Economy

The political situation in the UK
The worsening economy is Starmer's intractable problem: "Risking a meltdown"

The scandals have taken their toll, but the crisis for British Prime Minister Keir Starmer is also due to the fact that the economy is in many ways clearly worse than when he won the election two years ago, writes Bloomberg.

- The overall picture is simply an economy that is growing quite weakly, says Andrew Goodwin, chief economist at Oxford Economics, to Bloomberg.

A lot can be blamed on Donald Trump and the US's erratic foreign policy. But Labour's tax increases for companies are also having their effect, as is Labour's stricter migration policy.

At the same time, Labour inherited a mountain of debt and a runaway budget deficit, and British government interest rates are at the time of writing almost double those in Sweden. Starmer and Chancellor of the Exchequer Rachel Reeves' focus on deficits has given confidence in the fixed income market, writes Bloomberg.

The tasks for a new prime minister have been multiplied by the wars in Ukraine and the Middle East and everything that the Conservative Party left behind. If things go wrong, Britain faces a financial crisis, warns historian Anthony Seldon in a column for the Financial Times.

“If Starmer’s successor upsets the bond market, which is absolutely possible, Britain risks a meltdown,” writes Seldon.

Oil Market
Fuel crisis heading for critical turning point this summer: "Risk of global recession"

The fuel crisis resulting from the Iran war is heading for a critical turning point this summer, reports the Financial Times.

More than two million barrels of oil per day are currently being taken from strategic reserves, but many of these reserves will run out in July. Levels are expected to be at record lows by the end of May, according to CNBC.

According to Paul Diggle, chief economist at investment firm Aberdeen, it is not unlikely that the price of oil could reach $180 per barrel from today's $109. That would mean runaway inflation and recession in a number of European and Asian countries.

The increase in travel and demand for air conditioning as the northern hemisphere gets summer will put further pressure on reserves.

“If the conflict in the Middle East does not end in the coming weeks and the Strait of Hormuz is not opened, I fear we could be facing a global recession,” says EU Transport Commissioner Apostolos Tzitzikostas.

Electricity prices
Economist predicts record-high summer electricity: “A small patch”

The cold, the Iran crisis and the new electricity export to Finland, together with low water levels, have kept electricity prices up so far this year. As summer approaches, electricity prices usually fall, but now Nibes energy economist Claes Hemberg predicts that they will instead continue to rise.

For homeowners, the monthly bills this summer could end up being between 3,000 and 4,000 kronor, Hemberg believes.

– That’s a lot of money for a household, he tells SVT.

The government's electricity subsidy, approximately 1,500 kronor for a homeowner, is described by Hemberg as a "small band-aid on a big wound". 

Middle East crisis  Strait of Hormuz
"Hormuz hoarding" an increasingly serious problem in the world

Tickets to Indian "Cola Light parties" with promised access to the drink have sold out quickly when a shortage of aluminum cans has led to hoarding that has caused the soft drink to run out in many parts of the country, reports NBC.

In South Korea, garbage bags and syringes are being hoarded, writes the Financial Times, and previously there have been rumors of condom hoarding in China, reports Norwegian E24.

More than oil and fuel may become scarce goods in the wake of the Iran war, and this type of "Hormuz hoarding" will, just as during the corona crisis, be a factor that exacerbates the shortage.

Another more serious danger concerns the large amounts of artificial fertilizers that previously passed through the Strait of Hormuz, and the UN has warned of an impending famine.

The manufacturing industry is also acting, and there is a global rush to build up stocks, writes Bloomberg in a comment on upcoming industrial statistics from several heavy countries.

The climate threat  Global challenges
Truck giants received help after meeting with Kristersson

Truck manufacturers Volvo and Scania have conducted an extensive and successful lobbying campaign for reduced emissions requirements and the government has helped, according to emails that Dagens Nyheter has seen.

The three Swedish CEOs of Europe's three largest truck manufacturers – AB Volvo, Scania and German Daimler – met with Ulf Kristersson (M) in November. The prime minister then asked for a basis for upcoming EU negotiations, and internal instructions show that the Swedish government later presented several of the arguments that the manufacturers sent, writes DN.

In March, the EU hammered through a relaxation of the previous emissions requirements, and according to DN, the change is very similar to the proposal that Scania sent to the government in November.