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Energy price cap to hit £2,800 in October – here's everything you need to know
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Kissinger warns against the defeat of Russia as Western unity on sanctions frays
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FTSE 100 inches higher; Pound slumps against dollar after PMI miss
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Matthew Lynn: Working life is getting better, not worse – despite what the Left wants you to think
Ofgem has warned that the energy price cap will surge to £2,800 in October, piling even more pressure on already-strained household budgets.
The energy regulator said it expects the cap to rise 42pc from its current level of £1,971. That’s after a 54pc increase in April and up from £1,277 in October 2021.
Jonathan Brearley, chief executive of Ofgem, told MPs on the BEIS Committee: “The price changes are genuinely a once in a generation event not seen since the oil crisis in the 1970s.”
Ofgem said it will write to Chancellor Rishi Sunak to warn him of the rise. It comes after the regulator proposed to review the price cap every three months, instead of twice a year, in a move it said will help bring down prices sooner.
But industry analysts have cast doubts on these claims, forecasting that the cap will remain broadly unchanged after a review in January 2023.
05:54 PM
Wrap-up
That’s all for today! Thanks for following along. James will be back tomorrow.
05:36 PM
Stellantis and Samsung plot $2.5bn battery plant in US
Car maker Stellantis and battery maker Samsung will invest $2.5bn into a battery plant in Indiana as the former tries to step up its shift to electric vehicles.
Bloomberg reports:
The facility will have an initial annual output of around 23 gigawatt hours when it opens in 2025, and that will eventually increase to 33 gigawatt hours, the companies said Tuesday. The project will create 1,400 new jobs in and around Kokomo, which already is home to Stellantis engine and transmission plants.
05:07 PM
Airbnb pulling out of China – CNBC
Airbnb will close its domestic operations in China amid growing competition from local rivals, CNBC reports.
All mainland Chinese listings – homes and experiences – will be taken down by this summer.
05:00 PM
Nasdaq down 3pc on torrid day for social media companies
Over in New York, the tech-heavy Nasdaq index has come off its session lows, but is still down 3pc as social media companies sell off heavily.
04:29 PM
ITV and Royal Mail set to fall as Centrica and Johnson Matthey head for FTSE 100
Broadcaster ITV and monarchy-approved postage purveyor Royal Mail are both teetering on the edge of elimination from the FTSE 100, the index operator has warned.
In a set of indicative changes released ahead of the confirmed moves tomorrow, FTSE Russell said gas giant Centrica and chemicals company Johnson Matthey would likely take their spots.
The timing may be slightly awkward for Centrica given how much discussion there is over windfall taxes currently. The group’s shares are up about 16.3pc this year – but it’s having a bad day today so these predictions may have shifted.
03:56 PM
Biden hasn’t ruled out oil export controls – US energy secretary
Jennifer Granholm, the US energy secretary, has confirmed Joe Biden is still weighing up the possibility of oil export controls to ease pressure on domestic fuel prices.
Speaking to reporters, she said: “I can confirm the president is not taking any tools off the table.”
03:36 PM
Spiegel loses $1.4bn as Snap plunges
Wall Street is deep in the red today, with the tech heavy Nasdaq down about 3.3pc at present.
Today’s big disaster story is Snap, the creator of Snapchat, which has fallen 41pc in trading today after cutting revenue and profit forecasts.
The blow is so severe that it has cut chief executive Evan Spiegel’s net worth by 30pc, or $1.4bn, while chief technology officer Bobby Murphy has lost 36pc, or $1.8bn. Both are still worth more than $3bn.
03:23 PM
Glencore will pay $1.5bn to settle UK and US investigations
Glencore will pay $1.5bn to settle a pair of UK and US probes into allegations of wrongdoing at the group.
The commodities trader will announce the settlement later today, sources told Bloomberg.
Earlier today, the Swiss-headquartered company said it would appear in court today in relation to the twin investigations. It expects to settle both, and a separate Brazilian investigation, this year.
In February, it said $1.5bn had been set aside to to resolve potential settlement payments.
03:09 PM
Handing over
That's all from me today – thanks for following! My esteemed colleague Louis Ashworth is in the hot seat for the rest of the day.
02:52 PM
UK denies plans for Royal Navy to get grain from Ukraine
The Government has insisted there are no plans to send the Royal Navy to help get food exports such as grain out of the blockaded Ukrainian port of Odesa.
