2015 took the business and economic world on a bumpy ride, but what were the top stories of the year?
2015 business was beset with data breaches but Talktalk and Ashley Madison caused the most uproar. 157,000 customers of Talktalk were affected by the breach in October with bank details being accessed and stolen and two teenage boys from Northern Ireland arrested and bailed in November in connection with the attack.
It was, however, the Ashley Madison attack that caused the most personal damage to its customers. The controversial American extramarital affairs internet dating website was hacked in July 2015 and, when demands for the site to close weren’t met, user data including names, addresses and credit card details were released. Immediately groups of internet vigilantes sprung up, hoping to obtain the details of public individuals to expose and extort. However, things took a turn for the darker when a number of suicides were reported as a result. Currently the owners of the website are facing a multimillion dollar law suit from affected users.
As the Greek debt crisis rumbled into its sixth year it looked, at one point, to threaten the stability of the whole Eurozone with rumours of Greece exiting the Eurozone becoming stronger and increased friction between Europe and Greece as Greece persistently rejected the austerity imposed on it as terms of its bail out. Eventually, Greek Prime Minister, Alexis Tsipras, agreed to the terms of €86bn Eurozone programme. But with the refugee crisis hitting Greece particularly hard and capital controls still in place, the economy has fallen back into recession, meaning Greece’s problems look likely to continue well into 2016 and beyond.
This year, we’ve seen oil prices sink to lows people wouldn’t have believed possible at the height of the petrol price protests a few years ago. The global slow down has led to a slackening in the demand for oil leading to falling prices and, consequently, prices at the petrol pump. Good news for consumers as prices fall from a one time high of nearly £1.50 a litre to less than £1.00 per litre even in some parts of the notoriously over priced South East.
Once the hallmark of sturdy German reliability, no other brand has seen as dramatic a fall from grace as Volkswagen this year. Starting in America, it was revealed that many diesel models had been fitted with the so-called defeat device, which enabled vehicles to detect when they were in an emissions test and allow the engine to run at a different setting than when on the roadresulting in them passing tests, while still breaching emissions standards on the road. With share prices hit hard in the wake of the scandal, and reports of mounting legal costs and fines, more cynical analysts have moved beyond questioning how VW will recover, to whether they will at all.
Facebook tax payments
Mark Zuckerberg made the news at the end of the year with his announcement that, following the birth of his daughter, he and his wife would be giving away 99% of their Facebook shares to charity with the aim of promoting equality and human advancement. But while this altruistic gesture made headlines around the world, probably thanks to some highly efficient PR, Facebook’s corporate tax payments in the UK slipped under the radar somewhat. Despite profits multimillion dollar profits, thanks to some natty channelling of funds, Facebook’s UK corporation tax bill for last year amounted to the not so altruistic £4,327.
Slow down in China
For many years China was the new global economic darling with its endless double digit GDP growth. However, as the global recession began to bite at even this economic behemoth, the summer saw 40% knocked off its stock market value, and the third quarter of 2015 saw it report its worst economic performance since the crisis began with its GDP rising only 6.9%. But, with other major economies reporting GDP increases of less than 1%, it’s safe to say, China is still experiencing levels of growth most economies can only dream of.
July’s budget proved to be one of the most controversial the country had seen in years. In an attempt to fulfil the Tory election promise to reduce the budget deficit, George Osborne looked to reduce the benefits bill by £12bn with massive cuts to tax credits. Amongst other moves, working tax credits for many families would be reduced by up to £1,400 a year, hitting some of the poorest working families the hardest. In the end, the move was defeated in the House of Lords, leading George Osborne to surrender the idea. However, with the economic recovery still in a fragile state, many in the financial sector are still pushing for action to be taken to bring the deficit under control.
FTSE passed the 7,000
In March this year the FTSE 100 hit a record high, passing the 7,000 mark. The peak of 7,000 was hailed as a major positive indicator for the economy, with corporate profits and optimism growing. It was thought the index would continue to ascend, with the economy blossoming. However, with China’s struggles, uncertainty around Greece and struggles in the US economy, the FTSE swiftly declined from this high, and currently sits around the 6,300 mark.
Dairy farmer blockades
This summer saw the biggest fall out between supermarkets and dairy farmers to date. Culminating in farmers blockading supermarket distribution centres, protests started when three major milk processors announced they would cut the price they pay dairy farmers for milk leading to farmers claiming they were being paid less for their milk than it cost to produce. As global demand slumped with Russia banning European dairy products and falling sales in China, and fine weather meaning a surplus in UK supply, it was the perfect storm for prices to crash.
UK steel collapse
The global downturn, falling commodity prices and China’s economic slowdown claimed another major victim this year, the UK steel industry. With thousands of jobs lost as plants closed, there were accusations of China being at fault, not just because of the slowdown they were experiencing, but also for deliberately dumping steel at sub-prime prices on the UK market, in some cases, even selling at a loss. The government was asked to step in, but limited help was offered.
It’s been a tumultuous year for UK business and industry, and although many of these problems are no longer making headlines, that doesn’t mean they’ve gone away. With the business community increasingly jittery as the EU referendum looms on the horizon, and concerns over TTIP , 2016 looks likely to be just as stormy.