Hello and welcome to our weekly intelligence briefing for boards, where we help directors keep up to speed on the macro trends affecting businesses across the world, and corporate governance news.

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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:

Today, the Editorial Board wrote that the UK must rapidly restore its economic credibility by reversing course on its ill-conceived and fiscally reckless mini-budget.

“By severely undermining the UK’s economic and financial integrity, the new Conservative administration is gambling with British people’s money, pensions, and homes.”

The Bank of England has been left to pick up the pieces with its bond-buying programme. But it is the job of the government to restore UK credibility, we argued.

Earlier in the week, we wrote that the market reaction to the mini-budget proves that credibility is more important than blind conviction: The Truss administration’s dogmatic belief in the unproven approach of slashing taxes and regulation to boost growth threatens serious costs for households and for companies.

On another topic entirely, we debated Giorgia Meloni’s victory in Italy’s general election over the weekend. A European leader with political roots in the neo-fascist movement merits concern, but not panic, we argue. The win was far below the two-thirds majority required to change the constitution without a referendum.

“Italy’s checks and balances in the shape of the presidency and the constitutional court seem safe, for now.”

Mini-budget chaos

The Bank of England unleashed a £65bn bond-buying programme on Wednesday in an urgent attempt to calm markets and avert a meltdown in the pensions sector following the UK government’s mini-budget announced last Friday.

Chancellor Kwasi Kwarteng’s £45bn in debt-funded tax cuts has sparked turmoil in gilt markets , threatening the UK’s financial stability. The IMF this week issued a scathing rebuke of the chancellor’s plan, and urged the government to reevaluate, warning the cuts could stoke soaring inflation.

The central bank is now operating in full crisis-management mode , reports our economics team. But analysts are concerned the bank appears willing to print money to finance the government.

Final salary pensions schemes were most directly affected by the market turmoil, with 90 per cent of pension funds at risk of running out of collateral had the central bank not intervened. We explain what the bond rout could mean for retirement savings.

In a column for the FT, Minouche Shafik, director of the London School of Economics, called the policy “ bad economics ”, while Mohamed El-Erian, president of Queen’s College Cambridge, writes that damage to the UK economy is just beginning if market disorder is allowed to persist. Cat Rutter Pooley explains the risks to UK banks.

There is concern abroad, too: Kwarteng’s tax cuts risk not just the UK economy, but global recession , warned the US Federal Reserve.

Tory MPs are now questioning Kwarteng’s future , even as he insists he will not change course. Liz Truss on Thursday morning said she was sticking by her chancellor, vowing this morning to push forward with their tax-cutting plans.

The EU meanwhile is struggling to contain its Schadenfreude . For European finance ministers, the crisis has exposed what is widely seen as flawed thinking behind Brexit.

Robert Shrimsley also argues that hardline Brexit ideology lies behind the UK’s market rout . The Tories do not want to admit that their signature policy is making the nation poorer, writes Shrimsley. But they may be forced to do so.

Dollar strength

Sterling could reach parity with the dollar. But economies beyond the UK are also suffering the effects of a strong greenback. Nearly all G20 currencies are down against the dollar.

In the eurozone, the ECB is backing another big rate rise to tame inflation, possibly by 0.75 percentage points. “Our primary objective is price stability and we have to deliver on that,” said ECB president Christine Lagarde.

Martin Wolf explains why the strength of the dollar matters , with a plea to Kwarteng to take note: “messing up one’s macroeconomic policies, especially fiscal management, prove particularly dangerous when the dollar is strong, interest rates are rising and investors seek safety.”

Best of business news

Our interview with Vivek Ramaswamy, the self-styled scourge of “woke” boardrooms who claims stocks could triple if ESG aims were scrapped, is a fascinating insight into a growing rightwing backlash against asset managers that use ESG factors to influence their investing.

The serial entrepreneur has launched two new exchange traded funds in recent months that explicitly seek to pressure companies to drop efforts to diversify their workforces and cancel pledges to fight climate change.

One disagreement this week underscored the difficulty of leadership change at founder-led companies:

Fund platform AJ Bell’s chair, Helena Morrissey, has resigned after just nine months following a disagreement with UK financial watchdogs over the future role of the company’s founder, Andy Bell. Bell was to step down as CEO of the FTSE 250 group and become non-executive deputy chair, but the Financial Conduct Authority objected to the arrangement, citing governance risks.

Perhaps business leaders are better off out of the limelight. Andrew Edgecliffe-Johnson argues that CEOs should be prevented from believing the sycophants that surround them or from staying too long in the job - not least because our obsession with leadership risks creating all-powerful bosses unchecked by effective governance.

And if you are in search of distraction from market mayhem, why not check out our five data stories to cheer you up. From climate change to fertility, find the numbers heading in the right direction here .
Keep CEO pay packages simple, say experts

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