UK house prices dropped at their fastest annual pace for 14 years in July 2023, according to Nationwide.
The building society said house prices dropped by 3.8%, which is the biggest decline since July 2009. Nationwide said mortgage interest rates remain high, making affordability a difficult for house-buyers. Mortgage costs hit the highest level for 15 years in July 2023 as lenders grappled with inflation and uncertainty over rates set by the (BoE) Bank of England. The BoE recently raised interest rates by 0.5% to 5% in a belated efforet to curb rampant inflation which is currently well above the 2% target.
Average UK house £260,828
The average price of a home in the UK is £260,828 – 4.5% below the August 2022 peak. Many first-time buyers would welcome a drop in house prices, which have climbed in recent years, including during the pandemic.
But despite July’s fall, higher mortgage rates mean housing affordability ‘remains stretched‘, Nationwide said.
Real average house price data from 1975 – 2022*
*Indicative guide only (prices adjusted for inflation).
Euro zone inflation fell in July, and new growth figures showed economic activity picking up in the second quarter of this year, but economists still fear a recession.
Headline inflation in the EU was 5.3% in July, according to preliminary data released end of July 2023, lower than the 5.5% registered in June. However, it still remains substantially above the European Central Bank’s 2% target.
EU GDP
GDP growth accelerated in the second quarter, expanding by 0.3%, higher than the 0.2% expected by analysts.
In July 2023, Elon Musk rebranded Twitter to X – another step in his master plan to emulate Chinese super app WeChat.
Mr Musk has long said that he wants to transform his social media firm, which he bought last year for $44 billion, into a much larger platform.
He has previously praised WeChat – a so-called ‘everything app‘ that combines chat, dating, payments and social media – and has said creating something “even close to that with Twitter… would be an immense success”.
In a post on X this week, Mr Musk said that over the coming months, ‘we will add comprehensive communications and the ability to conduct your entire financial world’.
He will hope that growing X will lead to a revenue recovery – the company has lost almost half its advertising revenue since Mr Musk bought it, and it is struggling under a heavy debt load.
Established businesses
He has successfully disrupted several industries with his ventures such as Tesla, SpaceX, Neuralink, and The Boring Company. He may be able to bring some fresh ideas and solutions to the social media space with X. It will be interesting to see if he adopts an existing digital payment system or develops his own. XRP, for instance – could be a good fit.
What is WeChat?
WeChat is a ‘super-app’ that combines messaging, social media, payments, e-commerce, entertainment, news, and more. It is owned by Tencent, one of China’s largest tech companies, and has over 1.2 billion monthly active users, mostly in mainland China.
Everything App
WeChat users can do almost anything within the app, from ordering food to booking tickets to paying bills, without leaving the app. WeChat also hosts millions of mini-apps that are created by third-party developers and businesses to offer various services and functions to users. It is like WhatsApp, Facebook, Apple Pay, Uber, Amazon, Tinder and a whole lot more rolled into one. Launched by technology giant Tencent in 2011. WeChat is now used by almost all of China’s 1.4 billion pupulation (1.2 billion users seems to be the latest concensus).
Will it work in the West?
WeChat’s huge success in China is arguably down to two major factors. For one, most people in China access WeChat on smartphones, rather than desktop computers, due to the relatively late development of the internet in the country. And two, China’s lack of competition regulation – which contrasts with most Western countries – allows an app like WeChat to potentially effectively block rival platforms.
Could Mr Musk make a similar app work outside China? We may be finding out soon – and experts believe it may all depend on digital payments and his ‘system’ to implement this everyday task.
A major difference between China and the West is the widespread adoption of digital payment technology.
While shops in China are legally obliged to accept cash, in practice, digital payments are far more common.
This difference, may be an obstacle to Mr Musk’s ambitions. It will take the Western world longer to implement a truly cashless or credit card free society.
Why does Musk want to emulate WeChat?
Elon Musk has been an admirer of WeChat for a long time. He once said that WeChat is ‘so usable and helpful to daily life‘ in China, and that he wanted to achieve something similar with Twitter, no X. He also said that buying Twitter was an ‘accelerant’ to creating X, the everything app.
X The company likely to bring you the ‘Super’ App or the ‘Everything’ App
Mr Musk has hinted that he plans to add more features and functionalities to Twitter, such as video, communications, and financial services. He also said that the Twitter name did not make sense in the new context, so he decided to rename it as X, a brand that he has used before for his online banking business that later became PayPal.
Dystopia or Utopia – A dark sideor a force for good?
Is the Super App a natural progression and development for good or yet another infringement on our freedom, liberty and privacy. Is it even necessary?
In China, we have witnessed a level of state control interference over the internet that has reportedly made it extremely dangerous for people to speak out against the government on WeChat.
It is not unusual for dissenting voices to have their accounts suspended for days or weeks for something they have said in Chats or on Moments.
