While US President Joe Biden was “satisfied” with the outcome of the G7 summit last week, he
pushed G7 leaders to use their financial clout to counter China’s rising global influence and declared that western democracies were “in a contest with autocrats”.
European leaders were more cautious about antagonising Beijing at the summit, but news of the
EU and US ending a 17-year trade dispute over subsidies for Airbus and Boeing is evidence of a concrete steps forward for the western allies.
Yet
there is doubt over whether the G7’s delivery will match its rhetoric, writes chief foreign affairs commentator Gideon Rachman. Russian president Vladimir Putin and China’s president Xi Jinping will note that the alliance has changed, but they will not be intimidated yet, he notes.
Elsewhere, in its meeting this week,
the Federal Reserve is set to discuss tapering its asset purchase scheme as it looks to reduce the monetary stimulus it rolled out during the pandemic.
This is also a test of the Fed’s narrative on inflation being transitory, writes Mohamed El-Erian, president of Queen’s College, Cambridge university – and will have implications for the central bank’s policy credibility, economic reforms in the US and global financial stability.
Meanwhile the
UK’s inflation jumped to 2.1 per cent last month, exceeding the Bank of England’s target as the gradual easing of lockdown drove up prices.
But the delayed end to restrictions has left many businesses closed or operating with restricted capacity. And with the Treasury making it clear that it will not increase the existing support package,
businesses warned that the government risks “falling at the final hurdle”.
Post-Covid labour shortages have been another source of concern.
But it is too soon to worry, writes employment columnist Sarah O’Connor. The scramble for chefs and other workers could relax as the economy settles and the pandemic recedes, she notes.
International relations fared better, however, as the
UK and Australian governments agreed a trade deal. Alongside making it easier for Britons to work and travel to Australia, the deal will eliminate tariffs on goods with a 15-year transition period and quotas.
On to corporate governance and Paul Boyle, former chief executive of the Financial Reporting Council, has warned that
the government’s plan to reform the audit market is likely to fail. The proposals increase costs for companies without fully tackling competition among the Big Four, he argues.
And last week the damning findings of
an independent probe into Toshiba’s 2020 AGM were published. The report describes how senior figures at Japan’s Ministry of Economy, Trade and Industry collaborated with Toshiba’s senior management to prevent executives being voted out.
The report could become a catalyst for change in corporate Japan, writes Asia business editor Leo Lewis. And chief business commentator Brooke Masters calls for revolution:
Toshiba’s shareholders should vote down the entire board, she argues.
