LONDON (Reuters Breakingviews) - Sterling is a collateral victim of the race to be Britain’s next prime minister. The frontrunner, Boris Johnson, has promised Britain will be out of the European Union by the end of October, “do or die”. What’s more, he and his rival, Jeremy Hunt, are vying with each other to take a harder stance on Brexit. Whatever good that does either man’s chances, it’s inflicting considerable damage on the pound. More pain probably lies ahead.
LONDON (Reuters Breakingviews) - A new breed of central bankers is emerging. They speak plainly and are less steeped in economic theories than recent predecessors. That has benefits but also means it is harder to predict how they will react.
LONDON (Reuters Breakingviews) - The winner of the European Union’s jobs jackpot will matter less during the next economic downturn than the one who got the consolation prize. After much unedifying horse-trading about who would head the European Commission, the bloc’s leaders on Tuesday agreed a package deal that included naming International Monetary Fund boss Christine Lagarde to replace Mario Draghi as European Central Bank president. The Frenchwoman brings more continuity than credibility to an institution that rescued the euro from an existential crisis.
LONDON (Reuters Breakingviews) - Britain looks like it will finally get the right fiscal policy, though for the wrong reasons. As they battle to become prime minister, Conservative party rivals Boris Johnson and Jeremy Hunt are both promising a post-Brexit splurge. Lower taxes and higher government spending would mark an overdue retreat from austerity, and relieve the Bank of England of some of the burden of propping up the economy.
LONDON (Reuters Breakingviews) - The race to become Britain’s next prime minister has the potential to spice up a different contest: the one to replace Bank of England Governor Mark Carney.
SINTRA, Portugal (Reuters Breakingviews) - The European Central Bank’s annual gathering in Portugal is this year as much a celebration of its outgoing president, Mario Draghi, as a deep dive into the euro’s first 20 years. The Italian leaves his as-yet-unnamed successor one big unfinished job: pushing up stubbornly low inflation. But he is helping as much as he can before he goes.
PARIS (Reuters Breakingviews) - Central bankers are professional worriers. So it’s hardly surprising that they are increasingly fretting about climate change. When it comes to changing behaviour, they can at best nudge rather than shove.
LONDON (Reuters Breakingviews) - Things can sometimes go right even when they go wrong. The New Zealand Treasury official picked last month to be Ireland’s next central bank boss is facing an investigation Down Under about how he handled early accessing of sensitive budget information. If Gabriel Makhlouf’s appointment goes awry, the Irish finance ministry’s delight at recruiting overseas talent will look premature. But it would give Dublin a second chance to pick an ideal homegrown candidate.
LONDON (Reuters Breakingviews) - Mario Draghi’s ultra-loose monetary policy will outlast his tenure as European Central Bank president. The Italian will finish his eight-year term at the end of October without once having raised interest rates. As he heads for the exit, he is putting easing back in play.
LONDON (Reuters Breakingviews) - Imagine, for a moment, that the next head of the European Central Bank was chosen on merit. In reality, the process of selecting Mario Draghi’s successor is likely to involve a complex tug of war between rival governments as they carve up the European Union’s top jobs. But as Finnish central bank chief Olli Rehn told a Reuters Breakingviews event on Wednesday, the deciding factor should be competence rather than nationality. If politicians could be persuaded to play along, they could judge the candidates on three broad criteria.