Macron says state must ‘take in hand’ several parts of energy sector
That’s all from us today, thank you very much for following! Our live blog on the P&O Ferries scandal is still open, you can check it out here. More from the desk:
Anglo-American cuts jobs at North Yorkshire fertiliser mine
Anglo-American is cutting almost a tenth of its workforce at the fertiliser mine it is developing in North Yorkshire, two years after taking over the project. Rachel Millard has the story:
The FTSE 100 mining giant is axing up to 70 permanent roles from the Woodsmith project near Whitby, insisting the “difficult decision” is necessary as it changes the way the mine is built.
The figure equates to about 9pc of employee role, although it also has about 600 full-time contractors on site.
Anglo-American took on the project in early 2020 when it bought the mine’s founder Sirius Minerals for £405m, rescuing the project but leaving many Sirius shareholders nursing heavy losses.
Macron says some EDF assets should be nationalised
French President Emmanuel Macron said some Electricite de France (EDF) assets should be nationalised as part of his plans to bolster the country’s energy independence.
Presenting his election manifesto in Paris, the French leader said that for activities most linked to questions of national sovereignty “the state should retake some capital” as part of a larger overhaul of EDF.
Earlier in the press conference Macron spoke of a need to take back control of several “industrial players” in the sector.
The energy market chaos exacerbated by the Russian invasion of Ukraine is giving fresh impetus to France’s long-mooted push to restructure its biggest power supplier, whose finances are crippled by an historic drop in the availability of its aging nuclear plants and government measures to cap electricity bills.
MPs question whether taxpayers are overpaying for Bulb administration
Taxpayers face costs of up to £3bn to run collapsed energy firm Bulb with administrators prevented from buying cheaper energy in advance, a group of MPs has claimed. Rachel Millard reports:
Darren Jones, Labour MP and chairman of the Business Select Committee, has raised questions over whether Bulb is having to buy energy at high rates on the spot market, rather than locking in cheaper rates in advance.
In a letter to Kwasi Kwarteng, the Business Secretary, Mr Jones said: “In respect of the Bulb special administration regime, we understand that ministers refused to allow the administrators of Bulb to re-hedge prior to the Russian invasion of Ukraine.
“This has resulted in a much larger cost exposure to the taxpayer. Please can you confirm whether this decision was taken by BEIS (Department for Business, Energy and Industrial Strategy) or Treasury ministers and explain if the advice of administrators with experience of running energy companies was rejected?”
Bulb, which was the UK’s seventh largest supplier with about 1.7m customers, was effectively temporarily nationalised in November after it collapsed amid spiralling wholesale gas prices. It is currently being run by administrators with Government funding.
FTSE jumps as oil price rallies
The FTSE 100 has extended gains as oil majors lifted the commodity-heavy index, while the Bank of England raised interest rates as expected and struck a less hawkish tone on further hikes.
The index climbed 1.3pc with oil majors Shell and BP adding 3.2pc and 2.1pc, respectively, tracking a rally in crude prices over supply concerns. Danni Hewson at AJ Bell said:
“The Bank of England proved itself a reliable companion for markets today delivering a rate rise that was neither too hot nor too cold. Looking at how sectors reacted to the news of a 0.25pc hike it was clear investors had very much priced it in.
“Those high street banks which would usually get a boost from such a change actually fell with the exception of HSBC and Standard Chartered, but that probably had more to do with the legacy of an early surge in Asian markets. Retail was a mixed bag and many consumer-facing businesses – restaurants, pubs and gyms – actually enjoyed a little boost.
“This hike won’t act as a panacea, MPC members can’t just wave a magic wand and put that inflation gene back in its bottle, but it is another step and one likely to be followed by several more in the same direction.”
Getir touches £8bn in latest funding round
Getir has raised £581.7m in its latest funding round, valuing the ultra-fast grocery delivery firm at £8bn.
The Turkish group was founded in 2015 and operates in 81 cities in Turkey as well as another 48 cities in Europe, the UK and the US.
It launched in the UK at the beginning of 2021 and last August it signed a three-year partnership with Spurs.
