Government & Agencies

Why stablecoins will entrench dollar’s supremacy

25 Oct 2024

A Russian plan to break the greenback’s grip met a cool reception at the BRICS summit in Kazan. The more important monetary news was Stripe’s $1 bln acquisition of digital-currency group Bridge. Dollar-pegged blockchain currency will keep Uncle Sam on top of the monetary order.

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.

Ishiba’s bad election bet will boost Bank of Japan

24 Oct 2024

The new prime minister’s decision to call a snap election next week could see his Liberal Democratic Party lose an outright majority in the lower house. That would weaken Shigeru Ishiba’s long-term prospects but would help safeguard the central bank’s push to slowly raise rates.

China-India ties will settle into a new normal

23 Oct 2024

A deal on patrolling their disputed frontier is a welcome development. Leaders Xi Jinping and Narendra Modi will meet too. There's little chance of going back to the status quo of business ties four years ago, however. India will keep entry barriers for Chinese companies high.

China pins stimulus on money merry-go-round

23 Oct 2024

Beijing plans to swap some of its $9 trln of local government debt into bonds with full, rather than implicit, state backing. The rejig will lower rates of interest, lengthen maturities and allow provinces to issue more debt to banks. That will juice spending for a while.

China can help itself with a stronger stock market

22 Oct 2024

President Xi Jinping wants companies worth some $11 trln to deliver better returns. Boosting long-term value would reassure anxious savers and help bring down government debt. Taming volatility, though, will require Beijing to cede some control.

UK’s bad tax on share trading looks hard to kill

18 Oct 2024

Britain’s stamp duty on equity transactions hampers and distorts investment. Yet abolishing it probably won’t revive the fortunes of the country’s shrinking stock market. Chancellor Rachel Reeves has little cash to spare, and cheaper ways to boost domestic share ownership.

Inflation is not dead, it’s just resting

18 Oct 2024

Annual price increases are returning to the subdued 2% level targeted by many central banks. Official interest rates are falling too. Yet there’s a long history of policymakers prematurely celebrating the end of inflation. The experience of the 1970s offers a cautionary tale.

China’s growth reprieve will be short-lived

18 Oct 2024

Third quarter output slowed to 4.6% on subdued retail sales and property investment but Beijing's target pace of "around 5%" needs sustaining to achieve developed economy status by 2035. Unless policymakers move their own goalposts, they'll have to contort themselves a lot more.

Lagarde struggles to dispel market’s gloomy vibes

17 Oct 2024

The European Central Bank lowered its key interest rate to 3.25% but didn’t commit to further cuts. Markets fear a recession and expect borrowing costs to be below 2% in 12 months. President Christine Lagarde may be forced to loosen policy faster – and reassure investors of that.

Coldplay gives Hong Kong rush of blood to the head

17 Oct 2024

The UK band’s sold-out concert suggests the struggling economy’s affluent locals have plenty to spend. Yet city leader John Lee reckons policies like streamlining mortgages and IPOs will foster growth. He’d do better finding ways to help the less well off boost consumption.

China’s woes make Plaza Accord 2.0 less outlandish

16 Oct 2024

If Donald Trump becomes US President, he wants a weak dollar and taxes on Chinese imports. He may use the threat of tariffs to get Beijing to boost the yuan, an echo of the 1985 Plaza Accord. A strong currency hurts growth, but a trade war could be worse for President Xi Jinping.

Measured UK tax hike can avoid dealmakers’ Brexit

16 Oct 2024

Chancellor Rachel Reeves has to raise money in her Oct. 30 Budget and may up capital gains tax from 28% to 35%. That would require 2,000 buyout barons to pay $120,000 extra on their funds’ profits. Such a small hit would probably stave off a threatened private equity exodus.

India’s moment is hurt by interference label

15 Oct 2024

New Delhi called Ottawa linking its agents to homicides "preposterous" as the countries expelled each other's diplomats. A similar US case has higher stakes. If the saga shunts perceptions of India into the same bucket as China, its status as a land of opportunity will suffer.

Putin’s economic resilience rests on war addiction

15 Oct 2024

Sanctions and the fall in oil prices have hit the Russian economy. But growth has outpaced expectations since the 2022 Ukraine invasion thanks to high military spending, now at more than 6% of GDP. The reliance on ongoing conflict hides President Vladimir Putin’s vulnerability.

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.

Nobel prize brings global inequality back in focus

14 Oct 2024

Economist Daron Acemoglu and two colleagues shared the Swedish award for showing why some countries are rich and others poor. Their findings – democracy and rule of law matter – are a reminder that huge disparities in income among, and within, nations remain a festering issue.

Old theories offer new insight into global rivalry

14 Oct 2024

The geographer Halfold Mackinder in 1904 proposed that future strife would revolve around control of Eurasia. Though the modern world is very different, it’s one way to understand conflicts in Ukraine and the Middle East and the showdown between the United States and China.

Italy has more to gain from France’s pain

14 Oct 2024

Rome borrowing costs are converging with Paris. Prime Minister Giorgia Meloni’s stable government is pledging to contain its deficit and pushing through reforms, at a time when its peer is in turmoil. To press home the advantage, though, Meloni will need to take bolder action.

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.