MoneyWeek

I wonder if you have finished making your summer holiday plans yet? If you have not you might want to get going – particularly if you think you might need a hire car. In the summer of 2019 you would have been able to rent a normal family car for around £310 a week. Try and get your hands on the same this year (good luck to you) and it will cost you more like £652. Over double. Why? The answer is more interesting than you think – this is the post-pandemic global economy in a nutshell. When the lockdowns began, the car-rental business pretty much shut down globally – and car-hire firms, keen to raise cash and cut costs, sold down their fleets (often at very low prices). At the…

A £1.25m castle in Scotland has gone up for sale through Strutt & Parker following the eviction of its former owners in a decades-long battle over an unpaid debt of £230, says The Times. The Grade A-listed Knockderry castle was previously owned by Marian van Overwaele, who was put into bankruptcy in a dispute stemming from a £230 bill for her bridal-wear business in 1997. The debt ballooned to £30,000 including costs in the course of Van Overwaele’s attempts to fight it, which included trying to transfer ownership of the property to her brother George Amil in order to stop it being seized. The family was evicted in March. Good week for: Kate Bush (pictured) made an estimated $2.3m in royalties between 27 May and 23 June, after her 1985 single Running…

“There really is no pretence now that the Fed [hasn’t], in an act of penance for allowing inflation to get out of control, donned a horsehair shirt and is fully prepared to drive the US economy into recession,” says Albert Edwards of Société Générale. The more important question is whether bringing about a recession will dispel fears about inflation. “The outlook for commodities is key, especially with the backdrop of the war in Ukraine. But I still see commodity prices plunging just like in Q4 2008.” Back then, headline inflation dropped from 5% to -2% in just 12 months. Certainly, recent trends in commodities have been more bearish. The S&P GSCI index of 24 major raw materials is up 31% in 2022, but has fallen back 9% since mid-June on growing…

“The oil price says a trans-Atlantic recession is almost nailed on,” says Russ Mould of AJ Bell. “Since 1970, the oil price has doubled year-on-year six times and on four of those occasions the US and UK have gone into recession within the next two years.” At around $116 a barrel, Brent crude is up by 475% since its March 2020 nadir. “Everyone is waiting nervously to see if 2021 makes it five out of six.” Prices got an extra boost this week as G7 leaders discussed plans to impose a price cap on Russian oil (see page 9). That may exacerbate existing supply problems. “About two million barrels a day of Russian oil and refined-product supplies” are unable to enter global markets at present because of sanctions, says Myra Saefong…

Russia has defaulted on its debt for the first time since 1998. Sunday marked the end of a 30-day grace period for interest payments of $100m on two eurobonds. Russia says that it sent the funds to Euroclear, a Brussels-based clearing house, but sanctions prevented the money from being paid to bondholders. Moscow has called the default artificial. “Everyone in the know understands that this is not a default at all,” said finance minister Anton Siluanov. “Governments usually default when the burden of borrowing is too painful or they suffer a currency crisis”, says Neil Unmack on Breakingviews. “Yet Russia had debt of just 17% of GDP last year and has plentiful revenue from selling oil and gas.” It is sanctions that have triggered this default. “The outcome suits both sides:…

“‘Made in Vietnam’…is making its mark on the global stage”, says investment fund Vietnam Holding. “Manufacturers from all over the world are looking at Vietnam as part of their relocation strategy to effectively diversify and reduce supply chain risks”. Apple recently moved some iPad production into the country, joining firms such as Samsung and Intel that already have a significant presence, partly in response to manufacturing delays caused by lockdowns in China. The textile industry is also booming, says Tomoya Onishi in Nikkei Asia. Exports are on course to hit an all-time high of $22bn in the first half of 2022, a 23% rise on last year. Numerous free trade deals and the post-pandemic boom in the West have turned Vietnam into the world’s second-largest clothing exporter. Things looked very different last…