Russia faces unprecedented cyber attacks as volunteer hackers vow to attack Kremlin
Russian government departments are facing an unprecedented wave of cyber attacks as a global volunteer army seeks to disrupt the Kremlin. James Titcomb reports:
The country’s digital ministry said it was seeking to support local IT companies as part of an effort to shore up its cyber defences.
It said it was aiming to block some foreign internet traffic as it seeks to slow down the onslaught of attacks. In the past, Russian government websites have been blocked for foreign visitors.
Ukraine has appealed for volunteers to join an “IT army” to hit government websites and state-owned companies such as Sberbank, Aeroflot and Gazprom.
About 300,000 have signed up to a channel on the messaging app Telegram, in which members are assigned tasks.
It’s for me to hand over to my colleague Giulia Bottaro, who will steer the blog into the evening. Thanks for following along today!
Oil prices keep FTSE above water
European stock markets are mostly underwater, but the FTSE 100 is up about 0.8pc and looking comparatively healthy. London’s blue-chip index is being boosted by the rise in oil prices, with Shell providing the biggest upwards thrust.
UK suspends tax cooperation with Russia
The Treasury says the UK has suspended all exchange of tax information with Russia and Belarus as part of continued sanctions against the Kremlin.
Information is currently exchanged through bilateral ‘Double Tax Agreements’.
The department said:
This tax information is exchanged as part of global collaboration to address tax compliance risks, however, today’s decision to suspend tax information exchange will ensure the UK is not supplying Putin’s regime with information that could lead to an increased tax benefit or yield for Russia.
Lucy Frazer MP, financial secretary to the Treasury, said:
As we look to put Vladimir Putin’s regime under decisive economic pressure, it would not be right to continue to exchange tax information with Russia and Belarus.
Along with the other economic measures we’ve already taken, this step will help starve Putin of the resources he needs to carry out his barbaric campaign of violence.
Macron says France must take control of some energy firms
Emmanuel Macron said France will need to take control of some energy sector firms as part of plans to make the country more self-reliant.
The French leader did not name any companies and said the moves would be part of a strategy that would include delivering on his government’s campaign to overhaul energy markets to decouple electricity and gas prices.
“The state will need to take in hand several aspects of the energy sector,” Macron said on Thursday, as he laid out his manifesto just three weeks before the presidential election. “We will have to retake capitalist control of several industrial actors.”
He also reiterated French support for nuclear power, saying:
(Nuclear) is the only mix that allows us to reduce our carbon emissions in an efficient, rapid and sovereign way.
Credit Suisse: Stocks are back
It’s a pretty mixed picture on stock markets today, with the US benchmark flat, and the FTSE 100 the only gainer across Europe’s main indexes.
Stocks have have had a rough run recently, with January’s rate-worry sell-off compounded by the aftershocks of Russia’s invasion of Ukraine.
It’s time for a turnaround, says Credit Suisse. The Swiss bank’s global investment committee has turned “overweight” on stocks, just three months after cutting its allocation.
They noted a fairly upbeat response to yesterday’s Fed rate hike, and a fall in commodity prices from the highs touched shortly after the invasion:
The positive market reaction to the FOMC’s deliberations suggests that markets have had enough time to digest the changed economic outlook. Although we would stress the still high uncertainty with regard to developments in Ukraine, we note that glimmers of hope have surfaced.
ECB hawk: We could raise interest rates twice this year
One of European Central Bank’s most hawkish rate-setters has said a double increase in the interest rate can’t be ruled out this year.
Klaas Knot, president of the Dutch central bank, said it doesn’t make sense to be “overly precise”, but that at least one increase – which would be the first in a decade – now looks possible this year:
I find it a realistic expectation but by no means a certainty. I also cannot exclude two hikes this year but that is only in the case in which incoming data would point to a further upward revision of the medium-term inflation outlook.
It comes after the ECB surprised markets last week by accelerating its stimulus wind-down.
