The Monday note - 27 November 2017

• The FTSE 100 index added nearly 29 points last week, closing on Friday at 7,409.6, thanks to better-than-expected trading statements. The ten year Gilt yield hardened to 1.25%, after the Office for Budget Responsibility (OBR) issued a downbeat forecast for UK growth. 
• According to a report in the Financial Times, many Japanese companies are struggling to find staff, which is even leading to delays for construction projects. The problem reflects Japan’s demographic problems, as well as a strengthening economy. 
• S&P cut the rating for South Africa’s local currency debt to ‘junk’ status, heaping pressure on the rand. The agency also cut the rating of South Africa’s foreign currency-denominated debt – which was already at junk level. 
• Uber announced it was buying 24,000 SUVs from Volvo, which will be converted to operate as driverless taxis. The ride hailing company will start to take delivery of the vehicles from 2019 onwards. 

Chief Economist comments: 

Last week’s UK government budget saw the announcement of plans to allow the testing of driverless cars on UK roads from 2019. Meanwhile, in the US, Google is already testing driverless mini-vans, with an engineer sat in the back of the vehicle, on the roads of Phoenix, Arizona. So are we already falling behind in the technology race that is going to radically transform the global economy over the next decade? Yes, but that may be a good thing. With any new technology, there is what is known as second mover advantage. Sometimes it is better to let someone else have the trouble and expense of ironing out the glitches.