Even people sharing seemingly uncontroversial information have found themselves on the wrong side of government censors and had their accounts and chat groups shut down.
Digital life footprint
Everything Everywhere – a super ‘system’ monitoring what you do, what you buy, where you go, when, how, who you talk to, what you say – all your movements, comments, discussions and activity will be known by someone else, somewhere, even your private discussions, holiday activity and medical details will be visible in the ‘system’.
Some may say this has happened already, but this ‘super-app’ will be a massive step closer to ‘life without privacy’.
Apple shares previously failed to close at levels that would have given the company a market cap of $3 trillion, despite a promising intra-day move in January 2022.
Milestone
Apple has become the first publicly traded company ever to be worth $3 trillion. The company’s market valuation reached this milestone on January 3rd, 2022. Apple’s stock briefly eclipsed $182.86 a share before closing at $182.01. The milestone is mostly symbolic but it represents investor recognition of Apple’s success over the past few years as the company has reported several record-breaking quarters of big growth in all of its product lines.
Apple is not just a hardware player – it has an even bigger slice of the tech’ consumer pie than you may imagine, especially in the cloud computing arena.
Second time lucky
Apple has regained its $3 trillion valuation to become the first-listed company, in modern times, to reach the $3 trillion milestone again. It acheived this on 30th June 2023. Shares climbed more than 2% to hit a record $193.97. However, by direct comparison and by todays valuation, the East India Trading Company beat Apple to this accolade long-a-go in the 17th Century having acheived a higher value equivalent to $7 trillion in todays money.
Arthur C. Clarke, in full Sir Arthur Charles Clarke, (born 1917, Minehead, Somerset, England – died 2008 ). English writer, notable for both his science fiction and his nonfiction. His best known works are the script he wrote with American film director Stanley Kubrick for 2001: A Space Odyssey (1968) and the novel of that film.
Threads is a new app, owned by Meta (Facebook), and built by theInstagram team, for sharing public conversations akin to Twitter. You log in using your Instagram account and posts can be up to 500 characters long and include links, photos, and videos with a 5 minute limit. Threads is Meta’s first app envisioned to be compatible with an open social networking protocol
Threads is seen by many as a direct competitor toTwitter, the social media platform owned by billionaire Elon Musk. Threads has been setting records for user growth since its launch on July 5, 2023, with politicians, celebrities, news creators and users joining the platform. Threads surpassed 100 million user ‘sign-ups’ within five days of launch according to information from Meta.
Projected to create revenue of $8 billion by 2025
Threads is projected to contribute a staggering$8 billion to Meta’s annual revenue by 2025. The report further highlights that Threads has already garnered 1 million sign-ups and is on track to reach an impressive milestone of 1 billion users in the near future.
User drop-off to be expected?
However, some recent news reports suggest that Threads has encountered challenges in retaining its users and competing with Twitter. Threads ‘daily active users’ is reporteded to have fallen from 49 million two days after its launch, to 23.6 million users about three weeks later in July 2023, according to reports. The app’s average usage time also fell from 21 minutes to 6 minutes over the same timeframe.
According to a recent news article, Google says people should use its search engine to check whether information provided by Bard is actually accurate, as it may display inaccurate or offensive information that doesn’t represent Google’s views. Just Google views I wonder…?
Google’s UK boss Debbie Weinstein said Bard was not really the place that you go to search for specific information, but rather an experiment best suited for collaboration around problem solving and creating new ideas.
‘Just checking the answer with my search engine!’
Hallucinate
According to an Android Authority article, both Bard and ChatGPT can hallucinate or confidently lie when asked about obscure topics. Bard does offer a link to search results and will sometimes cite a source or two. However, Google states that Bard can even lie about its own inner workings so you cannot trust everything it says…?
Testing… 1… 2… 3…?
According to a report by Marie Haynes, Bard predicts it will generate accurate responses 85% of the time by September 2023, but in an experiment, it posted an accuracy score of 63%, meaning it had incorrect information in more than 1/3 of its responses
Early days, or habouring a problem for the future?
The FEDNOW payment system is a new instant payment infrastructure developed by the Federal Reserve that allows financial institutions of every size across the U.S. to provide safe and efficient instant payment services.
Live system
It went live on July 20, 2023 and enables individuals and businesses to send and receive money in near real-time, 24/7/365, through their depository institution accounts.
The service is a flexible, neutral platform that supports a broad variety of instant payments and offers optional features such as fraud prevention tools, request for payment capability, and tools to support payment inquiries.
FedNow is the first new payment rail in the United States since the introduction of the Automated Clearing House (ACH) in the early 1970s.
Digital Dollar?
Is this a possibly a pre-emptive strike to get ahead of international digital currency deployment and set the scene to adopt a digital payment structure of a new ‘crypto coin system’ for the future – the digital dollar?
Rolls-Royce share price soared by 20% in july 2023 after it raised its profit guidance and reported strong demand in its jet engine and defence businesses.