Fears of widespread food shortages are growing as Russian continues to steal key supplies and block exports from Ukraine, which is often dubbed the "breadbasket of Europe".
But a Government spokesman denied reports that warships could be sent to help secure the safe passage of grains.
He said:
Putin's despicable blockade of Odesa is preventing food getting to people who need it.
02:40 PM
Chart: Energy price cap to hit £2,800
02:33 PM
Shell investors vote down Follow This climate resolution
About 80pc of Shell's shareholders have voted against a climate resolution proposed by investor group Follow This.
The Dutch shareholder group had argued that the company's climate plans didn't go far enough and weren't aligned with the 2015 Paris climate accord.
Shell instead won support from 79.9pc of investors for its own proposals. Chairman Andrew Mackenzie said the results showed "we appear to be on the right track".
It comes after Shell's AGM was delayed for two hours when protesters took over the meeting and glued themselves to chairs. Three people were arrested following the protests.
02:20 PM
US security chiefs scramble to prevent Russian interference in midterms
US security chiefs are scrambling to prevent Russian interference in the midterm elections as they are "very concerned" about the Kremlin using cyber warfare and online disinformation.
Tom Rees in Davos has more:
Jen Easterly, US director of the Cybersecurity and Infrastructure Security Agency, said the US has been forced to beef up its election cybersecurity after the Kremlin was accused of influencing the 2016 vote to help Donald Trump win.
02:11 PM
Germany to bring back coal plants if Russia cuts off gas
Germany is planning to bring back coal and oil-fired power plants if Russia cuts off natural gas shipments.
Robert Habeck, economy minister, will present an emergency decree enabling the government to reopen the facilities in case of gas shortages, Bloomberg reports.
It comes even as Mr Habeck's Greens – part of Olaf Scholz's ruling coalition – pushes to bring forward the phase-out of coal to 2030. It was previously planned for eight years later.
Germany is resorting to desperate measures to keep the lights on and its factories running amid soaring prices and the threat of Russia cutting off supplies. Regulators are also drawing up plans to ration energy if needed.
01:57 PM
RenewableUK: Windfall tax would be 'retrograde step'
Dan McGrail, chief executive of RenewableUK, warns a windfall tax on renewable energy producers would set the UK back in the transition to clean power.
The Government’s main priority should be to help hard-pressed consumers and the best way to do that is to invest in renewables which are our cheapest sources of new power.
01:47 PM
Wall Street opens lower after Snap shock
Wall Street's main indices dropped at the opening bell following a strong relief rally in the previous session as weak forecasts from firms including Snapchat owner Snap added to nerves about the economy.
The tech-heavy Nasdaq tumbled 1.8pc, leading losses. The S&P 500 fell 0.8pc, while the Dow Jones was down 0.5pc.
01:38 PM
Petrol prices soar to new record high
In more grim news for bills today, the average petrol pump price has surged to a fresh record high.
The cost of unleaded petrol hit 169.61p a litre yesterday, according to figures from the RAC. That’s up from 168.67p on Thursday last week.
Fuel price have broken record after record in recent days, as the war in Ukraine offsets Rishi Sunak's fuel duty cut back in March.
In one positive development, though, diesel edged lower to 181.37p a litre yesterday, down from 181.48 the day before.
Simon Williams at the RAC said:
As ever-rising fuel prices are contributing to the cost-of-living crisis, we’re surely reaching a point where further intervention from the Chancellor is required to take the pressure off households and businesses.
01:27 PM
Resolution Foundation: Energy bill surge is 'untenable'
Torsten Bell, chief executive of the Resolution Foundation, says more Government support is inevitable after the energy price cap rise.
He says the increase will put 9.6m families in England in fuel stress this winter, meaning they'll spend more than 10pc of their budgets on energy. This is "totally untenable", he adds.
01:22 PM
National Energy Action: Price cap will strike terror into the hearts of millions
Adam Scorer, chief executive of fuel poverty charity National Energy Action, says the fallout from the price cap rise is "unthinkable".
Ofgem's warning that the price cap will rise again by over £800 in October will strike terror into the hearts of millions of people, already unable to heat and power their homes. It will plunge households into deep, deep crisis. The financial, social and health impacts are unthinkable.
