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When, in the closing weeks of 1783, Pitt the Younger became Great Britain’s youngest ever prime minister at the tender age of 24 — a record he retains in today’s UK — his government had a poor prognosis. It was dubbed “the mince pie administration” on the assumption it would not last much beyond the Christmas period, while satirists mocked the “infant Atlas”. Was the nation safe with “a kingdom trusted to a schoolboy’s care”?

But Gabriel Attal, the fresh-faced 34-year-old appointed last week as French PM, should be encouraged by Pitt’s example: before his untimely death, the Georgian premier went on to a successful near 20-year, two-term career in the top job and still makes the lists of great political leaders.

Attal has not yet reached the dizzy heights of command: as number two to the French president, his mentor, he has been described as “baby Macron”. Speculation is rife on whether the choice of a loyalist, subordinate in age (Élisabeth Borne, 62, female, and therefore never a Macron mini-me, resigned after less than two years), will end like Caesar’s sponsorship of Brutus: is it a chance for the protégé to overtake or even betray the older man?

The promotion of Attal looks like a sign that Emmanuel Macron is banking on the French electorate having stereotypical assumptions about age and energy levels. The president, himself only 46, was the youngest ever to be elected in France in 2017, at 39. But these days his administration badly needs an injection of oomph.

However, do such Operation Young Bloods ever really deliver? “In presentational terms youth can be an advantage,” according to Steven Fielding, emeritus professor of political history at Nottingham university. For an incoming administration or a hopeful challenger “it highlights the vigour you’re going to bring to change”.

But, Fielding adds, it won’t work “at the end of a long spell of your party in power”. It’s a salutary warning not just to the French government but two of the UK’s incumbent parties, Conservative and Scottish Nationalist.

Both Tony Blair and John F Kennedy won power at the age of 43: Blair talked up a “young country”; JFK was the symbol of an optimistic future after two terms of Eisenhower, by then 70. David Cameron was also 43 when he became UK prime minister — no Pitt, but his smooth visage proved a useful, upbeat contrast during the 2010 election with Gordon Brown’s careworn features, with 13 years of Labour in power etched on them.

In recent months, Tory strategists casting around for attack lines to use against the opposition leader Sir Keir Starmer have had a go at his age — the Labour challenger is 61 to Sunak’s 43, the magic moment for Blair, Cameron and JFK. But it smacked of desperation; the attempt to portray Sunak as the change candidate has since been dropped.

As for the SNP, 38-year-old Humza Yousaf’s hopes of offering a fresh start after taking over from Nicola Sturgeon as Scotland’s first minister in March last year seem dashed: the party, which has been the largest in the Scottish parliament since 2007, is embroiled in scandals and down in the polls.

Steve Richards, author of several books on Britain’s political leaders, disputes the idea of 43 as a modern ideal: it’s good for establishing an aura of energy, he admits, but never having been part of a previous government proved a problem for both Blair and Cameron — “better for them to have been 10 years older with experience of government”.

The ill health that plagued Labour’s postwar administrations showed the danger of being too old, Richards adds, while Margaret Thatcher was lucky to be elected at 53: “A good age: previous ministerial experience, but fit and energetic . . . too energetic!”

The glaring exception among western democracies to this preoccupation with youthful vitality, is, of course, today’s US. America’s constitution demonstrates an opposite concern, blocking anyone under 35 from becoming president. This year’s White House contest is likely to be the battle of the gerontocrats, pitting incumbent Joe Biden, now 81, against Donald Trump, 77. Both broke the upper age record when inaugurated the first time around. Observers are struggling to use even the deadly, backhanded compliment “sprightly” about either of them with any conviction.

It is “a sight to make surrounding nations stare” as the satire on Pitt’s premiership put it, but for the opposite reason. Perhaps the US should encourage Biden and Trump to look for some Macron-style mini-me protégés. Or perhaps in the latter case, we should pray they do not.

How Adebayo Ogunlesi’s contrarian bet led to $12.5bn BlackRock tie-up

Global Infrastructure Partners co-founder steps into the limelight with ‘transformational’ deal

Adebayo Ogunlesi, co-founder of Global Infrastructure Partners, credits his wife Amelia for a career switch that led on Friday to a $12.5bn deal and a leadership position at BlackRock, the world’s largest money manager.