US markets rise
Wall Street opened higher, the morning after the Federal Reserve’s rates hike. As of about 15 minutes ago, the S&P 500 was up 0.2pc and Nasdaq was flat.
Meanwhile Brent crude oil is back above $100 a barrel on fresh concerns about a shortfall in supply.
US mortgage rates top 4pc for first time to 2019
Average US mortgage rates surged last week from 3.85pc to 4.16pc, topping 4pc for the first time in three years.
The Federal Reserve increase the benchmark interest rate by 0.25 percentage points on Wednesday, the first of many hikes expected in the coming months.
Rates haven’t been this high since May 2019.
Banks loses patience as strict Hong Kong struggles to contain Covid-19
Hong Kong’s leader has admitted that banks in the Asian financial hub are “losing patience” after the failure of its unpopular zero-tolerance approach to Covid.
My colleague Lucy Burton reports:
Bank bosses have long warned the tough measures put in place to eradicate the virus in Hong Kong, which is now suffering the world’s worst spike in Covid deaths, could affect its status as a financial hub as quarantine rules meant it became increasingly isolated.
Despite calls for change, Hong Kong has continued to tighten its rules in recent months. However in a major u-turn amid spiralling case numbers, Carrie Lam has acknowledged there was a problem.
“I have a very strong feeling that people’s tolerance is fading,” said Hong Kong’s chief executive on Thursday as she hinted at a change in the city’s approach. “I have a very good feeling that some of our financial institutions are losing patience about this isolated status of Hong Kong.”
P&O: We are firing 800 seafarers and our losses are unsustainable
Statement’s in from P&O Ferries, which says it is not currently a “viable business”:
We have made a £100m loss year on year, which has been covered by our parent DP World. This is not sustainable. Our survival is dependent on making swift and significant changes now. Without these changes there is no future for P&O Ferries.
These circumstances have resulted in a very difficult but necessary decision, which was only taken after seriously considering all the available options. As part of the process we are starting today, we are providing 800 seafarers with immediate severance notices and will be compensating them for this lack of advance notice with enhanced compensation packages.
Double-digit inflation is coming, warns John Lewis boss
For a more hawkish view than the Bank of England, try Dame Sharon White.
Inflation could hit double digits following Russia’s invasion of Ukraine, the boss of John Lewis has said.
My colleague Laura Onita reports:
Dame Sharon said her big concern was that inflation would remain “more enduring than any of us expected” as the cost of energy keeps rising.
“We’re seeing inflation that we haven’t seen for 30 years,” she told the BBC. “Everything you can see in terms of the impact on energy prices from the Ukraine war suggests that we might well end up in double-digit inflation.”
Dame Sharon, an economist who was the Treasury’s most senior civil servant before joining the employee-owned retailer, said the combination of rising inflation and a fall in the number of people in the workforce was “a real double crunch”.
Gurpreet Gill from Goldman Sachs Asset Management says:
We expect the Bank to proceed with caution, implementing 0.25% rate hikes until the policy rate reaches 1pc, at which point it will likely pause the tightening cycle. That said, the case for data dependence and flexibility in the face of a war and ongoing global pandemic remains strong, suggesting the policy unwind will be more eventful for investors to navigate than in the past.
Silvia Dall’Angelo, from Federated Hermes, notes that energy is a key risk at the Monetary Policy Committee tries to balance tackling inflation with avoiding triggering a severe slowdown:
Similarly to the Fed, the Bank of England is facing a tight labour market in the UK, potentially providing a fertile environment for second-round effects, which would lead to ingrained elevated inflation.
However, similarly to the ECB, the Bank of England is also facing an economy that is quite sensitive to changes in energy prices – the UK is a net energy importer – meaning that the latest terms of trade shock stemming from the conflict in Ukraine will weigh significantly on aggregate real income and spending down the road.
The Bank of England has retained a tightening bias today, but the path for monetary policy ahead looks murky.
Pound now flat
The pound has extended its losses for the session, and is now flat on yesterday’s fix price.