01:10 PM
Energy suppliers to face more scrutiny as prices soar
Ofgem is preparing to ramp up its scrutiny of energy suppliers ahead of another jump in the price cap.
The regulator is expanding compliance reviews for energy firms, requiring them to respond to four additional assessments to ensure they are monitoring risks to their financial health and setting fair tariffs for customers, Bloomberg reports.
That adds to four other steps announced in April, with bills set to soar a further 42pc in October.
It comes after more than 4m British households saw their energy supplier go bust as firms were left unable to pass on higher wholesale costs to consumers.
In a letter to companies, Neil Lawrence, director of retail at Ofgem, wrote:
We intend these to start a culture change in our engagement with the energy retail sector, which will see a much stronger focus on obtaining proactive assurance that suppliers are set up to deliver high standards for consumers and are fit to operate in the market.
01:03 PM
Kwarteng: I'm confident of a deal to sell Bulb
Kwasi Kwarteng has said he's confident that a deal will be reached to sell collapsed energy supplier Bulb.
Speaking to MPs on the BEIS Committee, Mr Kwarteng said there was some interest from the private sector.
He added: "We don't, as a government, see ourselves running energy companies."
Bulb, the UK's seventh-largest energy supplier, was placed under special administration in November after it admitted it couldn't survive the sharp rise in wholesale gas prices.
It's estimated the bailout will cost the taxpayer more than £2bn.
12:57 PM
Scope: Price cap rise will be 'horrific'
James Taylor at disability equality charity Scope warned the impact of the price cap rising by £1,500 in a single year will be "horrific".
Many disabled people are already forced to commit a large amount of their income to energy costs. Disabled people often rely on energy intensive equipment like electric wheelchairs, electric hoists, or monitors.
12:53 PM
Everything you need to know about the energy price cap
The energy price cap rise will pile more pressure on to already struggling households and comes alongside an inflation rate of 9pc and higher taxes since last month, writes Will Kirkman.
Traditionally, the solution to rising gas and electricity tariffs was for customers to shop around for a better deal.
Energy price cap to hit £2,800 in October – here's everything you need to know
12:42 PM
Kwarteng: Windfall tax 'not necessarily the right move'
Business Secretary Kwasi Kwarteng has argued that a windfall tax is not necessarily the right way to help consumers struggling with the cost-of-living crisis.
Asked by MPs on the BEIS Committee whether he supported a new levy, he said: "I have been very clear about a windfall tax: I don't think it supports investment, I don't think it's necessarily the right thing."
Mr Kwarteng stressed that any decision would be for Chancellor Rishi Sunak to make.
12:35 PM
Uswitch: Need for more support 'could not be more urgent'
Justina Miltienyte, head of policy at Uswitch.com, says Ofgem's confirmation of the increase "confirms the worst fears of everyone who is currently struggling to pay their energy bill".
Although we have long expected the price cap will rise again in October, this is the first time the regulator has estimated how high it could soar.
12:26 PM
Energy bills to hit record levels
Sky's Ed Conway calculates that the next jump in the price cap will take energy bills to their highest as a proportion of household spending since records began in the 1950s.
The Bank of England has previously said energy bills will be at their highest since the 1980s.
The disparity comes from differences in how you measure household spending. Either way, though, it's going to be painful for British households.
12:18 PM
RBC: Energy windfall tax could cost UK £100bn
The latest predictions for the surge in the price cap will fuel calls for a windfall tax on the profits of energy companies.
Chancellor Rishi Sunak is said to be drawing up plans for a levy on electricity producers, as well as on major oil and gas firms.
But not everyone is in favour of such a move.
John Musk, an analyst at RBC, warned a new tax would be "very short-sighted" and could cost the UK £100bn in lost investment by 2030.
He also said a large element of the Government's new energy security strategy would be "at risk" if the plans went ahead.
Shares in energy firms including SSE, Drax Group and British Gas owner Centrica have all taken a beating today amid concerns about a possible windfall tax.
12:10 PM
Ofgem calls for more Government support
Ofgem boss Jonathan Brearley said the increase in the energy price cap meant "more is needed" and called on ministers to do more to support consumers.
He said:
There are significant lessons to be learned from this crisis and change is absolutely needed to the way we regulate the retail market.
