MoneyWeek

You can see why an exasperated Harry Truman called for a one-handed economist. In social sciences there are always alternative perspectives to consider and definitive answers are rare. That makes America’s threat of further tariffs this week (the measures were revealed after we went to press) all the more extraordinary: because if there’s one thing virtually all economists – from the most avid Austrian to the keenest Keynesian – agree on, it is that tariffs are a bad idea. “They raise prices, slow economic growth, cut profits, increase unemployment, worsen inequality, diminish productivity and increase global tensions,” as JPMorgan Asset Management’s chief global strategist David Kelly reminds us. “Other than that, they’re fine.” “Expect investors’ rotation from the overpriced US to underpriced Europe to endure” A return to the 1930s…

Billionaire Indian steel magnate Lakshmi Mittal (pictured) leaving the country because of the government’s tax raid on ultra-wealthy non-domiciled individuals is “embarrassing” for Labour “at a time when it is attempting to reassure investors that Britain is open for business”, says Alex Singleton in The Telegraph. Nom-doms avoid paying tax on foreign income and capital gains, but new rules come into force on 6 April. The changes were first proposed by former Tory chancellor Jeremy Hunt. Labour put forward stricter rules and removed a Tory exemption allowing non-doms to transfer money into offshore trusts to avoid inheritance tax. Economists warn the crackdown could lead to a £1bn loss by the end of the current parliament as wealthy foreigners leave. It seems the “rich have voted with their feet… abandoning the…

War fever appears to have gripped Britain’s media. Never able to resist an opportunity to catastrophise, pundits are now predicting at best a return to the Cold War, at worst a full-scale invasion of Europe by Russia as it seeks to recreate the geopolitics of the old Soviet Union. This follows America’s U-turn over its previous support for Ukraine and the long-threatened withdrawal of its defensive shield for Europe. Europe now realises America means it and is therefore in a rush to rearm lest a victory in Ukraine is followed by an onslaught against Eastern Europe. Why, the media wonders, are financial markets ignoring this, with UK and European stockmarket indices regularly hitting new highs? The reason is that the collective wisdom of markets is far greater than that of…

The promised “nuclear renaissance” might have a short half-life, says Alexandra White in the Financial Times. Uranium had been riding the coat-tails of AI, with projections that the technology will drive huge future growth in electricity demand. Microsoft is backing the restart of Three Mile Island. There has been much hype around “small modular reactors”, which are more flexible than existing nuclear power plants. The problem? They are prohibitively expensive, 50% pricier than “gas-fired power plants and those with carbon capture”. Uranium spot prices recently touched an 18-month low. Trading at about $65 per pound, they have fallen more than a third since a peak in early 2024. Energy-efficient Chinese AI models have cast doubt on the electricity bull case, says Jinjoo Lee in The Wall Street Journal. Meanwhile talk…

“Europhoria” has broken out on continental bourses, Holger Schmieding of Berenberg tells Bloomberg. “In more than 30 years in markets, I have rarely seen such a sudden surge in Euro-optimism.” The Europe-wide Stoxx 600 index outperformed the US S&P 500 by a record 17 percentage points in the first quarter of this year in dollar terms. Germany’s Dax delivered a 13% gain, say Bloomberg’s Jan-Patrick Barnert and Julien Ponthus. Yet the headline gains hide cracks. “Historic” pillars like carmakers remain under pressure, with the rally focused on sectors such as defence that are “hugely dependent” on German government promises of higher spending. Transatlantic rebalancing Investors have been selling US stocks en masse in favour of Chinese technology and Europe, says Karishma Vanjani in Barron’s. A third of the US equity…

“Rachel Reeves did nothing to change cash Isas in the Spring Statement. But prepare to have this quarrel all over again in the autumn because the Treasury is still considering a cap on cash within an individual’s £20,000-a-year allowance. Reeves is right to look at changes. The £20,000 allowance is generous by European standards. It is not unreasonable for the Treasury to ask if tax reliefs would do better work for everyone – savers included – if greater sums were directed at productive assets, such as UK equities. Such a reform would be in line with the original spirit of Isas and their 1980s predecessors. On their introduction in 1999, the Isa allowance was £7,000, of which only £3,000 could go into cash. It was only as late as 2014…