Wounded PM leaves UK economy in painful limbo 7 Jun 2022 Boris Johnson remains in office even though 41% of his party’s lawmakers voted to oust him. His fragile position, and probable attempts to win back public support, will add to existing economic uncertainty. It’s another reason for companies and investors to look elsewhere.
Guest view: Global hunger fight means no biofuel 6 Jun 2022 Food supplies have shifted rapidly from surplus to shortage. Sarasin’s Henry Boucher argues Western governments have a way to stop prices spiralling further. It entails prioritising food over fuel, and scrapping states’ biofuel mandates.
Global cracks complicate West’s energy transition 2 Jun 2022 Modern civilisation is built on fossil fuels. If past shifts are a guide, switching to renewable energy will take decades, says Edward Chancellor. Conflict with Russia and tensions with China make this harder. The West faces a choice between decarbonisation or deglobalisation.
Oil embargo will hurt Putin more than EU 31 May 2022 Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.
Angola bank IPO ends very long march to capitalism 30 May 2022 Eight years after its birth, the African oil producer’s stock market is finally getting its first listing. Given the delay, floating 10% of lender BAI is a coup for President Lourenço’s reform drive. At under $1 bln, the valuation is low enough to ensure it completes the trip.
Stability and security trump threat of sanctions 30 May 2022 India is buying more Russian oil and coal, and a state-led group of companies is now eyeing Shell’s stake in an LNG project. Price volatility and climate woes are dictating national priorities. It’ll be thorny for the West to punish poorer countries for putting themselves first.
Financiers may pave U.S. campaign trail with gold 27 May 2022 With ex-Bridgewater boss David McCormick questing for a Senate seat, more Wall Streeters could try their hand at politics. Wealth built in bull-market times can give even novices a lift. And from Ken Griffin to Jamie Dimon, there’s no shortage of finance bosses with strong views.
Fingers crossed Davos Man gets it wrong again 27 May 2022 Gloomy delegates at the Swiss conference worried about a prolonged conflict in Ukraine, Covid-19 lockdowns in China, and runaway food and energy prices. But in 2020 they failed to foresee the global pandemic. This time, an incorrect forecast might be good news for the planet.
EU’s Ukraine budget support lacks long-term focus 27 May 2022 Kyiv will need at least $30 billion this year to plug the holes in its ravaged finances. Western allies have pledged enough money to keep it running in the short term. But as the country’s situation deteriorates, they should brace for a lasting effort to keep Ukraine afloat.
Beijing’s stimulus ignores elephant in the room 27 May 2022 Premier Li Keqiang sounded the economic alarm and urged officials to step up tax cuts and spending. Yet pandemic controls are stressing struggling local governments. Without relaxing zero-Covid policies, all efforts to help China hit its 5.5% growth target look futile.
UK windfall tax has reasonable hierarchy of pain 26 May 2022 Finance minister Rishi Sunak is funding a $19 bln fiscal support plan with a $6 bln raid on North Sea oil. The levy is gentle on companies who invest, and harsh on those with big tax assets from past losses. But high energy prices mean a further thwack to utilities may follow.
How sanctions against Russia could backfire 26 May 2022 The threat of financial punishment did not prevent President Vladimir Putin from invading Ukraine. History shows that economic penalties can stoke conflict by pushing countries to be more self-sufficient, Edward Chancellor writes. Investors risk being stuck with stranded assets.
Seizing oligarch assets is a slippery slope 26 May 2022 The EU hopes to confiscate $31 bln of yachts and villas from blacklisted billionaires. Washington is mulling similar steps. However wrong Russia’s invasion of Ukraine may be, short-circuiting the criminal process to seize property risks weakening trust in Western rule of law.
HSBC’s jarring ESG message, Davos in spring 26 May 2022 The bank’s head of responsible investing believes policymakers are exaggerating the financial risks of climate change. In this Viewsroom podcast, Breakingviews columnists discuss the ramifications of those remarks. Plus: The World Economic Forum is back, but the mood is dour.
Global stability partly hangs on Saudi reinvention 25 May 2022 The kingdom’s efforts to shape its image go so far as branding a café at Davos bearing the crown prince’s name. Worldwide demand for oil and gas amid the Ukraine war gives Saudi extra power and a chance to realign itself politically. There’s much more work to do.
U.S. sanctions give Russia default it doesn’t need 25 May 2022 The Treasury won’t let Moscow pay U.S. bondholders, tipping it into default. The move further isolates Vladimir Putin but will have minimal impact. It’s a surreal twist given Russia can still pay its debts, while battlefield foe Ukraine urgently needs relief but isn’t getting it.
Russia fossil fuel embargo has an inexorable logic 25 May 2022 Western allies are discussing buyer-imposed caps or tariffs to shrink Russia’s oil and gas revenues. But the measures would keep money flowing to Moscow, and could trigger the abrupt end of Russian imports they are meant to delay. Better to jump straight to an embargo now.
UK’s power tax plan may avoid tilting at windmills 24 May 2022 Shares in utilities like SSE and Drax dived after reports of Rishi Sunak eyeing up 10 bln pounds of excess profits. Windfalls from high power prices are hard to grab and North Sea oil is a better target. But the UK chancellor’s haul from power groups will still be far from zero.
Biden tries a new tool for handling China: realism 24 May 2022 At first glance a pact with India, Japan and Vietnam looks short on substance and skips sensitive issues. The U.S. also looks likely to drop many tariffs against China. But where his predecessors’ bids to woo or contain Beijing failed, Biden’s are at least likely to prove durable.
Smaller, warmer Davos confronts a siloed world 23 May 2022 The Swiss confab of global leaders returns this week after a gap of over two years. Pandemic, war, and the unusual spring timing explain some notable absences. As markets tumble and economies turn inward, founder Klaus Schwab’s knack for brokering relationships faces a test.