The company, which makes engines for aeroplanes, ships and submarines, repoertedly said it expects to make between £1.2 billion and £1.4 billion in underlying operating profit this year, up from its previous forecast of £800 million to £1 billion.
The profit upgrade reflects the improvement in Rolls-Royce’s operations under its new chief executive, who took over in January with a mandate to turn the companyaround. A transformation programme was launched to boost productivity, efficiency and innovation across all divisions. It appears to be working.
Drivers
One of the main drivers of Rolls-Royce’s recovery is the revival in air travel and flying hours as Covid restrictions were eased. The company charges customers for the number of hours its jet engines run, which have dramatically rebounded from the slump caused by the pandemic. Rolls-Royce said it expects to generate £750 million in free cash flow this year, up from its previous target of £500 million.
Another factor behind Rolls-Royce’s growth is the increased defence spending following Russia’s invasion of Ukraine. The company makes propulsion systems for Royal Navy warships and submarines, as well as engines for military aircraft. Rolls-Royce reportedly said its defence unit had delivered ‘exceptional‘ performance and secured new contracts.
Share price hits 52 week high!
Rolls-Royce’s share price hit its highest level since March 2020, when the prospect of travel bans caused aviation-related stocks to plunge. The stock has almost doubled in value this year, making it the best-performing stock on the FTSE 100 over the past six months.
Analysts and investors have welcomed the signs of progress at Rolls-Royce, which had struggled with profitability and cash flow issues even before the pandemic.
Rolls-Royce is scheduled to report its half-year results next week, which are expected to show profits of between £660 million and £680 million some analysts suggest, more than double market expectations. The company said it remains confident in its medium-term outlook and its ability to deliver value for customers and shareholders.
Definitely one to watch. It’s been on my ‘share radar’ for a couple years now. Share price hit intraday high of £1.94 on 28th July 2023
British Gas owner Centrica and Shell see profits soar as bills rise.
Profit for the six months ending in June 2023 for British Gas owner Centrica rose to around £1.34bn from £262m a year earlier. The rise in profits came from the company’s nuclear and oil and gas business, rather than from the British Gas energy supply business which performed much worse. The average annual British Gas profit has been £584m in recent years.
Profit increase down to Ofgem ‘tweak’
However, the profit boom is surprisingly down to a ‘tweak’ to the regulator Ofgem’s energy price cap that allows the supplier to recover elements of the costs of supplying its 10 million customers during the energy crisis.
The supplier’s current profit highs are likely to upset consumer groups that have campaigned against the supplier’s treatment of vulnerable energy customers as record energy market prices forced millions into fuel poverty. Some have called the profit making ‘legalised robbery’, and demanded to bring energy into public ownership.
Dividend plans
Centrica plans to raise its interim dividend by around a third but remarks that its underlying profitability will ease significantly in the second half of the year. Energy firms saw their profit margins hit last year when wholesale prices surged in the wake of Russia’s invasion of Ukraine. Wholesale prices also jumped as th UK emerged from the dark cloud Covid as markets undicated that the UK was ill prepared for the enconomic recovery. Brexit blues didn’t help either.
The energy price cap remains £1,000 above its pre-pandemic average, despite oil and natural gas costs easing significantly. It is predicted by industry ‘experts’ to remain around the £2,000 a year average for the coming winter months, maintaining excessive pressure on household budgets.
Some ‘windfall’ tax recovery, over the years will apparently go back to ‘society’, British Gas says.
Centrica chief executive reportedly said that a lot of the firm’s profits were ‘going back into society’.
‘I know it’s difficult to see the word profits, or dividends, or similar words when people are having a tough time. I’m very conscious of this,’ he reportedly said.
Windfall
‘Bear in mind, over the next couple of years we are expecting to pay a windfall tax of ‘probably‘ well over £600m on our UK gas business off the back of the profits that we’re seeing, so a lot of this is going back into society.’
A contentious thought
A business needs to make profits otherwise there is no business. It exits to make a profit and to supply a service or product – but it is about how that business makes its profit, isn’t it?
Token windfall tax temporarily slapped on by the UK government is only payable on UK profits. Oil and gas recovery companies will only pay a tax windfall on UK related profits not on overseas returns!
Profits from fossil fuel recovery invested in greener energy for the future – that’s a topic for another article.
XRP, the native token of the blockchain company Ripple, soared more than 60% on Thursday after a U.S. judge delivered a major victory to the firm in its legal battle with the Securities and Exchange Commission (SEC).
The SEC had sued Ripple in December 2020, alleging that it had raised over $1.3 billion through the sale of XRP in an unregistered securities offering. The SEC claimed that XRP was an investment contract that gave buyers the expectation of profits based on Ripple’s efforts.
However, the Judge ruled that XRP was not a security “on its face” and that some aspects of its sale did not violate the federal securities laws.
