Economy

US lawmakers have demanded more information on the potential national security threat posed by the trove of classified documents found at Mar-a-Lago during the unprecedented search at the home of former president Donald Trump.The comments by Democrats and Republicans yesterday were among the first reactions from Congress to the release on Friday of the search warrant presented by the FBI on the day of the visit on August 8, revealing that Trump was being investigated for serious violations of the law related to national defence, the mishandling of government material and obstruction of justice. They highlighted the sharp partisan divide with regards to Trump’s treatment by US law enforcement, with Democrats focusing on the legal gravity of his behaviour and Republicans sceptical and critical of the search. Adam Schiff, the top Democrat on the House intelligence committee, has asked the director of national intelligence to review the harm to American interests — formally known as a damage assessment — resulting from Trump’s decision to hold on to a trove of sensitive material after leaving the White House in early 2021. “What is, to me, most disturbing here is the degree to which . . . it appears to be wilful, on the president’s part — the keeping of these documents after the government was requesting them back. And that adds another layer of concern,” Schiff said. Republicans, many of whom have rushed to Trump’s side and attacked the Department of Justice, the FBI and US attorney-general Merrick Garland over the past week, asked federal authorities to release the affidavit in support of the search warrant. Affidavits, which typically remain under wraps throughout a federal investigation, contain details on the reasons why the DoJ asked a federal judge to approve the search.Trump has maintained that the search was a politically motivated stunt, claiming to have declassified all the material before leaving office, though there is no record of such a step.“I think it’s very important long-term for the justice department, now that they’ve done this, that they show that this was not just a fishing expedition — that they had due cause to go in and to do this, that they did exhaust all other means. And if they can’t do that, then we’ve got a serious problem on our hands,” Mike Rounds, a Republican senator from South Dakota, told NBC.Happy Monday, and thanks for reading FirstFT Asia. We hope you have a great week. —SophiaFive more stories in the news1. EU calls for an end to war talk in Balkans Tension between Serbia and Kosovo spilt over into violent protests and border disturbances last month. In a bid to avert conflict between the neighbouring states, the EU has demanded that they abandon talk of war as the bloc and Nato prepare to hold crisis talks this week.2. US and China hold separate military drills in south-east Asia The rival superpowers displayed their military strength over the weekend; China dispatched fighter jets to Thailand yesterday while the US and Indonesia concluded two weeks of war games, marking the largest version of the annual Garuda Shield live-fire drills since starting in 2009. Japan, Australia and Singapore also joined for the first time.Further reading: A delegation of US lawmakers has travelled to Taiwan less than two weeks after House Speaker Nancy Pelosi visited the island in a move that inflamed tensions with China.3. Saudi prince made $500mn Russia bet around start of Ukraine war Kingdom Holding, one of Saudi Arabia’s highest-profile investors, disclosed yesterday that it poured hundreds of millions of dollars into Russian energy companies shortly before and after the invasion of Ukraine. Majority owned by Prince Alwaleed bin Talal, Kingdom made the investments even as western leaders threatened sanctions against Russia.4. Germany must cut gas use by 20% to avoid winter rationing Businesses and households are bracing themselves for Europe’s biggest energy crisis in a generation, which Germany has feared since Gazprom throttled supplies mid-June. Now, Germany’s top regulator has warned the country that it must cut gas use by a fifth to avoid a crippling shortage.5. Saudi Aramco profits hits fresh record amid high energy prices Russia’s invasion of Ukraine caused soaring energy prices, delivering profits that are now showing up in earnings results. State-owned oil group Saudi Aramco has broken its quarterly profit record set in May, recording a 90 per cent year-on-year increase in net income in the second quarter. The day aheadEconomic data A wide range of figures are released today, including China’s July retail sales and industrial production data, Japan’s monthly industrial production figures, and India’s monthly trade statistics.One year of the Taliban Today marks the first anniversary since the Taliban seized back power in Afghanistan.Indian Independence India celebrates Independence Day on the 75th anniversary of the end of British rule.Anniversary of Japan’s WWII surrender Emperor Naruhito, empress Masako and prime minister Yoshihide Suga attend a commemorative ceremony at the Budokan stadium in Tokyo today to mark the 77th anniversary of Japan’s surrender and the end of the second world war.What else we’re readingAfghanistan’s women speak Since the fall of Kabul to the Taliban in August last year, women across the country have had to find ways to cope with their lives being turned upside down. They have used an app to share their thoughts, fears and dreams. Read their messages here.