Full report: Inflation rates back to pre-pandemic levels
My colleague Tim Wallace has a full report on today’s interest rate decision. He writes:
It is the first time the Bank has raised rates in three consecutive meetings since the very first months of its existence in 1997, following December’s increase from 0.1pc to 0.25pc and February’s rise to 0.5pc.
Inflation hit a 30-year high of 5.5pc in January, with the Bank predicting annual price rises of around 6pc in February and March before the jump in costs peaks in April when the energy price cap goes up by more than 50pc.
Pressure on families and on businesses is likely to be sustained.
Household bills are set to rise again in October when the price cap is next resassessed. Bank officials warned it could mean another 35pc rise at that point, if wholesale price rises are sustained.
Where next for interest rates?
Today’s decision has certainly put the cat among the pigeons in one area: forecasters, economists and traders are rapidly re-drawing their expectations for the path of interest rates from here.
Here’s what the monetary policy summary says on the topic:
In the United Kingdom, market-implied expectations for the path of Bank Rate over the year ahead had risen, with market pricing consistent with an increase in Bank Rate of 0.25 percentage points, to 0.75pc, at this MPC meeting. The market-implied path for Bank Rate now reached around 2pc by end-2022, around 70 basis points higher than immediately prior to the MPC’s February meeting.
The latest Bank of England Market Participants Survey suggested that respondents expected a slightly shallower path for Bank Rate than the market-implied path over the next couple of years, but a greater number of respondents viewed the balance of risks around that path as being skewed to the upside rather than to the downside.
That’s a slight cut compared with February, when the expectation was for the Bank Rate to reach 2.25pc by the end of the year.
Samuel Tombs from Pantheon Macroeconomics (a top forecaster), thinks markets are still way ahead of themselves:
Ordinarily, cutting interest rates reduces the cost of borrowing, which stimulates growth. Raising them helps curb demand, theoretically then lowering inflation.
But the situation the MPC has found itself in is complicated: much of the current inflation is driven by exogenous factors such as soaring commodity and energy prices, which the Bank of England can’t control (unless it decides to starting producing oil).
Instead, officials are needing to trade off the need to curb price rises with the danger that raising rates could force an overly sharp slowdown in activity.
Vivek Paul, from the BlackRock Investment Institute, agrees that expectations of rapid tightening look premature:
While we do see more policy tightening over the coming years, we believe there is excessive hawkishness in most developed markets. We think overtly aggressive rate hikes would exact a heavy toll on growth.
Bank agents warn of slowdown
The latest summary of business conditions report, based on research from the Bank of England’s regional agents, makes for interesting reading.
Agents reported strong demand in most sectors, with the impact of the omicron Covid-19 variant fading.
But inflation is clearly starting to bite, and companies are reporting “intense” recruitment difficulties as Britain’s worker shortage drags on.
From the report:
In response to increased cost pressures, many contacts said they expected to raise prices to rebuild or protect margins, which on average remain below normal. But the extent to which these cost pressures will become embedded in wages and prices is unclear.
In the section on manufacturers, agents noted that companies expected output constraints (i.e. shortages of goods and labour) to persist this year, or even run into 2023.
They note that sanctions on Russia may cause some supply disruptions:
Though few companies have direct trade links with Russia and Ukraine, many have indirect exposure to them via supply chains. Contacts said that the conflict was likely to affect the availability of raw materials and components from both countries as well as from neighbouring ones. For example, supplies of some agricultural products from Belarus have also been disrupted.
BoE decision: Snap reaction
Here’s some snap reaction to today’s MPC decision.
Suren Thiru from the British Chambers of Commerce says:
The decision to increase interest rates, while expected, looks ill-timed against a backdrop of growing domestic and global headwinds, including Russia’s invasion of Ukraine.
While interest rates remain low by historic standards, the latest rise will be viewed by many as a further step in a prolonged period of aggressive monetary tightening at a time when consumers and businesses are struggling under a myriad of rising cost pressures.
Higher interest rates will do little to curb the global causes behind this inflationary surge and risk intensifying the headwinds facing the UK economy by damaging confidence and deepening the financial squeeze on consumers and businesses.
