Breakingviews

A UK triple dip? It’s just one big slowdown

By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The usual British definition of a recession – two consecutive quarterly declines in GDP – is misleading. By the more meaningful American standard of “a significant decline in economic activity”, the UK cannot enter its third recession since the 2008 financial crisis – even if GDP falls in the current quarter, as it did in the last three months of 2012.

European carbon market doesn’t need a supply fix

By Kevin Allison

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Policymakers racing to prop up the European Union’s carbon market should focus on the long term instead. Proposals to boost record-low carbon prices show a confusion about what cap-and-trade systems such as the EU’s Emissions Trading Scheme can achieve. Even if the carbon price fell to zero, greenhouse gas emissions would stay within an agreed 2020 limit. To ensure the scheme’s future, authorities should focus on the cap, not juggle permit supplies.

Rate cuts won’t revive India’s stalled growth

(The author is a Reuters Breakingviews columnist. The opinions expressed are his own)

By Andy Mukherjee

India’s latest interest rate cut won’t revive growth. The central bank’s quarter-percentage point reduction in the policy rate, to 7.75 percent, is just as futile as the last one almost a year ago. GDP will pick up when New Delhi curbs its own profligacy and improves the investment climate. The February budget may be the current government’s last chance to do both.

Markets’ new-year euphoria looks overdone

By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The new-year euphoria in financial markets looks overdone. The S&P 500 is up 5 percent, investors are throwing record sums into equities and Treasuries are flirting with 2 percent yields. But fiscal cliff diving can still hurt the economy and at least one incentive to put money to work may wear off.

Buoyant markets give ECB upper hand in Irish spat

By Neil Unmack and George Hay

 The authors are Reuters Breakingviews columnists. The opinions expressed are their own.

Buoyant markets are allowing the European Central Bank to play tough. The ECB’s governing council has rejected a plan by Dublin to restructure its 2010 bank bailout, on the grounds that it would breach its rules against funding governments. And with markets still docile from the ECB’s own bond-buying promise, the pressure to cut a special deal for Ireland is receding.

China FX swap may blur Bank of England mandate

By Peter Thal Larsen

The author is a Reuters Breakingviews columnist.  The opinions expressed are his own.

The Bank of England is discovering the downside of being the City of London’s chief watchdog. The central bank is under pressure from financial institutions to set up a currency swap with the People’s Bank of China. Such a move would help to boost London as a centre for trading offshore renminbi. However, worrying about the City’s competitiveness also risks blurring the BOE’s main objective of preserving financial stability.

Ticket to ride up London’s Shard looks toppy

By Quentin Webb

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Why the dizzying cost to gawp out at London from the top of the Shard? From February visitors can pay nearly $40 to watch the world go by from the top of Renzo Piano’s striking tower. If the weather obliges, the view from 310 metres up will astound. But the cost is steep compared to viewing other great cityscapes. Blame the footloose global rich.

Davos desperately seeking the next Internet

By Christopher Hughes
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

To feel good again, the world’s financial elite need a growth catalyst like the Internet. America’s shale gas revolution fits the bill. Ask delegates at the World Economic Forum in Davos for their 2013 outlook, and that simple idea features in most answers. It may only surface as a passing reference in conversations around the Swiss ski resort. But in the echo chamber of Davos, the notion that shale gas is a reason to be bullish has become common wisdom.

South Korea may need a rate cut to fight weak yen

By Andy Mukherjee

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Japan’s weak yen policy could be South Korea’s biggest economic enemy this year. The strengthening won, which has risen 23 percent against the yen in the past six months, was partly to blame for the country’s anaemic GDP growth in the fourth quarter. It’s also putting the squeeze on manufacturers like Hyundai. Lower interest rates could help to ease the pressure.

Apple finally succumbs to uncreative destruction

By Robert Cyran

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Apple has finally succumbed to uncreative destruction. A five-year run with the iPhone and iPad catapulted the company to investment royalty, but it’s coming to an end. Over $50 billion of market value – nearly the equivalent of HP and Dell combined – vaporized in the hours after Apple reported flat fourth-quarter profit. Copycats are gaining and margins are shrinking. Chief Executive Tim Cook needs a real innovation to escape this Red Queen’s race.