Special topics in The Monday Briefing
Christmas Quiz
Our Christmas quiz offers an eclectic test of knowledge of economics and business. The answers and a brief explanation of the factors at work are at the end of this note.
1. Four of the following were added to the basket of goods used to calculate consumer price inflation in the UK this year, while two were removed from the basket. Which were added?
a) Baking trays
b) Smart speakers
c) Three-piece suits
d) Dog treats
e) Envelopes
f) Electric toothbrushes
What’s the purpose of a company?
Expectations of business change over time. The tax and regulatory environment shift with the political cycle. Society’s expectations change too, and in recent years they have risen.
The size of the UK state
While they disagree on many things, the UK’s Labour and Conservative parties seem to favour an expansion in the state – though to very differing degrees.
A China-US trade deal won’t end protectionism
Last week US equities hit new highs on hopes that China and the US would reach an agreement in their 18-month trade dispute. Financial markets think a deal would reduce uncertainty, boosting investment and growth.
Crunching the credit signals
This time last year central banks in the rich world were poised to tighten monetary policy. The US Federal Reserve was expected to continue raising interest rates and the European Central Bank (ECB) president Mario Draghi had announced the end of its programme of quantitative easing.
A bumpy road for the auto industry
The car industry is a bellwether of the global economy. When global trade and growth boom so, too, do car sales. With growth slowing and globalisation under pressure, the auto industry is suffering. Car production and sales are falling across most of the rich world and in China and India. The downturn in the sector is the most pronounced since the global financial crisis.
Weaponising global networks
Globalisation has been one of the defining features of the modern era. It has been marked by the movement of goods, services, ideas, capital and people through a plethora of cross-border networks.
Financial markets and the fight against climate change
On Friday, millions of people around the world joined climate change protests. Earlier in the week, Bill Gates, the Microsoft co-founder and philanthropist, warned climate change campaigners that divesting, or refusing to hold, fossil fuel stocks, such as oil companies, was a waste of time. “Divestment, to date, probably has reduced about zero tonnes of emissions. It’s not like you’ve capital-starved [the] people making steel and gasoline.”