Johnson resigned on Thursday after a never-ending series of ethics scandals finally turned his party against him. (And the latest one is particularly gross. We’ll just throw a link in here.) Although Johnson’s tenure has been defined by scandal, one could argue (and we would) that it was Britain’s abysmal economy that ultimately brought him down. The UK has the highest inflation among the G7 countries — 9.1% in May and is forecast to reach 11% later this year, writes my colleague Mark Thompson. Rising food and fuel prices have created the UK’s worst cost-of-living crisis in decades: disposable incomes are on track for the second sharpest fall since records began in 1964, according to the Bank of England. And typical UK wages have not risen at all since the 2008 financial crisis, the Resolution Foundation said on Monday. So it’s no wonder the public isn’t exactly bullish on Boris. But why is the UK economy doing so much worse than its peers? Let’s start with Brexit, Johnson’s “signature” achievement. Withdrawal from the European Union: Against this backdrop, the global economic pressures facing each country — a tangled supply chain caused by the pandemic and rising commodity prices due to Russia’s invasion of Ukraine — have hit the UK far harder than its allies. G7. There is a recession for anyone unlucky enough to take on Johnson, as the world’s fifth-largest economy ground to a halt in February, began shrinking in March and worsened in April. As inflation soars, British consumers are buying less and anti-poverty campaigners say UK households have been forced to choose between “heating and consuming”. Every major sector of the economy is moving in reverse, according to the National Statistics Service. Oh, and it’s going to get worse: The U.K.’s economic outlook has “deteriorated materially,” the Bank of England said. And the Organization for Economic Co-operation and Development predicted last month that the UK economy would not grow at all next year — the worst expectations for any G7 economy next year. So, yeah, the scandals weren’t big for Johnson. But political leaders around the world are under enormous pressure from inflation. It turns out that people really don’t like it when they can’t afford the things they want. Johnson’s scandals were the final straw for a prime minister who was already on paper-thin ice. Otherwise, the Tories might have stuck with Johnson big time and (mostly) — just as he did with the five-week prorogation of Parliament, corruption allegations, a lobbying scandal and most of Partygate.
NUMBER OF THE DAY: 9
That’s the number of children we now know Elon Musk has — up from the seven the world was aware of before Business Insider reported Wednesday that the world’s richest man welcomed twins last year with an executive at one of his companies, the Neuralink. Musk tweeted on May 24 saying, “US birth rate has been below minimum sustainable levels for ~50 years,” and pinned it to the top of his Twitter account with more than 100 million followers.
GAME STOP IT
GameStop stock is about to get a lot cheaper. The company’s board of directors on Wednesday approved a 4-for-1 stock split, effective July 22. For current GameStop shareholders, the total value of their investment will remain the same, but they will own four times as much stock when all is said and done. Depending on where GameStop stock trades in a few weeks, that would push the stock price down to $30 — about where it was before the meme-stock frenzy sent shares as high as $347 in January 2021. Shares of the meme stock rose after the news on Thursday. GameStop ( GME ), like other meme stocks, has a tough 2022 ahead of it. The stock fell earlier this year, though it has bounced back a bit recently, notes my colleague Jordan Valinsky. The stock is down about 14% this year, reflecting the broader market sell-off. Hard to believe, but even at a third of its all-time high, GameStop may still be a bit pricey for individual investors. Making the stock cheaper could stimulate demand and create more liquidity for the company. Although deep-pocketed institutional investors are usually not bothered by high stock prices, individual investors may be put off by high prices. The growth of zero-fee trading apps, including Robinhood, E-Trade and others, have boosted demand for meme stocks like GameStop and AMC — and helped make stock splits more attractive in recent years. Enjoying Nightcap? Subscribe and you’ll get all of this, and some other funny stuff we’ve been loving around the web, in your inbox every night. (Okay, most nights—we believe in a four-day week around here.)
