Putin losing energy war as European gas supplies near record levels

Vladimir Putin has seen Russian revenues from gas tumble from highs set in August – Sputnik/Mikhail Metzel via Reuters

Europe is on course to end the winter with near record volumes of gas in storage, dealing a blow to Vladimir Putin’s efforts to fund his war in Ukraine.

Combined supplies in the European Union and the UK were equivalent to 731 terawatt-hours on February 15, according to data from Gas Infrastructure Europe, essentially the same as the previous seasonal record set in 2020.

European natural gas prices have tumbled to their lowest level in 17 months, with benchmark Dutch futures falling below €50 for the first time since September 1, 2021, as the continent gets used to life without Russian energy.

Prices have plunged more than 80pc from their August peak when Russian gas cuts hit Europe with about $1trn in costs, sending inflation surging to its highest levels in decades.

It comes as Russia is selling the equivalent of £100m worth of foreign currency a day in a bid to balance its books amid towering spending and slumping energy revenues as it fights its war in Ukraine.

Moscow’s finance ministry has pledged to stick to running a budget deficit of no more than 2pc of gross domestic product (GDP) this year, even as its spending outweighed income by nearly $25bn (£21bn) in January.

Russia is selling 8.9 billion roubles (£100m) worth of foreign currency per day to cover the deficit and the government plans to levy a one-off “voluntary” tax on big business.

Gas prices in Europe have fallen dramatically thanks to relatively mild weather over winter and efforts to reduce consumption and boost reserves.

06:06 PM

See you on Monday morning

That’s it from me tonight, have a great weekend!

05:49 PM

Ex-Serco boss starts new role

The former boss of Serco and the grandson of Winston Churchill has been appointed chairman of Smith & Nephew, the medical company which makes knee replacements.

Retail editor Hannah Boland reports…

Rupert Soames will take up the post in September as the business embarks on a turnaround in an effort to stem the slump in its share price.

Smith & Nephew is worth around 40pc less than it was at the start of the pandemic after Covid restrictions and NHS backlogs meant operations were either delayed or cancelled.

It has also more recently been hit by supply issues. Smith & Nephew makes joint replacements as well as wound dressings and sports medicine products. The company was founded in Hull in 1856 when a chemist developed a new method of refining cod liver oil.

Mr Soames’ appointment comes amid a wider shake-up at the top of the business. Last February Smith & Nephew brought in a new chief executive to help spur growth, saying Deepak Nath was joining the company at an “inflection point”.

Marc Owen, senior independent director at Smith & Nephew, said: “We believe that Rupert’s extensive track record of value creation in global companies and deep understanding of corporate governance will help Deepak Nath and his team deliver on their existing plans to grow the business and to improve its operational performance.”

Mr Soames left Serco, which is one of Britain’s biggest outsourcers, in January after saying it was time to “outsource” himself following nine years at the helm. During that time he oversaw a turnaround of the business including helping to repair its relationship with the Government. Serco was paid more than £600m to run some of the contact-tracing call centre testing sites during the pandemic.

Although that revenue stream has since dropped off, the company raised its sales forecasts last year, after signing more contracts for work on UK and Australian immigration systems, as well as healthcare and defence in the US.

Rupert oversaw Serco’s turnaround, including helping to repair its relationship with the Government – Luke MacGregor/Bloomberg

05:23 PM

Return on six-month US bonds soar

The gap between returns on six-month US Treasury bonds and the broad-based S&P 500 index is closing.

The yield on six-month bonds today has risen to a high of 5.053pc, a level not seen for over a decade.

Kathy Jones, the chief fixed income strategist for the Schwab Center for Financial Research explains:

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05:08 PM

Bulgaria scraps plans to join euro by Jan 2024

Bulgaria, the European Union’s poorest member state, has abandoned plans to adopt the euro by January 2024 amid continued politial turmoil.

The country, which saw inflation soar to 14.3pc last year, hoped to join the bloc’s official currency in hopes of boosting investment and credit security.

However, Bulgaria still does not meet the entry requirement on inflation and has not made some necessary legal changes, said finance minister Rossitsa Velkova.

The required changes will have to be made once a new parliament convenes after April’s early elections, triggered after failed attempts to form a government.

This could see Bulgaria join the euro by January 2025 instead.

Without a clear euro entry target within the next six monts could harm Bulgaria’s credit ratings, said Ms Velkova.

04:49 PM

FTSE 100 ends four-day closing streak

The FTSE 100 has managed to end the trading week above 8,000 points, after dipping to as low as 7,957.69 earlier today.

