23rd June 2021
Good morning
Today the new polymer £50 note enters circulation, it features mathematician, code-breaker and computer scientist Alan Turing. It also means you have until 30 September 2022 to spend the paper £20 and £50 notes. So start searching down the back of sofas for those old notes.
Today's stories
Rich got richer during Covid
China turns up the heat on Bitcoin
Yesterday's market moves
FTSE 100 +0.4% Â 7,090 FTSE 250 +1.0% 22,680
Markets edged higher ahead of a testimony from the chairman of the Federal Reserve that could offer further clues about the US central bank’s thinking on interest rates.In the UK there was encouraging macro data that showed the government borrowed less than expected in May as the economy continues to recover post lockdown.
WEALTHRich got richer during Covid
What’s going on?Global household wealth reached record levels in 2020 with the world’s richest being the main beneficiaries, according to a report by investment bank Credit Suisse.There are now 5.2m more US dollar millionaires in the world bringing the total to 56.1m or 1% of all adults. 2.5m are in the UK.
The gap between the richest and poorest also widened with the top 1% increasing its share of global wealth from 44% to 45%.Why is this important?It seems unlikely that household wealth would reach new heights during a global pandemic when large parts of the economy was shutdown but that’s exactly what’s happened.Total wealth increased by 7% to £300 trillion. It’s due to the decisions of central banks and governments to cut interest rates to record lows and implement income support packages like the furlough. This led to a chain of events whereby stock markets and housing prices soared in 2020.But some people benefited more than others:Winners
North America and Europe had most of the £21 trillion total wealth gain, increasing by £9 trillion and £7 trillion, respectively.
Homeowners and those with stock portfolios benefited from the booming property and equity markets.
Losers
Latin America and India saw their wealth fall 11% and 4% respectively.
Women and younger workers were adversely impacted as they are more likely to work in the sectors hit hardest by the pandemic like hospitality and retail.
Low earners were more likely to lose their jobs as economies went into lockdown. Particularly impacted were those in countries where the government did not support incomes with initiatives like the furlough.
TakeawayThe report predicts that global wealth will rise by 39% over the next five years to reach £420 trillion by 2025. This will mean even more millionaires and super rich and potentially even greater inequality.
CRYPTOChina turns up the heat on Bitcoin
The Chinese government is cracking down on Bitcoin which is seriously rocking the value of the world’s largest cryptocurrency.Yesterday Bitcoin fell below $30,000 for the first time since January – 50% down from the peak reached in April.It comes as China issued stern warnings for banks and payment firms not to support Bitcoin transactions. It’s the latest in a series of actions against crypto as China says it’s trying to control financial risks. Over the weekend Chinese authorities ordered the closure of cryptocurrency mines in Sichuan, the country’s second-biggest bitcoin mining province.Refresher – what is a cryptocurrency mine? These are massive centres filled with high-powered computers that solve complex algorithms to produce i.e. ‘mine’ new cryptocurrency.Bitcoin may be increasingly popular with Millennial and Gen Z investors but the crackdown by China raises more doubt over its long-term adoption by wider society. A currency that experiences such wild swings in value gives further ammunition to critics who say cryptocurrencies are too volatile and have no intrinsic value.
Stat of the day
50% of executives claim they are considering allowing their employees to bring pets to work when they return to the office
Other stories to keep you in the loop
Google closes its dedicated London start-up space
Channel 4 executives hit back at possible privatisation of network by government
Soho House plans New York IPO
London Underground to get full mobile network by end of 2024
