8 The Economist June 4th 2022
The world this weekBusiness
The euro zone’sannual
inflation rate leapt to 8.1% in
May. The European Central
Bank is expected to raise
interest rates for the first time
in a decade in July and again in
September. Surging prices may
mean that it will opt for bolder
increases than currently
envisaged, perhaps of half a
percentage point.If I knew then...
In America Janet Yellen
admitted that she had been
wrong to think that inflation-
ary pressureswould be tem-
porary. The treasury secretary
said that in 2021 she “didn’t
fully understand” the risks
from supply-chain bottlenecks
and other factors that have
driven America’s inflation rate
to a 40-year high, but that the
government recognised them
now. Joe Biden said that “fight-
ing inflation is our top eco-
nomic challenge”. The issue
could hurt the Democrats in
the mid-term elections.India’s economygrew by 4.1%
in the three months ending
March 31st, year on year, a
slower pace than in recent
quarters. After rebounding
from covid-19, the country is
now beset by rising prices.
Annual inflation reached an
overall 7.8% in April, but the
category for food, which
accounts for half the consumer
price index, hit 8.4%.Oil pricesrose sharply, in part
because of the eu‘s long-de-
layed agreement to place an
embargo on Russian oil. The
price of Brent crude closed
above $120 a barrel for the first
time in two months. Some
members of opecare reported-
ly willing to exclude Russia
from oil-production targetsagreed to under opec+, be-
cause Russian volumes have
been hampered by sanctions.Police raided the headquarters
of dwsGroup, a big German
asset-management firm, amid
allegations that it misled
investors. A whistleblower has
claimed that dwsexaggerated
the amount it held in esg
(environmental, social,
governance) assets. Such
embellishment is known as
greenwashing, and is a grow-
ing problem in the esg
industry. America’s Securities
and Exchange Commission is
preparing to tighten the rules
on how esg products are
defined and marketed.There was speculation that
another bidder could emerge
for vmware, an enterprise-
software firm. Broadcom, a
chipmaker, recently agreed to
pay $61bn for vmware in a
friendly takeover.America’s Supreme Court put a
temporary hold on a law in
Texas that would have stopped
social-media platformsfrom
removing content they label as
misinformation or extremist.
Industry groups challenged
the legislation, saying it would
damage the effort to scrub hate
speech and propaganda from
the sites. In a 5-4 decision thecourt did not rule on the con-
stitutionality of the law, but
decided to send the issue back
to the lower courts.Sheryl Sandbergunexpectedly
decided to step down as chief
operating officer of Meta. Ms
Sandberg joined Facebook in
2008, helping Mark Zucker-
berg transform it into the
behemoth social-media plat-
form that it is today. She is one
of Silicon Valley’s most influ-
ential executives and is expect-
ed to spend more time working
on her charitable causes.Share prices in Chinese tech
firmsrallied as the two-month
lockdown in Shanghai came to
an end. Nasdaq’s Golden
Dragon China Index of Chinese
companies that list shares in
America recorded its first
monthly gain in May since
October. Sentiment was also
boosted by Alibaba’s solid
growth in quarterly sales.Gold Fields, a gold-mining
company based in South Afri-
ca, agreed to buy Yamana
Gold, a Canadian rival, for
$6.7bn. The combined firm
will be the world’s fourth-
largest producer of gold. The
price of the precious metal has
been volatile this year as cen-
tral banks raise interest rates.
Gold Fields was founded byCecil Rhodes in 1887, but has
just one mine left in South
Africa after expanding to Aus-
tralia, Peru and west Africa.Unileverappointed Nelson
Peltzto its board, after the
activist investor’s fund accu-
mulated a 1.5% stake. Mr Peltz
has sat on the boards of other
big consumer-goods compa-
nies and is credited with help-
ing to turn around Procter &
Gamble by pushing a cost-
cutting agenda there.
Unilever’s shareholders hope
their stock will do as well as
p&g’s, which has risen by 83%
since Mr Peltz joined the board
in 2018 (he left last year).The need for speed
“Top Gun: Maverick”made
$156m at the American box
office over the Memorial holi-
day, breaking the record for the
four-day weekend. Over its
first five days the film raked in
$320m worldwide. The pro-
ducers delayed its release
when cinemas shut during
covid, preferring it to be
viewed on the big screen rather
than on streaming devices. Top
Gun 2 is tapping into nostalgia
for the 1986 original. Around
55% of tg2’s audience in Amer-
ica is aged 35 and over, a demo-
graphic often overlooked in
the blockbusters market.Consumer prices
Euro area, % change on a year earlierSource: Eurostat8
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