Breakingviews

Britain’s grammar school plan gets 5 out of 10

September 9, 2016

Reintroducing selective schools won't necessarily fix the UK's two big problems: too-high inequality and too-low productivity. It fits, though, with an emerging trend of the state picking winners. Whether that works depends on the success of safeguards to protect the losers.

May’s migrant musings a cautious positive for City

September 5, 2016

The UK prime minister has cast doubt on the efficacy of a so-called points-based immigration system post-Brexit. That sounds good for UK financial firms hit by restrictions on non-EU workers. The catch is Theresa May has little choice but to get net migration down somehow.

Mongolia’s hangover needs more than IMF medicine

August 19, 2016

The nomad state hiked interest rates to 15 pct to defend a plunging currency. An IMF rescue seems likely, and the new government has shown it is willing to take the pain needed. Longer-term, the real cure for its economic ills will be to woo nervous foreign investors back.

Contrary smoke signals bedevil Brexit firefighting

August 17, 2016

An unexpected drop in the number of people claiming jobless benefit jars with other, grimmer survey data. Monetary policy has already been eased to manage any post-vote slowdown and a fiscal stimulus is likely. Clashing signals make it harder for policymakers to target such help.

Believe bonds not stocks on Brexit damage

June 30, 2016

Stocks have rebounded after the referendum, suggesting Britain’s prospects aren’t too grim. Yet falling gilt yields point to bleaker outcomes. In the absence of hard economic data, a post-vote slump in consumer morale supports the pessimistic thesis.

Austerity has no place in post-Brexit Britain

June 27, 2016

Chancellor George Osborne has since 2010 aimed to cut public debt and deficits in the name of financial stability. He may now need to row back to cope with any post-vote economic slowdown. Investors’ reaction so far suggests his fiscal rigour was over-zealous in the first place.

Money trail shows China sticking to bad habits

May 16, 2016

Total credit jumped again in April, suggesting Beijing is making little progress weaning the economy off its addiction to debt. Infrastructure and property investment are still expanding quickly. Despite renewed talk of reform, growth still seems to be the main priority.

Dixon: Vote to quit EU could tip UK into recession

April 18, 2016

A victory for Brexit will trigger political turmoil and acrimonious divorce talks. Investment will grind to a halt as firms wait for the fog to clear. That could cause a recession.

Bank CoCos deserve all the brickbats

March 18, 2016

Deutsche Bank’s John Cryan thinks new hybrid bank bonds are flawed. Market turmoil is forcing regulators to clarify when baffled investors get coupons. Yet unless there is also standardisation of when they convert from debt to equity, CoCos will always be prone to death spirals.

Peugeot could rev revival by scrapping luxury line

February 24, 2016

The French group has become one of Europe’s most profitable mass-market carmakers under boss Carlos Tavares, with a 5 pct operating margin in 2015. But a costly plan for a new premium brand risks spoiling the performance. Junking the idea would speed an already healthy recovery.