Society

European pay anger is more costly than inflation

3 Apr 2023

Workers are striking and demanding salary hikes to make up for higher living costs. Governments and central banks are warning about the risks of a consumer price spiral, but after three years of real wage stagnation, further restraint will inflict political and economic pain.

Capital Calls: Illumina’s odd bedfellows

3 Apr 2023

Concise views on global finance: The FTC’s order that Illumina unwind its Grail acquisition puts head commissioner Lina Khan on the same side as Carl Icahn. Khan opposes the deal because Illumina can raise prices, while the activist thinks the deal doesn't make sense.

UK growth demands better-directed fiscal fireworks

13 Mar 2023

Finance minister Jeremy Hunt’s March 15 budget may feature 30 bln pounds of headroom to ease headaches like workers’ pay. But Britain’s real malaise is a lack of long-term business investment. To keep pace with foreign largesse, Hunt needs to deploy significant tax breaks.

Female entrepreneurs’ glass ceiling is intact

8 Mar 2023

Two decades after boardroom quotas were first introduced, women have advanced at listed firms. Yet despite making up 40% of US business founders, female entrepreneurs capture just 2% of venture capital cash. Governments and asset managers can help raise that proportion.

Pocketbook confusion puts economy on wrong path

1 Mar 2023

Americans are feeling worse about the job market but better about their finances. Those sentiments should be flipped. The U.S. job market still features low unemployment and larger-than-usual raises. Households’ steady spending, meanwhile, threatens to keep inflation high.

European gas savings success hides darker reality

27 Jan 2023

Spurred by soaring prices, the continent used 12% less of the fossil fuel in 2022. Despite a push to conserve energy, much of the drop was due to companies switching to other pollutants or shutting plants. Gas-hungry sectors like chemicals and steel face a protracted struggle.

Capital Calls: Data falsehoods

26 Jan 2023

Concise views on global finance: Better-than-expected U.S. GDP and durable goods data suggest the country might be spared from a recession. But exclude Boeing sales and corporate stockpiling, and the economic outlook is less rosy.

Euro-banks have done their time in valuation jail

26 Jan 2023

Deutsche Bank, BNP Paribas and peers are valued by investors as if they are headed for a bruising slump. Yet the region’s lenders have been treading more cautiously than they did before the 2008 crisis, and have pared back risky trades. Their rehabilitation deserves more credit.

California floods underscore rising climate costs

24 Jan 2023

Catastrophic storms have devastated the Golden State’s economy and left more than $1 bln in damages. In this Exchange podcast, climatologist Adam Smith explains how global warming has made weather events more expensive, and what governments can do to protect against them.

Britain can afford to pay nurses and teachers more

20 Jan 2023

UK public workers want a big raise from the government. An inflation-matching pay rise would cost 18 bln pounds; growing state employees’ salaries in line with the private sector around half that. Downing Street could fund it with a 1p rise in VAT and closing tax reliefs.

UK has wrong approach to EU-style strike limits

16 Jan 2023

British PM Rishi Sunak wants to force minimum service levels during public sector strikes, as exist in the rest of Europe. But the plan is too broad and coercive, looking like a knee-jerk reaction to the current unrest. It needs to be better thought-out, in a pacified atmosphere.

Smarter taxes could ease UK productivity crisis

9 Jan 2023

Britain is the sick man of Europe again, due mostly to workers’ weak output. It needs an extra 115 bln pounds of annual investment just to match G7 peers. The government’s best bet is to prod businesses to spend more with tax incentives, funded by levies on wealth and property.

Conscious consumerism will be left on the shelf

29 Dec 2022

Shoppers have been forking out for organic and plant-based food for health, environmental or other reasons. Squeezed incomes will test their ethical commitment. Throw in higher input costs, and 2023 looks an unappetising year for fake burger purveyor Beyond Meat and its rivals.

Qatar has got what it wanted from the World Cup

15 Dec 2022

The Gulf state has taken more flak than it would have done had it not staged the soccer tournament, which ends on Sunday. Yet in this Viewsroom podcast, Breakingviews columnists discuss how Qatar’s largely successful event also aids a strategy to make itself globally visible.

Democracy remains vulnerable despite a good year

12 Dec 2022

Autocrats like Xi Jinping and Vladimir Putin have suffered setbacks. So have demagogues like Donald Trump. But the tough economic outlook presents further challenges for democratic systems. So does the fact that many people feel their lives have little meaning, says Hugo Dixon.

Big Pharma will muscle in on obesity gold rush

28 Nov 2022

Novo Nordisk and Eli Lilly’s weight loss drugs are swelling their valuations, and give them a lead in a potentially $50 bln market. Yet rivals like Pfizer are not far behind, and others can snap up biotechs like Altimmune. An increasingly crowded sector may lead to lower returns.

Adidas’s Kanye West bet is still in credit

27 Oct 2022

The 18 bln euro sportswear maker severed ties with the musician over offensive comments. In this Viewsroom podcast, Breakingviews columnists discuss how the financial benefits to Adidas nevertheless outweighed the costs. That may spur other brands to pursue outspoken stars.

Adidas-Kanye split leaves investors in the money

25 Oct 2022

The $18 bln sportswear group cut ties with the musician, now called Ye, after he made offensive comments. Its sluggish response risks a boycott. But given Yeezy sneakers’ high profit margins in recent years, shareholders may already have won more than they stand to lose.

French protesters have a point on wages

20 Oct 2022

Inflation running at 10.9% is eroding European workers’ salaries. Companies benefitting from a power crisis, like 139 bln euro TotalEnergies, can afford pay hikes. For others, one-time bonuses are a better way to keep workers happy and cushion the downside of looming recession.

Time for Europe to tame its energy cravings

19 Oct 2022

After paying through the nose to fill its gas storage reserves to 92%, the bloc is seeking to secure more affordable fuel. Measures like curbing price volatility, club purchases or flexible caps will be no panacea. While supply is tight, curbing demand is the key.