11:40 AM
Ofgem boss: I know this will be distressing
Jonathan Brearley, chief executive of Ofgem, has acknowledged how distressing the price cap rise will be for households already facing record high costs.
Around 22m households will see their energy bills increase by more than £800 just as heating demand starts to pick up at the beginning of winter.
Mr Brearley said the period for assessing and determining the next price cap was only halfway through and that volatility in gas markets was still high.
11:27 AM
Graduates to earn £125,000 as London battles America for top legal talent
One of the City’s elite “magic circle” law firms has boosted the starting salary for its most junior solicitors to £125k, escalating a war for talent with aggressive American rivals.
Patrick Mulholland has more:
Clifford Chance updated its graduate recruitment website on Monday to reflect a 16pc salary bump to £125,000 from £107,500 – the second pay raise in just over six months.
Read Patrick's full story here
11:16 AM
Wall Street set to fall after Snap's profit warning
Wall Street looks set to drop at the opening bell after Snap's weak forecasts slammed the brakes on a brief rally.
The Snapchat owner plunged 29pc in pre-market trading after slashing its second-quarter earnings forecast and warning the economy had worsened faster than expected in the last month.
Google owner Alphabet, Twitter, Meta and Pinterest, which all earn a chunk of their revenue from advertising, fell between 3.7pc and 12.4pc.
This brought an end to yesterday's rally, when a rebound in banking and tech stocks helped lead Wall Street higher after a string of heavy losses driven by inflation and recession fears.
Futures tracking the tech-heavy Nasdaq dropped 1.7pc, while the S&P 500 was down 1.1pc. The Dow Jones lost 0.7pc.
11:06 AM
National Grid calls for local energy pricing
National Grid has called for a break-up of the electricity market so that different prices are charged in different parts of the country.
The company said so-called "nodal pricing" in the wholesale market would create a more efficient system and help to bring costs down.
It added that this system – coordinated by a central dispatch – was key to achieving a net zero electricity system by 2035.
The proposals raise the prospect of consumers paying different prices for their power up and down the country, though it's not yet clear which areas would face cheaper or more expensive tariffs.
Cian McLeavey-Reville at National Grid ESO said:
The options presented today lay the groundwork for a future energy system which is secure, reliable and offers value for money.
10:53 AM
BA owner faces revolt over 'excessive' bonuses
British Airways' parent company is facing a shareholder revolt amid a backlash over an "excessive" increase in share awards even as the pandemic sparked hefty losses.
International Airlines Group is braced for a substantial rebellion at next month's annual general meeting after Glass Lewis recommended that investors vote against the pay deal, Sky News reports.
The proxy adviser told clients that IAG's proposal to increase chief executive Luis Gallego's maximum share award under its restricted stock plan from 100pc of salary to 150pc was "misaligned with the stakeholder experience".
IAG was handed hundreds of millions of pounds in Government support during the pandemic, while it also suspended dividends and raised funds through the sale of new shares.
The airline said Mr Gallego voluntarily forfeited a £900,000 bonus last year and pointed out that the ratio between the pay of its chief executive and its average employee was among the lowest in the FTSE 100.
10:39 AM
Shell forced to pause AGM
Staying on the subject of climate change, Shell has been forced to pause its AGM after protesters derailed proceedings.
Chairman Sir Andrew Mackenzie asked police to clear the room at Central Hall in Westminster after repeatedly being interrupted by members of the audience.
The protesters accused the oil company of profiting from carbon-emitting products that contribute to climate change.
10:34 AM
Climate transition will cost finance sector up to £340bn, warns BoE
The Bank of England has warned that UK banks and insurers face climate-related losses of between £210bn and £340bn over the next three decades, depending on how quickly the Government acts to target net zero.
The central bank said the financial system was well placed to absorb those losses, though in the worst case scenario much of it would be passed on to consumers, with the poorest in society hit hardest.
The findings were outlined in the Bank's first ever stress test to assess how the financial services industry will cope with the transition away from fossil fuels.
Sam Woods, chief executive of the Bank's Prudential Regulation Authority, said:
Climate change will inevitably drive losses for banks and insurers, even in a scenario where governments around the world take swift and early action.
10:23 AM
Nato chief: We mustn't trade security for profit
Jens Stoltenberg, Secretary General of Nato, has launched a blistering attack on the West's economic ties with Russia and China, saying that profits shouldn't be pursued at the expense of long-term security.