It closed down 0.10pc at 8,004.36, dragged down by NatWest’s full year results and fresh inflation concerns provoked by stronger-than-expected retail sales data.

Today’s choppy performance contrasts ends a week of milestones for Britain’s blue-chip index. On Wednesday, it passed 8,000 for the first time in history. Yesterday, it set a new intraday record of 8,047.06. And until today, the UK’s top equity index broke the closing record for four consecutive days.

The FTSE 250 also had a tough day: closing 0.46pc to 20,088.93.

04:27 PM

Russia delays release of 2022 GDP figures

Russia has postponed the release of its full year gross domestic product (GDP) figures, according to the Federal State Statistics Service.

The Russian government agency, also known as Rosstat, said on its website that its full year GDP figures for 2022 will now be released on Wednesday 22 February. They were suppoed to be released this afternoon.

No explanation was provided for the change.

Moscow’s finance ministry has pledged to stick to running a budget deficit of no more than 2pc of gross domestic product (GDP) this year, even as its spending outweighed income by nearly $25bn (£21bn) in January.

04:00 PM

Handing over

That is all from me for this week. Here is the customary handover to my colleague Adam Mawardi, who will keep you up to speed as you head into the weekend.

03:57 PM

Space X fined $175,000 for failing to share collision data

Space X faces a $175,000 civil penalty for failing to share collision analysis prior to a launch in August.

The private space business, whose chief executive is Elon Musk, was accused by the Federal Aviation Administration in the US of failing to submit data at least seven days before a launch of its Starlink Group 4-27 mission.

The data is used to “assess the probability of the launch vehicle colliding with one of the thousands of tracked objects orbiting the Earth,” the FAA said.

Space X has 30 days to respond. Here is a reminder of its first private astronaut mission last year.

03:35 PM

KPMG settles £1.3bn lawsuit with Carillion liquidators

KPMG has settled the £1.3bn lawsuit brought by the administrators of collapsed contracting giant Carillion who accused the accounting firm of negligent and misleading audits.

The Big Four firm’s chief executive Jon Holt called Carillion an “extreme and serious corporate failure” adding it is “important that we learn the lessons from its collapse”.

The terms of the settlement have been kept confidential.

The Official Receiver, acting on behalf of Carillion’s creditors, had accused KPMG of failing to spot misstatements about the group’s accounts and providing misleading financial statements.

The contractor’s collapse in 2018 was one of the biggest corporate casualties in British history, costing 3,000 jobs and leaving 30,000 suppliers and subcontractors with £2bn in unpaid bills.

Carillion – REUTERS/Darren Staples

03:14 PM

‘We’ll have to continue to raise rates’ says Fed chief

We have yet more uncomfortable Fed comments for the markets.

A Federal Reserve Governor has said the central bank should keep raising interest rates to reduce inflation which remains “much too high”.

Michelle Bowman told a conference in Tennessee today:

I don’t think we’re seeing what we need to be seeing, especially with inflation.

I think we’ll have to continue to raise the federal funds rate until we start to see a lot more progress on that.

Federal Reserve Governor Michelle Bowman – REUTERS/Ann Saphir

03:03 PM

Wall Street moves further downward

Wall Street stocks retreated in early trading, extending a pullback following data earlier this week that raised worries about more Federal Reserve interest rate hikes.

The yield on the 10-year US Treasury note, closely watched as a barometer of monetary policy expectations, rose closer to 4pc.

The Dow Jones has fallen 0.4pc to 33,576.51, while the S&P 500 has slipped 4,056.03. The tech-focused Nasdaq Composite has slumped 1.1pc to 11,729.72.

It comes as economists at Goldman Sachs and Bank of America have added to their forecasts another 25 basis-point increase at the US Federal Reserve’s June meeting later this year.

Goldman said the move was “in light of stronger growth and firmer inflation news” while Bank of America blamed “resurgent inflation and solid employment gains”.

Bank of America expects the Fed’s first rate cut to come in March 2024.

Among individual companies on the markets, Deere & Company jumped 5.8pc after reporting higher profits and offering an upbeat assessment of its market, with “low machine inventories” boosting demand for agriculture equipment.

02:50 PM

Founder of Chinese bank disappears amid Xi Jinping’s crackdown

The billionaire founder of a leading Chinese investment bank has disappeared amid a continuing crackdown on free enterprise by the Communist country’s leader Xi Jinping.

Banking & financial services correspondent Simon Foy has the latest:

China Renaissance, the Hong Kong-listed boutique bank, told investors on Thursday night that it has been unable to contact Bao Fan, its chairman, chief executive and controlling shareholder.

Shares in the bank plummeted 50pc in early trading on Friday before paring some of the losses to trade around 30pc lower.