Yael Selfin from KPMG says:
Given the tight labour market, the pressure on pay could intensify further, supporting today’s decision. We could also see some potential fiscal loosening at next week’s Spring Statement thanks to the better than expected borrowing numbers this year, should the Chancellor choose take advantage of the £20bn undershoot to ease the cost of living crisis.
Nonetheless, the markets may have got carried away with pricing in a total of five more rate hikes by the end of this year. With the current inflation shock being largely supply driven, the recent spike in energy prices could have little effect on inflation at the relevant policy horizon of 2-3 years. We expect the MPC to follow through with two more rate increases this year, although we cannot rule out further increases if that risks de-anchoring inflation expectations.
Traders cut rate bets, pound falls amid dovish tilt
Today’s announcement is actually something of a dovish tilt: traders were expecting that the MPC may be trying to go faster, but instead Sir Jon’s vote indicates hesitancy.
That has knocked the pound slightly, and traders are paring back bets about the pace at which further interest rate increases will now come.
Cunliffe warns on household incomes
With Sir Jon Cunliffe the lone voice against hiking rate today, we get a pretty clear insight into his thoughts. From the Monetary Policy Report (my bold):
For one member of the Committee [i.e. Cunfliffe], it was appropriate to maintain the existing stance of monetary policy at this meeting. This member recognised the risk of second-round effects from a protracted period of high inflation and a tight labour market and that, as a consequence, further policy tightening might be warranted. This member, however, also placed great weight, at this point, on the very material negative impacts of higher commodity prices on real household incomes and activity. These appeared to have been exacerbated by Russia’s invasion of Ukraine.
The invasion could also increase uncertainty and decrease consumer and business confidence. Such impacts on activity and employment would push against domestic inflationary pressures. For this member, the path of monetary policy would depend upon a fuller assessment than currently possible of the balance between these pressures, especially given current volatility in commodity markets.
Inflation could hit 8pc in second quarter
The MPC has raised its forecast for inflation following the invasion of Ukraine. It says:
Regarding inflation, the invasion of Ukraine by Russia has led to further large increases in energy and other commodity prices including food prices. It is also likely to exacerbate global supply chain disruptions, and has increased the uncertainty around the economic outlook significantly.
Global inflationary pressures will strengthen considerably further over coming months, while growth in economies that are net energy importers, including the United Kingdom, is likely to slow.
Inflation is expected to increase further in coming months, to around 8pc in 2022 Q2, and perhaps even higher later this year.
Invasion of Ukraine condemned
The MPC’s monetary policy summary starts with a short missive on Ukraine:
The Bank of England condemns Russia’s unprovoked invasion and the suffering inflicted on Ukraine. The Bank is working closely with the UK Government to support its response in coordination with international authorities. The Bank’s Monetary Policy Committee (MPC) supports this condemnation and welcomes these actions.
The MPC voted eight to one in favour of an interest rate hike, with only deputy governor Sir Jon Cunliffe against.
Bank raises interest rates to 0.75pc
Breaking: the Monetary Policy Committee has raised interest rates to 0.75pc.
Pound hits day’s highs ahead of decision
Sterling is growing stronger ahead of the announcement at 12pm, hitting its highest point of the day so far.
Bank of England decision coming up…
Only a few minutes now until the latest interest rates decision.
A hike to 0.75pc is basically a certainty. Inflation is at a three-decade high and set to surge higher next month once the energy price cap is raised, and nearly all the members of the Monetary Policy Committee have recently sounded their support from increasing the cost of borrowing.
There’s likely to be some acknowledgement of the impacts of the war in Ukraine in today’s decision, but the MPC are unlikely to say it has swayed their path.
Banks: Don’t expect us to increase savings rates
Hoping that higher interest rates will me better rate on your savings account? Think again.
Savers should not expect savings rates to climb dramatically even if central interest rates rise today, banks have warned.
My colleague Will Kirkman reports:
Natwest chairman Howard Davies told Radio 4’s Today programme that a “competitive market” meant it was unlikely any increase in the Bank Rate would be passed on in full. This comes after just one in 10 banks or building societies passed on the last rate rise in full, according to Defaqto, an analyst.