Digital coin
The judge drew a distinction between the sales of XRP to institutional investors, which she said could constitute investment contracts, and the sales of XRP to the general public on exchanges, which did not.
Argument
The judge also denied Ripple’s argument that the SEC lacked jurisdiction over XRP transactions because they were not domestic, and agreed with the SEC that the Howey test, a four-pronged criteria to determine whether an asset is a security, applied to cryptocurrency transactions.
The ruling was welcomed by Ripple and its supporters, who argued that XRP was a utility token that facilitated cross-border payments and did not depend on Ripple’s efforts for its value.
Ripple’s chief legal officer, reportedly tweeted: “A huge win today – as a matter of law – XRP is not a security. Also, a matter of law – sales on exchanges are not securities. Sales by executives are not securities. Other XRP distributions – to developers, charities, and employees- are not securities.”
A lawyer representing over 19,000 XRP holders who intervened in the case, reportedly called on U.S. exchanges to relist XRP in solidarity with the decision.
Crypyo boost
The ruling also boosted the sentiment in the broader crypto market, as it suggested that the SEC did not have unlimited authority over digital assets and that some tokens could escape the securities classification.
‘Have you seen the news? Crypto might possibly could be going manstream.’ ‘Oh WOW! – What’s crypto?’
Crypto-related stocks such as Coinbase and crypto-coins such as ADA, HBAR, BITCOIN & ETH surged following the news.
More to come?
However, the case is not quite over yet, as the SEC said it would continue to review the decision and pursue its claims against Ripple for the sales of XRP to institutional investors.
The SEC also responded to the judge’s ruling by saying that it did not change its position that XRP was a security and that it would seek to prove that Ripple violated the securities laws in certain circumstances.
The outcome of the case could have significant implications for the crypto industry, as it could set a precedent for how other tokens are regulated and how other lawsuits are resolved.
Who are the oppressors? The few: the King, the capitalist, and a handful of other overseers and superintendents. Who are the oppressed? The many: the nations of the earth; the valuable personages; the workers; they that make the bread that the soft-handed and idle eat.
There are eight billion people living on Earth today, according to the United Nations (UN).
It’s hard to calculate the number of people in the world accurately, and the UN admits its calculations could be out by a year or two – but it estimated that in November 2022 the eight billion line was crossed.
It is only 11 years since the population hit seven billion, and experts say this huge growth is because of many reasons including better health, nutrition and medicine.
One billion in 1800
The world reached one billion people in around 1800, then it took about another 100 years to get to the second billion – but since the 1950s the popultion growth has sped up dramatically.
Countries in Asia, including India, were responsible for a large amount of population growth over the last ten years.
The increase in population shows more children are being born, surviving adulthood and having children of their own.
People are also living longer because of better medicine and nutrition.
Greater population in India than China
If you saw a picture of every person on the planet every second, it would take 253 years.
Middle-income countries, mostly in Asia, accounted for most of the growth over the past decade, with 700 million more people since 2011.
India has increased by roughly 180 million people, and is set to surpass China as the world’s most populous nation next year for the first time in almost 2,000 years.
Birth rates in China have decreased since 1980 when the country’s one-child policy was introduced, and more women have also been having children later in life to focus on their education and career opportunities.
Sub-Saharan Africa population to grow the fastest in coming years
When it comes comes to which countries are likely to grow more in the future, the UN says that most of the 2.4 billion people to be added before the global population peaks are likely to be born in sub-Saharan Africa. This includes countries like Angola, Botswana, Cameroon and the Central African Republic.
But experts say that the rate of rapid growth is starting to slow down, meaning it will take about 15 years for the population to reach nine billion – which wouldn’t be until the year 2037.
One of the main reasons for this is that people in many parts of the world are having less children. In the 1960s five births per woman was the global average, now it’s nearly half at 2.4 per woman.
The UN is predicting that the global population will rise to around 10.4 billion people in the 2080s and remain at that level until 2100.
Does it matter?
The population growing is seen as a success by the UN because it shows how much public health, nutrition, personal hygiene and medicine has improved – but it can also present challenges.
Population pressure
Having more people on Earth puts more pressure on nature, with people in competition with wildlife for water, food and space, as well as with each other. Also, growing food as fuel creates immense infrastructure pressure.
This could lead to mass migration and conflict in coming decades, experts say, particularly as extreme climate change could make parts of Africa and countries so hot they could be unsuitable for people to live in.
More people means there are less resources to go around, and so governments will also need to think about how the way people and countries use what the world currently has and how this can this should be used.
This also includes how we are using energy and the impact on climate change if big countries with growing populations continue to use fossil fuels.
Although having more people on the planet will impact the environment, in fact it is the increase in producing and using materials which creates dramatic pollution increases that causes more of an impact to our immediate environment.
The UN Secretary General António Guterres said: ‘…it is a reminder of our shared responsibility to care for our planet and a moment to reflect on where we still fall short of our commitments to one another.’
