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Rishi Sunak clashes with Boris Johnson over rail strike threat
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Bank of England told to ditch green obsession as prices surge
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FTSE 100 rises 0.3pc
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Ben Marlow: The unions cannot grab back power like the 1970s
China has admitted its economy is faring worse now than during the depths of the pandemic as Beijing’s zero-Covid policy takes its toll.
Li Keqiang, China’s Premier, warned that “economic indicators in China have fallen significantly, and difficulties in some aspects and to a certain extent are greater than when the epidemic hit us severely in 2020”.
Mr Li called on officials to make sure the unemployment rate falls after it climbed to 6.1pc in April – the highest since February 2020.
Forecasts by Bloomberg also predict that China’s economy will grow just 4.5pc this year – well below the government’s forecast of 5.5pc.
It comes after millions of people were forced to stay at home during lockdowns in key cities including Shanghai as Beijing battled a fresh wave of infections.
05:20 PM
Wrapping up
That's all from us, thank you for following! We will see you tomorrow, but before you go, here's some of the latest from our reporters:
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Britain plots rival summit to Davos to woo international elite
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Ford cars to automatically slow down by schools and hospitals
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Boris Johnson willing to cut deal with unions over rail strike threat
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Alexander Lebedev cuts ties with Independent after sanctions hit
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Russian default ‘a matter of time’ after Biden blocks bond payments
05:13 PM
Apple chief pushes back on campaign to unionise stores
A senior figure at Apple has suggested its relationship with staff could be damaged if they decide to unionise.
As Bloomberg reports:
Apple retail chief told employees that the effort could slow workplace progress and that third-party labor groups don’t share the company’s commitment to employees.
“It is your right to join a union -- and it is equally your right not to join a union,” Deirdre O’Brien, senior vice president of retail and human resources since 2019, said in a video to employees.
“We have a relationship that is based on an open and collaborative and direct engagement, which I feel could fundamentally change if a store is represented by a union under a collective bargaining agreement,” she said.
“And I worry about what it would mean to put another organisation in the middle of our relationship. An organisation that doesn’t have a deep understanding of Apple or our business, and most importantly, one that I do not believe shares our commitment to you.”
05:00 PM
Pfizer 'won't make profit on selling drugs' to poorer countries
In news from Davos, Pfizer has pledged to supply all its medicine and vaccines to 45 lower-income countries on a not-for-profit basis.
The company, which faced criticism over its vaccine pricing during the Covid pandemic, unveiled an "accord for a healthier world", warning of the "tremendous health equity gap in our world that determines which of us can use these innovations and which of us cannot".
Albert Bourla, Pfizer’s chief executive, said: "We are living in a time where science is increasingly demonstrating the ability to take on the world’s most devastating diseases."
He said other pharmaceutical companies were keen on also taking a similar approach.
Pfizer made $36.8bn in sales from its Covid vaccine last year, helping its profits to double.
04:37 PM
Roche develops monkeypox PCR tests
Pharmaceutical giant Roche has developed new PCR tests to spot monkeypox, as more clusters of the virus are detected across the globe.
Roche said the three PCR tests had been developed "very quickly" to detect the virus and "aid in following its epidemiologic spread".
Chief executive Thomas Schinecker said: "Diagnostic tools are crucial for responding to and ultimately controlling emerging public health challenges as they advance response measures such as tracing efforts and treatment strategies.”
There have been 78 confirmed cases of monkeypox in the UK, after seven more were identified in England on Wednesday.
In this latest outbreak, the virus has been detected in 19 countries across the world.
04:18 PM
Small businesses being left with 'no choice but to pass costs on'
Smallest firms are 'defenceless against many-fold rises in electricity and gas bills', bosses have warned, as the Government readies to unveil its cost-of-living support plan.
Rishi Sunak is reported to be gearing up to announce a £10bn financial package of support, which could come as soon as tomorrow.