Here's more from his speech at the World Economic Forum in Davos:
These massive sanctions remind us of one of the important lessons from this conflict – that we should not trade long-term security needs for short-term economic interests...
09:49 AM
Protesters target Shell AGM
Shell's annual general meeting has been plunged into chaos amid protests by Extinction Rebellion.
Protesters singing "we will, we will stop you" prevented chairman Sir Andrew Mackenzie from speaking during the meeting in London. They repeatedly chanted "Shell must fall".
Sir Andrew said he'd asked the police to remove the activists as they were refusing to allow him to conduct the meeting.
09:32 AM
Russia using food supplies as a weapon, says EU chief
Russia is using food supplies as a weapon with global repercussions, acting the same way as it does in the energy sector, EU chief Ursula von der Leyen has said.
Speaking in Davos, the European Commission President said "global cooperation" was the "antidote to Russia's blackmail."
She added: "In Russian-occupied Ukraine, the Kremlin's army is confiscating grain stocks and machinery... And Russian warships in the Black Sea are blockading Ukrainian ships full of wheat and sunflower seeds."
Russia's invasion of Ukraine – and the West's attempt to isolate Moscow as punishment – have sent the price of grain, cooking oil, fertiliser and energy soaring.
The Kremlin yesterday said the West was responsible for the global food crisis after imposing the severest sanctions in modern history on Russia over the war in Ukraine.
09:24 AM
Grant Shapps: UK will prioritise food if rail unions strike
Britain will prioritise the supply of food, goods and energy if railway workers vote to hold widespread strikes in the coming months, Grant Shapps has said.
The strike, billed by the rail workers union as the "potentially the biggest rail strike in modern history", has been proposed in protest at pay freezes and threats to jobs as part of spending cuts on the network.
Asked by the BBC about the Government's plans to ensure food supplies didn't run out as a result of any disruption to freight services, the Transport Secretary said: "We will have to prioritise freight and goods and energy supplies moving around."
The RMT strike ballot closes today. If the legal threshold for a strike is met, action could begin as early as June, it said.
Read more on this story: Emergency plans to stop food crisis as biggest rail strike in modern British history looms
09:15 AM
Property sales fall as market starts to cool
Property sales fell slightly in April as the market began to cool, but “intense competition” remains amongst buyers fighting over a chronic shortage of homes for sale.
Rachel Mortimer has more:
There were 106,780 transactions last month, almost 4pc lower than those recorded in March, according to the latest data from HM Revenue and Customs.
09:11 AM
Windfall tax would hurt North Sea investment, says Harbour Energy
A windfall tax on profits from energy sales would harm the level of investment in the North Sea, according to the boss of Habour Energy.
Linda Cook, chief executive of the FTSE 100 energy firm, warned a new levy would make Britain less attractive compared to other regions, adding: "Fiscal instability creates uncertainty".
She said higher taxes would mean less funding available for re-investment at a time when the industry is being "encouraged" to boost domestic oil and gas production and accelerate green energy projects to reduce reliance on Russia.
09:05 AM
Capital Economics: Weaker economy not yet easing prices
Nicholas Farr, assistant economist at Capital Economics, says the Bank of England will need to keep raising rates to ease surging prices.
The chunky fall in the composite activity PMI for May suggests economic growth has continued to slow to a crawl, but that inflationary pressures remain intense. That means interest rates still have much further to rise, from 1pc now to 3pc in 2023.
08:55 AM
Pound slumps after PMI shock
Sterling has fallen sharply against the dollar after the latest economic data fuelled fears of a recession.
The latest PMI survey revealed an unexpected slump in private sector growth to its lowest since last year's lockdown, with soaring prices the major culprit.
While the reading is still above 50 – meaning it's still expanding – the outlook is now highly uncertainty, and the Bank of England will likely face more pressure to act.
The pound slumped 0.7pc against the dollar to $1.2483.
08:51 AM
Lloyds: Outlook for businesses 'particularly uncertain'
Rhys Herbert, senior economist at Lloyds Bank, warns the current inflationary pressure show no signs of letting up.
Growth was always expected to slow as the economy returned to its pre-pandemic level, but the pace of the recent slowdown seems to have been greater than was generally anticipated. In particular the post-omicron pickup appears have fizzled out, quickly reflecting several uncertainties, including the Ukrainian crisis.