The Taliban said they would defend women’s rights ‘within the framework of Islamic law’, but analysts and diplomats remain deeply sceptical

Polio virus reappears in rich economies After being nearly eradicated, the virus has turned up in New York City, London, Israel and Ukraine. Data from the WHO and Unicef show the largest sustained decline in childhood vaccinations in three decades, raising concerns that vaccine hesitancy and global conflicts could allow the disease to make a comeback.We’re getting closer to a world without animal testing Experiments on animals have long been the only permissible way to test the safety of a drug — but many drugs that are effective in mice don’t work well in humans and vice versa. Now, scientists are using new technology to grow miniature human organs for more accurate and more humane research.Computers in the classroom need a reboot Children don’t necessarily learn more from laptops than they do from textbooks, which suggests that perhaps we have been approaching technology in the wrong way for education.Arctic melting four times faster than rest of the planet, study says Scientists have for a long time known that the Arctic is heating faster than the rest of the planet, but have not agreed on a rate. The warming effect, along with long-term declines in sea ice levels, are considered two main indicators of climate change.Travel adventuresFind out where to get really away from it all, in Morocco, Chile, Lapland and New Zealand.An angling trip in the Martin Pescador wilderness © Eleven More

Economic data from Asia’s two economic powerhouses kicks off the global trading day on Monday – a batch of July indicators from misfiring China, and Japan’s Q2 GDP report.We get the first insight into how China’s COVID-hit economy started Q3, with July readings of industrial output, retail sales, house prices and urban investment. Economists are generally looking for recovery, albeit gradual.Chinese stocks snapped a five-week losing streak on Friday to close the week up 0.8%, lifted by the feel-good factor on Wall Street and an easing of Sino-U.S. tensions over Taiwan.Also on Friday, however, five U.S.-listed Chinese state-owned companies whose audits are under scrutiny by the U.S. securities regulator said they would voluntarily delist from the New York Stock Exchange.Meanwhile, Japan’s economy is expected to have bounced back strongly in the second quarter after contracting in the first, with economists forecasting quarterly growth of 0.6% and annualised expansion of 2.5%. Japan’s yen rose around 1% against the dollar last week – its third weekly rise in four. Could it break convincingly through the 130 per-dollar barrier this week?The tone across Asia on Monday will also be set by the growing hope that U.S. inflation has peaked. This could further fuel the rally in risk assets, steepen the U.S. yield curve and weigh on the dollar. Later on Monday, the U.S. Treasury releases its “TIC” data for June, which measures flows in and out of U.S. sovereign debt. In light of the recent political strains, China’s demand will be closely watched.Key developments that should provide more direction to markets on Monday: Japan Q2 GDP estimate China industrial output, retail sales, house prices, urban investment data (July)New York Fed manufacturing index (August)Fed’s Christopher Waller speaks on banking and finance  More

Hello and welcome to the working week.There is an anniversary on almost every day of the year, but some carry more historical significance than others, and this is one of those weeks.Afghanistan has two anniversaries coming up. Friday is Independence Day, commemorating the signing of the Treaty of Rawalpindi in 1919, in which Britain granted Afghanistan self-determination over its foreign affairs. However, most will be more concerned with Monday, which marks a year since the Taliban regained control. The FT has produced a series of articles about how society and the economy has changed since the religious group’s return to power 12 months ago, and they are worth a read.This week also begins with the 75th anniversary of the British withdrawal from the Indian subcontinent, marking the partition of India and Pakistan. India’s prime minister Narendra Modi is to address the nation from historic Red Fort in Delhi with the focus likely to be on the troubles in Kashmir, the country’s only Muslim-majority state.For British schoolchildren, it is all about the present as students in England, Wales and Northern Ireland on Thursday receive the emails and envelopes containing their A-level and vocational exam results. The task of accepting and finding university places through the clearing process will then begin in earnest.As with the Advanced Higher exam scores announced for Scottish school students last week, the A-level results are expected to be down on last year, but probably up on pre-pandemic years. The exam body AQA has said papers will be more generously graded to reflect the return to normal test conditions. Maybe, you’re of an opinion that the whole system of examinations should be abolished? FT columnist-turned-teacher Lucy Kellaway looks at the pressures facing schoolchildren and the issue of anxiety in