Federation of Small Businesses chair Martin McTague said:
“The cost of living crisis starts with a cost of doing business crisis. The prices that small firms pay for inputs are running well ahead of consumer prices – businesses are trying to absorb the difference, but many are being left with no choice but to pass costs on.
“At the local level, the very smallest firms are now reporting unmanageable energy bills, even before the Autumn rise hits them. Some are planning to close their doors as energy bills are so high as to make their business unviable.
“The smallest firms are defenceless against many-fold rises in electricity and gas bills, not benefitting from the protection of the consumer price cap, nor the leverage that big corporates can harness to get the best deals."
03:56 PM
Government unveils fresh assessment into microchip factory takeover
The Government has kicked off a full assessment into the Chinese takeover of microchip plant Newport Wafer Fab, after months of wrangling.
Kwasi Kwarteng announced the decision to launch the national security assessment into the takeover by Nexperia, a Dutch business owned by Chinese electronics company Wingtech. It will mean the Government is able to more rigorously scrutinise the deal and, if necessary, intervene in the sale.
Nexperia bought the factory for £63m last summer. However Mr Kwarteng can retroactively block that takeover.
Newport Wafer Fab is Britain’s biggest microchip plant.
The government has 30 working days to carry out that assessment, it said, with the process now underway.
03:32 PM
World's largest dedicated food tech fund launches amid 'apocalyptic' global prices
A London-based investor has now raised $300m to plough into "future food" companies, as more interest turns to 3D-printed steaks and dairy ice cream which can be made without cows.
Synthesis Capital said it had raised the world's largest dedicated food technology fund to pour into companies that could help "transform our food system to feed 10 billion people by 2050, within planetary boundaries".
It comes as food prices spiral in the wake of the war in Ukraine. Earlier this month, the Bank of England governor warned that the situation was "apocalyptic" and risked hitting the developing world hard.
Andrew Bailey said: "It's not just I have to tell you a major worry for this country. There's a major worry for the developing world as well."
03:11 PM
Slump in new homes coming onto the market
Fewer people are putting their homes on the market, online estate agency Purplebricks Group said, as it forecast a £8.8m loss for the past year.
Purplebricks said it had experienced a "continuation of lower volumes" of new instructions for the sale or purchase of properties since it last updated investors in January.
It received 40,141 instructions for the year to April 30, a sharp fall from 58,043 in the previous year.
Purplebricks will report its full year results on July 12.
02:57 PM
Handing over
That's all from me, thanks for following along! Hannah Boland will take the reins from here.
02:57 PM
Prudential names former Citi banker as new boss
Insurance giant Prudential has poached its new boss from a Canadian rival as it continues its pivot towards Asia.
Prudential said former Citi banker Anil Wadhwani will pick up the reins in February next year. The company will tap him for his experience of the Asian markets, where Mumbai-educated Mr Wadhwani has spent most of his career.
The insurer is listed and has headquarters in both Hong Kong and London, but there have been concerns in recent years that it might walk away from its London base after a pivot to Asia and Africa.
Having sold its UK and US businesses, Prudential's chief executive will be based in Asia for the first time when Mr Wadhwani takes up the role.
Mr Wadhwani said:
I am honoured to have been appointed as the new chief executive of Prudential.
02:48 PM
Russian oligarch investigated over sanctions violations
The UK is investigating whether Russian tycoon Petr Aven violated sanctions in what could be the first such probe since the start of the war.
Authorities raided Aven's UK home last week and seized £30,000 in cash, while bank transfers following Russia's invasion of Ukraine are being scrutinised, Bloomberg reports.
Some of the money was reportedly transferred to a company managing the tycoon's residential property and used for running costs. The probe is also looking at whether a British national working for the company facilitated a violation of sanctions.
Aven, a shareholder in Alfa-Bank, was sanctioned alongside long-term partner Mikhail Fridman at the end of February as part of a huge wave of sanctions against Russian oligarchs.
