Breakingviews

Iconoclasts needed to topple central bank targets

August 25, 2016

A reboot of global monetary policymaking is the best thing that could emerge from rate-setters’ annual Jackson Hole shindig. An overhaul is pressing as reality upends more and more economic orthodoxies. Ditching simplistic and discredited inflation targets would be a good start.

Nigeria’s problems defy central bank fixes

July 28, 2016

A hefty rate hike was a fair response to a slump in the naira that’s fuelling inflation. Yet this is unlikely to lure much foreign money back to Africa’s biggest economy. Its political, trade, and fiscal misfortunes are too pernicious for even yield-starved investors to overlook.

Giants of central banking will be cut down to size

December 30, 2015

The limited power of the Draghis and Yellens of the world is evident. They can’t conjure up inflation and the market impact of unorthodox monetary policies has waned. Rate-setters did their bit to support the global economy. It’s time fiscal and wage policies did more work.

London’s bankers should retrain as builders

December 28, 2015

The City’s banks are sacking thousands of staff. Meanwhile, the construction sector needs 120,000 new pairs of hands to boost UK housing supply to a level that eases house-price inflation. For bankers smarting from accusations of social uselessness, it might make a decent change.

Mario Draghi is central banking’s tragic hero

December 3, 2015

Despite new easing measures, the ECB chief’s fight to revive inflation looks doomed. Forces beyond his control, such as oil prices, are too strong. Markets are moving against him. Draghi is admirably determined, but will probably be remembered for trying rather than succeeding.

UK wage puzzle demonstrates breakdown of old laws

November 11, 2015

The textbook tradeoff between lower unemployment and higher inflation isn’t happening. Britain’s jobless rate is at its lowest since 2008 yet wage growth is actually slowing. Workers aren’t suffering now, but they must hope unemployment and inflation don’t start rising together.

Hefty ECB rate cut might do more harm than good

November 10, 2015

Some European Central Bank policymakers want to push the floor for policy rates deeper into negative territory. This may depress the euro and bond yields for a while. But Nordic evidence of the price banks pay when rates are so low suggests an outsized cut may be self-defeating.

Enjoy UK’s economic idyll while it lasts

January 21, 2015

Britain seems to have reached the sunny uplands. Earnings are rising faster than prices, unemployment is falling and policy rate rises are off the agenda. But persistent disinflation casts a dark shadow. If prices stop rising, wage increases may also disappear.

Bitcoin is latest victim of disinflation

January 16, 2015

The would-be currency is down 33 pct this year. Bitcoin is a collectible like a painting so psychology matters, and that’s against it in the current climate. Free transactions could end too. The tech may have value, but bitcoin will struggle to regain lost confidence.

Falling prices show ECB failed at its only mandate

January 7, 2015

Euro zone inflation is now negative. Sinking oil prices played a part, but market expectations were falling well before. The European Central Bank has long been seen as doing too little, too late. No wonder investors have lost faith in the bank’s ability to fulfill its mission.