In a message sent to staff this morning, Wang Lixing, head of investment banking, said “Good morning . . . I think everyone has had a restless night”, and told employees “not to spread or believe rumours”.

Read on for details.

The announcement that Bao Fan, one of China’s best-connected founders, is uncontactable sparked a drop in his bank’s share price – REUTERS/Mike Blake

02:32 PM

Wall Street markets plunge at the opening bell

US markets have taken a tumble amid fears that accelerating inflation could prompt the Federal Reserve to keep monetary policy restrictive through the year.

The Dow Jones Industrial Average fell 0.4pc at the opening bell to 33,572.75.

Meanwhile, the broad-based S&P 500 sank 0.5pc to 4,068.41 and the tech-heavy Nasdaq Composite fell by 0.7pc to  11,777.51.

02:00 PM

British oil producer to cut back on North Sea projects

A London-listed oil producer is delaying new drilling at its flagship North Sea field, becoming the latest British company to blame the windfall tax for curbing its plans.

Energy correspondent Rachel Millard has the details:

Enquest said the raid on profits had led it to “optimise its capital programme”, with spending for 2023 now estimated at $160m (£134m) and extra drilling planned for its flagship Kraken field deferred.

Amjad Bseisu, chief executive, said the Government’s Energy Profits Levy would “have implications for our capital allocation strategy and our UK production growth ambitions”.

Enquest is the third oil and gas producer to publicly announce changes to its plans in response to the increase in the levy from 40pc to 75pc to pay for support for households struggling with high energy bills.

Read why its shares have fallen 11.7pc.

01:43 PM

Segro tops FTSE 100 as warehouse rents grow

Property investor Segro is top of the pile on the FTSE 100 today after revealing it had benefited from record growth in rents from its warehouses last year.

Shares rose 3.8pc after the company said had seen strong demand for the sites and has focused on logistics locations in European cities where supply of space is limited.

It said that pre-tax profit rose 8.4pc on an adjusted basis to £386m.

Chief executive David Sleath said:

Our portfolio valuation fell in the second half of 2022 as investment yields rose and values weakened across the sector in response to macroeconomic conditions.

However, the impact on our portfolio was mitigated by its high quality and the strong rental growth we delivered across all of our markets.

01:20 PM

Insurer Allianz posts record profit

German insurance giant Allianz reported record results for last year as higher prices for policies helped offset a weaker performance in its asset management unit.

Net profit came in at €6.7bn (£6bn), it said, up 2pc on a year earlier.

The group’s underlying, or operating, profit jumped by nearly 6pc to a record €14.2bn (£12.6bn).

Revenues also hit a new record in 2022, climbing by 2.8pc to €152.7bn (£135.7bn).

The company said higher volumes and prices for policies had boosted earnings at its flagship property and casualty division.

The life-health unit meanwhile had benefitted from business growth in Asia and the acquisition of Aviva’s operations in Poland.

Allianz – REUTERS/Charles Platiau

12:59 PM

Asda gives hourly-staff 10pc pay rise

Asda has announced it will give hourly-paid staff a 10pc pay rise, with rates rising to £11 per hour from April and £11.11 per hour from July.

The supermarket is spending a record £141m on the increases for more than 115,000 staff at its 633 stores.

It follows an 8pc pay increase for hourly-paid retail roles last year.

The new rates, which exceed the Government’s National Living Wage and the Real Living Wage, were agreed with the Usdaw trade union.

Asda – REUTERS/Molly Darlington

12:49 PM

US markets poised to fall

Wall Street is expected to open lower in the face of hawkish comments from Federal Reserve officials that ramped up investors’ expectations of higher interest rates.

Contracts for both the S&P 500 and Nasdaq 100 retreated after the underlying indexes sank more than 1pc on Thursday.

Federal Reserve Bank of Cleveland President Loretta Mester said she had seen a “compelling economic case” for rolling out another 50 basis-point hike, and St Louis President James Bullard said he would not rule out supporting a half-percentage-point increase at the March meeting.

Futures contracts on the Dow Jones Industrial Average were down 0.6pc, S&P 500 futures were off 0.8pc, and Nasdaq 100 contracts had fallen 1pc in premarket trading.

12:26 PM

Schiphol airport boss apologises after ‘poor financial results’

Amsterdam’s Schiphol airport has posted an annual loss after severe staff shortages led to massive queues, lost luggage and flight cancellations last year.

Royal Schiphol Group’s chief executive Ruud Sondag delivered an apology to staff and shareholders over the “poor financial results”, as the airport posted a net loss of €77m (£68.5m).