08:49 AM
Price rises fuel recession fears
The latest PMI figures are a bad miss, with the index of private sector growth unexpectedly collapsing to levels seen during the last Covid lockdown.
The speed of the slowdown was the fourth-largest on record and worse than anything seen before the pandemic.
The survey highlighted the devastating impact that surging prices are having on the economy and will likely pile more pressure on the Government to do more to help.
Chris Williamson, chief business economist at S&P Global , said:
The UK PMI survey data signal a severe slowing in the rate of economic growth in May, with forward-looking indicators hinting that worse is to come.
08:40 AM
UK growth slumps to weakest since lockdown
UK private sector firms have signalled a sharp slowdown in activity as the escalating cost-of-living crisis and wider impacts of the war in Ukraine took their toll.
The S&P Global/CIPS composite PMI came in at 51.8 in May, down sharply from 58.2 in April. That's the slowest rise in business activity since the economy began to emerge from lockdowns in March 2021.
Moreover, the month-on-month loss of momentum in May was the fourth-largest on record and exceeded anything seen prior to the pandemic.
The report showed the fastest rise in operating expenses since the index began in January 1998, led by a rapid acceleration in input cost inflation across the service economy.
Concerns about squeezed margins and weaker order books resulted in a considerable drop in business expectations for the year ahead, with the lowest private sector growth projections since May 2020.
08:29 AM
Gas prices rise with Russian flows in focus
Natural gas prices pushed higher this morning as the market focused on potential further disruptions to supplies.
Benchmark European prices ended three sessions of losses to rise as much as 3.6pc. In recent days they've been trading near to levels seen just before Russia's invasion of Ukraine. The UK equivalent rose 4.4pc.
Traders remain focused on interruptions to supplies from Russia. Moscow cut flows to Finland last week and to Poland and Bulgaria last month after they refused Putin's demand for rouble payments.
There's still uncertainty among EU nations about how they can pay for Russian gas without breaching sanctions.
Meanwhile, imports of liquefied natural gas have surged as the continent braces for a potential cut-off and tries to reduce its reliance on the Kremlin.
08:23 AM
Pound drops to one-week low against euro
Sterling has dropped to a more than one-week low against a strengthening euro but was little changed against the dollar ahead of PMI data that could shine more light on the UK's growth prospects.
The pound was down 0.3pc against the euro to 85.24pc, its weakest level against the single currency since May 16. Against the dollar it was broadly flat at $1.2590.
It comes after ECB chief Christine Lagarde she saw the deposit rate at zero or "slightly above" by the end of September, implying an increase of at least 50 basis points from its current level.
08:15 AM
Martin Sorrell: UK should press ahead with windfall tax
Sir Martin Sorrell has thrown his support behind an energy windfall tax amid growing calls for more support during the cost-of-living crisis.
Speaking to Bloomberg in Davos, the advertising mogul said: "They should do it... These are super-normal profits and this is an exceptional time."
While Labour has called for a levy on the profits of energy giants, the Government has so far resisted the move, saying it would deter investment.
Sir Martin acknowledged a windfall tax would deter investment, but said the cost-of-living crisis was so severe that it made sense.
There are also signs that ministers may be considering an about-turn on the issue. The FT reports that Rishi Sunak is preparing a tax on electricity generators, as well as on oil and gas producers.
08:10 AM
Avon Protection slumps as boss steps down
Shares in Avon Protection have slumped more than 15pc after it reported a drop in profit and said chief executive Paul McDonald was stepping down.
The beleaguered manufacturer, which specialises in respiratory protection equipment, said Mr McDonald will step down at the end of the financial year after 19 years at the business.
It came as the first reported a 70pc drop in operating profit for the first half of the year.
Analysts at Jefferies said the results were "complicated and very messy", adding that the year ahead will be "tough".
Avon has been plagued by a string of recent issues and has been forced to shut down its body armour division after admitting its bulletproof vests weren't bulletproof.
08:01 AM
Crossrail: Elizabeth Line finally opens
Amid all the gloom, there's a least some good news for London commuters and train enthusiasts.
The much-delayed and heavily over-budget Crossrail project has finally opened to passengers, allowing faster travel across the capital.
