Money‚ Markets & Macroeconomics

Chinese EV makers will drive around EU tariffs

12 Jun 2024

The bloc is imposing levies ranging from 17% to 38% on electric cars imported from the People’s Republic. Some, like BYD, can swallow the cost, while others will find workarounds. Europe’s policymakers will have to go back to the drawing board if they want to have a real impact.

Jerome Powell goes from astrophysics to stargazing

11 Jun 2024

Price pressures and a strong job market complicate the US central bank’s job. But it’s getting harder to delay interest-rate cuts after telegraphing them last year. Forecasts due Wednesday are pivotal. Muddled data ahead of the November election may sideline the Fed chairman.

Price cuts will lift US vibes only so much

11 Jun 2024

Since 2019, poorer Americans have received bigger pay hikes than their rich counterparts. Higher costs for basics like food and rent also mean inflation hit them harder. Fresh discounts from Target, McDonald’s and Amazon help, but offer limited relief for tight household budgets.

Macron lobs petrol on fiery French economic waters

10 Jun 2024

After suffering a beating in European elections, France’s president has called a snap parliamentary poll. Debt investors are already antsy about the country’s yawning deficit. A new electoral battle with Marine Le Pen’s far-right National Rally party will hardly help matters.

European defence requires bolder investors

7 Jun 2024

Small military industry firms struggle to access financing. Lack of interest from banks and big funds has prompted two-thirds of them to refrain from seeking equity funding. The EU’s attempt to finance groups producing gear used both in war and peace can only be a first step.

Japan has ways to avoid a sovereign debt crunch

7 Jun 2024

As interest rates rise, investors are fretting about the sustainability of government debt in the developed world. Japan’s gross debt of more than 250% of GDP and heavy debt-servicing burden makes it look vulnerable to a loss of confidence. But appearances are deceptive.

ECB can start worrying about growth, not inflation

6 Jun 2024

The European Central Bank cut interest rates for the first time since September 2019, but predicted inflation will stay above its 2% target until 2026. That could tempt Frankfurt hardliners to delay further monetary easing. Doing so would endanger the bloc’s fragile recovery.

UK building plans will fail to get off the ground

6 Jun 2024

Rivals in the July 4 election promise 300,000 new houses a year to ease shortages and lower prices. A lack of builders makes that unlikely. More than 346,000 construction jobs have disappeared since 2019. Without immigration or training, Britain will remain cramped and expensive.

India’s resilient democracy comes with a cost

6 Jun 2024

Narendra Modi will have to rely on a coalition government after a shock upset in the national elections. In this Viewsroom podcast, Breakingviews columnists explain why politicians may dig deeper to support the poor and how power sharing may create challenges for big business.

Immigration benefits outweigh US border troubles

5 Jun 2024

President Joe Biden is under pressure to solve the problem of inbound surges at the southern border. But foreign-born workers fill gaps left by retiring boomers, an advantage over countries like China and South Korea. The rebound in newcomers provides a long-term economic boon.

EU vote is prelude to Europe’s real choice

5 Jun 2024

Some 370 mln voters from 27 member states are set to pick a new assembly. The result will influence how EU government leaders decide who should lead the next European Commission. Backing incumbent Ursula von der Leyen to avoid a chaotic deadlock is in the bloc’s best interest.

India may no longer be Narendra Modi’s

4 Jun 2024

His party is on course to lose its majority and will be at the mercy of allies to form a government. It ends a decade of extraordinary stability in the world’s fifth-largest economy. A market selloff hints at the costs of coalition rule. Growth may slow but there are some gains.

Russian bond rout raises risk of financial crunch

4 Jun 2024

Yields on the country’s debt are at 20-year highs on worries about the budget largesse lavished on the economy. With inflation rising and interest rates at 16%, President Vladimir Putin’s desire to keep funding the conflict in Ukraine could result in lasting fiscal turmoil.

Modi 3.0 offers limited opportunities for the West

3 Jun 2024

Western leaders’ hopes for India as a bulwark against China outweigh their concerns about Narendra Modi’s authoritarian streak. They will have more scope to work with the prime minister during his expected third term. But the overlap of interests and values is limited.

South Africa avoids doomsday, remains in purgatory

3 Jun 2024

After the elections, the African National Congress will lose the grip on parliament it held since 1994. Poor results by the hard left lower the risk of a market-unfriendly ‘doomsday coalition’. But with GDP growth of just 0.9% and large deficits, the country’s future looks bleak.

EU’s wobbly budget rules can bolster shaky economy

3 Jun 2024

Eleven countries have breached Brussels’ fiscal levees, with deficits larger than 3% of GDP. But the limits come with loopholes and allow for delays. That’s good news for a bloc desperate for growth to rival the US. For Europe, weaker rules are better than misguided austerity.

Tories’ obsession with French unions is obsolete

31 May 2024

UK PM Rishi Sunak accused Labour of plotting ‘French-style union laws’. But France has the lowest proportion of organised workers among big European nations. And there were fewer strikes in the last three years than in Britain. Time for the Conservatives to find another bogeyman.

Change is coming to UK’s macroeconomic policy

31 May 2024

The opposition Labour Party, the strong favourite to win the upcoming election, has promised continuity in its fiscal and monetary approach. An ugly economic inheritance at home and global challenges abroad make that ambition unrealistic. Investors should prepare for a shift.

Korea’s music industry has more than a BTS problem

31 May 2024

Shares in entertainment firms like Hybe and SME have slumped along with CD sales since members of top K-pop group BTS left for military service. They reunite next year, but a sluggish economy and shaky China sales mean top labels can’t afford to assume business is bulletproof.

Next UK leader will bang head against fiscal roof

30 May 2024

Britain’s election in July is likely to hand power to the opposition Labour Party. In this Viewsroom podcast, Breakingviews columnists discuss how constrained finances could mean higher taxes. For business leaders, the promise of more stability may be as good as it gets.