Twitter rebrands as X and kills off blue bird logo
Twitter, the social media platform, has undergone a major rebranding, changing its name to X and replacing its iconic blue bird logo with a simple black-and-white X. The move was announced by the company’s owner, Elon Musk, who reportedly said he wanted to create a “super app” that would transform the global ‘town square’.
New Logo
Musk and Twitter’s chief executive, Linda Yaccarino, posted pictures of the new logo projected on the side of Twitter’s headquarters in San Francisco, California. They also changed profile pictures and bios to reflect the new brand identity. The desktop version of the app has already switched to the new logo, while the mobile version is expected to follow soon.
My last tweet – says the BLUE bird
Musk is reported to have said he was looking to change Twitter’s logo because he wanted to “embody the imperfections in us all that make us unique”. He also said he had a personal affinity for the letter X, which he also used for his other ventures, such as SpaceX and X.com. Yaccarino said the rebrand was an exciting new opportunity to make a fresh “big impression” and go further than Twitter.
Rebranding
The rebranding of Twitter marks the biggest change to the platform since Musk began his tumultuous tenure. Among the changes have been sacking thousands of staff, locking verification checkmarks behind a paywall, reinstating banned accounts like those of Andrew Tate and Donald Trump, and applying reading limits.
The reaction from users and marketers has been mixed, with some praising the bold move and others criticising it as unnecessary and confusing. Some have also questioned whether the new logo infringes on the trademarks of other companies that use similar designs, such as Tesla and Xbox.
The company has not yet revealed whether other aspects of the platform, such as tweets, hashtags, and handles, will also be changed to match the new brand name.
Elon Musk, the billionaire entrepreneur behind Tesla, SpaceX and Neuralink, has revealed his latest venture: xAI, a new artificial intelligence company that aims to “understand the true nature of the universe”.
Musk announced the formation of xAI on Wednesday on Twitter and on the company’s official website, which features a minimalist design and a brief introduction.
“Today we announce the formation of xAI,” the website states. “The goal of xAI is to understand the true nature of the universe.”
AI
The website also lists 12 members of the xAI team, including Musk himself as the director. The team consists of researchers and engineers who have worked at leading AI firms such as Google’s DeepMind, OpenAI, Microsoft Research and Tesla.
Power
It was reported that xAI was incorporated in Nevada in June 2023 and Musk has purchased thousands of graphic processing units (GPUs) to power his AI vision. The company also has a Twitter account, @xAI, which has gained over 300,000 followers in less than a day.
Musk invited the public to ask questions about xAI on a Twitter Space – this was scheduled for 1h. July 2023. He has not provided any further details about the company’s mission, vision or products.
However, based on Musk’s previous comments and involvement in AI, it is likely that xAI will focus on developing artificial general intelligence (AGI), or human-level intelligence that can perform any task across any domain.
AI Critic
Musk has been a vocal critic of OpenAI, the AI research organization that he co-founded in 2015 but left in 2018. He has accused OpenAI of becoming too secretive, too commercial and too “woke”, especially after the launch of its popular chatbot ChatGPT.
Musk has also expressed his concerns about the potential dangers of AI, warning that it could pose an existential threat to humanity if not aligned with human values and goals. He has advocated for ethical and responsible development of AI, as well as global cooperation and regulation.
With xAI, Musk may be trying to create an alternative to OpenAI that is more aligned with his vision and values. He may also be aiming to achieve breakthroughs in AI that could benefit his other ventures, such as Tesla’s self-driving cars, SpaceX’s reusable rockets and Neuralink’s brain-computer interfaces.
AI Robots at a bar
However, xAI will also face many challenges and uncertainties in its quest to understand reality. AI is a complex and rapidly evolving field that requires massive amounts of data, computing power and talent. It also raises many ethical, social and philosophical questions that are not easy to answer.
Moreover, xAI will have to compete with other established and emerging players in the AI space, such as Google, Facebook, Amazon, IBM, Microsoft and Meta. These companies have invested billions of dollars in AI research and development and have access to vast amounts of data and resources.
It remains to be seen whether xAI will be able to achieve its ambitious goal and how it will impact the AI industry and society at large.
Baidu said its AI system called Ernie 3.5 outperformed OpenAI’s ChatGPT and GPT4 in several key areas.
The Chat Bot was revealed in March 2023 and has since been publicly testing it in China. The chatbot is based on Baidu’s foundational AI model called ERNIE.
Baidu’s advancements underscore the intense competition taking place in the area of generative AI with technology giants in the US and China rapidly advancing their AI models.
ERNIE – Enhanced Language RepresentatioN with Informative Entities
US and China AI Bots go head to head
Ernie was first introduced in 2019, and since then, Baidu has been improving and upgrading it with new versions. The latest version, Ernie 3.5, was announced in June 2023, and it claims to outperform OpenAI’s ChatGPT and GPT 4 in several key areas
Baidu’s Ernie is an artificial intelligence (AI) model that powers the company’s chatbot service, Ernie Bot. Ernie stands for Enhanced Language RepresentatioN with Informative Entities, and it is a natural language processing (NLP) deep-learning model that can understand and generate natural language.