02:33 PM
Severn Trent launches £30m fund to help with bills
Severn Trent has launched a support package to cut water bills by up to 90pc for a further 100,000 cash-strapped customers as households struggle with the cost-of-living crisis.
The Coventry-headquartered water firm unveiled a £30m fund to help those on low incomes, adding to its existing scheme that supports 215,000 customers in need.
Severn Trent said research suggests another 100,000 customers in its area are set to fall into so-called water poverty as finances are stretched by soaring energy bills and living costs.
The crisis is expected to deepen even further later this year, with inflation set to top 10pc and the energy price cap to jump to £2,800.
Liv Garfield, chief executive of Severn Trent, told PA:
As cost-of-living pressures continue to rise, we're acting now to support people struggling to pay their bills... We don't want anybody in our region feeling nervous about their water bill arriving.
02:17 PM
VW to pay UK drivers £2,000 each over dieselgate scandal
Volkswagen has settled its UK class action lawsuit for £193m after more than 90,000 drivers were impacted by the so-called dieselgate emissions scandal.
The German car giant said both sides had come to the out-of-court settlement and as many as 91,000 claims had been resolved.
It said no admissions of liability had been made, while a separate contribution towards the claimants' legal costs and other fees will be handled separately.
VW has faced numerous lawsuits over dieselgate after software designed to lower emissions when being tested was exposed as fraudulent in 2015.
That led to a recall across Europe that cost the company billions of euros and massive fines from regulators.
01:51 PM
Investors hit as windfall tax wipes £226m from value of green energy firms
The Government’s controversial proposals to impose a “windfall tax” on energy firms has wiped hundreds of millions of pounds off firms in the sector, including renewable energy companies.
Lauren Almeida has more:
More than £226m has been wiped off London’s leading renewable energy infrastructure trusts in recent days as Rishi Sunak's plans to impose a one-off tax on energy firms have gained traction.
01:36 PM
Wall Street falls ahead of Fed minutes
Wall Street has opened lower ahead of minutes from the Federal Reserve's May meeting, which will likely offer clues about plans for future interest rate rises.
The S&P 500 lost 0.3pc at the opening bell, while the Dow Jones and Nasdaq were both down 0.4pc.
01:27 PM
Money printing spree hurts company that prints money
Surging inflation is making our money less and less valuable, which is particularly bad news if you're in charge of printing money.
Shares in De La Rue, which produces Britain's banknotes, have tumbled 10pc after it warned rising costs would hit its profits.
Clive Vacher, chief executive, said rising energy costs in the supply chain and higher oil prices – which affect its polymer banknotes – were darkening the outlook.
The company warned its profit in the year ahead would be "broadly flat" as operating costs increased by £5m.
Still, there could be some good news, as soaring inflation has traditionally fuelled demand for hard cash, though Mr Vacher said it was "too early to say" what the impact would be.
12:57 PM
Oligarch Alexander Lebedev cuts ties with Independent after sanctions hit
Alexander Lebedev has cut ties with the Independent after the former KGB agent was sanctioned in Canada, writes Ben Woods.
The billionaire was hit with an asset freeze and visa ban last Friday over his links to the Kremlin, while Vladimir Putin continues to wage war on Ukraine.
12:46 PM
US durable goods orders rise amid steady demand
Orders placed with US factories for durable goods rose in April, highlighting firm demand for equipment and merchandise.
Bookings for durable goods – items meant to last at least three years – increased 0.4pc in April after a downwardly revised 0.6pc rise the previous month, according to the Commerce Department.
The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, climbed 0.3pc after a 1.1pc gain a month earlier.
The figures suggest companies are continuing to spend as they look to enhance productivity amid high inflation and a tight labour market.
It’s less clear, however, whether businesses later this year will reconsider the current pace of investment in the face of higher interest rates and an anticipated slowdown in economic activity.
12:25 PM
US natural gas prices hit 14-year high
Natural gas prices have surged to a 14-year high in the US as the crisis gripping Europe spreads across the globe.