“There will be some pass through [to savers if Bank rate rises]”, Mr Davies said. “But the market is very competitive at the moment, so I don’t think it will be one for one, depending on the rate rise we get today.”
According to Moneyfacts, an analyst, the number of savings accounts that can beat Bank rate has fallen to its lowest count since November 2008. However, banks have raised borrowing costs for mortgage holders and pulled their best deals in response to previous rises.
Interest rates: back to ‘normal’?
About 45 minutes until we get the latest interest rates decision from the Bank of England.
The Monetary Policy Committee is expected to increase the Bank Rate by 0.25 percentage points to 0.75pc, a return to pre-pandemic levels.
The biggest surprise may be if we see a more hawkish push: at the last meeting, four members backed a 0.5pp ‘double’ move. Will the Ukraine conflict have changed their thinking?
FTSE back in the green
After a slide into the red following the Kremlin’s rebuffal of reports that peace talks are progressing well, the FTSE 100 has found its feet again and is back in the green.
More broadly, European shares remain in the red – nerves are clear still pretty fraught.
P&O: Follow the latest updates
We have a full report up on P&O: P&O Ferries suspends all services ahead of ‘major’ announcement
You can follow live updates here: Turmoil at ports as P&O Ferries suspends operations – latest updates
Stocks turn red as Kremlin denies report of progress in talks
European stock markets have given up their gains and flipped into the red, with the FTSE 100 now down 0.3pc, after the Kremlin said reports of major progress in peace talks with Ukraine are “wrong”.
Further discussions between the sides are expected today.
It comes a day after US President Joe Biden called Vladimir Putin a “war criminal” and offered to supply $800m of new military equipment to Ukraine.
Questions swirl as P&O suspends operations
Ferry company P&O Ferries has halted operations this morning, leaving ships stranded at ports across the UK pending a “major company announcement” later today.
My colleague Hannah Boland reports:
P&O Ferries has sent a memo to staff, seen by the Telegraph, telling them all its vessels had been asked to discharge passengers and cargo and “standby for further instructions”.
“We will be making a major company announcement today which, with the support of our shareholder DP World, will secure the long-term viability of P&O Ferries.”
It said the move would, however, mean “serious disruption” at all its ports today. It operates routes between Dover and Calais, as well as Hull and Rotterdam, Liverpool and Dublin and Cairnryan in Scotland and Larne in Ireland.
Passengers reported having been stranded without information at ports this morning.
IFS: Sunak and Johnson have hiked taxes as much in two years as Brown and Blair did in 10
Rishi Sunak and Boris Johnson have raised tax rises as much in two years as Gordon Brown and Tony Blair did in ten, according to the Institute of Fiscal studies.
Continuing a strong of pre-Spring Statement analyses, the think tank says Mr Sunak’s tax pledges will add around 2pc of GDP to the UK tax burden, or roughly £46bn total.
To put this increase in context, tax rises announced over the last two years are as large as those announced over the entire decade of Tony Blair’s premiership.
At least in part, these tax increases are a response to long-term pressures on the public finances that come from an ageing population. No prime minister since Margaret Thatcher has pursued a policy of overall tax reductions during their time in office.
Isaac Delestre, one of the IFS’s research economists, said:
Mr Johnson and Mr Sunak may find a way to cut some taxes before the next election. But if we look just at their actions to date, they have announced as large a tax increase in two years as Mr Blair and Mr Brown did in ten.
Nickel market flatlines again after trade reopens
Another chaotic opening for nickel trading at the London Metal Exchange has piled embarrassment on the 145-year-old exchange.
First, brokers found that orders to sell at the lower-limit of 8% below Wednesday’s closing price were being rejected, after the LME expanded the trading band the previous day.
Then three trades did appear to go through at that price – but four minutes before the market had been due to open. Finally, the LME informed brokers that trading wouldn’t restart until 8:45 a.m. and canceled the three earlier trades.