schools. Some events are happening at a more frequent rate this year, namely British strikes. The UK’s summer of discontent will be marked by another national rail strike this week, made worse by a general walkout across London’s public transport networks. Next Sunday, more than 1,900 workers at Britain’s biggest container port Felixstowe are set to strike, plus we have another week of the criminal barristers’ strike at courts in England and Wales, with no resolution in sight. So how about some good news? We are about to take a significant step forward — a giant leap, even — in Nasa’s Artemis space programme. The mission aims to land the first woman and minority ethnic astronaut on the Moon, preparing for a long-term lunar presence and providing a stepping stone to sending humans to Mars. Nasa plans to livestream the transfer of the Artemis 1 rocket to the launch pad on Wednesday with the aim of completing lift-off by the end of the month.Economic dataInflation watchers will be kept busy this week with updates from the EU, Japan and Canada, plus, on Wednesday the publication of the Federal Open Market Committee’s latest meeting minutes will perhaps give some indication of the Fed’s willingness to tighten monetary policy.It is also going to be a busy week for British economic news with figures on employment, inflation, productivity, retail sales, consumer confidence and house prices (is the market at a turning point?). All are likely to garner comment on the state of UK plc.CompaniesOnline sellers had a pretty good pandemic, largely because consumers had few other options when making purchases during the lockdowns. Now that travel restrictions have been lifted, it is the turn of the service sector to profit, as shown in recent results for airlines and hotel chains. My colleague Brooke Masters explains.This week we reach the tail-end of the current reporting season with results from a clutch of retailers that are either purely online or have benefited greatly from ecommerce, notably Walmart on Tuesday, Target and Tencent a day later, and AO World on Thursday. AO World is trying to shift its business model away from sales growth to building and maintaining margins. The problem for such retailers as we enter an economic slowdown will be maintaining sufficient sales demand. Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayCanada, monthly manufacturing survey plus wholesale trade figuresChina, July retail sales and industrial production figuresIndia, monthly trade statisticsJapan, monthly industrial production figuresNigeria, monthly inflation dataUK, Rightmove house price indexUS, Federal Reserve board of governors member Christopher Waller gives opening remarks to the 2022 Summer Workshop on Money, Banking, Payments, and Finance hosted by the FedResults: HelloFresh H1, Henkel H1, Phoenix Group H1, Saudi Aramco H1 financial statement (results and dividend announced on Sunday), Westpac Q3 trading updateTuesdayAustralia, minutes of the Reserve Bank of Australia’s August policy meetingColombia, Q2 GDP dataEU, international goods trade figuresGermany, ZEW economic sentiment surveyUK, flash Q2 productivity estimate plus employment statisticsUS, July industrial production plus residential construction figuresResults: BHP Billiton FY, Genuit Group H1, Home Depot Q2, Pandora H1, Softline Q1 trading update, Walmart Q2WednesdayBulgaria, flash Q2 GDP dataDubai International Airport, the world’s busiest for international passenger traffic, reports passenger traffic figures for the first half of the yearFrance, wheat harvest quality reportNew Zealand, interest rate decisionUK, July producer price index (PPI) data, plus Office for National Statistics (ONS) private housing rental price data and house price indexUS, Federal Open Market Committee publishes the minutes of its July meetingResults: Balfour Beatty H1, Carlsberg H1, Cisco Systems Q4, Glanbia H1, Lowe’s Cos Q2, Persimmon H1, Santos H1, Swiss Life H1, Target Q2, Tencent Q2ThursdayCanada, July consumer price index (CPI), plus industrial product and raw materials price indicesEU, July inflation figuresResults: AO World FY, AutoStore Q2, Estée Lauder Q4, Geberit H1, Hella FY, Kohl’s Q2, Marshalls H1, Origin Energy FY, Rank Group FYFridayCanada, monthly retail trade figuresGermany, monthly PPI figures for industrial productsJapan, July CPI figuresUK, GfK consumer confidence survey, ONS July retail sales data and monthly trade figuresResults: Deere & Company Q3, Kingspan H1, Standard Bank H1World eventsFinally, here is a rundown of other events and milestones this week. MondayAfghanistan, first anniversary since the Taliban seized back powerFrance, Italy, Spain: Assumption Day public holidayIndia, Independence Day celebrations on the 75th anniversary of the end of British ruleJapan, 77th anniversary of Japan’s surrender and the end of the second world war. Emperor Naruhito, empress Masako and prime minister Fumio Kishida attend a commemorative ceremony at the Budokan stadium in Tokyo.UK, further industrial action from criminal barristers in England and Wales, who have been striking over legal aid funding. Also, more than 500 Unite members at Liverpool’s container ports will close their ballot for strike