Money‚ Markets & Macroeconomics

UK inflation dip puts Andrew Bailey on the spot

19 Jul 2023

The growth in UK consumer prices slowed more than expected in June, to 7.9%. It’s welcome news for households, and sent British stocks soaring. The Bank of England governor, though, is likely to keep hiking rates, increasing the risk he will go too far.

How to breathe life into zombie office property

18 Jul 2023

Lenders are steering clear of buildings that face reckonings from remote working, pushing prices down. In this Exchange podcast, real estate investor Scott Rechler argues that it will take financial and civic engagement to make empty space desirable for living – and investing.

Russian crude imports expose India forex struggle

18 Jul 2023

The UAE is the Modi administration’s new target as it tries to make the rupee a global trading currency. Sanctions-hit Russia wasn’t keen, so refiners like Indian Oil have to settle deals with Moscow in yuan. New Delhi has yet to show it’s offering more than a speculative bet.

China risks leaving it too late to stimulate

17 Jul 2023

The world’s second-largest economy grew a slower-than-expected 6.3% in the second quarter. Yet despite weakness in property and consumption, there are pockets of strength. Hitting the 2023 growth target looks less certain and a sharper slowdown could yet catch Beijing off guard.

West is sleepwalking off healthcare cliff

17 Jul 2023

Europe is scrambling to end its reliance on Chinese raw materials for green energy and chips. But policymakers forget the region sources 80% of ingredients for top medicines in the East. Producing them at home may prevent a crisis but it risks exacerbating public debt piles.

European gas security rests on a fragile balance

14 Jul 2023

Mindful of last summer’s mad price rally, EU states have lots of the fossil fuel in storage. This, plus higher Chinese purchases, may keep European contracts below Asian ones. But that may prompt US cargoes of liquefied gas to head East, lifting European gas prices again.

New Aussie central bank boss faces two-front war

14 Jul 2023

Deputy Governor Michele Bullock is replacing Philip Lowe. She’ll wield less power in a more independent institution than her gaffe-prone predecessor. The inside pick offers stability as the Reserve Bank battles an economic slowdown and the prospect of El Nino-driven inflation.

China property risk rears its ugly head again

14 Jul 2023

After showing some signs of stabilising, the housing market is set to be the biggest drag on second-quarter GDP. But Beijing is wary of deploying large-scale stimulus to prop up prices. The knock-on effects on consumption will be lasting and painful for the economy.

Megalomania runs in the Disney DNA

13 Jul 2023

The $165 bln media company is letting boss Bob Iger stay until 2026 despite a sagging stock price. Iger’s predecessor Michael Eisner stuck around forever, too, and that didn’t end well. With Disney in a serious transition, Iger isn’t doing himself – or shareholders – any favors.

Gregorian calendar, Fed target spoil inflation dip

12 Jul 2023

New data suggests the US is close to beating inflation. Yet June’s 3% rate was somewhat helped by a yearly comparison that will only get tougher. And with the Federal Reserve sticking closely to its 2% inflation goal, the finish line is probably much further out.

Andrew Bailey’s silence is hurting UK homeowners

12 Jul 2023

Traders’ confusion over the Bank of England’s decisions is sending market interest rates wild. That has pushed the cost of a popular mortgage to a 15-year high. To limit household pain, the governor needs to ditch his usual reticence and tell markets that they are wrong.

Venture capital has female entrepreneur black spot

11 Jul 2023

Companies founded by women get at best 3% of venture money each year. That’s a sign investors are not allocating capital wisely and missing lucrative deals, Loyal VC founding partner Kamal Hassan tells The Exchange podcast. It’s time to change the venture playbook.

UK growth plan aims pea-shooter at monster problem

11 Jul 2023

Finance minister Jeremy Hunt wants Britain’s $2.5 trln pension system to invest more in private equity and startups. His scheme avoids the risky idea of forcing managers into buying British assets. But it’s too fuzzy and timorous to solve the country’s dismal lack of investment.

How to crack the climate free rider problem

10 Jul 2023

One reason countries fiddle while the world burns is that they bear the costs of action while everyone benefits. Creating a “climate club” would incentivise nations to pull their weight. But a lot of geopolitical stars first need to align, says Hugo Dixon.

UK could borrow a leaf from Canada’s mortgage book

7 Jul 2023

High levels of housing debt have left British borrowers exposed to rising interest rates. One way to avoid this problem is to fix payments as a proportion of the loan. Some Canadian lenders offer such adjustable-term mortgages, Edward Chancellor writes. The UK could follow suit.

Why central banks cannot relax in inflation fight

4 Jul 2023

Western policymakers have frantically hiked interest rates to dampen consumer prices. In this Exchange podcast, Claudio Borio, a top official at the Bank for International Settlements, argues that rate-setters need to keep going to ensure costs of living won’t stay elevated.

El Nino will brew up potent new economic storm

4 Jul 2023

The Pacific Ocean phenomenon is back. Resultant floods, heatwaves, water scarcity and fires will damage crops and infrastructure, may cost trillions, and augur inflation and rate hikes. Worse, climate change makes such events stronger and more frequent, embedding supply shocks.

Capital Calls: China’s central bank, Generali

3 Jul 2023

Concise views on global finance: The People’s Bank of China plays it safe by earmarking Pan Gongsheng as its new governor; the Del Vecchio family gets the green light to own more than 10% of the 30 bln euro Italian insurer.

EU green finance standard may play second fiddle

3 Jul 2023

Sustainability-minded investors are flocking to climate disclosure plans set out by the ISSB, an accounting standards body. They already cover less than tough EU goals. Brussels believes its regulatory might will make its standards the norm, but global finance may well not.

Weaker China offers opportunities to US and allies

3 Jul 2023

The mutiny against Russia’s Vladimir Putin is a blow for Beijing, while the Chinese economy is weak. The People’s Republic is still a threat, notably to Taiwan. But the US and its partners should grab any chance to work with China on issues like climate change, says Hugo Dixon.