German climate change policy takes Trumpian turn 18 Jul 2017 Angela Merkel has castigated the U.S. President for pulling out of the Paris accord. Yet two German states are putting mining jobs ahead of cutting carbon emissions. If they don’t reconsider, the Chancellor’s green credentials – and the global agreement – will suffer a blow.
Inflation gives Bank of England a summer reprieve 18 Jul 2017 Prices rose just 2.6 pct in June, easing the pressure on the central bank to hike rates. That gives it a bit more time to gauge the extent of any Brexit-induced slowdown. When it comes to normalising monetary policy, Britain is shuffling towards the back of the queue.
Carillion needs high-speed balance sheet repair 17 Jul 2017 Despite winning a share of the UK’s 55 bln pound high-speed rail line, the distressed construction company’s situation is precarious. Its pressing task is to find investors to put in perhaps 500 mln pounds, before customers start cutting loose.
Central banks oust politicians as market fixation 17 Jul 2017 Investors are worrying about interest rates rather than elections. Statistics are a more reliable guide to the economic outlook than polls to political outcomes. But the path for monetary policy remains uncertain. Expect asset prices to be jumpy and their moves more synchronised.
EasyJet can afford a spell on autopilot 17 Jul 2017 Losing its chief executive to broadcaster ITV is manageable for the UK airline, one of the FTSE-100’s best performers this year. While Carolyn McCall did a good job – and bagged easyJet a higher valuation than Ryanair – what she leaves behind has structural advantages over rivals.
Murdoch’s Sky takeover can survive lengthy review 14 Jul 2017 The media mogul won’t offer more concessions to win quick approval for his 11.7 bln pound bid for the UK broadcaster. That will probably trigger an extended probe which investors think makes a deal less likely. But authorities can suggest remedies to clear the way for a deal.
Britain’s 5G auction puts customers before coffers 14 Jul 2017 Regulators capped incumbent BT’s participation in upcoming mobile-spectrum auctions. That may lead to less fevered bidding, and smaller takings with which to pay down the national debt. It’s a reasonable trade-off in order to ensure a competitive four-player telecoms market.
Aramco exemption bends London IPO rules to limit 13 Jul 2017 The UK regulator wants to change its listing regime to lure state-controlled groups like the Saudi oil giant. The watchdog has to keep markets clean while protecting London’s competitiveness. But making policy for a single company - especially one as big as Aramco - is a mistake.
AstraZeneca’s 3 billion pound CEO is overvalued 13 Jul 2017 That is how much was wiped off the drugmaker’s market value after a website reported Chief Executive Pascal Soriot will join Teva. Any such exit would hardly inspire confidence, coming after another senior departure and before a key medical trial. But the reaction is excessive.
RBS path to normality gets a little shorter 12 Jul 2017 The UK bank will pay $5.5 bln to settle allegations it mis-sold mortgage-backed bonds, not too out of whack with rivals’ deals. RBS still has a long list of legacy issues to resolve, but the risk is becoming background noise. Boss Ross McEwan is a step closer to paying dividends.
Bank of England puts price on bond fund stupidity 12 Jul 2017 Regulators worry that the growth of open-ended bond funds could cause fire sales. A central bank paper estimates that could add nearly half a percentage point to companies’ funding costs. Pointy-headed analysis should reinforce the case for more sensible investment models.
Amec probe pollutes tricky oil merger 12 Jul 2017 John Wood Group shares fell more than 6 percent after the company it is taking over, Amec Foster Wheeler, said it was under investigation for possible bribery. The probe was a known risk, but the bad timing, combined with a low oil price, makes the 2.2 bln pound deal look rash.
A trend for Burberry to copy: focus on margin 12 Jul 2017 The British brand had a good first quarter and is on track to deliver planned cost cuts. That still leaves new boss Marco Gobbetti with plenty to do to rebuild investors’ confidence. A good option would be to follow Saint Laurent’s lead and set a firm operating margin target.
Britain learns how not to think about work 12 Jul 2017 A review of the UK “gig economy” suggests some jobs have conditions that make them little better than having no job at all. Others appeal much more than pay levels would suggest. Employment data does not capture the difference. Developing countries have known this for decades.
Fickleness hampers French seduction of bankers 11 Jul 2017 Gallic politicians are scrapping taxes and tweaking labour laws in an attempt to lure London-based financiers to Paris after Brexit. Though the gifts are appealing, memories of past banker-bashing are fresh. Today’s charmers could be replaced by unfriendly characters tomorrow.
UK’s jobs review kinder to employers than workers 11 Jul 2017 A government-backed study proposing better rights for gig workers and changes to tax hits some helpful notes. It stops short, though, of calling for business to bear the cost of a highly flexible workforce. That is a realistic reflection of the UK’s weaker bargaining power.
Pearson’s $1 bln Penguin sale papers over cracks 11 Jul 2017 The education group is selling almost half its 47 pct stake in Penguin Random House to co-owner Bertelsmann. Pearson has maximised the cash proceeds, but the valuation looks low. With a still-troubled core business, boss John Fallon is running out of assets to sell.
TalkTalk’s focus on cheap may not be cheerful 10 Jul 2017 The UK broadband provider’s founder Charles Dunstone wants to grow the business with a focus on value for money. That’s risky in a competitive market, and endangers profitability. The alternative – finding a buyer – could be tricky given the company’s rich valuation.
SoundCloud flags music’s lopsided digital revival 7 Jul 2017 The German streaming service is cutting 40 percent of staff, according to reports, after Spotify shelved a possible purchase last year. With most of the returns from the industry’s digital renaissance going to labels, streamers have yet to prove they have an independent future.
Japan and EU find solace in Trump trade rejection 6 Jul 2017 Last year both were focused on negotiations with the United States. But the U.S. president’s protectionist stance prompted them to revive long-standing talks. Though the “political agreement” is far from complete, it’s a sign that trade liberalisation can still happen.