action in a dispute over pay and conditions.TuesdayBahamas, leaders of the Caribbean nations meet for a two-day conference at the Baha Mar resort to discuss the region’s approach to the COP27 climate talks in Egypt in NovemberUS, the 45th anniversary of the death of Elvis Presley at his home in MemphisWednesdayBelgium, Nato secretary-general Jens Stoltenberg meets Kosovo’s prime minister Albin Kurti in Brussels amid rising tensions between Kosovo and Serbia. A day later, Kurti is due to meet Serbian president Aleksandr Vucic.Indonesia, Independence Day national holidayNorway, the country’s oil wealth fund, one of the world’s largest funds, reports half-year figures at ArendalsukaUS, former vice-president Mike Pence speaks at Politics & Eggs at the New Hampshire Institute of PoliticsThursdayUK, A-level and vocational exam results — including the new T-Level technical qualifications — for school students in England, Wales and Northern Ireland. Plus, about 40,000 members of the Rail Maritime and Transport (RMT), Unite and the Transport Salaried Staffs Association (TSSA) unions to stage national train strike over pay and redundancies issues.US, Nasa’s Space Launch System will be rolled out to Launch Pad 39B at the Kennedy Space Center ahead of the Artemis 1 moon mission.FridayMontenegro, no-confidence vote expected on the minority government led by prime minister Dritan Abazović after he signed a controversial agreement with the powerful Serbian Orthodox Church, opposed by human rights activists and pro-western partiesUK, about 10,000 members of the RMT union employed by Transport for London, 400 Overground staff working at Arriva Rail London and more than 1,600 bus drivers, mainly in west London, will strike in separate disputes over jobs and pay. Also, Welsh Water imposes its first hosepipe ban for Pembrokeshire since 1976 due to the arid weather conditions.SaturdayHungary, State Foundation Day public holiday celebrated with fireworks on the banks of the River DanubeUK, the RMT, Unite and the TSSA union members will hold another day of strike action on the national railways over pay and redundancies issues. Plus, a demonstration is planned in London calling for an early general election.SundayGermany’s chancellor Olaf Scholz begins a state visit to CanadaUS, Hawaii Statehood Day commemorating its establishment as the 50th state admitted into the union in 1959UK, members of the Unite union at Britain’s largest container port, Felixstowe, begin strike action in a dispute over pay More

LONDON (Reuters) – Stood on her hind legs to greet any prospective owner who might approach her glass-doored kennel, Harriet is a black English cocker spaniel abandoned as a deepening cost-of-living crisis pushes growing numbers of Britons to part with their pets.She was found running along a busy road in London after witnesses saw her pushed out of a car and is one of 206 dogs and 164 cats currently being looked after at rehoming centres run by the Battersea animal charity.It is a similar story at other centres across the country – with some seeing record inquiries for dog and cat returns – as the tightest squeeze on living standards since at least the 1960s forces many owners to decide the additional cost of food plus hundreds of pounds in vet bills is no longer manageable.”We are concerned that’s going to be an increasing reason for people bringing their dogs in to Battersea,” Steve Craddock, who manages the centre in soutwest London, told Reuters.Exotic pets such as snakes and lizards are also proving too expensive due to their need for specialist heating and lighting.Three snakes, including an 8-foot (2.4-metre) boa constrictor, were recently dumped in pillow cases outside a reptile shop, the Royal Society for the Prevention of Cruelty to Animals (RSPCA) told Reuters.The trend, which follows a surge in demand for pets during COVID-19 pandemic lockdowns in a country known for its love of animals, comes as households brace for energy bills to more than triple in January on last year, hammering people’s incomes.The Bank of England has warned Britain faces a long recession. A NEW FINANCIAL CRASH Dogs Trust, which currently has 692 dogs needing homes in 21 centres across the country, said the last time it had seen anything like this was in the wake of the 2008 financial crash. “This cost-of-living crisis has crept up on us a lot more quickly than people ever expected,” said the Trust’s operations director Adam Clowes.Such is the pressure that the charity is considering whether it should expand an emergency support fund, normally reserved for people on welfare benefits who need short-term financial support to keep their pets, to more middle income earners.Animal charities say they are also worried the squeeze on living standards will have an impact on donations, though they are not seeing this yet.At Battersea, some pets are being rehomed. Magpie is a British short hair cat who arrived pregnant after her owner of two years realised that they could not afford the kittens. All of her four kittens have now been found new homes.But that is unlikely to be the case for most animals, with another charity, Woodgreen, saying applications to adopt animals have dropped to the 100s a month from around 10,000 during lockdowns.Pilar Gómez-Igbo, an assistant editor, could have been one potential owner, but having done some research she is now worried about the extra costs.”As the change in living costs became more evident, yes definitely, it joined the list of things to seriously consider,” she said. “I will make myself wait a little.” More

