ALEX BRUMMER: Fuel costs dough stability


ALEX BRUMMER: After the financial crisis, the Titanic struggled to ensure that no bank was too big to fail – the Secretary of Business should take the same hair-shirt approach for energy companies

  • Britain made terrible choices on energy
  • Our cost of living problems are global in nature
  • In Kazakhstan, doubling the price of gasoline was enough to unleash hell










You might think that the protests and brutal crackdown on shooting in Kazakhstan had little to do with the tensions over the cost of living in Britain.

But the roots are the same as for the demonstrations of yellow vests in France from 2018 and the noisy demonstrations disrupting the political order in Chile.

Globally, the Cop26, the IMF and the World Bank, as supporters of climate change action, want to see higher carbon taxes and that businesses and consumers pay realistic prices for it. energy.

Feeling hot: Britain made terrible choices on energy

In Kazakhstan, doubling the price of ultra-low gasoline by 0.47 US cents per liter was enough to unleash hell.

Britain has made terrible choices when it comes to energy, ranging from freshening up to opening untapped offshore oil and gas resources like Cambo off the Shetland Islands, and not investing quickly enough in the new nuclear. Dependence on just-in-time imported oil and gas without sufficient storage compounds the problems.

It is undeniable that our cost of living problems are global in nature. This is illustrated by euro area inflation, which soared to 5 percent in November, the highest level ever for the single currency bloc. In Germany, a historic example of price stability, it stood at 5.7% last month. The same factors that led to soaring consumer prices in the UK are driving those on the continent, energy costs and post-Covid supply chain bottlenecks being key factors. The main drivers are energy prices in the euro area. Average household gas and electricity bills on the continent are expected to increase from € 650 (£ 542) to € 1,850 (£ 1,541) in 2022.

It might not be as big of a shock as in the UK, but domestic users in Germany will still have to rack up £ 19bn in extra fees, creating an early challenge for new Chancellor Olaf Scholz.

Rather than face the realities of the market ahead of the French presidential elections in April, President Macron has responded by temporarily freezing electricity and gas bills, which is easier in a country where the government has a large stake in major suppliers.

The Conservatives, who cling to the idea that reducing the budget deficit is a good idea, do not have that option. Election arithmetic, which dictates that something needs to be done, should focus on consumers in a hurry rather than bailing out an undercapitalized industry.

In the aftermath of the financial crisis, the Titanic struggled to ensure that no bank would be too big to fail. Business Secretary Kwasi Kwarteng is expected to take the same sloppy approach to energy companies.

Digital

Martin Sorrell at S4 Capital demonstrates with great skill where digital, technology and advertising meet.

So, the assault inside tech entrepreneur Vin Murria’s tent on M&C Saatchi seems to make sense. It also reminds Sorrell of his glory days at WPP and S4 in that Murria recognizes that being in the public sphere provides the opportunity for the brave to use the equity by issuing new papers.

It is the reverse of private equity, which operates a debt model.

Murria, as Vice President of M&C, has a clear vision of the brand’s value and its prospects for getting on board with the advertising group while in despair following the 2019 accounting scandal. She has bought a dominant position directly through a 12.5% ​​stake and through an investment vehicle, AdvancedAdvt, which holds 9.8%.

Minority investors looking for a cash exit from M&C are pretty cool about an all-paper deal that limits the escape route. If Murria really wants M&C, she has to step down from her role as vice president, improve the offering and come up with a cash alternative.

Sports life

Athletic has transformed sports reporting with the variety, breadth and quality of analysis on its digital platform.

He uses data well with a flair and intelligence the kind first seen in Michael Lewis’ Moneyball.

By snatching up the San Francisco-based publication for £ 404million, The New York Times is gaining not only 1.2million subscribers (including this writer), but also a team of journalists who understand finance and is ready to speak out against sexual abuse and other scandals.

There is no immediate intention to merge with NYT sports production. But the combination of two powerful franchises will create the ability to transform the quality and breadth of sports analysis.

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