago.
New bot alert: Elon Musk has launched an AI chatbot called Grok on his social media site X.
Number of the Day
The prison term Sam Bankman-Fried could face after being found guilty of fraud and money laundering at now-collapsed crypto exchange FTX and trading firm Alameda Research.
Not a subscriber? Sign up for free
Want to reach an audience of UK business leaders, young professionals and 2,000+ other smart, ambitious people? Reply to this email and we'll be in touch.