Ali Carnegie, a business energy broker based in south-west England, spends most of his working day on the phone breaking bad news to clients.In normal times, Carnegie wrangles with gas and electricity providers over single-digit percentage increases in the bills of the more than 250 small to medium-sized enterprises he has on his books. But now he has to recommend contracts that may tip some of his clients’ businesses over the edge as energy bills have started to rise sharply, driven primarily by Russia’s squeeze on gas supplies to Europe.Last month, a hospitality business he works with was offered a new electricity contract priced at £605,000 a year, a seven-fold increase on its previous one. The owners are now working out whether their business can survive the rise. Spiralling energy costs are just one of a number of pressures weighing on the UK’s 5.5mn small businesses. “This winter would be very grim if energy prices alone were going up,” said Carnegie, who runs Cornwall-based consultancy Total Energy Solutions. Increasing wage bills, higher raw material costs, the supply chain crunch and the fallout from Brexit only add to the pressures. The upshot is that many SMEs, which together employ around three-fifths of the UK workforce, will probably collapse without government intervention.In 2020, the first year of the pandemic, the UK lost nearly 390,000 small businesses, more than one-20th of the total. Tina McKenzie, policy chair at the Federation of Small Businesses (FSB), predicted that this winter “could easily be just as devastating . . . if not worse”.In the three months to June 30, SMEs in the hospitality, manufacturing, construction and retail sectors all reported input costs almost double the level of the same quarter last year, according to the FSB Small Business Index. Over the same period, 5,629 company insolvencies were registered in England and Wales, 13 per cent up on the previous quarter, according to official data. “The government’s got to wake up to the fact that there’s a real crisis facing small businesses,” said Andrew Goodacre, chief executive of the British Independent Retailers Association. “If you lose businesses, you lose high streets, you lose jobs and you lose livelihoods. That’s hard to recover from.”Industry groups have called on ministers to help small businesses with their energy bills through the winter and provide an uplift in the threshold for full business rates relief.Both candidates in the race to replace Boris Johnson as prime minister have made limited commitments that would help small businesses. Frontrunner Liz Truss has promised to scrap the planned increase in corporation tax, while Rishi Sunak has committed to extend the 50 per cent business rates discount. A government spokesperson said: “No national government can control the global factors pushing up the price of energy but we will continue to support business in navigating the months ahead.” Last week, as temperatures rose again, family-owned Cornish ice cream maker Roskilly’s celebrated its best day of trading since it began selling the treat 35 years ago. But the outlook is less sunny. The wage bill for its 60 staff is up 10 per cent and the company has been turned down for contract renewal by its energy provider, which risks leaving it at the mercy of fast-rising variable tariffs come October. Producing and freezing 400,000 litres of ice cream a year is an energy-intensive enterprise. With 4 per cent margins on a turnover of around £2.3mn a year, the company is heading for a big loss. “The staff are all terrified because they know if I don’t have the money, I might have to cut hours or jobs in the winter, if we even make it that far,” said Silke Roskilly, one of the directors. ‘The staff are all terrified because they know if I don’t have the money, I might have to cut hours or jobs in the winter, if we even make it that far,’ — Silke Roskilly, director of Roskilly’s © Kai Greet/FTIn the energy market, small businesses have been “thrown to the wolves”, the FSB’s McKenzie argued. While consumers benefit from some protection from the energy price cap and state financial support, and larger corporations can hedge against rising energy costs, SMEs are “an easy target” for suppliers, she added. “If you’re an energy company, where are you going to get your big hikes? Small businesses, because there’s no protection whatsoever,” McKenzie said. An especially tight labour market has conspired with rising energy, food and drinks costs to hit the hospitality industry particularly hard. The food and accommodation sector has an 8 per cent vacancy rate, the highest of any industry, according to the Office for National Statistics. Earlier in summer, Anthony Pender, co-owner of Yummy Pub Co, which has three sites in London and south-east England, was so short-staffed he was pulling pints himself. Now, staffing levels are up but the company’s wage bill has increased from 26 to 31 per cent of turnover. Its biggest draught lager supplier has put prices up by a quarter and the electricity bill has doubled.