Government & Agencies

UK bank tax would fall on shrinking shoulders

11 Sep 2024

Lenders fear that finance minister Rachel Reeves will tap them to help plug a fiscal ‘black hole’. Reversing a tax cut from the last government would be the simplest option. The high returns of NatWest, HSBC and Lloyds suggest they can afford it, but rate cuts may change that.

Draghi’s Europe plan collides with national crises

9 Sep 2024

The former Italian PM reckons the bloc must invest an extra $883 bln a year to catch up with the US and China. His report sensibly calls for telecom mergers and a common defence strategy. But the big lift will have to come from governments beset by their own issues.

China’s global battery ram will be hard to stop

6 Sep 2024

The US and EU have erected tariffs to limit imports of electric vehicles. The People’s Republic has an even bigger lead in batteries. New tech gives rivals a chance to muscle in, but Chinese cellmakers’ head start means resisting giants like $115 bln CATL will come at a cost.

Michel Barnier joins Macron’s last chance saloon

5 Sep 2024

French President Emmanuel Macron picked the former Brexit negotiator to form a government after inconclusive elections. The choice will antagonise the Left and divide the Right. It may buy Paris some time with Brussels on its budget. But the weak executive will have a short life.

VW row flags Germany’s creaking corporate model

5 Sep 2024

The $55 bln carmaker is battling unions as it tries to deepen a $11 bln cost-cutting programme. A complex shareholder base makes agreement harder. Such feuds are becoming more common as German consensus-driven governance faces a weak economy, trade wars and climate change.

Seven & i deal will test Japan’s financial renewal

5 Sep 2024

Couche-Tard’s takeover interest in the 7-Eleven owner is a pivotal moment for the country’s efficiency drive. In this Viewsroom podcast, Breakingviews columnists explain why Tokyo ought to wait to see how the target reacts before opining, and how a deal could easily turn hostile.

Oil’s new slump cuts across OPEC’s plan A

4 Sep 2024

Crude prices are off sharply, partly due to weak economic data and partly because a potential Libyan supply crisis appears to have been resolved. Yet OPEC plans to hike output in October. The producer group may have to choose between aggravating the selloff and its own unity.

Germany gets timing wrong with Commerzbank sale

4 Sep 2024

At first glance, the decision to offload shares in the 16 bln euro lender seems smart given a 130% share-price jump in three years. But the valuation is still low. And if long-rumoured M&A materialises, Berlin will forego its special influence and miss out on a takeover premium.

Trade War II will be easy to lose for China

4 Sep 2024

The hit to its exports from higher US tariffs threatened by Presidential nominee Donald Trump would be severe. Beijing’s failure to abide by the terms of past truces will make de-escalation hard to achieve, so will its determination to export its way out of a growth slump.

Far-right’s vote win is a loss for German economy

2 Sep 2024

PM Olaf Scholz’s coalition parties got trounced in regional elections, with the extreme right-wing AfD winning more than 30% in Thuringia and Saxony. That could prompt Berlin to double down on fiscal discipline and tighten immigration rules, deepening the country’s growth woes.

China GDP hiccup would have long-term aftershocks

2 Sep 2024

This year’s growth target of “around 5%” faces headwinds. It’s now more a planning tool, so a miss might not seem as consequential as when the goal was all but compulsory. But a slowdown would probably prompt new policies to keep alive 2035 plans like doubling per-capita income.

Raw economics will trump migration’s sour politics

2 Sep 2024

Nearly 900 mln people would like to live in another country, but most can’t move due to political and social opposition to foreigners. These attitudes are hard to shift. But deepening demographic crises mean a migration-fuelled boost to labour supply is critical for growth.

India’s food inflation debate will get spicier

2 Sep 2024

Governor Shaktikanta Das shot down an idea from New Delhi to strip food costs from the central bank's price target. Ignoring the item would allow the RBI to trim rates and combat slowing GDP growth. It would also hurt the poor. As inequality rises, so will pressure to bend.

UK’s housing mess requires costly fix

29 Aug 2024

PM Keir Starmer has pledged to build many more houses. Yet homebuilders’ shares are not pricing in a boom. Private players may prefer to sell fewer, pricier properties. More government funds would help, at the risk of further squeezing Britain’s finances.

Shipping rates yet to signal a calmer Middle East

22 Aug 2024

The US is pushing hard for an Israel-Hamas peace deal. But shipping executives expect rates to stay high this year as vessels avoid the Red Sea. While only a rough gauge of regional tensions, the freight experts may be more accurate forecasters than ceasefire optimists.

China’s ammo export curb is more a green defence

19 Aug 2024

Beijing is restricting overseas sales of antimony, a metalloid it dominates production of that's also a key ingredient for weapons. Realpolitik alone would explain it. But the People’s Republic also needs the supply-constrained element for its rapid production of solar panels.

The ECB is running out of time to revive euro zone

16 Aug 2024

The bloc’s GDP rose by a steady 0.3% in the second quarter. But business surveys and sentiment data suggest growth is flagging. Inflation is sticky so European Central Bank chief Christine Lagarde may be reluctant to cut rates decisively. But waiting risks impairing the recovery.

Short seller sharpens a divide in India’s market

16 Aug 2024

Hindenburg Research says Madhabi Puri Buch’s past stake in an Adani-linked fund makes the chair of the securities regulator unfit to probe the tycoon’s empire; her response kept stocks calm. Locally, she is seen as tough. Outsiders watching the saga will be more sceptical.

Iran danger marks return of oil’s risk premium

13 Aug 2024

Conflict in Gaza and tit-for-tat attacks in the Middle East have desensitised markets to possible supply shocks. A US warning of imminent retaliation against Israel changes that. Despite weaker demand, oil prices reflect the dangers of infrastructure and tankers becoming targets.

Drahi-for-Bharti swap gives BT partial relief

12 Aug 2024

French mogul Patrick Drahi is offloading a 25% stake in the British telco worth about $4 bln to India’s Bharti. BT CEO Allison Kirkby can stop worrying about her indebted shareholder. Alongside Deutsche Telekom and Mexico’s Carlos Slim, her share register still looks crowded.