In the 15 minutes after the reopening of trading, just two trades were made. It’s looking like a slow and painful road back to normality.
Veteran emerging market bond trader Paul McNamara has a cynical view of Russia’s claims it is attempting to pay its debts:
Moscow puts new controls on foreigners trading Russian assets
The Kremlin has introduced new controls to restrict foreigners’ ability to trade Russian assets, Reuters reports, according to a Citigroup memo to clients.
The wire says:
Russia has now laid out details of the application process for foreigners seeking to trade assets and which will restrict trading to those granted permits, the Citigroup memo says.
The process requires foreign investors wanting to buy and sell Russian assets to provide detailed information up front in order to obtain a permit to trade.
It’s difficult to say how that will work in practice, but given Russia’s stock market is still closed, it might indicate we’ll see more limits on asset shedding once it reopens.
Many Western investors are likely to be more restricted by sanctions anyway, so further controls in Russia may have a limited impact.
Road fuel prices set records again
Another day, another set of record fuel prices: it has never been more expensive to fill your tank.
Wednesday average prices, per the RAC:
Petrol: 165.4p per litre
Diesel: 176.76p per litre
The impact of (relatively) lower oil prices is expected to feed through in the coming week.
Here are some of the day’s top stories from the Telegraph Money team:
Spooked lenders pull long-term mortgage deals: Lenders have pulled their long-term mortgage deals to stop homebuyers locking in cheap repayments as they prepare for further increases in interest rates by the Bank of England.
Restaurants pressure diners to add Ukraine donations onto bills: Restaurants in London have started to automatically add donations to Ukraine to all customer bills, irking diners who have already made separate contributions to humanitarian charities.
Santander compensates customers after forcing them to use mobile phones: Santander has been forced to compensate customers after making it virtually impossible to bank online without using a mobile phone.
Pound rises ahead of Bank meeting
Sterling is gaining some ground against the dollar and euro as traders await an expected hike in interest rates to 0.75pc at noon today.
It’s up about 0.3pc against the greenback, continuing to come off year-and-a-half lows prompted by a strong dollar.
Russia claims to have ordered crucial bond payment
Just in: Russia’s financial ministry says it has sent an order to make the $117m coupon payment that came due yesterday.
The order was made to Citibank’s London branch. It is not yet known whether the payment to Citi was made in roubles or dollars.
The financial ministry says it will say whether Citi received the order later today.
Failure to make the payments would constitute the country’s first default on its foreign debt in a century.
Growth warning in wake of Fed rate hike
Bond markets are signaling a recession may be approaching, with a key indicator blinking red following the Fed’s move to raise interest rates last night.
The yield curve between 5- and 10-year US government bonds has inverted – meaning, counter to conventional logic, it is more lucrative to hold shorter- than longer-dated debt.
As Bloomberg explains:
These are time-honored indicators of oncoming growth pains as the inflation-fueling fallout from Russia’s invasion of the Ukraine continues. With officials projecting raising interest rates as high as 2.8pc by the end of 2023, bond traders are growing increasingly concerned that the economy could buckle under the weight of monetary-policy normalisation.
Moderate gains for FTSE at open
The FTSE 100 has built on yesterday’s relief-rally on hopes for peace between Russia and Ukraine, adding another 0.6pc at the open before a mild slowdown to 0.5pc up.
LME delays opening electronic nickel trading until 8:45am
Here we go again. The London Metal Exchange says it won’t open electronic nickel trading until 8:45am, following further apparent technical issues.
The LME introduced an 8pc down limit on prices today, but traders say that order at the level were rejected.
Yesterday, the LME was forced to suspend trading (having reopened it after more than a week) following glitches that allowed orders to take place below the down limit.
Ocado shares drop after revenue warning
Shares in Ocado have fallen 7.2pc at the open after the company warned its joint venture with Marks & Spencer may not grow revenue as much as expected this year.
The FTSE 100 company said Ocado Retail’s growth, which it had predicted would be in the “mid-teens” would now be closer to 10pc for the full year.