The Elizabeth line is initially open from Paddington to Abbey Wood, with the remainder of the line not expected to open until later this year.
London Mayor Sadiq Khan and Transport for London Commissioner Andy Byford travelled on the first westbound service that departed Paddington at 06:33 am, accompanied by hundreds of rail enthusiasts, some of whom had queued for hours.
Mr Khan said: "We should be incredibly proud of this fantastic new line, it is 22nd century fit. It's spacious, silent, comfortable; this is the game changer we need."
The Elizabeth line was supposed to open in December 2018 and at £18.8bn is £4bn over-budget.
07:51 AM
Energy firms lead FTSE losses amid windfall tax fears
It's a miserable morning for energy firms, which are suffering sharp losses amid fears they could be hit by a windfall tax.
Rishi Sunak is preparing a levy that would target more than £10bn in excess profits for electricity generators, including wind farm operators, the Financial Times reports.
SSE has slumped 8.4pc to the bottom of the FTSE 100, while Drax Group and Centrica are propping up the mid-cap index with losses of 12.5pc and 9.2pc respectively.
07:39 AM
KPMG fined £3.4m over Rolls-Royce audit
KPMG has been hit with a £3.4m fine for failing to address evidence of bribery while working on accounts for Rolls-Royce.
The Big Four auditor was told it could face a fine of up £4.5m, but saw this reduced after admissions related to the case.
The Financial Reporting Council first launched an investigation into KPMG's conduct in 2017 over bribery allegations following a probe by the Serious Fraud Office.
KPMG had been Rolls-Royce's auditor since 1990 but was sacked by the FTSE firm after agreeing a settlement with the SFO and US Department for Justice amid bribery claims. These resulted in the engineering giant paying out £670m in fines.
The FRC said its latest findings related to two sets of payments made by the company to agents in India, which "gave rise to allegations of bribery and corruption".
The regulator said that KPMG was aware of "allegations of bribery and malpractice through the use of intermediaries and advisers", which also involved a separate defence firm.
The FRC said the new findings amounted to "serious failures to exercise professional scepticism, to obtain sufficient, appropriate audit evidence and document this on the audit file".
07:33 AM
FTSE risers and fallers
The FTSE 100 has last ground in early trading as the global sentiment turned sour again after yesterday's brief respite.
The blue-chip index dropped 0.9pc, taking its cue from US futures as bleak results from social media firm Snap dented the mood. Energy firms were also a major drag.
Energy firm SSE was the biggest faller, losing more than 8pc following reports Rishi Sunak is preparing a windfall tax on electricity generators.
Royal Mail shed more than 5pc after Peel Hunt downgraded the stock to "sell" from "buy", saying it now assumes no dividends or buybacks citing a weakening consumer environment and inflationary pressures.
Advertising giant WPP tumbled 3.1pc to hit its lowest since March 8, while ITV dropped 3.6pc.
The domestically-focused FTSE 250 was down 1pc, with energy firms Drax Group and Centrica shedding 11pc and 8pc respectively.
07:25 AM
Supermarket sales fall as price rises squeeze shoppers
Supermarket sales have slumped as soaring prices force Britons to cut back on spending.
Sales were down 4.4pc in the 12 weeks to May 15, according to the latest figures. Over the last four weeks, grocery prices jumped 7pc – the biggest leap since May 2009.
Fraser McKevitt at Kantar said: “People are really feeling the squeeze at the supermarket tills and they’re having to stretch their budgets further to accommodate rising prices.
“To put the most recent numbers into context, if you were picking up supplies for a family fry up over the long weekend with toast, eggs, sausages, bacon, and beans it would cost you £6.83 – that’s a significant 40p increase on last year.”
There is some temporary respite ahead however, with the Jubilee Bank Holiday set to spark "bumper" supermarket sales, with alcohol, soft drinks, barbecue foods and desserts all expected to be in high demand.
07:10 AM
Investec: Windfall tax could risk energy investment
Sunak's mooted plans for a windfall tax on power producers is already getting some pushback.
Here's what Martin Young at Investec has to say:
A windfall tax on generation could possibly jeopardise much needed investment, and could see higher returns demanded.
07:06 AM
Sunak prepares windfall tax on electricity generators
Rishi Sunak is said to be drawing up plans for a windfall tax on electricity generators on top of hit to North Sea oil and gas producers.
