Dangerous times for the British economy
Prime Minister Boris Johnson’s political position continues to sway this morning as several subordinate ministers resign following two catastrophic asylum last night. This move raises questions about how long he can stick to power and what leadership changes look like to the UK economy.
The resignation was associated with a series of scandals that cast doubt on Johnson’s honesty. Two prime ministers who resigned from the cabinet yesterday, Finance Minister Rishi Sunak and Health Minister Sajid Javid, said they could no longer serve in the Johnson administration. Say a snack It was right for the public to expect the government to be “properly, competently and seriously done”.
This development puts Johnson in a more dangerous position than it was a month ago. When he survived a vote of no confidence, more than 40 percent of Conservatives did not support him. In a series of resignations, Conservative Parliamentarians called on him to resign, but on a rapidly evolving day, Mr Johnson vowed to fight.
The prime minister immediately reshuffled the cabinet and appointed Minister of Education Nadim Zahawi as the new prime minister. Zahawi told Times Radio this morning that he would reconsider the government’s plans to raise corporate taxes in the spring. “My job is to rebuild the economy and return to growth,” he said in another interview with BBC Radio. And 2023 will be a tough year for the economy, he said.
Mujitaba Rahman, managing director of Europe for consultancy Eurasia Group, said Johnson will pay more attention to various parliamentary flows, especially his party’s rights, to thwart the possibility of a vote of no confidence. I said it would be.
The latest scandal in Downing Street included accusations Conservative lawmaker Chris Pincher, a minister of the Johnson administration, groped for the two men. For days, the government said he was unaware of the previous accusation when the Prime Minister appointed Pincher, but on Monday Downing Street admitted that Johnson knew about one accusation.
“This is not a stable government in the policy-making business like a regular government,” Rahman said. “This is a crisis-driven government, driven by Johnson’s desire to survive and stay there. That drives the policy agenda.”
With soaring prices for food, energy and other consumer goods, many people in the UK are facing a cost of living crisis... In addition, labor shortages and supply chain issues, partly due to Brexit, have pushed up service prices and made it difficult for businesses to operate. Inflation is at its highest level in 40 years and is not expected to peak for months. Tax and loan costs are rising and interest rates are at their highest level since 2009.
Economic factors outweigh the turmoil in British politics, Jordan Rochester, a strategist at Nomura Bank, wrote in a report last night. When London’s financial markets reopened this morning, the UK’s benchmark stock market index rose more than 1%, along with the rise of other European markets, Times Echenelson wrote. After a slight rise yesterday, the pound sterling fell slightly against the US dollar this morning, down 1.5% the day before, hitting a two-year low as investors sought to secure the US dollar in fear of a recession. I attached it.
Political instability has arisen as Britain prepares for a “summer of dissatisfaction.” Workers demanding higher wages have gone on strikes that haven’t been seen over the years, writes Stephen Castle of the Times. After a major strike by railroad workers last month, criminal lawyers are some of the latest lawyers demanding more wages.British Airways teachers, health, postal workers and staff are also threatening strikes
What’s happening
The hack may have released police data on one billion Chinese residents. This episode highlights the fact that while Beijing has become an expert in data collection on citizens, it is not very good at protecting that data. An unidentified hacker named ChinaDan sells data for 10 Bitcoins (only $ 200,000).
SAS will cancel many flights after applying for Chapter 11. Scandinavian Airlines, which filed in the United States, said it plans to use court protection to save more than $ 700 million. Airline predicament is part of the summer problem for the European travel industry, including staff shortages and strikes.
The euro will fall to its 20-year low against the US dollar. Two currencies Came within a few cents of hit parity, Partly because of relations with Russia, the European economy stumbled. Oil prices also plummeted yesterday, dropping more than 9%, with the US benchmark West Texas Intermediate crude falling below $ 100 for the first time since May.