Melanie Smith, the venture’s chief executive officer, said:
Significant increases in raw materials and product cost prices, energy, utilities, and dry ice through Q1 have added further cost headwinds for the grocery industry in the UK.
The venture has has capacity problems during the pandemic amid surging demand.
European car registrations his record February low
European car sales dropped to the lowest on record for February, amid continued supply disruptions that the conflict is Ukraine will likely make worse.
Registrations of new vehicles dropped 6.7pc to below 720,000 according to the European Automobile Manufacturers’ Association. The drop was driven by double-digit declines in Italy and France.
If the UK and the EU’s close trade allies are included, the fall was 5.4pc.
It marked the eight consecutive month of declines, and a sharper drop than in January.
Chinese stocks continue to soar
Chinese stocks are climbing further today, building on booming gains yesterday as traders welcome a push from Beijing to stabilise markets.
Hong Kong’s benchmark Hang Seng index is up 6.4pc, while a more China-focused gauge is 6.8pc higher, coming off its best day since 2008.
The rises have erased heavy slumps on Monday and Tuesday this week.
Online harms bill coming today
After year of consultations and revisions, the Government’s Online Safety Bill will be presented in full today, nearly a near after the first formal draft.
The legislation, which will hand regulator Ofcom the power to impose large fines (and, headline-grabbingly, personally prosecute executives who fail to comply), includes the following:
The criminalisation of cyber-flashing
Measures to stop trolling and abuse on social media
Requirements for age verification on pornographic websites
A right for appeal when users fell their posts have been taken down unfairly
Nadine Dorries, Secretary of State for Digital, Culture, Media and Sport, has written in the Telegraph about the bill today. She says the OSB will “finally bring some accountability to Silicon Valley”.
Nord Stream gas flows waning
Gas and oil prices are well off their recent highs, but there are signs of new pressures arriving in the system, with supply through the Nord Stream 1 pipeline 15pc lower this morning than yesterday afternoon.
A Gazprom spokesperson has told Bloomberg that all supply demands are being met.
Russian gas deliveries coming via Ukraine were also slightly below contractual volumes, although remarkably they still have been disrupted, even as the confilct enters its fourth week.
Agenda: Oil and gas tick up
Good morning. Oil and gas price have pushed higher, ending days of declines, as flows of Russian gas to Germany show signs of slowing. Brent crude is up 2.7pc, while European gas is 7pc higher.
At noon today, we’ll get the latest rates decision from the Bank of England, which is expected to increase the cost of borrowing for the third meeting in a row.
Meanwhile, Chinese stocks are surging further, extending yesterday’s gains after trader were reassured by a pledge from Beijing that it supports market stability.
5 things to start your day
1) The dash for diesel as Britain ditches Russian energy Motor fuel is a sore spot for the UK in its reliance on Moscow for supplies
2) Michael Gove draws up legal loophole to help councils escape Gazprom contracts Officials hope plans will let councils walk away from Russian energy giant without huge exit fees
3) Church of England takes aim at companies with big Russian investments Church’s investment fund and pension board call on TotalEnergies to cut business ties
4) Russia on cusp of historic default after failing to pay $117m Finance minister says Moscow has the funds and “ball is in the court” of US authorities
5) Rail staff to be forced to work weekends in bid to boost train travel Unions vow to fight measures aimed at making bailed-out industry more efficient
What happened overnight
Asian markets rallied again on Thursday with another blistering surge in tech firms helping Hong Kong extend its recovery. Hong Kong’s Hang Seng Index rocketed more than 9pc and the city’s tech gauge flying by a record 22pc. Tokyo charged 3pc higher, while Shanghai, Sydney, Seoul, Manila and Wellington were all up more than 1pc, while there were also big gains for Singapore, Jakarta and Taipei.
Coming up today
Corporate: Cineworld, Endeavour Mining, FDM Group, Harbour Energy, Helios Towers, Marshalls, Premier Oil, Trainline (full-year results); Ocado (trading update)
Economics: Bank of England interest rate decision (UK), inflation (EU), building permits (US), housing starts (US), jobless claims (US)