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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:

After a calamitous detour into the unfunded tax cuts of Liz Truss’s “mini” Budget, the Conservative party’s appointment of Rishi Sunak as their new leader and prime minister has at last calmed the markets. The FT’s Editorial Board writes that Sunak should now prioritise restoring the UK’s reputation for fiscal competence, and resist the party’s obsession with whether it can win the next election.

In China, Xi Jinping has consolidated his hold on China’s levers of power with an overhaul of the ruling politburo. Our leader argues that tense times lie ahead: the new loyalist hierarchy dominated by Xi will spell a fresh focus on economic self-reliance, a stronger military build-up and further divergence from the west.
Big Tech’s dreams collide with reality

Big Tech’s advertising business is being hammered by global economic turmoil. This week, shares in Google parent Alphabet fell on the back of a slowdown in its core search ads business , while Snap’s stock plunged after it posted sluggish growth.

Meta - Facebook’s parent - saw its market capitalisation fall by $65bn as dwindling sales and rising costs hit the world’s largest social media platform. Investors are unconvinced by Mark Zuckerberg’s big bets on the metaverse and artificial intelligence.

Almost every part of the tech industry is facing a combination of pressures , including a stronger dollar, falling consumer demand, weakness in Europe and Asia, rising interest rates and geopolitical tensions - particularly  US restrictions on the Chinese semiconductor industry .

“Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today,” said one analyst.

“How investors are feeling right now is that there are just too many experimental bets,” said another.

Xi tightens his grip

Xi Jinping’s newly appointed Politburo Standing Committee has spooked markets . The president stacked his elite political body with loyalists  to tighten his grip on power.

Investors are expecting the appointees to focus on security and state control rather than on business-friendly policies. That sent Chinese stocks into turmoil in Hong Kong and New York.

The politburo is the most powerful political body in China, and has until now been a check on the leader’s power through a convention that ensured it was made up of politicians of different ages, and from all factions of the party.

Europe-China correspondent Yuan Yang argues that Xi’s limitless presidency means limited future diplomacy : communicating with foreign audiences will become more difficult as internal party discipline hardens.

EU foreign policy chief Josep Borrell labelled China an increasingly “tough” competitor. That will not help Chinese companies seeking approval for acquisitions in Europe.

And already, German exporters are rethinking their €100bn “love affair” with China.

Meanwhile, China’s wealthy are activating escape plans . Rich citizens fearing high taxes and personal safety have begun shifting capital out - and hoping to move their residencies overseas.

Can Sunak unburn toast?

Rishi Sunak, the UK’s new prime minister, wasted no time this week in reversing his predecessor's policies.

He wants more time to go through the country’s long-awaited medium-term plan, now that calmer markets have given the government space to breathe. The fiscal statement will be delayed until November 17.

Sunak and chancellor Jeremy Hunt have a vast fiscal hole to fill, estimated at £40bn - but part of that figure reflects high borrowing costs stemming from the markets’ loss of confidence in UK public finances under Sunak’s predecessor Liz Truss.

By delaying the fiscal statement, they estimate they can reduce the hole by £10bn because markets have calmed since Truss’s resignation. Public finances have benefitted from what some commentators have dubbed the “dullness dividend” .

That, in turn, lessens the need for hefty tax rises and cuts to public spending - for now.

Will it be enough? The FT’s Alphaville points out that one phrase has stood out in recent weeks: “You can’t unburn toast” .

“It refers to the un-doable, permanent damage from making an error, such as trashing your country’s financial credibility.”

Sunak’s Conservative party is polling at its lowest level for a generation. He has a vast challenge to end months of chaotic infighting and restore the UK’s fiscal credibility.

And as Robert Shrimsley points out, Sunak is not yet strong enough a leader to enforce party discipline. He has concluded that his best electoral bet is to rebuild a coalition of factions.

The new cabinet and aides are in place. The former is intended to reflect “all the talents” by drawing on those factions - but it is a delicate balancing act.

Sunak’s reappointment of Suella Braverman as Home Secretary, who resigned just days ago over a security breach, is another gamble. Stephen Bush explains why Sunak is paying the Braverman price .

Nevertheless, a wary EU has greeted Sunak’s premiership with relief . And Sunak’s promised “Brexit Deliver Unit” - a department dedicated to tearing up EU legislation has now been ditched .

Best of the rest of business news

European banks are doing well . Deutsche Bank posted one of its highest profits since before the financial crash this week, on the back of rising interest rates. Barclays, Santander, UniCredit, Standard Chartered, HSBC and UBS have all beaten analyst’s estimates.

Strong performance in fixed-income trading also helped lenders.

That raises the likelihood of governments targeting lenders with windfall taxes . The profits are an attractive target for cash-strapped governments.

In the US, investment managers are up in arms about a regulator’s plan to revamp the rules around fund names. The Securities and Exchange Commission is trying to crack down on misleading markets by requiring funds to prove that 80 per cent of their holdings match their names.

That would affect naming strategies, from those termed “core” and “growth” funds to those that purport to invest in “sin stocks” or claim they rely on “ESG” investing.

More than 100 funds and investors have filed public comments on the proposal before next week’s deadline.

And in the UK, the food industry sees imminent rule changes around supermarket multibuy promotions for unhealthy foods as a gratuitous assault on living costs - and their profits.

But consumer industries correspondent Judith Evans argues that tougher junk food rules would do us all good : to delay or cancel restrictions (as the new UK government may be tempted to do) would be a major public health mistake.
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