In 2005, Ogunlesi, then a top banker at Credit Suisse, was summoned to Omaha, Nebraska, by the energy arm of Warren Buffett’s Berkshire Hathaway to study a large takeover. It was the kind of call most financiers dream of, but Ogunlesi complained to his wife: “I really don’t want to go.”

In an interview with the Financial Times, he said his wife offered an ultimatum: “Either you decide you like your job and you want to keep doing it. Or, if you decide you don’t, go find something else. But please don’t think you can spend the next five years moaning.”

After that “kick in the behind”, Ogunlesi quit banking and at the age of 52, decided to try his hand as an investor.

Ogunlesi and a handful of colleagues, mostly from Credit Suisse, considered private equity, then near the apex of a pre-financial-crisis takeover bubble. But they opted for a contrarian bet, raising a fund to invest in the niche sector where he had done his first deal in 1983: the financing and operating of airports, energy plants and other crucial infrastructure. 

“We picked infrastructure because that was an area where there was very little competition,” said Ogunlesi, now 70.

In just 17 years, GIP quietly amassed $105bn in assets and pioneered a booming $1tn sector that is one of the fastest growth segments of money management. BlackRock chief executive Larry Fink said Friday’s deal was “transformational” for the larger group’s ambitions in private markets.

The tie-up will put Ogunlesi on BlackRock’s board and global executive committee, pushing the publicity-shy Nigerian-born financier into the spotlight. It also cements his status as one of Wall Street’s wealthiest and most powerful figures. He and his GIP colleagues will collectively become the second largest shareholders of BlackRock, a nearly $120bn company.

“In the early days, people underestimated ‘Bayo’,” said Kenneth Chenault, former CEO of American Express, and a close friend of Ogunlesi since both were at Harvard Law School. “He was flying under the radar and then people woke up one day and saw [GIP] was a $50bn fund . . . What he has done is amazing and historic.”

Raised in Lagos by a father who was the first Nigerian professor of medicine and a mother who ran a nursery school, Ogunlesi earned a first class degree at Oxford university, and law and business degrees from Harvard.

Ogunlesi then won a prestigious Supreme Court clerkship working for Thurgood Marshall, the first black justice: “It was one of the best jobs I’ve ever had,” he said. The justice provided a model that still influences him today. 

“When you watch somebody who’s a giant or an icon and see that he conducts himself as a normal person, you cannot help but learn from that,” said Ogunlesi. “Be serious in what you do but don’t take yourself too seriously. When you become pompous, nobody wants to be around you.”

He moved to New York to work at the Cravath law firm but quickly jumped to First Boston, later bought by Credit Suisse, to work on a Nigerian gas project. Six months in, the deal died when Nigeria experienced a coup and Ogunlesi’s client nearly went to jail. “I learned very early on that there is a lot of political risk associated with infrastructure projects,” he said.

At Credit Suisse, Ogunlesi forged the connections that later helped GIP succeed. He ruffled feathers with a brutal early 2000s restructuring of the investment bank, and later became chief client officer. When Ogunlesi and his co-founders struck out on their own to launch GIP in 2006, Credit Suisse’s then-CEO Oswald Grübel backed them with $1bn of the bank’s money. A meeting with Jeff Immelt led to $500mn more from General Electric.

Building a business let Ogunlesi implement another of Marshall’s principles: “If you can find people who are smarter than you, surround yourself with them and consider your job as a leader to be clearing obstacles out of their way and inspiring them to do the best that they possibly can.”

The first years were not easy. A $600mn equity investment in UK waste management company Biffa in early 2008 proved disastrous. Fallout from the global financial crisis drove down activity at its customers such as restaurants and construction sites, and it lost business to fly-by-night competitors. Telling investors in 2012 that the stake’s value had dropped to $93mn was “the most mortifying moment in my career as CEO,” Ogunlesi said. “The moral of the story is: avoid businesses where there are no barriers to entry.”

Failed infrastructure investments are particularly painful, because margins are thinner than in traditional corporate buyouts. “You cannot afford to have an investment that turns out to be a zero,” Ogunlesi said. 