Trained on large data sets
Ernie 3.5 is based on Baidu’s foundational AI model, which is trained on huge amounts of data from various domains, such as news, social media, encyclopedias, books, and more. Ernie 3.5 can handle various NLP tasks, such as question answering, dialogue generation, text summarization, sentiment analysis, and more.
According to a test by the China Science Daily journal, Ernie 3.5 surpassed ChatGPT and GPT 4 in general abilities and outperformed the more advanced GPT 4 on several Chinese-language capabilities.
ERNIE version 3.5 boosted its training and efficiency, making it faster and cheaper to upgrade to future versions. Baidu hopes that ERNIE Bot will become the next must-have app in China’s internet market, attracting users because of its natural and engaging conversations.
Intergration
Baidu has been integrating ERNIE Bot across multiple business applications, ranging from cloud computing to smart speakers.
AI Chatbot
ERNIE Bot is one of the examples of how Baidu is investing in AI technology and competing with other tech giants in the US and China. Baidu’s founder Robin Li, reportedly said that ‘foundation models are an engine driving global economic growth and represent a major strategic opportunity that cannot be missed‘.
The major BIG players, Alphabet (Google), Microsoft & META all have their own versions of AI. Hopefully it will be used ‘intelligently’.
AI stands for Artificial Intelligence, which is the ability of machines to perform tasks that normally require human intelligence. AI can involve various aspects of cognition, such as perceiving, reasoning, learning, problem-solving, and even creativity.
Types of AI
AI can be classified into different types based on the level of intelligence and the scope of tasks that machines can perform. One common way to categorise AI is by using the following four types:
Narrow AI: This is the most common and basic type of AI, which refers to machines that can perform specific tasks very well, but cannot generalize to other domains or situations. Examples of narrow AI include speech recognition, face recognition, web search engines, recommendation systems, self-driving cars, and chess-playing programs.
General AI: This is the type of AI that aims to achieve human-like intelligence across a wide range of domains and tasks. General AI would be able to understand and learn from any kind of data, reason and solve problems, communicate and interact with humans, and exhibit common sense and creativity. However, general AI does not exist yet, and it is considered a long-term goal of AI research.
Super AI: This is the type of AI that would surpass human intelligence in all aspects, including speed, memory, knowledge, creativity, and wisdom. Super AI would be able to outperform humans in any task and domain, and potentially pose existential risks to humanity. Super AI is also a hypothetical concept that has not been achieved or proven yet.
Artificial neural networks: This is a type of AI that mimics the structure and function of biological neural networks, which are the basis of human brain activity. Artificial neural networks consist of layers of interconnected nodes that process information and learn from data. Artificial neural networks are widely used for various applications of AI, such as computer vision, natural language processing, machine learning, and deep learning.
Applications of AI
AI has many applications in various fields and industries, such as:
Healthcare: AI can help diagnose diseases, analyze medical images, design drugs, assist surgeries, monitor patients, and provide personalized care.
Education: AI can help personalize learning, assess students’ progress, provide feedback, tutor students, grade assignments, and create educational content.
Business: AI can help optimize operations, enhance customer service, automate tasks, analyze data, generate insights, improve decision making, and increase productivity.
Entertainment: AI can help create music, art, games, movies, and other forms of entertainment.
AI can also help recommend content to users based on their preferences and behaviour.
Security: AI can help detect threats, prevent cyberattacks, enhance surveillance, identify frauds, enforce laws, and protect privacy.
Social: AI can help communicate with humans through natural language processing and speech synthesis. AI can also help understand human emotions and behavior through sentiment analysis and facial expression recognition.
Challenges and limitations of AI
AI also faces many challenges and limitations that need to be addressed by researchers and users. Some of these include:
Ethical: AI raises many ethical issues such as bias, fairness, accountability, transparency, privacy, human dignity, and social impact. How can we ensure that AI is aligned with human values and does not harm humans or society?
Technical: AI still faces many technical challenges such as scalability, robustness, explainability, interpretability, generalization, and adversarial attacks. How can we improve the performance, reliability, and security of AI systems?
Societal: AI also has many societal implications such as employment, education, regulation, governance, and collaboration. How can we adapt to the changes and opportunities that AI brings to our lives, work, and society?
AI is here to stay – it’s all about how we use it for the betterment of ‘humankind’. Please, let’s use it safely, responsibly and for the good!
Big tech companies heavily involved in the development of AI products
UK house prices have defied expectations by increasing slightly in June 2023 but annual prices fell at the fastest rate since 2009 as soaring mortgage costs took a toll on the market, according to Nationwide Building Society.
