6 The EconomistAugust 3rd 2019
The world this week Business
TheFederalReservecutits
benchmarkinterestratefor
thefirsttimesincethe
financialcrisis,bya quarterof
a percentagepointtoa rangeof
between2%and2.25%.After
nearlyfouryearsoftightening,
JeromePowell,thecentral
bank’schairman,saidtheFed
waslooseningmonetarypolicy
amiduncertaintiesabouttrade
andtheworldeconomyaswell
aslowerinflationexpecta-
tions.A fewdaysbeforethe
Fed’smeeting,figuresshowed
thattheAmericaneconomy
grewatanannualisedrateof
2.1%inthesecondquarter,well
belowthefirstquarter’s3.1%.Theeurozone’seconomygrew
atanannualisedrateofjust
0.8%inthesecondquarter.
Inflation,meanwhile,fell
againinJuly,to1.1%,shortof
theEuropeanCentralBank’s
2%target.Ata meetingofthe
ecbonJuly25th,MarioDraghi,
itsoutgoingpresident,signall-
edthathewas“determinedto
act”toaddresstheeurozone’s
persistentlylowinflation.
Manyinvestorsareexpectinga
newroundofinterest-ratecuts
inSeptember.Computer world
The London Stock Exchange
reached an agreement to buy
Refinitiv, a provider of
financial data, for $27bn.
Refinitiv is jointly owned by
Blackstone and Thomson
Reuters, who will both obtain a
stake in the lseas part of the
deal. By acquiring Refinitiv, the
stock exchange and clearing-
house group will greatly ex-
pand its market-information
operations, pitting it on many
trading floors against Bloom-
berg, another data provider.In a deal that creates a behe-
moth in the market for every-
day drugs, Pfizeragreed to
merge its off-patent medicines
business with Mylan, a gener-
ics drugmaker. The transaction
will place Pfizer’s previously
bestselling drugs such as
Viagra, which came up against
stiff competition from generic
versions when its patent
expired, in a new company
alongside Mylan’s products.Michael O’Leary, the boss of
Ryanair, Europe’s biggest
low-cost airline, said that
around 900 jobs might be shed,
including 500 pilots, in part
because the grounding of
Boeing’s 737 maxaircraft has
caused Ryanair to cut flights.In Washington the Senate
Foreign Relations Committee
approved sanctions on firms
involved with Nord Stream 2,
Russia’s gas pipeline to Ger-
many (Congress must approve
the bill). Observers think the
pipeline is an attempt by Vladi-
mir Putin to increase European
reliance on Russian energy.America’s Justice Department
approved the merger of
T-Mobileand Sprint, but only
after the mobile-telecoms
companies agreed to sell a
range of assets to Dish, a satel-
lite-tvcompany, that will
bolster its wireless services
and expand competition in the
market. T-Mobile and Sprint
still face a lawsuit trying to
block the deal brought by
several states, led by California
and New York, before they can
seal their transaction.Huawei, a Chinese telecoms-
equipment maker, reported a
23% increase in revenue in the
first half of the year and said its
5 gbusiness was thriving,despite being blacklisted by
America. The company did
acknowledge, however, that
America’s prohibition on its
hardware was affecting smart-
phone sales outside China.SoftBank announced the cre-
ation of a second Vision Fund
through which it and outside
investors will back technology
startups. The new fund hopes
to raise $108bn.After 20 years of legal to and
fro, the European Court of
Justice ruled that a two-second
sample from Kraftwerk’s “Met-
all auf Metall” that was used in
another song represented a
reproduction of the original
work and required a licence.
The decision could have a
profound effect on the music
industry, especially hip-hop.
The court also decided, how-
ever, that a music sample that
had been “modified” did not
amount to a reproduction.InterContinental Hotels,
which counts the Crowne Plaza
and Holiday Inn brands among
its assets, became the first
global hotel business to stop
supplying miniature toilet-
riesin its rooms in order to cut
down on plastic. It will instead
provide shampoo and the like
in larger receptacles across its
more than 5,600 properties.The modelProcter & Gamble recorded a
big net quarterly loss after
writing down the value of its
Gilletteshaving products
business by $8bn. This was in
part because of a “lower shav-
ing frequency” in developed
markets, as the fashion for
beards grows ever more pop-
ular among younger men.The rivalry in the food-delivery
market heated up with Take-
away.com’s$10bn proposed
takeover of Just Eat. Takeaway
operates mostly in Germany
and eastern Europe, and Just
Eat in Britain and western
Europe; a merger would make
them more competitive
against Uber Eats and Deliv-
eroo. Food-delivery drivers are
also taking a bigger bite of the
market; a survey this week
found that more than a quarter
of them in America had nib-
bled on customers’ orders.