Prices jumped above $9 per million British thermal units for the first time since 2008, extending their recent rally as fears over a supply crunch deepen.
Stockpiles of the fuel remain below normal for this time of year as exports soar to a record and output remains muted.
A drought on the West Coast is expected to curb hydro-power generation, while forecasts for hotter weather across the East are set to boost demand for air conditioning and natural gas.
12:17 PM
Britain plots rival summit to Davos to woo international elite
Britain is drawing up plans for a two-yearly investment summit that would rival Davos amid concerns from Downing Street that the Switzerland gathering has become a party town.
Tom Rees and Christopher Williams in Davos have the story:
The Government is in the early stages of putting together the summit expected to be launched in autumn 2023 after Davos was shunned by many top political and business leaders this year.
11:40 AM
US futures subdued ahead of Fed minutes
Wall Street looks set for a subdued open as investors await minutes from the Federal Reserve's May meeting.
The minutes, due later today, will be combed through for clues on the path for future interest rate rises. Fed chair Jerome Powell has promised to keep pushing on rate hikes until there is clear and convincing evidence that inflation is dropping.
Markets are pricing in 50 basis point hikes in June and July, even as fears grow about waning US economic momentum.
Futures tracking the S&P 500 were flat, while the Dow Jones dipped 0.1pc. The Nasdaq gained 0.1pc.
11:23 AM
Russia to pay dollar debt in roubles as default looms
Russia will service its foreign debt in roubles after an expiry of a US sanctions loophole meant Moscow is no longer able to pay in dollars.
The country's finance ministry said payments will be made to foreign investors' type C accounts, which they will be able to access after applying to Russia's National Settlement Depository.
The move pushes Russia one step closer to an international default, which would be the first since the aftermath of the Bolshevik revolution.
Russia is due to make coupon payment on several bonds on Friday, but the bulk of the owners are said to be based outside the US, meaning a settlement may still be possible unless European banks stop the transactions out of fear of US reprisals.
A further tranche, on bonds that are predominantly US-held, is due next month. If that payment is rendered impossible, Moscow will enter a 30-day grace period, after which it would likely be deemed to have defaulted.
Read more: US declares it will push Russia into default
11:10 AM
G7 leaders consider coal phase-out pledge
Ministers from the G7 will this week consider committing to phase out coal energy by 2030 and decarbonise their power sectors by 2035.
G7 climate, energy and environment ministers are meeting in Berlin, where they will attempt to agree on commitments to ensure the response to the energy crisis and war in Ukraine doesn't derail longer-term green energy plans.
A draft document seen by Reuters reads: "We commit to phase out domestic unabated coal power generation and non-industrial coal-powered heat generation aiming at the year 2030."
The draft would also commit G7 countries to have a "net zero electricity sector by 2035" and to start reporting publicly next year on how they are delivering on a past G7 commitment to end "inefficient" fossil fuel subsidies by 2025.
The war in Ukraine has prompted some countries to flock to non-Russian fossil fuels and burn more coal to reduce their reliance on the Kremlin's gas, sparking fears the energy crisis could undermine efforts to fight climate change.
Yesterday Germany said it will reopen coal and oil-fired power plants if Russia cuts off gas supplies.
More on this story: Germany to reopen idled coal plants if Russia cuts gas supply
10:45 AM
M&S boss: We're cheaper than Waitrose, it's as simple as that
Here's some more from Laura Onita on M&S's big price claims:
In April, M&S slashed the prices of everyday essentials under Stuart Machin, its head of food, who takes over as chief executive of the company from Wednesday.
10:22 AM
Twitter to hold annual meeting amid Musk uncertainty
Twitter will face sceptical shareholders during its annual meeting later today as doubt remains over whether the social media company will complete its takeover by Elon Musk.
The world's richest man tweeted earlier this month that the $44bn acquisition was "temporarily on hold" while he sought more information about the proportion of fake accounts on Twitter.
