1. UK Government Debt 

In November, the UK government reached an all-time high level of debt, adding another £22 billion ($27 billion) in net debt. This is the difference between what the government spends and what it earns from taxes. If current spending patterns continue, the government’s debt is expected to increase by about 10% in the next year. The government has also had to pay £7 billion ($8.5 billion) in interest payments, which is £2 billion ($2.5 billion) more than the previous year and is likely to increase further due to rising interest rates. Additionally, the government has spent more on energy price cap schemes, which have a cost of £5 billion more than last year and will continue until 2024. The UK government has rarely had a surplus, where it earns more from taxes than it spends, in the last 50 years. However, the country’s debt as a percentage of its economy is currently lower compared to other countries such as the US, France, Spain, Italy, and Canada. The UK government earns the equivalent of 30% of the country’s total economy from taxes. 

2. UK Housing Market Stability 

Nationwide, a British building society, predicts that the UK housing market could remain relatively stable next year, despite an anticipated recession. One reason for this is that around 85% of mortgage holders in the UK fixed their rates on longer-term deals before recent rate hikes, which should provide some protection. Additionally, wages are currently relatively strong and housing is becoming more affordable. As a result, Nationwide predicts that prices may only dip by about 5% next year. The stability of the housing market could also help to boost consumer spending, which is a major driver of the economy. However, there is a shortage of housing supply in certain areas of the UK, particularly in London, which could limit potential price falls and make it difficult for homebuyers to find a bargain. 

3. FTC plans to challenge Microsoft 

The Federal Trade Commission (FTC) plans to sue to block Microsoft’s $70 billion acquisition of Activision Blizzard, which would make Microsoft the third-largest gaming company in the world by revenue. The FTC is concerned that the deal would give Microsoft the power to manipulate prices, lower the quality on competing consoles, or withhold content from competitors, as Activision is one of the few game developers that publishes top games across multiple devices and consoles. Microsoft has tried to appease regulators by signing a 10-year deal to bring Call of Duty to Nintendo, but the FTC and UK and EU authorities are still concerned about the acquisition. The FTC has a history of challenging acquisitions by large tech companies in an effort to prevent anti-competitive practices in the US, and has already blocked the merger between Lockheed Martin and Aerojet Rocketdyne Holdings and the Nvidia acquisition of ARM this year. The FTC is also going to court this week to stop Meta from buying a virtual reality start-up. 
 

4. Nike’s strong sales performance  

Nike had strong sales this month, with overall sales increasing by 17% compared to the same time the previous year and online sales increasing by 25%. The company also saw an improvement in sales in China, despite the effects of lockdowns.  “Quality investing” refers to the practice of buying strong businesses that are able to compete in their growing industries. However, these types of businesses can sometimes become overhyped and their share prices can become inflated. Even well-performing businesses may struggle at times and investors may lose money if they have overpaid for the shares. However, some businesses are able to weather challenges and continue to perform well. Nike’s recent strong sales and inventory management may be a good example of this, and the company may provide hope for struggling retailers. Budget-conscious shoppers have been cutting back on unnecessary purchases, so stores have had to rely on holiday discounts to sell their stock, which can decrease profit margins. Nike, on the other hand, has reduced its inventory and has been selling full-priced products at a good rate, aided by strong Black Friday and Cyber Monday sales. 

By Fizah Jathol