Fiscal Policy

Chinese planners face an anxious wait

5 Nov 2024

The outlook for trade will worsen regardless of who wins the US election. It may take months for the new president’s policies to take shape. Beijing also needs time to assess how well its plan to stimulate its $18 trln economy is working. No point wielding any bazookas yet.

China consumer is epitome of delayed gratification

4 Nov 2024

Beijing says it wants to boost consumption’s 53% share of GDP as investment-led growth fades. Yet central planning is hard to square with free-spirited spending. Rebalancing without a period of stagnation is not easy. Recent policies also suggest the old model is hard to ditch.

Election throws Japan into turbulent waters

28 Oct 2024

The ruling LDP's drubbing at the polls means whichever party forms the government will have to rely on rivals. That will add pressure to boost fiscal spending and make it harder for the central bank to raise rates, slowing the country's economic transformation.

Biden’s precise industrial policy may soon mutate

24 Oct 2024

National Security Adviser Jake Sullivan says protecting key technology and renewable energy was an apt response to China’s threat, while similar policies from allies vindicate the US approach. But if Donald Trump returns, the same tariffs and sanctions may become blunter weapons.

UK budget is a tightrope walk over a black hole

24 Oct 2024

Finance Minister Rachel Reeves is due to set out tax and spending pledges while hemmed in by campaign promises and economic reality - even if debt rules are tweaked. In this Viewsroom podcast, Breakingviews columnists discuss the tall task of selling it to the public and markets.

Trump stumbles onto a useful globalist policy

22 Oct 2024

The protectionist presidential candidate floated an exemption for 4.4 mln US citizens living abroad from paying some $12 bln of income tax at home. It would streamline an unwieldy patchwork system for expatriates. And if structured properly, it might even help prevent evasion.

UK tax threat revives gambling stocks’ M&A saga

14 Oct 2024

Entain and Evoke shares fell over 10% on reports of a 3 bln pound tax hike on the sector. After a troubled few years in which it was a target for MGM, debt-laden Entain had looked on the mend. If Britain turns the fiscal screw, smaller players may need to bulk up.

China stimulus aims at its greatest wall of debt

14 Oct 2024

The finance ministry pledged to tackle local government borrowings. It reveals an intent to smash systemic financial risk and, by not rushing to support consumer demand, a desire to avoid repeating past spending mistakes. Beijing's plan is welcome but still missing key details.

UK government can still trip over lower fiscal bar

11 Oct 2024

Chancellor Rachel Reeves needs an extra 31 bln pounds in public investment by 2029 to boost the country’s anaemic growth. Easing the spending rules is a start. But without a clear plan and return targets, the Labour administration will fall into a debt trap of its own making.

China’s stock market bazooka is yet to fire

10 Oct 2024

The People’s Republic recently unveiled a raft of measures to solve a housing bust and support the market, producing a pop of post-vacation enthusiasm. That’s now waning as investors await a bigger move. In this Viewsroom podcast, Breakingviews columnists discuss what comes next.

New UK government is mired in unreal vibecession

2 Oct 2024

After winning the election, Labour leaders repeatedly warned of financial pain ahead. That helped drag consumer confidence to a six-month low in September. The economy is actually improving but this month’s budget will have to raise both much-needed money and rock-bottom morale.

Kamala Harris’ economic plan bows to realities

27 Sep 2024

Unlike Biden's crisis-sized agenda, Harris faces fiscal headwinds and divided government - if she manages to win. Promises of tax credits for small businesses and families, along with a deal on taxes with Republicans, are the most she's promising, and most she can deliver.

Beijing directs fiscal firepower at itself

27 Sep 2024

The government may sell $284 bln of special bonds. Part of that will be to boost consumption while a huge chunk will probably support indebted local provinces and state banks. That'll help GDP hit the official target this year but won't do much to alter the longer-term picture.

Trump lays out gluttonous tax-break smorgasbord

25 Sep 2024

The US presidential candidate has floated an array of handouts for all. His latest giveaway: unwinding the same cap on state and local deductions that he himself enacted. Add exemptions on worker tips, overtime and Social Security, and the sum exceeds $7 trln of fiscal ruin.

BoE bond tinkering offers Labour a fiscal lifeline

18 Sep 2024

Governor Andrew Bailey will this week say by how much he wants to reduce the Bank of England’s balance sheet in 2025. If he sticks to 100 bln pounds, higher gilt redemptions and fewer sales will cut the BoE’s losses. That would give the government a much-needed fiscal boost.

Trump’s SWF size envy not grounded in reality

6 Sep 2024

Sovereign wealth funds are created when countries run consistent budget surpluses and cash can be redirected towards creating long-term income. That’s not even close to a luxury the US has. Done poorly, they become a honey pot for politicians to reward the connected.

Sunbird momentum trade could go into reverse

22 Aug 2024

Americans moved in their millions from cold states to hot, but climate change is making that trend less durable. Florida, a $1.6 trln economy underpinned by inflows of young retirees, is one state that could start feeling the heat, in a bad way.

Kamalanomics contains too much of some good things

16 Aug 2024

Ahead of the Democratic convention next week, Kamala Harris is unveiling plans to unstick the housing market, curb food prices and lower taxes. Cutting red tape and other steps to encourage more homebuilding is sensible, but excessive goodies for buyers risks stoking inflation.

Dueling US tax ideas miss $4 trln elephant in room

15 Aug 2024

Both leading presidential campaigns have floated exemptions for tip income and higher credits for parents. Donald Trump also wants to move Social Security checks out of Uncle Sam’s reach. Such populist pitches pale next to expiring 2017 cuts, which will anchor the policy debate.

Flying PIIGS nations stir rethink in Europe’s core

12 Aug 2024

Former crisis economies like Spain, Greece and Italy have outpaced France and Germany by up to 20% since the pandemic. Lower exposure to manufacturing, a tourism boom and Brussels funds all helped. The role reversal may push Berlin to tolerate looser fiscal and monetary policy.