“We just can’t pass on those costs as we’ll have no customers left,” said Pender. He warned that over the winter he may have to reduce trading hours, cut back the menu and lay off chefs to save money, adding that he was already seeing the “tell-tale signs” of recession. “I think we’re heading towards a catastrophic market event. Our business will survive on £5mn turnover, but how do Dick and Rita at the Dog and Duck turning over a few thousand a week survive?”Yummy Pub Co has four months’ worth of cash reserves to draw on — a rarity for businesses in the sector where most cash piles were depleted by the Covid-19 pandemic. One in six hospitality businesses has no reserves, according to the trade body UKHospitality (UKH).‘I think we’re heading towards a catastrophic market event. Our business will survive on £5mn turnover, but how do Dick and Rita at the Dog and Duck turning over a few thousand a week survive?’ — Anthony Pender, co-founder of Yummy Pubs © Yummy Pub CoThe British Institute of Innkeeping calculates that independent pubs will need to trade 20 per cent above pre-pandemic levels just to stand still, but 86 per cent are reporting profits down on 2019 levels.“Not all businesses will be able to survive this onslaught, and those that can will be closely considering how they can keep their costs down just to stay afloat,” said Kate Nicholls, UKH chief executive. In the coastal town of Lymington in southern England, Raoul Perfitt, managing director of organic hair dye manufacturer Herb UK, is also trying to work out how to make it through the winter. Post-Brexit, the increased cost of exporting to the EU, which accounts for a fifth of revenues, had already cut into margins. But in recent months the price of essential raw materials has increased dramatically, in some cases as much as five times. The company, which employs more than 50 staff in the UK and turns over £7.5mn a year, has also been hit by a three-fold increase in electricity costs. Fortunately, Herb moved to a new, more efficient premises in January. “If we were still in the old unit, it would have been horrendous,” said Perfitt. “We’ve invested heavily in more efficient heaters, smaller production units . . . so we’re trying to mitigate everything we can.”As they steel themselves for a sharp downturn over the winter, many small businesses are left wondering how much help they will get from the new UK prime minister with the leadership contest creating a policy vacuum.“It feels like we’re on a pause button, whilst everybody spirals into a winter of discontent,” said the FSB’s McKenzie. More

MUMBAI (Reuters) -India’s best-known stock investor Rakesh Jhunjhunwala, dubbed the country’s Warren Buffett, died on Sunday, prompting an outpouring of tributes for a self-made billionaire whose fortunes rose with the country’s economy.Jhunjhunwala died at the age of 62, a week after the launch of his budget airline, Akasa Air. He had looked and sounded frail promoting the carrier. The cause of his death was not immediately known.He is survived by his wife, whom he used to call his only client, and three children. He leaves stakes in around three dozen Indian companies and a legacy of quoting one-liners like “the trend is your friend” and “the only rule I have is there are no rules”.”All I’ve known is trading and investing. I don’t want to do anything else in life,” Jhunjhunwala told Reuters 10 years ago. “I’ll call it quits the day I die.”On Monday, he told CNBC-TV18 that India’s economy, Asia’s third-biggest, was “entering a golden age,” expressing hope that “my fellow Indians are as optimistic as I am.”Jhunjhunwala was a big public supporter of Prime Minister Narendra Modi, who lauded him on Sunday as “indomitable, full of life, witty and insightful”.Jhunjhunwala’s communication skills helped small investors understand the stock market, said businessmen and bankers based in India’s financial capital, Mumbai, who had interacted with him for over 30 years. His insights on the economy and companies made him a TV celebrity.Born in the state of Rajasthan and trained in chartered accountancy, Jhunjhunwala started dabbling in stocks as a teenager and went on to manage a stock trading firm, RARE Enterprises. His net worth was about $6 billion, according to Forbes.He made his first big profit by buying 5,000 shares in Tata Tea with borrowed money, confident the markets had under-estimated the potential of a company looking to grow at a time of rising yield production. He trebled his money within months.Better, bigger investments followed, including a leveraged bet in the late 1980s on iron ore exporter Sesa Goa. Jhunjhunwala bought the stock at 60-65 rupees and sold at 2,200 rupees.His firm’s investments include many Tata Group companies, such as Tata Motors (NYSE:TTM), watchmaker Titan, Tata Communications and Indian Hotels Co, which runs the Taj hotels.Other investments include Indiabulls Housing Finance, Star Health Insurance, Federal Bank and vocational training