GIP was one of the first private fund specialists to hire a powerful chief risk officer, and was an early advocate of operational improvements to boost the value of infrastructure assets. Its first investment, a 2006 stake in London City airport, sold a decade later for four times the original purchase.

At London Gatwick airport, GIP introduced oversized luggage trays and other innovations that cut security screening times by more than half, freeing passengers to spend more in restaurants and shops where GIP received a concession.

“The thing about infrastructure businesses is a lot of them are monopolies and monopolies tend not to focus on customer service,” Ogunlesi said. “There are things you can do to generate improvements in operational efficiency and customer service and, obviously, revenues.”

GIP’s sprawling portfolio also includes Sydney and Edinburgh airports, the port of Melbourne, critical US pipelines, CyrusOne data centres and Italo high-speed rail. Its companies have combined annual revenues of $75bn and 115,000 employees.

The BlackRock deal aims to open the door to even larger investments by leveraging the heft of a $10tn asset management goliath that is a top shareholder of most global companies.

“This is not about cashing out,” Ogunlesi said. “It is about the opportunity we have as part of BlackRock to build what is without question the premier infrastructure investing business. That’s the mission I’m on.”  

Most of the $12.5bn price tag will be paid in BlackRock shares, and 40 per cent will not vest for five years. Ogunlesi and GIP president Raj Rao will lead a division that combines GIP with BlackRock’s $50bn infrastructure business.

Though Ogunlesi will have his first boss in 18 years, he said Fink, a friend since both worked at First Boston, has downplayed the potential for conflict: “Larry said to me: ‘You will be on the board of directors, you will be my boss’. I think we have mutually assured destruction.”

Joining BlackRock will immediately increase Ogunlesi’s public profile, something he has resisted while serving on the boards of Goldman Sachs, the Lincoln Center and two hospitals. A pragmatist, he golfed with George W Bush and served with Fink on Donald Trump’s economic advisory council. But he also chairs Joe Biden’s infrastructure advisory council and most of his $220,000 in political donations went to Democrats.

Asked why he has remained so private, the father of two laughed. “I don’t need to read about myself,” he said. “I know enough about myself and who I am.”

Friends say that Ogunlesi, a passionate cricket and Tottenham Hotspur fan, makes time for them at critical moments. When Ken Frazier, another law school friend, was CEO of Merck and facing criticism for refusing to cut research budgets, Ogunlesi reassured him he was doing the right thing. Last summer, Frazier’s daughter fell ill in California while both men were at a wedding in Italy, so Ogunlesi volunteered his private plane.

Ogunlesi, a director of Topgolf Callaway Brands, said that he had become an “atrocious golfer” since knee surgery. But Chenault, who plays regularly with him, said this self-deprecation minimises his “competitive fire”.

“He is not a ‘master of the universe’ persona, but at the same time, don’t try to fool Bayo. He will shred you to pieces,” Chenault said.

Atlanta Fed boss warns US progress on inflation is likely to slow

Raphael Bostic believes rates need to stay on hold until at least summer to prevent prices from rising again

A top Federal Reserve official has said inflation could “see-saw” if policymakers cut rates too soon, warning that the descent towards the central bank’s 2 per cent goal was likely to slow in the months ahead.

After surging to its highest level in decades during the summer of 2022, US inflation fell sharply over the second half of last year, paving the way for rate-setters to consider lowering borrowing costs from their current 23-year high of 5.25 to 5.5 per cent.

However, Raphael Bostic, the Atlanta Fed president who will vote on the Federal Open Market Committee’s decisions this year, said he was “expecting to see much slower progression of inflation moving forward”.

There was, he said, “some risks that inflation may stall out altogether”.

Bostic’s remarks came ahead of a December CPI reading, which showed headline inflation drifting up to 3.4 per cent from 3.1 per cent in November.

While the Atlanta Fed president acknowledged that price pressures had fallen faster than he had expected last year, he still thought inflation was likely to be about 2.5 per cent by the end of 2024 and only hit the Fed’s goal in 2025.

Bostic said after the Fed’s December policy vote that he thought rates would need to remain on hold until after the summer. He told the Financial Times that the uncertainty facing the US economy warranted such a cautious approach.