He's also suggested that he could slash the value of his takeover deal.
Twitter said last week it remained committed to the deal at the agreed price. However, investors have appeared unconvinced, with shares closing at $35.76 yesterday. That's a 34pc discount to the $54.20 per share deal price.
While the virtual annual meeting will include a question and answer session, a Twitter spokesman said the company will not answer deal-related questions.
10:10 AM
Rishi Sunak clashes with Boris Johnson over rail strike threat
Rishi Sunak is refusing to cave into rail union demands for a major pay rise as Boris Johnson pushes for a deal to avert strike action.
Oliver Gill has the story:
Senior rail industry figures say that the Treasury will not grant an exemption to lift the public sector pay cap to avoid the most potent rail strike in a generation.
09:58 AM
MPs to investigate chip industry amid shortages and security fears
MPs are launching an inquiry into the UK chip industry amid widespread shortages and concerns over national security.
The global shortage of semiconductors has wreaked havoc in supply chains, impacting the production of products ranging from Minis to the PlayStation 5.
There are also growing security concerns as key chip assets are sold off to foreign buyers. Chipmaker Arm is up for sale after its failed takeover by Nvidia, while Newport Wafer Fab is set to be taken over by Chinese-owned Nexperia.
The Business, Energy and Industrial Strategy Committee said it's launching an inquiry to "get a better picture of the UK semiconductor landscape here at a time when there are concerns over the future of global supply chains".
Darren Jones, chairman of the committee, said:
Semiconductors are growing in technological and geopolitical importance. With scarce global supply, it’s essential that we conduct a stock take of the UK’s capacity and what Government can do to raise it.
09:23 AM
George Soros warns Ukraine conflict risks sparking Third World War
ICYMI – George Soros has warned that the conflict in Ukraine could spiral into a Third World War that ends western civilisation.
Christopher Williams in Davos has the story:
Mr Soros, the billionaire investor and advocate of European integration, said that the conflict had “shaken Europe to its core” in a speech to the World Economic Forum in Davos.
09:05 AM
Petrol hits new record high... again
Another day, another fuel price record broken.
Petrol pump prices across the UK now average more than 170p a litre for the first time ever, according to the AA.
Yesterday it reached 170.35p a litre, while diesel also reached a record of 181.35p a litre.
Prices have surged in recent months as Russia's war in Ukraine sparks fears of supply disruption.
The latest increase means that filling a typical 55-litre car tank now costs £22.76 more than it did a year ago. It now stands at £93.69, with experts warning this could hit the eye-watering mark of £100.
Luke Bosdet at the AA said:
Yesterday, petrol passed yet another milestone of misery along the road of record pump prices.
08:56 AM
Huw Pill: BoE must do more, but is wary of recession
The Bank of England needs to raise interest rates further to tackle inflation, but it's also wary of acting too quickly and pushing the UK into recession.
That's according to chief economist Huw Pill, who said he expected "some further moves in the direction we have been seeing" over the coming months.
He told the Western Mail newspaper: "I personally think there is more that needs to be done in this transition from what has been a very supportive monetary policy for the economy really going back to the financial crisis, through the fallout from Brexit and the pandemic.
"And we need to go not necessarily to a super restrictive stance, but to a stance that takes some of that support away and is more reflective of the fact inflation is higher and labour markets tighter."
Mr Pill, who has voted with the majority to lift rates at each of the MPC's four previous meetings, said surging inflation and the cost-of-living crisis meant there were risks if the Bank acted too slowly or too quickly.
08:42 AM
Pound edges up against euro ahead of Sue Gray partygate report
Sterling has ticked up against the euro, paring some of yesterday's losses as attention returns to partygate.
Top civil servant Sue Gray has handed her report into lockdown parties at No 10 to Downing Street, which is expected to release the findings later today.
