Money‚ Markets & Macroeconomics

Modern capitalism’s problem is too much prosperity

19 Jul 2024

Growth in productivity worldwide has collapsed since the 1970s. One explanation is that modern life in developed countries has become too comfortable as governments cushion the effects of economic cycles. Reviving capitalist economies may require accepting some level of hardship.

Trump 2.0 might be the same, but much more

18 Jul 2024

After an earth-shaking few weeks in US politics, the Republican presidential candidate’s odds of returning to the White House look higher. In this Viewsroom podcast, Breakingviews columnists discuss what a second term might look like, and why Trump might be empowered this time.

China’s plenum strikes the right opening chord

18 Jul 2024

Party leaders pledged at a key meeting to ‘unswervingly encourage’ the private sector. The details will be key but there are enough fresh signals to suggest President Xi Jinping sees the problems in the $17 trln economy, and may adjust policy course to shore up confidence.

Public investment dearth is Europe’s growth killer

17 Jul 2024

Germany will spend a paltry 0.15% of GDP on new government-backed projects in 2025. Other European countries are tightening their belts for fear of having to raise taxes. But failing to invest enough in the green transition, infrastructure or defence will cripple their economies.

Inflation teaches five lessons for the next crisis

16 Jul 2024

After taming a 9% rise in prices without breaking economies, US Fed Chair Jay Powell and other central bankers are poised to pat themselves on the back. There’s also an opportunity to improve the playbook. Among the useful takeaways: embrace taciturnity, flexibility and humility.

Trump VP pick plays on a message of decline

15 Jul 2024

The Republican candidate's new running mate JD Vance solidifies an agenda of trade and immigration restrictions pitched to struggling workers. Vance’s story of upward mobility appeals to the blueprint, and a grim truth: for working-age men, it’s harder to climb the ladder.

China’s weak economy awaits new remedies

15 Jul 2024

Growth slowed to 4.7% in the second quarter. Real estate woes endure and lacklustre consumption points to a greater reliance on exports. Policymakers can still hit their annual GDP target, but the sobering data ups the stakes for fresh fixes from this week’s Third Plenum.

UK gilts are ready to regain their long-lost shine

12 Jul 2024

British government bond prices are off 24% in three years due to a budget crisis, tight monetary policy and political turmoil. Yet the UK now has a fiscally austere new administration with a big majority and a central bank ready to cut borrowing costs. That could stop the rot.

Victorian rail mania has lessons for AI investors

12 Jul 2024

Excitement over artificial intelligence has spurred a wave of investment. In the mid-1840s, British speculators similarly went wild for another capital-intensive technology: railways. The historic boom and subsequent bust provide a salutary warning for today’s hyped-up markets.

Markets will keep shaky French regime on a leash

11 Jul 2024

A left-wing coalition and Emmanuel Macron’s centrists are vying for control of France’s government. Fiscal discipline may fall by the wayside. Paris is already being disciplined by Brussels for its high deficit and debt. A reliance on foreign investors leaves little wiggle room.

China’s financial sector is put on needed GDP diet

11 Jul 2024

Officials have tweaked how they measure the value banks add to the $17 trln economy. Local governments now have less incentive to inflate lenders' deposits and loans. It's a sensible move that recognises how inefficient and bloated bank lending has become.

UK green fund has risky but valid investor carrots

10 Jul 2024

The new government’s ‘National Wealth Fund’ is really $9 bln of public cash with capped returns. The risk is private investors slated to provide treble that figure get too good a deal. But with the UK’s energy transition requiring $64 bln a year, a degree of largesse makes sense.

EU’s China trade weak spots hide in plain sight

9 Jul 2024

Beijing may retaliate after Brussels imposed tariffs on Chinese-made electric vehicles. Of the 5,000 product groups the People’s Republic imports from the EU, many are too crucial or too small to bother with. But luxury goods, petrol cars and some foods are plausible targets.

Global economy finds new ways to keep growing

8 Jul 2024

Despite fears of a slowdown, world GDP is expanding at 3.5% a year, faster than in 2023. As the US engine loses thrust, Europe and emerging markets are picking up. A sluggish China and geopolitical confrontations are risks. But for now, investors can enjoy a Goldilocks moment.

French election shock puts Macron in new quandary

7 Jul 2024

The left will dominate France’s parliament after Sunday’s runoff, while Marine Le Pen’s far right suffered a surprise setback. President Emmanuel Macron will struggle to build a centrist coalition. But appointing a left-leaning prime minister would leave investors on edge.

Labour ‘open for business’ stance faces early test

5 Jul 2024

New UK PM Keir Starmer wants to boost growth and attract capital. He must balance those priorities with political anxiety about inbound investment. Companies like Royal Mail and Thames Water will show where he draws the line, and how he wields extensive powers to block M&A.

UK elections herald return to tarnished stability

4 Jul 2024

Polls suggest voters will hand Rishi Sunak’s Conservative Party a historic defeat. In this Viewsroom podcast, Breakingviews columnists discuss how a new government might pick up the pieces amid the legacy of a now-immutable Brexit and political turmoil engulfing global peers.

Trump’s gains supercharge higher-for-longer trade

3 Jul 2024

The former president’s improved odds of re-election are pushing up yields on longer-term Treasury bonds. His tax and trade agenda would add to inflationary pressure, keeping rates high. But an unpredictable race and uncertainty about Trump’s policies will leave investors on edge.

Le Pen will fail as star of Meloni in Paris

3 Jul 2024

Markets are relatively calm about the prospect of a far-right government after Sunday’s second electoral round. They may believe that Marine Le Pen’s party would mimic the apparent moderation of Italy’s Giorgia Meloni. Her fiscal plans, inexperience and beliefs suggest otherwise.

New UK government can claim competence dividend

2 Jul 2024

Eight years of political upheaval and economic uncertainty raised the risk premium for investors. Now the centrist Keir Starmer is set to take over, while France and the US face electoral turmoil. For the first time since the Brexit vote, the country looks a relative safe haven.