Jon Sindreu

The departing Keir Starmer’s decision ​to bind himself ​with manifesto tax pledges and ⁠budget rules was informed ​by overly optimistic forecasts. ​These showed GDP growth going from 0.3% to almost 2%. His ​successor needs to ​avoid a similar temptation as the ‌Iran ⁠war ebbs.

G7 pressure for Beijing ⁠to revalue ​its currency have ​resurfaced but even a 25% increase in the ​yuan would ​not overcome China's vast ‌cost ⁠edge. Closing the gap requires trimming regulation, funnelling ​capital into ​bold ⁠industrial policy, and even ​some targeted ​protectionism.

[LONDON] Big problems invite simple fixes, and there is a risk that Western policymakers are starting to treat the yuan as a big problem.

US corporate profit margins jumped to 16% in the first quarter, ​lifting a market where valuation ​multiples are unchanged from late ⁠2024. Earnings growth, underpinned by ​loose fiscal policy, is powering the ​rally. That makes it vulnerable if Uncle Sam narrows a big budget deficit.

Devolution can remake politics more than growth - Jon Sindreu

Sterling ‌rose 1% on reports Shabana Mahmood will be finance minister. Markets may see her ​as a safe pair of hands - ​no small matter post-Liz Truss. Yet ⁠Mahmood's economic nous is unproven, and ​post-Rachel Reeves her key job is the ​rapid execution of bold, growth-hiking policies.

Cutting the 5% VAT ‌on electricity bills and picking John Healey as finance minister suggests Britain’s new prime minister is focused ​on the cost of living. It may ​calm turbulent UK politics, but without a ⁠clear plan for growth and investment the ​stability may prove short-lived.

Renewed conflict in Iran has left most investors ​unruffled – but only if ​they had spread their money ⁠across indexes. Single stock ​volatility has surged, widening the gap ​with S&P 500 volatility to a record 34 points. History suggests ​such divergence won’t last.

A 3% tumble ‌and rebound for the tech-heavy Nasdaq 100 in a few days underscores markets’ extreme dependence on ​the health of the chatbot boom and ​the credibility of US central bankers. ⁠Stagnant valuations elsewhere suggest investors see little ​choice but to embrace concentration.

German factory orders ‌jumped 6.5% in June, and Ineos is snapping up undervalued chemicals groups. That suggests Western industry’s ​cyclical upswing isn’t just about AI ​and defence. Still, geopolitical fog and Chinese ⁠competition mean internal demand needs to ​get stronger.