company Aptech Ltd.Jhunjhunwala had told Reuters the growth of the Indian stock market since the country’s economy was liberalised in 1991 – a period in which the main Sensex index has risen about 40-fold – was a big factor in his success.”Investor, bold risk taker, masterly understanding of the stock market, clear in communication – a leader in his own right,” Finance Minister Nirmala Sitharaman wrote in a tribute on Twitter (NYSE:TWTR). “Had strong belief in India’s strength and capabilities.”Uday Kotak, chief executive of Kotak Mahindra Bank, and school and college mate, said Jhunjhunwala “believed stock-India was undervalued. He is right.”Kotak said on Twitter: “Amazingly sharp in understanding financial markets. We spoke regularly, more so during COVID. Will miss you Rakesh!” More

The writer is executive director of American CompassAt first glance, Republican opposition to the Chips and Science Act, through which Congress approved more than $70bn in support for the American semiconductor industry and roughly $200bn for scientific research, appears a straightforward story — of course the GOP resisted “big government” and “picking winners and losers”. But the criticism actually came from the opposite direction. Republicans showed an appetite for intervening in markets, confronting corporations, and unwinding globalisation. To appreciate how sharply America’s economic debate has swerved, one must dive into the legislative details — where platitudes about “strengthening America” and “helping working families” give way to trade-offs that force the application of abstract principles to decisions. With Chips, the main argument was over “guardrails”. The bill would offer semiconductor manufacturers billions of dollars in grants to build new fabrication plants in the US. But those grants came with strings attached. Any company accepting federal money for an American project had to agree not to make any new high-tech capacity investments in China. Despite sounding simple, such guardrails have various parameters. What counts as “high-tech”, and who decides? Should the definition be fixed, or should it evolve? Intel and others, determined to both take federal money and invest aggressively in China, lobbied to weaken the guardrails — and here the swerve comes into view. Historically, Intel might have expected a sympathetic hearing from Republicans. It is a large corporation seeking to maximise profits and make investments to further that goal. Isn’t that the GOP formula for a rising tide that will lift all ships? No longer. When the Democratic majority in the Senate was swayed by chipmakers’ advocacy and modified the bill accordingly, the Republicans were incensed. Their frustration is expressed in the memo quickly released by the Republican Study Committee, the largest caucus of conservatives in the House of Representatives. Entitled “Chips for China”, it warned that “it is especially critical to understand how [the bill] fails to protect US taxpayer dollars intended to boost semiconductor production from flowing to China”. Kevin Roberts, president of the Heritage Foundation, appeared on Fox Business to decry subsidising “the construction of semiconductor factories in China”. But keep the money in America, he told an audience at the Intercollegiate Studies Institute’s American Economic Forum later that week, and he would be “all in”. The question here is not whether federal spending should go towards construction in China. The Chips Act unambiguously specifies that a company can only receive a grant for a project in the US. The Republican claim is that a company benefiting from a federal programme should not be able to invest in China at all. But if supporting an entity that does business there constitutes “helping China,” then everything helps China. By this metric, a tax cut to encourage investment by multinationals is an impermissible pro-China subsidy. What Republicans are saying is not really specific to Chips — rather, it evinces a crossing of the Rubicon towards full decoupling from China. After all, it hardly makes sense that an American semiconductor company making new, publicly-supported investments in the US should be barred from investing in China, while one refusing to invest domestically is free to partner with the Chinese government. The underlying logic of the GOP criticism is that investment in China is not in the American interest and the implication is that federal policy should respond, paeans to “free trade” be damned.Legislation already under consideration would restrict investment flows both to and from China — for instance, implementing more stringent reviews, limiting Chinese access to US capital markets, and prohibiting the transfer of sensitive technology. But if Republicans don’t want Intel investing in China, they presumably feel the same way about Apple, Tesla, Goldman Sachs and Pfizer — and Harvard. Recent GOP rhetoric suggests they are less interested in subjective standards and reviews than outright bans. If they do well in November’s midterms, expect rapid advances in this direction. A more aggressive industrial policy could also follow. The rationale behind the Chips Act will hold for other critical industries like communications equipment, rare-earth minerals, and biopharmaceuticals. Conservative interest in rebuilding America’s industrial base may finally be overtaking the free-market fundamentalism that once dominated the centre-right. More