The scheme would slap a levy on more than £10bn of excess profits for firms such as SSE, ScottishPower and EDF, the Financial Times reports. It would also include wind farm operators.
If confirmed, the move would go significantly beyond Labour's calls for a windfall tax on energy giants, as the Government looks for ways to ease the cost-of-living crisis for households.
The Chancellor previously opposed a windfall tax, but has since said he's "pragmatic" on the issue and that no options are off the table. Boris Johnson has also toned down his rhetoric.
07:01 AM
FTSE 100 opens lower
The FTSE 100 has started the day on the back foot, reversing yesterday's gains as investors turn their focus to the public finances.
The blue-chip index slumped 0.7pc at the open to 7,457 points.
06:56 AM
KPMG: Cost-of-living crunch to hit public finances
Here's some more from Tim:
Overall Government spending fell, largely because the more than £5bn spent in April 2021 on the furlough scheme and support for the self-employed was not repeated as the Covid schemes have closed.
06:54 AM
National Insurance raise boost Sunak's coffers
Rishi Sunak raked in £10bn more last month than in April 2021 as the national insurance raid and the economic recovery combined to help restore the public finances, raising pressure on the Chancellor to ease the cost of living crisis with tax cuts or cash handouts.
My colleague Tim Wallace has more:
But Mr Sunak still needed to borrow £18.6bn in the month, the Office for National Statistics said, down from £24.2bn a year earlier but still the fourth-highest of any April on record.
06:50 AM
Fertiliser costs have tripled, warns industry chief
Aside from the impact of Russia's war on harvests and exports, there's a further threat to global food supplies: fertilisers.
Svein Tore Holsether, president of chemical and fertiliser company Yara International, warns some fertilisers have tripled in cost, putting them out of reach of some farmers.
He told BBC Radio 4:
What we are seeing in the recent months or you now for some parts of fertiliser it has tripled in cost. That is a consequence both of availability of fertiliser but also because crop prices have moved up which links very closely to the cost of fertiliser.
06:45 AM
Shapps warns of 'hunger and famine'
Good morning.
We start the day with a stark warning from Grant Shapps over the potential fallout from the food crisis.
The Transport Minister said the world could suffer "a lot of hunger and even famine" as a result of shortages sparked by Putin's war in Ukraine.
He said it was "absolutely essential" that Ukraine – known as the breadbasket of Europe – could continue to export grains.
Ministers are currently considering options to intervene in the crisis, with the Times reporting that the Royal Navy could be sent to the Black Sea to protect ships carrying food supplies out of Ukraine.
Mr Shapps said he held a meeting with Oleksandr Kubrakov, Ukraine’s infrastructure minister, and that different options were under consideration,
5 things to start your day
1) Henry Kissinger warns against defeat of Russia as Western unity frays: Former US Secretary of State urges Ukraine to cede territory to Putin in order to end war
2) Cost of electric car batteries set to soar as war disrupts supply chain: Price rises will be the ‘greatest obstacle’ to more consumers going electric, International Energy Agency warns
3) Nicola Sturgeon accused of 'manufacturing' Scotrail crisis: Scottish government refused to discuss pay ahead of industrial action that sparked wave of timetable cuts, says union.
4) Households brace for internet blackout as wave of bankruptcies threaten: Soaring inflation pushing smaller broadband suppliers to the brink could leave homes without connectivity
5) Millions ‘marching to starvation’ as Putin unleashes global food catastrophe: UN chief attacks Russia for sparking worst humanitarian crisis since Second World War.
What happened overnight
Hong Kong stocks opened lower on Tuesday, with the Hang Seng falling 0.4pc.
The Shanghai Composite Index retreated 0.2pc, while the Shenzhen Composite Index on China's second exchange dropped 0.6pc.
In Tokyo, the benchmark Nikkei 225 index was down 0.5pc in morning trade, while the broader Topix index slipped 0.5pc.
Coming up today
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Corporate: Cranswick, HomeServe, RS Group (full-year results); Bytes Technology, Greencore, Shaftesbury, SSP (interims); Hill & Smith Holdings, Hilton Food (trading statement)
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Economics: World Economic Forum (EU); services PMI (UK, US, EU), manufacturing PMI (UK, US, EU); composite PMI (US, EU); new home sales (US)