The long-delayed Hudson River tunnel project is a few inches away. Yesterday, Governor Kathy Hokul of New York and Governor Philip Murphy of New Jersey agreed to split the cost of digging a tunnel for a new train. Among the most important and ambitious infrastructure projects in the country, this plan is not yet guaranteed to move forward.
Wal-Mart is reported to charge some suppliers new fees in response to rising shipping costs. According to a memo from The Wall Street Journal, the new rates are “Wal-Mart adapts to major changes, Increased costs seen in the transportation industry over the last few years.. Amazon did a similar move.
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When a global shortage of computer chips stagnated production during a coronavirus pandemic, the Byden administration and US legislators sought funding for computer chip taxpayers. It’s starting to look like a mistake, our colleague Sila Ovid wrote in the Ontech newsletter.
Some computer chips seem to be in excess over the last few weeks.. People around the world don’t buy electronic devices such as laptops, smartphones, and TVs as much as they did a year or two ago. Many are also worried about rising prices and the economic outlook. In South Korea, the main manufacturing hub, unused chips are stacking at the fastest rate in years. Intel, Nvidia, and Micron saw a surge in sales as demand for their products surged. Recently warned They expect sales to slow in the coming months.
Elsewhere, there is still a shortage of chips. Stellantis and General Motors had to do Idle assembly plant Recently, due to a shortage of semiconductors.
See the Bullwhip effect. How it explains Supply and demand disruptions can grow exponentially When they move through the supply chain. As my colleague Peter Coy explained in a recent opinion piece, as orders travel from customers to distributors and factories, shortages can quickly turn into the black and then come back again.
Meanwhile, the United States is cracking down About the export of semiconductors and other sensitive techniques from some western countries to China, based in part on the lessons learned from the sanctions imposed on Russia. Bloomberg Report The United States has shown that the Dutch company ASML Holding NV is trying to prevent the sale of Chinese technology used in the manufacture of computer chips for automobiles, telephones and computers.
Ultimately, attempts to build a homemade chip industry seem misguided... “Even if more computer chips are manufactured in the United States, there’s no reason why Texas-made chips will only be on the Ford F-150 and not on trucks from European and Asian companies,” Shira wrote. I am. It may be argued that the CHIPS Act (currently stuck in Congress) is intended not only to meet current demand, but to create it for the future. However, as Shira told DealBook, “While it is worth building advanced computer chip manufacturing expertise in the United States, the government may be trying to solve too many taxpayer money problems. There is sex. “
“The government has given this project as much impetus as you can, and it still failed.”
— Fernando Alvarez, Economist at the University of Chicago, on El Salvador’s decision Make Bitcoin the national currency.. Almost a year later, the country will be a closer default.
How the war fought the coolest company in Russia
Only a few months ago, Yandex was a rare business success story in Russia. The equivalents of Google, Uber, Spotify, and Amazon are all in one. However, the Times’ Neil McFerker reports that the war then broke out, with a sharp decline that symbolized the economic and cultural problems caused by the aggression.
Yandex’s market value plummeted by 80% In just a few months. The decline fell from $ 31 billion in late 2021 to less than $ 7 billion as Western investors fled and sanctions affected the Russian economy. Nasdaq has stopped trading its shares. The company’s founder, Arkady Volozh, and his chief agent left the company after facing EU sanctions.
The company is navigating extreme forms of remote work. About one-sixth of Russia’s workforce, or 2,500 employees, have fled Russia. Tensions are rising between retired employees and remaining employees.
Russian censorship was sacrificed. Yandex operates what the company claims to be the country’s top engine, as well as one of Russia’s largest news aggregation sites, with approximately 50 million visitors a day before the war. Collected. Executives and users began accepting curations from the Kremlin news sources, but the intrusion quickly turned Yandex into a joke.
“Yandex was like Russia’s island of freedom. I don’t know how to keep it going.” Elena Bunina, a professor of mathematics, said her five-year term as CEO of Yandex ended in April when she emigrated to Israel.
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