“Inflation must be firmly and surely getting back to our 2 per cent target,” said Bostic. “It would be a bad outcome if we started to ease and inflation started to rise up and down like a see-saw. That would undermine people’s confidence in where the economy is going.”

While rate-setters are growing increasingly confident that price pressures are returning to their pre-pandemic norms, most on the FOMC want to take their time in shifting from their current monetary policy stance.

Investors are hastier, with the market pricing in six quarter-point cuts this year, starting in March. That compares with rate-setters’ expectations of three cuts, while Bostic sees just two.

“Markets hear what we are saying — our projections for rate cuts have been pretty clear,” he said. “But it’s my sense that they believe inflation is going to come down faster than I do.”

The Atlanta Fed president warned that a recent surge in shipping costs on the back of disruption to traffic in the Suez Canal caused by the targeting of vessels by the Houthis would need to be watched “very closely”.

The cost of shipping a 40ft container from the Far East to Europe has soared almost 150 per cent over the past month, according to data from Xeneta, a logistics research firm.

“It will be very interesting to see to what extent the Middle East conflict and attacks on the container ships is starting to show up in the cost structure for businesses in my district,” he said.

Bostic believed that, with unemployment at just 3.7 per cent, the labour market remained too strong for the Fed to shift its focus from inflation to job creation.

“If we look at our employment mandate, we’re hitting that very firmly today,” he said. “But that is not the case for price stability.”

The labour market was no longer as hot as it was, however, with job creation largely confined to the healthcare and government sectors.

“There are signs underneath the hood that some segments of the economy have weakened,” he said, citing manufacturing.

While meetings with business contacts suggested wage growth would moderate this year from current levels of above 4 per cent, he still wanted to ensure labour costs were not so burdensome that they led businesses “to rethink their pricing strategies”.

“I’m not hearing that today,” he said. “But it is something I definitely need to watch out for.”

Bostic said he was taking a closer look at liquidity conditions after some rate-setters said in December that the Fed could soon need to slow the wind-down of its balance sheet.

Under the current terms of the quantitative tightening programme, up to $60bn worth of Treasuries and $35bn of mortgage-backed securities can run off the balance sheet a month. Some think the policy risks triggering spikes in funding markets trying to digest high levels of debt issuance by the US government.

“Today we haven’t really seen any movements in money markets that suggests we’re close to a scenario where we don’t have ample reserves any more,” he said.

“Clearly at some point, there’s going to be a signal that we’re going to get closer to that threshold, and we’re going to have to do some thinking.”

Market Questions is the FT’s guide to the week ahead

China’s economy will take the spotlight next week as Beijing releases its fourth-quarter reading on gross domestic product — and markets are expecting an uptick in growth following a string of underwhelming readings.

Official data released on Friday showed Chinese consumer prices remained in deflationary territory for a third straight month in December, adding to the pile of challenges policymakers face. But even in the face of falling prices, tepid trade and continuing property market woes, a median forecast from economists polled by Bloomberg points to expectations of a year-on-year rise of 5.2 per cent for GDP in the fourth quarter.

That would be an improvement on growth of 4.9 per cent during the previous three months — partly helped by a flattering base effect thanks to a severe drop in economic activity in late 2023 during the final throes of China’s zero-Covid isolation. Some analysts have pencilled in an even larger jump for fourth-quarter growth, released on Wednesday, with Standard Chartered forecasting a rise of 5.8 per cent.

Economists at Natixis said the fourth-quarter reading was likely to ensure China could deliver annual growth in line with Beijing’s target level of “about 5 per cent”. But they warned that “maintaining the same growth target will be demanding for 2024 because there is less tailwind from base effect and the structural deceleration continues”. Hudson Lockett

Is UK inflation still falling?

UK inflation data on Wednesday will provide the latest clue to investors as they assess how quickly the Bank of England will cut interest rates this year.

The faster than expected easing of inflation to 3.9 per cent in November from 4.6 per cent in the previous month prompted markets to bet the BoE would cut more aggressively than previously expected.

Economists polled by Reuters forecast that the downward path of inflation slowed in December, with annual price growth easing to 3.8 per cent.

