Artificial Intelligence (AI) is likely to play an increasing role in the future. What exactly is AI? Simply put, it is a machines ability to perform traits of human intelligence, such as learning, problem solving and perception. Why is it the future? On Thursday, BT Group, Britain’s biggest broadband and mobile provider announced plans to cut up to 55,000 jobs by 2030 and adapt to new technologies such as AI. BT Group CEO, Phillip Jansen, believes after completing its fibre roll out and simplifying its structure with AI, the business will gain significant profits whilst delivering better customer service.
AI is certainly a concept investors are warming to but there are still concerns around the rules and guidelines it needs. CEO of Open AI, Mr Sam Altman, was called to Congress this week along with other top technology CEOs to touch on the risks AI could potentially pose to society, how it would affect the jobs market and why regulations for the technology was mandatory. “If this technology goes wrong, it can go quite wrong” were the words Altman shared before suggesting a federal agency be created in order to review AI programmes before they are released to the world. It is evident that AI may eliminate some jobs, but it is also likely we see job creation as training and education is introduced in the future.
On Wednesday we saw a slight rise in the unemployment rate to 3.9% from January to March, signalling weakening in the labour market. This is an indicator that the Bank of England (BoE) will consider before their next rate meeting on the 22nd of June. There has been an increase in the amount of people that are looking to join the labour force again and this helped alter the unemployment figure. We must highlight that over 2.5m workers have been out of work due to poor health since the pandemic, with the blame pointed at record-long NHS waiting lists. UK Chancellor, Jeremy Hunt, has recently provided greater funding for childcare costs in an effort to encourage more workers to return to the labour force.
Businesses owned by Mr Elon Musk are rarely side-lined in the news and this week is no exception. Twitter, the social media platform, has a new CEO taking the place of Mr Musk, and this is Linda Yaccarino, who has developed the nickname “Velvet Hammer”. Having previously run NBCUniversal, the ad’s sales business, her main objective has been identified; to bring back advertisers to the business. Since the $44bn takeover by Mr Musk, ad sales have halved to $2.5bn as brands were conflicted with the significant moves made by the previous CEO. Will Mr Musk give Ms Yaccarino enough room to operate and convince brands that they can operate in a less controversial environment? This question can only be answered in time.
Japan’s headline inflation for April (year-on-year) was higher than expected at 3.5%, with core inflation (which excludes the cost of fuel and energy) rising to 3.4% from the previous 3.1%. This is now a fresh four-decade high of inflation in the world’s third largest economy and investors are increasingly wary that Bank Governor Uedo will stray from his previous dovish stance and tighten policy in order to reach the 2% inflation target. Japan’s GDP for the first quarter of 2023 was stronger than expected at 1.6%, driven mostly by increasing tourism and strong corporate earnings.
News in markets is ever flowing and can be perceived in good or bad light. In these times we as always maintain our message on diversification and ensuring portfolios are not overly exposed to market narratives. It is important to focus on the long-term opportunities that are created in markets.
Nathan Amaning, Investment Analyst
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