The surprise monthly rise of 0.1% reversed a 0.1% fall in May 2023 and surprised economic forecasts of a 0.3% fall! It pushed the average cost of a house in the UK up slightly to £262,239. House prices were 3.5% lower in June 2023 compared with a year earlier, the sharpest rate of decline since 2009.
The sharp increase in borrowing costs is likely to exert a significant drag on near-term housing market activity
EZPC LOANS LTD. ‘How does 6% sound to you?’
It is important to note that the housing market is subject to fluctuations and can be influenced by various factors such as economic conditions, government policies, inflation, interest rate increases and global events.
Crypto, short for cryptocurrency, is a digital or virtual currency that uses cryptography for security and operates independently of a central bank. Cryptocurrencies are decentralised currencies, meaning they’re neither issued nor governed by a central bank.
Some cryptocurrencies are issued by their developers, while others are generated by their respective network algorithms. They exist and operate on a public ledger called a blockchain, which records all crypto transactions. Blockchain encryption is designed to make all transactions safe and secure from tampering, counterfeit, and other forms of fraudulent transactions.
‘Do you know what crypto is? Nope, absolutely no idea, do I need to?’
Digital Wallet
Cryptocurrencies can be stored in a ‘digital wallet’ on a smartphone or computer, and owners can send them to people to buy things. Although we can’t see or touch cryptocurrencies, they do hold value. Cryptocurrencies are now being used to purchase many different products and services, and some people are even buying cars and houses with their digital assets. They’re not widely used at the moment, but many believe the use of cryptocurrencies could one day become a common way to trade.
Is there a future for a digital currency?
However, the future of cryptocurrency is uncertain and opinions are divided. Some predict that institutional money entering the market and the possibility of crypto being floated on the Nasdaq could add credibility to blockchain and its uses as an alternative to conventional currencies. Others predict that regulators around the world might come together on a global framework for crypto regulation, but this looks unlikely right now. It is impossible to predict the future of the crypto market with absolute certainty.
Despite a strong start to 2023, some analysts remain cautious on growth and predict pressure for digital assets. Cryptography and blockchains will continue to be integral parts of the modern economic toolkit.
In conclusion, while there is no consensus on whether crypto is the future of currency, it is clear that it has the potential to play a significant role in the future of finance.
Stop crypto?
There is evidence to suggest that the US, EU, UK and other nations are trying to regulate the crypto market. Some people in the crypto world believe that recent attempts to ring fence the crypto industry and cut off its connectivity to the banking system are reminiscent of a little-known Obama-era program called ‘Operation Choke Point’. This refers to a 2013 US government initiative that sought to cut off undesirable industries from banking services.
Meltdown
The sector was already under pressure, after prices of virtual currencies collapsed last year. Further damage came from the meltdown of several high-profile firms, including FTX, run by the so-called ‘Crypto King’ Sam Bankman-Fried, whom prosecutors have accused of conducting ‘one of the biggest financial frauds’ in US history. Jolted by the turmoil, US regulators stepped up their policing of the sector, which authorities say has been on notice since at least 2017 and that their activity runs afoul of US financial rules intended to protect US investors.
Crackdown?
The campaign has yielded a steady drumbeat of charges against crypto firms and executives, alleging violations ranging from failing to register properly with authorities and provide adequate disclosure of their activity to, in some cases, more damaging claims such as mishandling of consumer funds and fraud. The crackdown culminated this month in legal actions against two of the biggest platforms: Coinbase and Binance.
However, during a hearing on cryptocurrency and blockchain technology regulation, Senate Banking Committee Chairman Mike Crapo shared his belief that the United States would not be able to succeed in banning Bitcoin.
In conclusion, while there is evidence that the US is trying to regulate the crypto market, it is not clear if they are trying to stop it completely and there is also evidence that suggests that the US would not be able to succeed in banning Bitcoin.
What was operation choke point?
‘Operation Choke Point’ was allegedly an initiative of the United States Department of Justice that began in 2013 under the Obama administration. The program investigated banks in the United States and the business they did with firearm dealers, payday lenders, and other companies believed to be at a high risk for fraud and money laundering. It was an attempt by President Obama’s Department of Justice, the Federal Deposit Insurance Commission, the Consumer Financial Protection Bureau, and other government agencies to cut off banking and financial services for small businesses and industries that they deemed to be illegal enterprises or otherwise undesirable.
The UK is facing a cost of living crisis as inflation has soared to its highest level in decades. The Bank of England has raised interest rates 13 times since December 2021 in an attempt to bring inflation back down to its original target of 2%. But what does this mean for consumers, savers and borrowers?
What is inflation and why is it rising?
The current UK interest rate is now: 5.0%
Inflation is the term used to describe rising prices. How quickly prices go up is called the rate of inflation. Inflation affects the purchasing power of money, meaning that the same amount of money buys less goods and services over time.
