1 UK economy shrinking ‘fastest since 2009’ (Larry Elliott & Nick Fletcher in The Guardian) The Bank of England and the Treasury are under increasing pressure to prevent Britain from sliding into recession after a wide-ranging health check of the economy completed since the referendum showed the sharpest downturn in activity since the peak of the financial crisis seven years ago,
Service industries ranging from banks to restaurants, hedge funds, bars, gyms and hairdressers were all affected by what was described as a “dramatic deterioration” in business confidence that suggests the economy is on course to shrink by 0.4% in the third quarter unless conditions improve.
The City now expects the Bank to deliver a package of immediate support – including a cut in interest rates and a resumption of its quantitative easing programme – when its monetary policy committee meets early next month.
Philip Hammond, the new chancellor, admitted that confidence had been dented by the surprise of Brexit vote and dropped a broad hint that he was contemplating spending increases and tax cuts for his autumn statement.
Labour’s shadow chancellor John McDonnell, who said this week that £500bn of infrastructure investment was needed to combat the economic slowdown, said the chancellor’s comments meant “Britain is on hold until Philip Hammond makes up his mind.”
2 Amazon to enter student loan business (BBC) E-commerce giant Amazon has entered the student loan business, teaming up with US bank Wells Fargo to offer lower interest rates to subscribers of its “Prime Student” services.
For an annual fee “Prime Student” gives subscribers discounts, free delivery and access to Amazon’s video streaming. Wells Fargo is one of the largest providers of student loans in the US. The deal should help the bank promote products and Amazon attract students.
“Prime Student” subscribers will be eligible for a 0.5% discount on Wells Fargo student loans. Amazon charges $49 a year in the US or £39 in the UK for its “Prime Student” service. The fees are about half of a regular Amazon “Prime” membership.
In the US the student loan business is a billion dollar industry and Americans are believed to hold over $1 trillion in university-related debt. Tackling the student debt crisis has been a central issue in the US election. Both Hillary Clinton and Bernie Sanders presented plans to cut that debt and lower the cost of higher education.
Wells Fargo is one of the largest private lenders of student loans in the US. It had $12.2bn in outstanding student loans in 2015.However, the US federal government remains the largest provider of student loans.
3 Pokemon Go, from prank to phenomenon (San Francisco Chronicle) Google unwittingly planted the seed for “Pokemon Go” two years ago in one of the many April Fools’ Day jokes the internet company is famous for.
In a mischievous 2014 post, Google announced a new training tool, created in conjunction with Pokemon and Nintendo, for hunting Pokemon using Google Maps. Its goal, the company said, was to hire the world’s best Pokemon Master — because it valued technically savvy risk takers who can “navigate through tall grass to capture wild creatures.”
The enthusiastic reaction to Google’s fake “Pokemon Challenge” video resonated within Niantic Labs, a little-known startup that had been incubating within the company — particularly with its founder John Hanke.
With the goal of building mobile apps and games that encouraged “adventures on foot with others,” Hanke named Niantic after a grounded whaling vessel grounded during the San Francisco Gold Rush of 1849 and converted to a storage building. The remains of the original ship were later found buried near a current San Francisco landmark, the Transamerica Pyramid.
Hanke was ready to found his own independent startup until Google co-founder Larry Page persuaded him he could keep Niantic within the internet’s most powerful company. Nintendo, meanwhile, had fallen on hard times. Just one month after Google’s Pokemon video, the Japanese video-game maker reported its third yearly operating loss in a row as its lackluster Wii U console cratered.
“Pokemon Go” offered a potential way out of its hole. Nintendo still owns the trademark to all the characters and retains a 32 percent stake in Pokemon Co. Similar-sized stakes are held by Game Freak, a company created by Pokemon creator Tajiri, and Creatures Inc., launched by Ishihara.
The final piece in the “Pokemon Go” puzzle fell into place last August, when Google reorganized itself as a holding company called Alphabet that would in turn own a collection of independent subsidiaries — from large ones like Google itself to tiny ones like Niantic.
Niantic laid out its plans for “Pokemon Go” last September, and the following month Google, Nintendo and Pokemon agreed to invest $20 million, with a promise to put up another $10 million if an undisclosed set of goals were met. Pokemon Co. says the additional investment hasn’t been made yet, even though it looks Niantic is hitting all its targets with the precision of a Pokemon Master.