The Pound gained against a basket of currencies yesterday after the vote for Scottish Independence was dealt a major blow when Shell and BP urged Scotland to vote No in the referendum. The bosses of the oil majors warned that Alex Salmond and his supporters are overestimating remaining North Sea oil reserves by up to 60%.
BP boss Bob Dudley said said in a statement on BP’s website that North Sea reserves are now largely “maturing”, adding: “I believe Sir Ian Wood correctly assesses its future potential. The opportunities today are smaller and more challenging to develop than in the past.”
Dudley said future investment on projects like offshore fracking and maintaining existing drills required “stability and certainty”, hinting that a decision to leave the UK would not be compatible with this. The Chairman of John Lewis also warned that Scottish shoppers will face higher prices if the country votes in favour of independence as firms are unlikely to continue to share the burden of higher operating costs in Scotland.
The Dollar weakened yesterday after the number of Americans filing for unemployment benefits unexpectedly rose last week to a two-month high, interrupting a steady decrease to the lowest level since before the last recession.
Initial claims have been hovering near pre-recession lows as the labour market continues to gather strength on the heels of stronger demand. Bigger gains in hiring are probably needed to reduce slack in the labour market and prompt employers to boost wages, which could propel consumer spending.
The focus yesterday was around the ECB president and the ECB’s monthly report, Mario Draghi stated that they are facing a set of conditions from low growth and low inflation, to high debt and high unemployment which can only be addressed by concerted action on both the demand and supply sides of the economy.
Draghi explained that this requires both national and European levels to play their parts in line with their respective mandate as laid down in the EU Treaties. Also highlighting that no monetary or fiscal stimulus can be successful if not accompanied by the right structural policies i.e. policies that foster both potential growth and instil confidence.
13:30 USD: Retail sales figures (Aug) expected to increase from no growth to 0.6% growth
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