Samuel Tombs, economist at Pantheon Macroeconomics expects inflation to remain unchanged from November. That would still be well below the 4.6 per cent forecast for December by the Bank of England. But Tombs added that it would be unlikely to prompt a dovish pivot in the central bank’s language at next month’s policy meeting as “wage growth [is] currently still much too rapid for the Committee to tolerate indefinitely”.

Ellie Henderson, an economist at Investec, expects price growth to have eased to 3.5 per cent thanks to lower fuel prices and lower food inflation. She also forecast a decline in core inflation, which excludes food and energy, to 4.7 per cent in December from 5.1 per cent in the previous month. The consensus is a milder easing to 4.9 per cent.

Henderson expects “some bumps” on the road to the Bank of England’s 2 per cent target, with a rise in January because of base effects on energy, and risks heightened by the current crisis in the Red Sea.

However, an increasing number of economists expect gas prices, which have dropped significantly from November, to help bring inflation below 2 per cent by April. Among them is Andrew Goodwin, economist at Capital Economics who forecast inflation to settle just below 2 per cent from April onward. “The UK inflation outlook has been transformed by steep falls in oil and gas prices and the recent softening in core price pressures,” he said. Valentina Romei

What will retail sales tell us about the health of the US consumer?

December’s retail sales data, to be released on Wednesday, will offer insight into the health of the US consumer at a moment where the cost of borrowing for Americans is at its highest level in decades. 

Economists polled by Reuters forecast that the Census Bureau will report a 0.3 per cent increase in overall retail sales in December from the prior month, the same rate of increase as in November. Excluding the more volatile autos sector, retail sales for December are expected to have increased 0.2 per cent month over month, also unchanged from November. 

Consistent growth in retail sales would suggest that consumer spending remains strong in the face of elevated interest rates. 

“The cost of borrowing for consumers remains high and student loan payments restarted in October, but job growth is still strong and wage growth is still strong and higher incomes are ultimately the key driver for retail sales,” said Torsten Slok, chief economist at Apollo Global Management. 

Those sentiments were reiterated on Friday morning by JPMorgan CEO Jamie Dimon who said the bank expected US consumers to remain resilient. 

The retail sales figures will be part of the Fed’s calculus when it meets at the end of this month. While no change in interest rate policy is expected, a big surprise in retail sales data — particularly one showing that US consumers are far weaker than the consensus — could help make the case for earlier cuts in interest rates this year. Kate Duguid

INFO LE FIGARO - Son président, Jean-Pierre Mustier, prépare un recours auprès du Tribunal de commerce de Nanterre pour demander à Hélène Bourbouloux de l’aider à négocier avec les 22 banques créancières.

Président d'Atos depuis mi-octobre, Jean-Pierre Mustier est bien décidé à faire flèche de tout bois pour assurer l'avenir de ce fleuron de la tech. Selon nos informations, il s'apprête à demander au Tribunal de commerce de Nanterre de confier à Hélène Bourbouloux la mission de l'assister dans ses délicates négociations avec les 22 banques créancières du groupe. Il y a urgence, car certaines lignes de financement doivent être renégociées avant le 24 janvier. Si Jean-Pierre Mustier, qui n'a pas souhaité commenter nos informations, n'a pas encore formellement pris la décision d'effectuer une requête auprès du président du Tribunal de commerce, il a déjà pris contact avec Hélène Bourbouloux. La mission de celle-ci pourrait se faire soit dans le cadre d'un mandat ad hoc, soit dans celui d'une conciliation.

La plus réputée des administrateurs judiciaires français a notamment à son actif la gestion de la procédure de sauvegarde de Rallye, holding de contrôle du groupe Casino, et les deux procédures de conciliation entre le géant des Ehpad Orpea et ses créanciers.

Le dossier Atos est au moins aussi compliqué. Le groupe aux 10 milliards de chiffre d'affaires et 100.000 salariés est endetté à hauteur de 5 milliards d'euros, dont 2,25 arrivent à échéance l'an prochain. La direction est d'autant plus obligée de trouver un aménagement de la dette qu'elle a engagé en parallèle deux négociations en vue de la cession d'actifs importants. D'une part, elle est en pourparlers avec Daniel Kretinsky pour lui transmettre les activités historiques d'infogérance (Tech Foundations), qui représentent la moitié de groupe ; d'autre part, elle est entrée en négociation exclusive avec Airbus pour lui vendre les activités cyber et big data (BDS). L'accord trouvé cet été entre l'ancienne direction d'Atos et Daniel Kretinsky est en cours de renégociation, et celle-ci s'avère très complexe. Un abandon du projet de cession de Tech Foundations pourrait être très mal vu des créanciers. Hélène Bourbouloux devra faire preuve de tous ses talents de conciliatrice à poigne afin qu'Atos ne soit pas contraint de déposer le bilan pour demander l'ouverture d'une procédure de sauvegarde.>

The musician posted several videos on Instagram showing him wearing a prototype of the shoe design.

