Politics

Dixon: Stock markets too sanguine about Brexit

28 Jul 2016

Investors think the UK will settle easily into a new deal with the European Union. More likely there will be cabinet wrangles, tortuous negotiations with the EU, and an unsatisfactory conclusion.

Trump chooses fear mongering over economic promise

22 Jul 2016

The White House hopeful was anointed at the GOP convention. He and other speakers, like tech investor Peter Thiel, presented a dire picture. The economy is stable but violence at home and abroad has unnerved voters. The grim message, coupled with populist appeal, could resonate.

Hadas: The realist’s approach to Brexit

20 Jul 2016

It's easy to think of things Britain might want to keep if it leaves the European Union. But an alternative approach is to work out what aspects it most wants to cast off. That leads to a difficult conclusion: what the UK really wants is what it already has.

Turkey will pay high price for political stability

18 Jul 2016

President Tayyip Erdogan is reasserting control after seeing off a military coup. He offers stability of sorts, which explains why Turkish assets pared knee-jerk losses. But his crackdown also engenders uncertainty, which investors loathe. Luring foreign money will be harder.

Turkey’s failed coup leaves no victors

16 Jul 2016

President Tayyip Erdogan’s government survived an attempted military coup but has few reasons for triumphalism. Much-needed foreign capital is likely to flee, and all the faster if there are harsh reprisals. Economic damage risks making this key U.S. and EU ally less reliable.

Kurdistan oil bust is study in underestimated risk

14 Jul 2016

Creditors will take control of Gulf Keystone after falling prices, excessive debt, unreliable payments and unrest left a company once worth nearly 4 bln pounds essentially bankrupt. Huge oil majors can afford such risks, but most investors should avoid wannabes that take them.

Assault on UK privilege has many possible targets

14 Jul 2016

Theresa May wants to focus on more than the "privileged few". If Britain's new prime minister is serious, the most glaring disparities are in pensions, savings, housing and infrastructure. Action in these areas would go some way to healing north/south and young/old rifts.

China’s legal defeat is new threat to Asian trade

14 Jul 2016

The People's Republic has angrily rejected an international panel's denial of its claims in the South China Sea. Though rhetorical sabre-rattling is mostly harmless, an economic backlash would hurt already-weak imports and exports in the region. Such tactics have misfired before.

New UK cabinet best suited to deliver Brexit-lite

14 Jul 2016

British Prime Minister Theresa May has appointed the pro-EU Philip Hammond as chancellor. Brexiteers Boris Johnson and David Davis also have major roles. But the appointments imply a post-EU Britain will look less different to the one that preceded it had others been in charge.

PRC legal setback reaches beyond “nine-dash line”

12 Jul 2016

A tribunal rejected sweeping claims over the South China Sea. Beijing refuses to recognise the court's jurisdiction. That means clashes will go on. It also casts doubt on China's respect for other international rules - and undercuts more positive moves to project economic power.

London’s divorce from wider UK can only go so far

1 Jul 2016

The capital's new mayor is right to seek greater tax autonomy. But after a divisive vote in which Londoners wanted to stay in the EU, the trick is to do so without increasing divisions with the rest of the UK. Offsetting devolution with lower grants is a good place to start.

Britain tests catastrophe bounce back theory

1 Jul 2016

Doom-mongers overestimated how much the U.S. economy would suffer after Lehman's collapse in 2008 or the 9/11 attacks. Gloom about the UK leaving the EU is better judged. As Bank of England Governor Mark Carney acknowledges, policymakers face much tougher challenges this time.

BoJo exit is small net positive amid UK shambles

30 Jun 2016

Boris Johnson’s decision not to run as Tory leader adds to Britain’s political chaos. The next UK prime minister will most likely be EU-exit advocate Michael Gove or reluctant Remainer Theresa May. A Brexit U-turn now looks less likely - but the process could be more cordial.

Britain’s best course of EU action is inaction

30 Jun 2016

It would be silly to push the button on leaving the European Union before Italy’s referendum in October or French and German elections in 2017. By then the UK will have more leverage, and voters a better idea what leaving looks like. Investors could be in for a dull interregnum.

Football apart, UK has no reason to envy Iceland

28 Jun 2016

The Nordic nation outshone England on the pitch but its EU trade ties are nothing to emulate. It has the single market access that Britain already enjoys, only without any say over the rules. Nor can it dodge the free movement of people or contributions to the bloc’s budget.

Post-EU Britain could address North-South divide

28 Jun 2016

Ditching EU state aid rules means Britain can in theory set different corporate tax rates around the country. That could ease regional economic disparities - a key flashpoint from the referendum. The catch is such a move would require a cleaner break with the single market.

Sterling destined for more measured misery

27 Jun 2016

After voting to quit the EU, Britain faces an economic slowdown that will warrant more monetary easing, a pickup in inflation, and huge political uncertainty. It’s a toxic mix for any currency. Spectacular plunges in the pound will give way to steady falls to new lows.

Austerity has no place in post-Brexit Britain

27 Jun 2016

Chancellor George Osborne has since 2010 aimed to cut public debt and deficits in the name of financial stability. He may now need to row back to cope with any post-vote economic slowdown. Investors’ reaction so far suggests his fiscal rigour was over-zealous in the first place.

The City’s future is in lap of EU gods

27 Jun 2016

Britain’s Leave vote could strip so-called passporting rights from domestic banks and asset managers. One solution is to claim the UK merits equivalent status as its rules match Europe’s. But even if euro peers okay that, London will lose control over future policy-making.

Spanish election offers only weak choices

23 Jun 2016

The second round of elections since December will either produce a weak centre-right minority, or hard-left coalition. Neither is what the economy needs, but the second would make investors far more nervous.