Global relations were tense this week as the US – backed by allies, including those in Europe and Nato –
accused the Chinese government of working with criminal gangs to launch global cyber attacks.
Chinese diplomats in the EU, UK, Norway and New Zealand soon hit back,
calling the accusations “groundless” and a “malicious smear”.
Global markets had a similarly shaky start to the week, fueled by
concerns about the Delta variant. On Monday, the FTSE 100 dropped 2.3 per cent, European bourses had their worst session of the year and US stocks were down 1.6 per cent.
Indeed, there are reasons to question the global economic boom that economists have been expecting as a result of post-lockdown reopenings, argues Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management. China and the US drive growth, “but cracks are appearing in their economic engines,” he writes.
The Delta variant is also playing on the minds of UK central bankers. On Monday, Professor Jonathan Haskel, a member of the Bank of England’s rate-setting committee,
told a webinar that it is too early to tighten monetary policy.
“The economy is not fully recovered yet and faces two headwinds over the coming months: the highly transmissible Delta [coronavirus] variant and a tightening of the fiscal stance,” he said.
And while global business columnist Rana Foroohar says that
worries about post-pandemic inflation are “premature”, there are other significant factors affecting inflation that we are not discussing enough – including tech, demographic changes, and their effect on real estate.
Meanwhile UK businesses face more immediate concerns, including staff shortages driven by the “pingdemic”. Prime minister Boris Johnson
resisted calls late last week to bring forward the date when fully vaccinated workers no longer need to self-isolate.
Since then, he has exempted
key workers with two jabs, but
there is confusion over self-isolation advice and which people can keep working if pinged.
Brexit remains troublesome too. The
UK will put itself on a collision course with the EU today by unveiling new demands that would overhaul trading arrangements between Great Britain and Northern Ireland.
Elsewhere, directors will want to take note of plans to
strengthen powers for the Competition and Markets Authority. The draft rules include heavy sanctions for corporate wrongdoing and direct fines.
There is also a
lesson to be learned in Philip Morris International’s deal to buy inhaler company Vectura. “When your purpose guides you on to a path that many onlookers rank somewhere between bizarre and totally unacceptable, something has gone rather wrong,” writes business columnist Helen Thomas.
