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Each day FT Leader writers on the Editorial Board meet to discuss the topics to be considered for Leader columns. Here are the issues that dominated this week:

Our leader on the ongoing rail strikes recognised that, like many other parts of the economy, particularly in the public sector, the appeal for higher wages is understandable after pay freezes amid high inflation.

The quid pro quo is crucial, though: “As part of any settlement, the [rail] union has to accept that the industry is changing.”

As for Germany’s decision to boost coal-fired energy as the primary means to cope with limited gas supplies from Russia, we used this as a peg to opine on the broader point of policymakers’ misguided response to energy policy amid war in Ukraine.

Boosting renewables must be the main focus, we urged: “Bureaucracy needs streamlining, and investment accelerated in modernising power grids and developing storage.”

In the days ahead, we are likely to return to the topic of Covid, and how health policies need to adapt as the virus adapts.

The US economy can handle significantly tighter monetary policy than it is already being subjected to, according to Jay Powell, the Fed’s chair. He was speaking to the Senate banking committee yesterday, with a clear signal that the US central bank will not flinch from raising rates again this year.

Inflation is worse than expected and a recession is looming. Earlier this week, the US central bank pledged itsunconditionalcommitment to restoring price stability in its most emphatic statement to date on tackling the highest rate of inflation in 40 years.

This is a watershed moment for the Fed, which last week stepped up its efforts to quell prices with a 0.75 percentage-point rate rise, the biggest since 1994. Powell’s testimony also came at a critical moment for the White House as it tries to manage expectations of an economic slowdown in the run-up to November’s midterm elections. Many economists are expecting recession by next year.

As the FT’s Martin Wolf points out, globalisation and the interdependence of economies mean there are no easy answers anywhere. Economics editor Chris Giles argues central bankers’ complacency has led us here.

In the UK, inflation hit 9.1 per cent this week, and is predicted to be in double digits by the autumn, adding to pressure on households, wage demands, and the threat of more industrial disputes like this week’s rail strike.

The biggest inflationary pressure comes from food prices. Grocery inflation reached an annual rate of 8.3 per cent this month, leaving households swapping branded groceries for own-label goods. Financial markets expect the Bank of England to raise rates to 3 per cent over the next year.

And more inflationary pressure in Europe, where consumer confidence is at a record low. The International Energy Agency has warned European economies to prepare for a shut-down of gas supplies from Russia this winter - part of Russian efforts to gain “leverage” in its war with Ukraine.

Emergency measures such as firing up mothballed coal-fired energy stations are justified, according to Fatih Birol, the agency’s chief, given the scale of the crisis and despite their heavy carbon emissions.

Germany, with its coal and gas addiction, is exposed - and so are politicians. Robert Habeck, Germany’s Green economic minister, is particularly compromised.

Meanwhile, private equity is selling to itself. In her well-read Big Read, the FT’s Kaye Wiggins explains how new and controversial transactions - “GP-led secondaries” - became the hottest trend in PE - circular deals in which a buyout group effectively sells a company to itself.

There are advantages to these complex arrangements for some investors, and of course, for PE partners. But the deals risk putting PE groups on a collision course with some investors, including pension funds.

The FT’s Helen Thomas explains why such deals are riddled with problems.

In corporate news this week, a reminder that whistleblowers are not always employees. Several came together at an event in London to report their experiences in taking on Facebook, now known as Meta, the world’s biggest social media company.

The FT’s Madhumita Murgia describes how one, a South African who worked for a content moderation outsourcing company in Kenya, says he dealt with horrific imagery, for which he was paid about £1.80 an hour. He was fired after demanding better pay, conditions and support - and he is still waiting for answers. Meta says it did not employ him and deines that it operates in Kenya.

Meta has faced a series of allegations about its harmful impact on society and democracy, including from those who risk their careers to speak out. Its widespread use of outsourcers means there could be many more in future.

Finally, the FT’s Pilita Clark has five tips for boards on keeping up with climate expectations. Climate policy is constantly changing to keep up with the demands of lawmakers, regulators, investors and customers in what she calls “jolting shifts” in expectations. Falling foul of any of them can have serious consequences - as HSBC, Black Rock and BP and Microsoft have found to their cost.
CFOs lured by high pay in private equity sector

This article is brought to you by FT Specialist’s Agenda, a publication that focuses on corporate boards.

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