NOW YOU SEE IT: Just days before parading his third men’s collection for Louis Vuitton, Pharrell Williams teased a collaboration between the French luxury brand and Timberland.

The musician, identifiable by his jewelry including a gold Human Made bangle, is seen in a short video lifting the leg of his jeans to reveal a loosely laced yellow Timberland boot. A Louis Vuitton logo appears on the tongue of the shoe, which he folds to reveal the brand’s signature monogram printed on the inside.

The short video was posted on the Instagram account Skateboard, the unofficial account run by the musician’s team which posts behind-the-scenes content from inside the Vuitton menswear studio.

In another video, Williams can be seen wearing the boots with flared jeans, a yellow Kenzo sweatshirt and a white cowboy hat as he watches a quadruped Spot robot built by U.S. firm Boston Dynamics walking around the Vuitton studio during preparations for the show, scheduled for Jan. 16.

Ahead of his debut last June, Williams posed on Instagram in outfits from the collection, prompting Vuitton chairman and chief executive officer Pietro Beccari to gently chide his new recruit.

“Pharrell is unveiling the collection piece by piece, because it is already 20 days that he wears [items from] the show,” Beccari said in the interview last June, noting that Williams is approaching the assignment from the perspective of a prolific luxury shopper. “He’s impatient and I said, ‘He’s the client, right? So that’s it.’”

That means that industry observers will be closely scrutinizing the music star’s appearances in the run-up to his shows. A collaboration with Timberland appears a logical move, given the brand’s close association with the hip-hop community.

The workwear boot was popularized by musicians including Wu-Tang Clan, Jay-Z, Tupac Shakur, Kanye West and The Notorious B.I.G., who frequently rapped about his “Timbs.” The boots were also adopted by female stars like Rihanna, Missy Elliott and Aaliyah.

It wouldn’t be the first big footwear collection for Vuitton, which under its previous menswear designer, the late Virgil Abloh, launched its own versions of Nike’s iconic Air Force 1 trainers.

Williams also has a history with Timberland, having designed several styles of the boot through his streetwear brand Billionaire Boys Club’s Bee Line collection. In 2022, a Timberland boot he customized with his own drawings sold for $7,500 on his auction platform Joopiter.

Wall Street giant is increasing loans to hedge funds, private equity and the ultrarich

Goldman Sachs GS -0.53%decrease; red down pointing triangle has given up on lending to Main Street consumers. Now it’s doubling down on wealthy clients.

The Wall Street giant is increasing lending to its private-wealth clients, individuals and families who on average have $60 million with the bank. In its trading department, loans to institutional clients, including hedge funds seeking to borrow for stock purchases, are on track to produce the highest revenue in at least three years.

In all, Goldman’s loans and lending commitments outstanding, excluding consumer, totaled $327.5 billion at the end of the third quarter, up about a third from the same time in 2020.

The firm is looking for ways to diversify its revenue stream beyond dealmaking and trading. Consumer lending was meant to help with that, but the bank has been retreating from that business after incurring billions of dollars in losses from the failed effort. When Goldman reports fourth-quarter and full-year earnings on Tuesday, it is expected to highlight growth in nonconsumer lending at a time when dealmaking is depressed.

Lending to big clients has long been seen largely as a way to get other business from them. While that remains the case, Goldman is also interested in generating more net interest income at a time of elevated rates.

Some of the lending increase is being funded by deposits from savings accounts, a portion of the abortive consumer push that the bank plans to stick with. It had accumulated $150.6 billion of consumer deposits at the end of the third quarter compared with $120 billion at the end of 2022.

