Politics

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.

UK banks have range of Brexit shock absorbers

23 Jun 2016

British lenders can weather the storm if Britons vote to leave the EU. Banks will no doubt be hit should the economy slow. But it’s harder for them to go bust than it was in 2008. They have bigger liquidity backstops to cope with any bank run - and so does the Bank of England.

Britain’s EU vote: a guide for the perplexed

23 Jun 2016

The UK is voting on whether to leave the European Union. In many ways, Britain is already a euro-anomaly. No matter which way the public votes, the referendum will leave scars, and usher in big changes that go beyond the EU’s borders – whatever shape those may take.