Traders will also have an eye on measures to tackle the cost-of-living crisis – including a windfall tax on energy firms. These are expected to be released tomorrow, raising accusations that Boris Johnson is trying to distract from the partygate scandal.
Adam Cole, an analyst at RBC, said the pound doesn't seem "particularly sensitive to political uncertainty at the moment, with this week's losses owing more to the accumulating evidence that the economy did indeed slow sharply in April in response to the hit to household real incomes and higher taxes".
The pound gained 0.6pc against the euro to 85.13p. Against the dollar it was little changed at $1.2537.
08:28 AM
UK gives green light to Chelsea FC sale
The sale of Chelsea FC to US investor Todd Boehly has been approved by the Government, marking an end to oligarch Roman Abramovich's near 20-year ownership of the club.
The approval of the £4.25bn takeover ends month of uncertainty for staff and fans after Abramovich was forced to pursue a sale in early March, shortly before being sanctioned.
Since then, Chelsea has been operating under a special licence. A host of wealthy investors submitted offers for the club, including a late bid by billionaire Jim Ratcliffe.
Mr Boehly's winning bid is backed by private equity firm Clearlake Capital. It includes a £2.5bn purchase of shares and £1.75bn for further investments to benefit the club.
The process was complicated by the need to comply with sanctions and ensure none of the proceeds found their way to Abramovich, but instead to charitable causes.
08:15 AM
Russia 'ready' to set up corridor for food leaving Ukraine
Russia is reportedly prepared to set up a humanitarian corridor for ships carrying food to leave Ukraine.
Deputy Foreign Minister Andrei Rudenko said Russia was prepared to unblock ports to help ease the global food crisis, but that Ukraine still had to clear mines, the Interfax news agency reported.
Rudenko also said Moscow will discuss the possibility of holding a prisoner exchange with Ukraine once prisoners who surrendered have been convicted.
Russian and separatist officials have said some of those who surrendered should be put on trial for war crimes.
08:11 AM
IFS: Inflation could hit 14pc for poorest households
Inflation for the UK's poorest households will hit 14pc later this year as another rise in energy bills adds to the misery.
That's according to the Institute for Fiscal Studies, which said rising gas and electricity prices will disproportionately affect the worst off, as they spend a much larger share of their household income on energy.
It comes after Ofgem yesterday warned the price cap will surge by another £800 to £2,800 in October. That means bills will have more than doubled in just a year.
Heidi Karjalainen at the IFS said:
As poorer households spend more of their budgets on gas and electricity, this increase is likely to hit poorer households harder.
08:00 AM
Big Short investor Michael Burry posts cryptic tweet
The already-sour mood across global markets has darkened further thanks to a cryptic tweet from Big Short investor Michael Burry.
In a tweet last night, the notorious bear wrote: "As I said about 2008, it is like watching a plan crash. It hurts, it is not fun, and I'm not smiling."
It's not clear exactly what Mr Burry, whose bet against the housing market before the 2008 was the subject of a hit book and film, meant with those words and many Twitter users urged him to clarify.
It's not the first time Mr Burry has drawn attention on Twitter, though he has a habit of deleting his posts. He warned retail traders about a year ago that the "mother of all crashes" was coming.
07:49 AM
SSE leads utility firm rebound
SSE is leading a rebound for utility firms this morning amid reports the Government is unlikely to target power generators in a windfall tax.
SSE jumped 4.6pc to the top of the FTSE 100, while Drax and British Gas owner Centrica were up 5.9pc and 3.5pc respectively.
All three stocks had tumbled yesterday after it emerged Rishi Sunak was considering targeting £10bn in excess profits from electricity generators – including wind farm operators.
The Government looks set to roll out a windfall tax tomorrow, but a report in the Times suggested the Treasury had dismissed the idea of targeting power generators as it was "too complex" to implement.
SSE was also boosted by a surge in operating profits, while the company said it'll invest over $24bn in the UK’s electricity infrastructure this decade. That's more, it said, than it'll make in profits.
