Trump may force Germany to do more for Europe 16 Jan 2017 Donald Trump is threatening to slap U.S. import tariffs on German cars. For all the economic pain, this could give the EU a new lease of life. Internal pressure failed to make Berlin spend more or give fiscal concessions to southern Europe. External threats might work better.
Sterling crash mystery lacks suspect – and victims 13 Jan 2017 There was no single trigger for the sudden 9 percent drop in the value of the pound on Oct. 7, a committee of central bankers has found. Big banks avoided major losses, and other markets were unaffected. Investors will have to learn to live with sharp but short-lived gyrations.
Regulators try to save fund lemmings from selves 12 Jan 2017 Customers of open-ended investments rely on false promises of liquidity that tend to evaporate in market panics. The Financial Stability Board has some ideas for addressing the ensuing risks. Its ideas are sound, but would be superfluous if fund managers did their jobs.
UK retailers’ discount detox may be short-lived 12 Jan 2017 Strong sales at Marks & Spencer and Debenhams show efforts to wean customers off promotions are bearing fruit. More full-priced sales mean better margins. But the temptation to hoist the “sale” signs may return as inflation and weaker growth squeeze UK consumers.
Accounting tweaks could spark bank bond panic 2.0 12 Jan 2017 In 2016, fears Deutsche Bank's junior bonds would switch into equity caused market turmoil. Now, new solvency rules will force lenders to take bigger and faster losses in a downturn. If that pushes the debt near trigger points, it could spook investors all over again.
UK retailers offer belated gift for economic bulls 11 Jan 2017 Sainsbury's and Morrisons both beat sales expectations over Christmas. Such numbers are closely watched because some general retailers make up to 45 pct of annual sales over the period. Consumer sentiment is as important as the amount spent. The signs so far remain encouraging.
Britain’s true income gap is between young and old 11 Jan 2017 Labour Party leader Jeremy Corbyn's clumsy plans to rein in executive pay overlook an inconvenient fact: UK income inequality has fallen. Since the crisis retirees have done better than workers, though. Tackling the tensions caused by this divide makes a better political target.
UK media hardships make for strange bedfellows 10 Jan 2017 The publisher of the left-leaning Daily Mirror is talking with the owner of the pro-Brexit Express about investing in some of his media assets. The need to cut costs explains this unlikely editorial hook-up. The dismal outlook for print revenues spells more such alliances.
EU banks handed new way to lose business 9 Jan 2017 The European Central Bank will set tougher rules than American peers to limit risky lending. The limits could make it harder for Europe’s banks to compete with U.S. or UK ones in lucrative private equity deals. The upshot may be safer lenders – but ones that make even less money.
Anglo-U.S. trade exposed to specialness deficit 9 Jan 2017 The UK’s “special relationship” with America gets more crucial as it moves towards a clean break with Europe. Transatlantic imports and exports are balanced – which should please President-elect Donald Trump – yet Britain has more to lose. Finance looks particularly vulnerable.
Air Products has promising formula for Chinese M&A 9 Jan 2017 The $31 bln gas giant is circling Hong Kong-listed Yingde. Inbound Chinese M&A has all but evaporated but Air Products' timing is good: big debts and a boardroom fight have shrunk the target's market value to $700 mln. An existing Chinese presence would help de-risk any deal.
Regional pain makes UK consumer credit risks real 6 Jan 2017 The BoE's chief economist says a merely moderate rise in housing finance means consumer borrowing risks are contained. But unemployment is up in Scotland and northern England, where faster-growing personal loans matter more. Banks' pricing competition could worsen the reckoning.
Brexit could derail UK’s anti-corruption push 6 Jan 2017 Britain's keenly awaited anti-graft strategy has been delayed. The UK had looked to be making headway in reducing the billions of pounds laundered through London. The risk is this gets lost in the rush to quit the EU - or even that UK shadiness is seen as worth clinging to.
Sports Direct undercuts exec pay ideals 6 Jan 2017 The retailer’s bosses receive an apparently model mix of low salaries and performance-based awards. The former CEO’s fixed pay was less than a twentieth of Martin Sorrell’s at WPP. Yet an exemplary pay mix has failed to deliver either shareholder returns or good governance.
Bank fine-fighting begins to have some logic 5 Jan 2017 Barclays is battling U.S. authorities over charges it mis-sold mortgage bonds. UBS has contested accusations it aided tax evasion in France. With fewer outstanding legal bills and regulators habitually levying huge penalties, lenders have more to gain from pushing back.
Next’s retail crisis has distinctly British twist 4 Jan 2017 The clothing chain warned pre-tax profit may fall 14 percent this year. As well as Next's own problems, that's down to Brexit-related inflation, higher business rates and wage bills. British shoppers have also embraced online retail more readily than in some other markets.
Germany’s thriving job market no solace for Merkel 3 Jan 2017 Unemployment has fallen to its lowest since 1981, and the number of people in jobs is at a record. Chancellor Angela Merkel presided over this happy state but will struggle to leverage it in upcoming elections. Voters are more focused on less predictable flows of migrants.
Exec pay is crying out for a race to the bottom 3 Jan 2017 Battles against corporate excesses are worthy but come unstuck all too quickly. Bosses keep getting paid more than their predecessors. To save capitalism, some could tender their services more cheaply. The tradition of the $1 CEO serves as a template. Even better: work for free.
Best of Breakingviews 2016: Our readers’ top picks 30 Dec 2016 You demonstrated a varied, voracious appetite for insight in 2016. The most-clicked columns, podcasts and graphics encompassed the rise of Trump and Brexit Britain to Singapore, Saudi Arabia, negative rates, tech titans and an ethical dilemma for Harvard's business school dean.
Investment banks’ next trade will be EU education 30 Dec 2016 No European city has as many international school places as London. That’s a problem for firms thinking of asking staff to move their families out of the UK capital following the Brexit referendum. The solution will be for banks to get into the education business themselves.