More lending comes with risk, including that of higher defaults. Goldman says that nearly all of the lending is secured by borrowers’ investments, but losses could mount if there’s a big drop in the value of the collateral or if there’s a recession. Banks suffered billions in losses, for example, when Archegos Capital Management, which had borrowed heavily to buy stock, imploded in 2021. Goldman largely sidestepped those losses.

Lending more to the wealthy is a linchpin of the new strategy.

In recent weeks, Goldman rolled out a new kind of loan to rich clients of its asset- and wealth-management division. The loans allow people to borrow against the value of their investments in certain private-equity, private-credit and other illiquid funds.

Clients can use the loans for pretty much anything, whether buying mansions or art or investing in more private funds with Goldman or other institutions.

The loans are critical to Goldman’s plans to boost revenue in asset and wealth management, which Chief Executive David Solomon is counting on to become a bigger source of revenue and profit.

“This one is particularly strategic,” Nishi Somaiya, global head of private banking and lending, said of the push to lend more to the ultrarich. “It hits all the things that are really important to us.”

Revenue from private banking and lending to wealthy clients increased 12% during the first nine months of last year from the same period in 2022.

In Goldman’s sprawling trading business, revenue from equities financing was higher during the first nine months of 2023 than it was during the same period in each of the prior three years—the furthest back Goldman discloses such figures—boosted by increased lending and the stock-market rally.

Equities lending and trading sat on different floors until 2019, shortly after Solomon and president John Waldron took over and insisted that they move next to each other. The directive came as part of their companywide initiative to encourage employees—in part through bonuses—to direct business to other units of the bank.

A swath of loans are originated under what Goldman refers to as FICC financing.

They include capital-call loans, which advance private-equity and other investment firms cash to make investments while they wait for their own investors to fulfill their commitments.

Regional banks were big in the business, and the banking crisis last year created an opening for large banks to grab more market share.

Goldman recently acquired $15 billion of capital-call commitments, including about $9 billion of outstanding loans, that belonged to Signature Bank before regulators seized it last year.

Goldman is also lending more to private-equity firms that are borrowing against their investments. Demand for these loans has been rising as private companies have held off on going public until valuations improve and as private-equity firms look for ways to return cash to their investors.

And even though the bank is bidding adieu to lending directly to consumers, it has been extending more credit lines to nonbank lenders that specialize in loans consumers use. Goldman over the past year has been providing more financing to UWM Holdings UWMC 0.46%increase; green up pointing triangle, which works with mortgage brokers, and tried to strike a deal with Rocket Mortgage, according to people familiar with the matter. UWM and Rocket Mortgage are among the largest players in U.S. mortgage lending.

Concerns over lack of chargers are not the real barrier to adopting EVs

The debate about electric vehicles in the UK comes laced with scare stories about hidden costs, suspect environmental credentials, battery lifetime, combustibility and the lack of charging points.

The latter is off-putting for motorists considering making the switch. But the concerns, like most others, are exaggerated.

Carmakers want a rapid increase in public charging facilities to help meet new green targets. Telecoms group BT has declared plans to convert roadside cabinets — traditionally used for cables — into EV chargers.

In total, the UK has nearly 54,000 public charging points compared with 1mn fully electric vehicles, a ratio of just over 18:1. But charging app Zapmap estimates there are also more than 680,000 domestic and work charging points, the locations at which most drivers top up their batteries.

The UK actually ranks mid-table in a group of 10 large economies when comparing the ratio of plug-in vehicles on the road, including hybrids, to standard chargers.

Ratios are imperfect, however, given EVs are a relatively new technology, says Ralph Palmer of campaign group Transport & Environment: it is not yet clear what an EV-dominated UK market would need. These measures also mask the impact of charger speeds. An ultrafast charger at a forecourt would serve more cars in a day than a slow kerbside alternative.  

UK ministers are aiming for 300,000 public chargers by 2030. Rollout rates are improving. Last year, more than 16,600 points were added, says Zapmap, a year-on-year increase of 45 per cent. If annual additions increased at the same percentage rate, the 300,000 ambition would be surpassed by the end of 2028. 

Higher numbers are harder to sustain as markets become more saturated. But there are reasons for optimism. BT is not the only company with ambitions in this area: the oil majors are also rolling out chargers, particularly at forecourts.

