Seven days in the Square Mile

The pound rose above $1.30 for the first time since mid-may, following hints from members of the Bank of England’s Monetary Policy Committee that the first interest rate rise in ten years may be in the offing. Other central bankers made similar noises. Yields on government bonds in the eurozone jumped to their highest level this year after the European Central Bank chief, Mario Draghi, hinted that the ECB was ready to begin unwinding its stimulus measures, because of an improving economy and the shift from “deflationary forces” to “reflationary ones”. Concern continued to mount about a potential crisis in sub-prime lending in Britain. The Prudential Regulation Authority warned that persistently low interest rates, and a boom in loans and car finance, had left lenders vulnerable to a downturn. Liberum warned that households were under sustained pressure from falling real wages, and are susceptible to reckless lending. Volvo became the first traditional carmaker to signal the end of the internal combustion engine: from 2019, all of its new models will have an electric motor. Subway said it would open another 500 stores and create 5,000 new jobs by 2020, cementing its place as the UK’S largest high-street fast food chain. Sony Music is to start pressing its own vinyl record releases for the first time since 1989 as the revitalised global vinyl market nears $1bn. London Fields Brewery, the trendy beer-maker beloved by hipsters, was sold to Carlsberg. Facebook passed yet another milestone: it now has two billion monthly users.