07:40 AM
Ocado slashes outlook as shoppers cut back
Ocado has released its results to coincide with M&S, and the picture is just as gloomy.
The retailer said its joint venture with M&S will suffer a slowdown in sales and profits as consumers increasingly tighten the purse strings.
Ocado Retail, which is owned 50-50 by the two companies, said sales tumbled further in recent weeks as shoppers bought less to cope with the cost-of-living crisis.
Sales declined by 8pc in the three months to April 25, compared to a 5.7pc fall in the previous quarter. Shares tumbled 5pc following the update.
Ocado said it has benefited from a rise in customer numbers, which have grown 12pc in the year to date. But it warned that "the rate of growth has slowed as consumers respond to short-term discounts and promotions".
Sales growth for 2022 is now expected to be in the "low single digits" – down from previous forecasts of 10pc – as the cost-of-living crisis and surging energy bills take their toll.
07:34 AM
FTSE risers and fallers
The FTSE 100 has pushed higher in early trading as markets continue to seesaw amid worries about an economic slowdown.
The blue-chip index gained 0.5pc after yesterday's sell-off, with commodity stocks providing the biggest boost.
Energy firm SSE was the biggest riser, gaining 4.8pc after reporting a 23pc surge in annual profit. This helped reverse yesterday's losses, when fears of a windfall tax gripped investors.
Miner Glencore was up 2pc after it said it'll pay up to $1.5bn to settle accusations of bribery and market manipulation.
Meanwhile, Imperial Brands rose more than 3pc after Goldman Sachs upgraded the stock to "buy".
The domestically-focused FTSE 250 gained 0.6pc, with Pets at Home up 8pc after its cheery results.
07:26 AM
Russia to hold emergency rate-setting meeting this week
Russia's central bank has moved the date of its next interest rate meeting forward by more than two weeks amid concerns further action will be needed to help stem the surge of the rouble.
The central bank, which has its next scheduled meeting set for June 10, will publish the key rate statement tomorrow morning after the extraordinary meeting.
It didn't offer any more details, but officials have said further cuts are likely as inflation as declined in the months since an emergency rate hike to 20pc following the invasion. The benchmark rate now stands at 14pc.
The rouble has soared to its highest levels since 2018 as surging exports and capital controls have sapped demand for foreign exchange. The dramatic move threatens Russia's competitiveness as an exporter, as well as its budget.
07:19 AM
Pets at Home vows to keep prices down after record profits
Pets at Home has revealed record annual profits as it cashed in on the boom in pet ownership, but warned on cost pressures ahead.
The retailer posted a 65pc surge in underlying pre-tax profits to £144.7m for the year to the end of March, while like-for-like sales were up 15.8pc.
The company said it was "not immune to current industry-wide inflationary pressures, in particular the impact of raw material, energy and freight costs".
But it added: "We have clear plans in place to keep our pricing competitive for customers, while doing everything we can to reduce our own costs."
Pets at Home has already taken measures to slash costs, which it said would keep it on track for full-year profits of £151m.
Outgoing chief executive Peter Pritchard, who will hand over the reins to Lyssa McGowan at the end of May after 11 years in charge, said:
Despite another period characterised by significant and evolving external challenges, our performance this year has been noteworthy, delivering record sales, profit, and cash flow.
07:12 AM
Germany dodges recession despite war
The German economy grew in the first quarter despite the impact of the war and the pandemic, allowing the European powerhouse to avoid a recession.
GDP grew 0.2pc quarter-on-quarter and 3.8pc on the year, according to official data. That followed a 0.3pc decline at the end of 2021.
It came despite soaring inflation and supply chain troubles that have threatened to derail Germany's key manufacturing sector.
While household and government spending remained mostly at the same level as in the previous quarter and exports were down at the start of the year, investments helped boost the economy.
Georg Thiel, president of the statistics office, said: "Despite the difficult global economic conditions, the German economy started the year 2022 with slight growth."