The rate of inflation in the UK is measured by two main indicators: the consumer price index (CPI) and the retail price index (RPI). The CPI is based on a basket of products and services that people typically buy, while the RPI also includes mortgage interest payments.
According to the Office for National Statistics (ONS), the CPI inflation rate was 8.7% in the year to May 2023, while the RPI inflation rate was 11.4%. This means that on average, prices were 8.7% and 11.4% higher respectively than they were a year ago.
The main drivers of inflation in the UK are:
Energy bills: Wholesale gas prices have surged due to global supply disruptions since the pandemic hit in 2020, geopolitical tensions, the war in Ukraine and increased demand. The government introduced an energy price guarantee to freeze energy prices for six months, but prices still went up 27% in October 2022. The energy price guarantee has been extended.
Shortages: The pandemic and Brexit have caused labour and supply chain issues that have affected many sectors, such as food, clothing, construction and hospitality. This has led to higher costs and lower availability of some goods and services.
Demand: As the economy recovers from the lockdowns, consumer spending has picked up, especially on leisure and travel activities. This has increased the demand for some goods and services, pushing up their prices.
How do interest rates affect inflation?
Interest rates are the cost of borrowing money or the reward for saving money. The Bank of England sets the bank rate, which is the interest rate it charges to commercial banks that borrow from it. The bank rate influences other interest rates in the economy, such as mortgage rates, loan rates and savings rates.
Interest rates climbed ever higher as the Bank of England lost control of inflation
The Bank of England uses interest rates as a tool to control inflation. The Bank has a target to keep inflation at 2%, but the current rate is more than five times that. When inflation rises, the Bank increases interest rates to make borrowing more expensive and saving more attractive. This reduces the amount of money circulating in the economy and slows down rising prices.
The Bank has raised interest rates 13 times since December 2021, from 0.1% to 5.0%. This is the highest level since March 2009, when interest rates were cut to a record low of 0.5% following the global financial crisis.
What does higher inflation mean for your money?
Higher inflation means that your money loses value over time. For example, if you had £100 in April 2022 and inflation was 8.7%, you would need £108.70 in April 2023 to buy the same amount of goods and services.
Higher inflation also affects your income, spending, saving and borrowing decisions.
Income: If your income does not keep up with inflation, you will have less purchasing power and lower living standards. For example, if your salary was £30,000 in April 2022 and increased by 2% in April 2023, you would earn £30,600. But if inflation was 8.7%, you would need £32,610 to maintain your purchasing power.
Spending: Higher inflation may encourage you to spend more now rather than later, as you expect prices to rise further in the future. However, this may also reduce your savings and increase your debt.
Saving: Higher inflation reduces the real return on your savings, meaning that your savings grow slower than prices. For example, if you had £10,000 in a savings account that paid 1% interest in April 2022, you would have £10,100 in April 2023. But if inflation was 8.7%, your savings would be worth only £9,300 in real terms.
Borrowing: Higher interest rates make borrowing more expensive, meaning that you have to pay more interest on your loans and mortgages. For example, if you had a £200,000 mortgage with a 25-year term and a 2% interest rate in April 2022, your monthly payment would be £848. But if the interest rate rose to 4.5% in April 2023, your monthly payment would increase to £1,111. Mortgage interest rates hit 6% in July 2023.
How can you protect your money from inflation?
There are some steps you can take to protect your money from inflation, such as:
Review your budget: Track your income and expenses and see where you can cut costs or increase income. Try to save more and spend less, especially on non-essential items.
Shop around: Compare prices and deals for the goods and services you need or want. Look for discounts, vouchers and cashback offers. Switch providers or suppliers if you can find better value elsewhere.
Pay off debt: This is a priority! If you have high-interest debt, such as credit cards or overdrafts, try to pay it off as soon as possible. This will reduce the amount of interest you pay and free up more money for saving or investing.
Save smartly: Look for savings accounts or products that offer interest rates higher than inflation (tricky to find). Consider diversifying your savings into different types of assets, such as stocks, bonds, property or gold. These may offer higher returns than cash in the long term, but bear in mind they also carry more risk and volatility.
Invest wisely: If you have a long-term goal, such as retirement or buying a house, you may want to invest some of your money in the stock market or other assets that can grow faster than inflation. However, you should only invest what you can afford to lose and be prepared for the ups and downs of the market. You should also seek professional advice before making any investment decisions.
Conclusion
Inflation and interest rates are two important factors that affect the UK economy and your personal finances. The UK is currently experiencing high inflation due to various factors, such as energy prices, shortages and demand. The Bank of England has raised interest rates to try to bring inflation back down to its target of 2%. Higher inflation and interest rates have implications for your income, spending, saving and borrowing decisions. You can take some steps to protect your money from inflation, such as reviewing your budget, shopping around, paying off debt, saving smartly and investing wisely.
How well has the Bank of England done to keep inflation at or close to 2%?
