The Economist

6 The world this week The EconomistAugust 4th 2018

Diverging from other central

banks that have moved to

unwind their stimulus pro-

grammes the Bank of Japan

said it was committed to keep-

ing interest rates “extremely

low” for the foreseeable future

and pledged to continue buy-

ing bonds. Haruhiko Kuroda

the central bank’s governor

said the forward guidance

should “counter speculation...

that the bank is heading

towards an early exit or an

increase in rates”.

The Federal Reservekept its

benchmark interest rate on

hold at its policy meeting. But

with the American economy

growing by an annualised rate

of 4.1% in the second quarter

its best performance since the

middle of 2014 the Fed is

widely expected to increase

rates in September. The Bank

of Englandraised its main rate

for the first time since Novem-

ber (and only the second time

since 2007) by a quarter of a

percentage point to 0.75%.

Turkey’scentral bank raised its

forecast for the country’s

inflation rate this year to 13.4%

from the 8.4% it had predicted

in April. A weak lira has

pushed up prices but the

central bank has not raised

interest rates by much in

response.

GDPin the euro zoneexpand-

ed by 0.3% in the second quar-

ter compared with the previ-

ous three months. That was

the slowest rate of growth by

that measure in two years

raising concerns that the pros-

pect of an escalating trade war

with America might be hurting

the region’s exports.

Political interference

Facebooksaid that it had

closed down several disinfor-

mation accounts on its sites

that were set up to disrupt the

mid-term elections. Although

smaller in scale than the at-

tempt to influence the presi-

dential election in 2016 it is

thought that this was a similar

Russian campaign to sow

discord. However the latest

attack was more sophisticated

using virtual private networks

to try to avoid detection.

Twitter’sshare price slumped

after it reported that the num-

ber of monthly active users to

its platform had fallen by 1m in

the second quarter compared

with the previous three

months. And Netflix’s share

price took another hammer-

ing; it recently reported a short-

fall in adding new subscribers.

This came after Facebook took

a drubbing in the markets

when it revealed similarly

disappointing user growth.

By contrast Applebeat expec-

tations with its quarterly earn-

ings report. Revenue was up by

17% compared with the same

three months last year to

$53.3bn boosted by the higher

price it charges for the iPhone

X(sales of total iPhone units

only increased by 1%). Net

profit rose by a third to $11.5bn.

A rescue deal to save House of

Fraserfell through when the

Chinese firm backing the

arrangement pulled out fol-

lowing a steep fall in its share

price. That leaves the future of

the British chain of depart-

ment stores in doubt.

Bumper Profit

After years of retrenchment

following the Deepwater

Horizon disaster BPreported a

hefty jump in headline profit

for the second quarter to

$2.8bn. The energy giant is

increasing its dividend for the

first time in four years. It is also

undertaking its biggest acquisi-

tion in two decades by agree-

ing to buyBHP’sshale assets

in America for $10.5bn.

With its income buoyed by

higher commodity prices Rio

Tintoannounced a package of

returns to shareholders worth

$7.2bn. The mining company

reported an underlying half-

year profit of $4.4bn.

Fidelitysurprised its rivals by

becoming the first big invest-

ment firm to launch new

index-tracking stock funds

with no fees for investors. It

also slashed the charges on its

existing funds. The announce-

ment underscores fee competi-

tion in the industry as it moves

away from a reliance on the

expertise of stock-pickers

towards low-cost index-based

funds.

BMWraised the price of sport-

utility vehicles it sells in China

to offset some of the cost of the

retaliatory tariffs that China

imposed on American car

imports. BMWmakes itsSUV

models for export to the coun-

try at a factory in South Caroli-

na though it is ramping up

production in China. Tesla

which has also raised the price

of its cars in China reported a

quarterly loss of $717.5m. But it

pleased investors by burning

less cash than had been ex-

pected and by promising to

turn a profit later this year.

Time to put your phone down

A range of tools were unveiled

for the Facebook and Insta-

gram platforms that will en-

able users to limit the time

they spend engrossed on their

apps. Concerns about addic-

tion to social media are on the

rise; surveys have revealed

that on average people check

their phones 50 times a day.

The tools require a degree of

discipline by users to be effec-

tive. But if users had that dis-

cipline perhaps they would

not need time-limiting tools.

Business

FANG Plus* index

Source: Thomson Reuters technology stocks*Ten leading

September 19th 2014=1

JFMAMJJ

2018

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