07:03 AM
MoD warns on shortages amid Russian blockade
The Ministry of Defence has issued a warning over soaring food prices and shortages as Russia's invasion of Ukraine wreaks havoc across global markets.
In its latest intelligence update, the MoD said there had been "no significant merchant shipping activity in or out of Odessa since the start of the war."
It added: "While the threat of Russia's naval blockade continues to deter access by commercial shipping to Ukrainian ports, the resulting supply shortfalls will further increase the price of many staple products."
07:01 AM
FTSE 100 pushes higher
The FTSE 100 has gained ground at the open as volatility continues to grip markets amid fears about inflation and a slowdown in economic growth.
The blue-chip index rose 0.5pc to 7,524 points.
06:50 AM
M&S warns of profit hit from Russia exit and cost-of-living crunch
Marks & Spencer has warned its profits will grind to a halt in the year ahead due to its costly exit from Russia and a deepening cost-of-living crisis.
The retailer said it's taking a £31m hit as it ends its franchise in Russia, which added £5.2m to its earnings last year.
It also warned that the squeeze on household budgets and the end of the business rates holiday will take its toll, adding: "Given the increasing cost pressures and consumer uncertainty, we do not currently expect to progress from this lower profit base."
It comes as boss Steve Rowe prepares to hand over to new chief executives Stuart Machin and Katie Bickerstaffe, who will have to navigate the cost-of-living crisis while keeping the food and clothing chain's turnaround on track.
06:42 AM
Russia hurtles towards default
The Kremlin may be cashing in on wheat exports, but it's got more serious financial difficulties to worry about, as Louis Ashworth explains:
Russia is on the cusp of its first foreign debt default in a century after the US cut the Kremlin off from paying its bondholders.
Read Louis' full story here
06:36 AM
Russia reaps $1.9bn wheat windfall
Good morning.
While the rest of the world grapples with a deepening food crisis, Russia has been quietly cashing in.
Putin's invasion of Ukraine has driven global wheat prices up 50pc this year to near-record highs, sparking fears of widespread famine and hunger.
But the Kremlin has continued to ship its wheat and has collected $1.9bn (£1.5bn) in revenues from wheat export taxes so far this season, according to data from SovEcon.
Russia has blockaded Ukrainian ports, trapping around 22m tonnes of grain, while it's also been plundering the country's reserves. Hot weather and droughts have affected crops elsewhere, exacerbating the crisis.
5 things to start your day
1) George Soros warns Ukraine conflict risks sparking Third World War: George Soros has warned that the conflict in Ukraine could spiral into a Third World War that ends western civilisation.
2) Russia on brink of first default since Bolshevik revolution: Russia is on the cusp of its first foreign debt default in a century after the US cut the Kremlin off from paying its bondholders.
3) Power to cost more in South under local price plan: Households face paying higher prices for electricity in London compared to Scotland at certain times of day under wide-ranging reforms to make the UK’s energy market more green.
4) Bank of England told to ditch green obsession as prices surge: The Bank of England has been urged to “focus on the basics of monetary economics” instead of climate change after warning that the City is at risk of more than £340bn of losses from global warming.
5) TikTok hustlers tempt with get-rich-quick scams as economic storm hits: Growing user numbers means more TikTok scammers are sure to seize the huge audience just as the cost-of-living crisis bites.
What happened overnight
Asian stock markets gained overnight after Wall Street sank on weak US housing sales and a profit warning by social media firm Snap.
The Shanghai Composite Index advanced 0.8pc while the Nikkei 225 in Tokyo shed less than 0.1pc. The Hang Seng in Hong Kong gained 0.5pc.
Coming up today
Corporate: HICL Infrastructure, Marks & Spencer, Mediclinic International, Pets at Home, Severn Trent, SSE (full-year results); Intertek (trading statement)
Economics: World Economic Forum, financial stability review (EU); Fed minutes, durable goods (US)