Did the rate of UK inflation rise last month?Surging oil and gas prices, coupled with climbing food costs, are weighing heavily on the UK economy. In June, inflation in the country hit a fresh 40-year high of 9.4 per cent, above levels in the eurozone and US.Inflation data for July will be released on Wednesday, with economists polled by Reuters expecting the consumer price index to have risen by 9.7 per cent year on year. British households are forecast to face average annual energy bills above £5,000 next year, as Russia’s war in Ukraine adds to a squeeze on oil and gas supplies to Europe.Earlier this month, the Bank of England warned that UK inflation is expected to hit 13 per cent and the country would fall into recession by the end of the year. The bank raised interest rates by 0.5 percentage points to 1.75 per cent as it attempts to damp demand and stem rising inflation. Vasileios Gkionakis, head of G10 currency strategy at Citi, said that inflation in the UK is “likely to prove stickier due to Brexit, complicating further [the] BoE’s policy.”The US consumer price index rose by 8.5 per cent year-on-year in July, according to figures released this week, slowing compared with the previous month. “The US doesn’t have quite as acute an energy issue as the UK,” said Lyn Graham-Taylor, senior rates strategist at Rabobank, adding that the Bank of England finds itself having “to sacrifice the economy” by raising interest rates in order to bring surging inflation back down to the 2 per cent target. Nikou AsgariWhat will retail sales tell us about the state of the US consumer? US retail sales figures for July are expected to give market participants insight into consumer confidence at the start of the third quarter — an important data point after two quarters of contraction. Economists polled by Bloomberg forecast that the Commerce Department will report a 0.2 per cent increase in overall retail sales in July from the previous month, a slowdown in growth from the 1 per cent increase reported for June. Some of the difference may be attributable to the decline in petrol prices since June, when the average cost for a gallon at the pump peaked at over $5. The move between June and July is less stark when auto and petrol prices are stripped out, though it still shows a slowdown: the Bloomberg poll indicates expectations of a 0.3 per cent increase in July versus 0.7 per cent in June. Analysts at Bank of America suggest it is possible that the plunge in gas prices — which was evident in a slowdown in annual consumer price inflation in July — could have ramped up consumer spending in other areas of the economy. Those analysts forecast a 0.9 per cent month over month increase in retail sales, stripped of the effects of spending on cars, petrol, building materials and restaurants. The data come in the wake of a red-hot jobs report for July as well as a second consecutive quarter of contraction in gross domestic product in the April-June period, the combination of which has provided a somewhat muddled picture of the state of the American consumer. “Following the second consecutive contraction in real GDP during Q2, the moderation in inflation and durability of consumption will inform how the third quarter plays out in terms of realised growth,” said Ian Lyngen, head of US rates strategy at BMO Capital Markets. Kate DuguidHas the dollar turned?The US dollar has been on a tear. The Federal Reserve’s aggressive interest rate rises, aimed at curbing inflation, have helped push the greenback to 20-year highs in recent months. Yet economists are divided over how much further the currency has to run.The latest US consumer price index data, which investors were watching closely for clues over how far the Fed will lift borrowing costs, showed signs of steadying in July. Wall Street stock markets rallied in response, and the dollar index — which measures the greenback against a basket of six other currencies — has slipped about 3 per cent lower from its July 14 peak. “Barring a major upward repricing of rate expectations or revived hard landing fears,” Société Générale’s Kit Juckes said on Friday, “the dollar has peaked for good, subject as ever to what is going on elsewhere.”Others are less sure: over 70 per cent of currency strategists polled by Reuters in early August thought the dollar’s strength had yet to peak, though a third of those surveyed said it would do so within the next six months.ING’s Christopher Turner is among those who reckon the dollar will stay strong to the end of the year, arguing that it tends to benefit from high rates of inflation, slowing economic growth and “flat/inverting US yield curves as we have today” — referring to the scenario where yields on shorter-dated government bonds are higher than those on longer-dated bonds.“Not until investors become convinced that the Fed is prepared to stimulate, not slow, the US and global economies should the dollar turn lower,” said Turner. George Steer More