Shell is committing $500mn a year in capital expenditure in 2024-25 to expand its EV charging footprint globally, including the UK. Privately owned Osprey, which installed 400 public chargers in the UK between 2018 and the end of 2022, raised its annual rate to 600 in 2023. 

The private sector has largely financed the rollout so far. Ministers have, though, agreed a £450mn fund that will allow local authorities to subsidise charging points in underserved areas. Importantly, the “Levi” fund will provide support for local authorities that do not have the resources to draw up charging plans.

Public charging needs to expand to support the EV market. But the cost of EVs, not insufficient charging infrastructure, is the real barrier to adoption.

Economists, in survey, pare back probability of recession in 2024, but still see anemic growth and rising unemployment

The good news is the probability of a recession is down sharply, according to The Wall Street Journal’s latest survey of economists. The bad news is that, for a lot of people, it is still going to feel like a recession.

Business and academic economists surveyed by the Journal lowered the probability of a recession within the next year, to 39% from 48% in the October survey.

“A recession in the year ahead seems less likely than it appeared at the start of 2023, since interest rates are trending lower, gas prices are down from last year, and incomes are growing faster than inflation,” said Bill Adams, chief economist at Comerica Bank.

Still, economists on average expect the economy to grow just 1% in 2024, about half its normal long-run rate, and a significant slowing from an estimated 2.6% in 2023.

“This is less a recession and more of a growth stop,” said Rajeev Dhawan, an economist at Georgia State University.

American employers should keep adding jobs in 2024, but at a much slower pace than in recent years. Economists expect payroll gains to average 64,000 a month this year, less than a third of the 225,000 average in 2023 and far below 399,000 in 2022.

With job growth falling below the growth of the labor force, economists expect the unemployment rate will climb from 3.7% in December 2023 to 4.1% in June and 4.3% by the end of the year. While that is low historically, a 0.6 percentage point increase in the jobless rate would imply a net one million more Americans unemployed by the end of the year, relative to this past December. Moreover, in the past that much of an increase in unemployment has almost always occurred during recessions, according to one widely followed rule.

One reason a growing economy may still feel to many like a recession is the wide dispersion in performance across industries. Cyclical sectors—those most sensitive to the economy’s ups and downs—are likely to struggle in 2024, even if there isn’t an overall economic contraction, economists say.

“Cyclical sectors of the economy are pulling in the reins on employment, and we look for companies to further tighten the reins as they lose pricing power,” said Kathy Bostjancic, chief economist for Nationwide Mutual.

A quarter of economists expected manufacturing to see the weakest job growth this year, while 17% cited retail, and 12% said transportation and warehousing. Those are all cyclical sectors. The majority of economists said healthcare will be the sector with the strongest job growth in 2024, while 11% cited leisure and hospitality.

That would be a continuation of trends in 2023, when hiring was also concentrated. Leisure and hospitality, government and healthcare together accounted for the bulk of job creation in 2023.

Transportation and warehousing employers have been cutting jobs in recent months after hiring aggressively in the wake of the pandemic, and manufacturing employment was essentially flat in 2023 as the sector struggled with high borrowing costs.

With growth remaining positive, the second condition of a soft landing is inflation returning to around 2%, the Federal Reserve’s target, and that too is in the cards for 2024, the survey shows. Economists see inflation as measured by the personal-consumption expenditures price index, excluding food and energy, falling to 2.3% at the end of 2024 from 3.2% this past November. That chimes with Fed officials’ projections. At their December meeting they said inflation would fall to 2.4% by the end of 2024.

The Fed is widely expected to cut rates this year, though economists are divided over when. Markets currently expect the first cut at the Fed’s March 19-20 meeting, but only 19% of economists surveyed agree. Roughly a third expect the first rate cut at the April 30-May 1 meeting, and just over a third at the June 11-12 gathering.

Economists also expect fewer rate cuts than the market, seeing just one or two quarter-percentage point cuts by the end of June, compared with three by markets. The current target is between 5.25% and 5.5%, a 22-year high.

The survey of 71 economists was conducted Jan. 5-9, before the release of the Labor Department’s consumer-price index report, which showed inflation firmed in December after rapid cooling through most of 2023.