He said: “Never before in Schiphol’s history have we disappointed so many travellers and airlines as in 2022.”

The global aviation industry struggled to cope with a surge in travel last year as the world reopened in the wake of the coronavirus pandemic.

Large layoffs during the pandemic led to massive staff shortages – especially at security screening – leading to long queues at Schiphol airport, sometimes stretching far outside terminals.

Travellers left stranded at Schiphol airport after unannounced strikes in April last year – REUTERS/Anthony Deutsch

12:12 PM

French fossil fuel emissions reach five-year high amid nuclear reactor outages

French greenhouse gas emissions from its power sector jumped to a five year high in 2022 as nuclear outages forced the country to use more gas.

Emissions from generating electricity rose 16pc to the equivalent of 25m tons of carbon dioxide, grid operator Reseau de Transport d’Electricite said.

The increase shows how the country’s green ambitions have come under pressure as a result of nuclear maintenance and repairs.

The outages at its nuclear plants, which have been undergoing repairs, have been costly, with prices of electricity, gas and carbon permits soaring across the continent last summer in the wake of Russia’s invasion of Ukraine.

France’s nuclear output plunged to its lowest level since 1988, turning the country into a net importer of power for the first time in four decades and exacerbating Europe’s energy crunch.

The energy crisis has eased in recent months amid mild winter and as EDF made some progress on reactor repairs.

French greenhouse emissions have increased as a result of outages at its fleet of nuclear reactors – Nathan Laine/Bloomberg

11:59 AM

Mercedes-Benz eyes more direct sales in Britain amid earnings pressure

Mercedes-Benz Group has warned of lower earnings this year amid economic uncertainty – but the company has a plan.

The carmaker said it would look to sell more vehicles directly in major markets such as Britain and Germany as it continues to target high margins on flat volume.

The company expects a lower adjusted return of 12pc-14pc on sales for its cars division in 2023 and group earnings slightly below 2022, even though sales at the Mercedes-Benz Cars business are expected at the same level.

It pointed to sluggish demand in Europe, a slow rebound from coronavirus restrictions in China, high energy and raw material costs and inflationary pressures to justify the forecast, adding prospects were better in the United States.

The carmaker is “quietly” turning to a direct sales model in various European markets including Britain and intended to do so in Germany as well.

Chief executive Ola Kaellenius said: “You turn yourself from a wholesaler into a retailer. It changes your whole attitude in how you run the business.”

Mercedes chief executive Ola Kaellenius at its annual press conference in Stuttgart – Christoph Schmidt/dpa via AP

11:42 AM

Purplebricks puts itself up for sale and makes fresh jobs cuts

Purplebricks, the online estate agent, has put itself up for sale and is exploring a break-up of the business as it warned on profits and launched a fresh round of job cuts.

Matthew Field has the latest:

The company said that costs related to its turnaround plan had been more than expected, meaning it will incur one-off charges of £1.2m. It now expects to post a loss for the year of between £15m and £20m.

Purplebricks’ share price slumped as much as 15pc following the announcement, adding to a sharp fall in the company’s value. Its shares were trading at just over 8p this morning, compared with their peak of around 500p in 2017.

The company has hired bankers to advise on a strategic review which it said could result in a sale of part or all of the business.

Read how Purplebricks’ attempts to turn around its business have caused problems.

The online estate agents has suffered as a result of the downturn in the housing market and disruption from internal restructuring – May James/REUTERS

11:25 AM

Gupta steps in with rescue deal for steel firm

Collapsed steel firm Aartee Bright Bar is set to be merged with Liberty Steel Group after steel tycoon Sanjeev Gupta stepped in to take over the business.

GFG Alliance, owned by Mr Gupta and his family, has bought Aartee and filed an application to challenge the administration, it revealed today.

The rescue deal comes after Aartee, the UK’s largest distributor of engineering steel products and a key customer of Mr Gupta’s Liberty Steel, called in administrators Alvarez & Marsal (A&M) earlier this month.

The West Midlands-based business blamed tough economic conditions and surging metal costs for the downfall.

GFG said it wants to restart operations in a bid to save the firm’s 250 staff, who operate from two productions sites in Willenhall and Dudley, West Midlands; and three distribution and sales offices in Rugby, Warwickshire; Bolton, Lancashire; and Newport in South Wales.

Over time, the business would be integrated into Liberty’s operations.

An employee passes the electric arc furnace at Liberty Steel’s Aldewerke mill in Rotherham – Chris Ratcliffe/Bloomberg

11:09 AM

I asked the Bing chatbot if it loved me – but it just wants to be friends

Watch below as our tech reporter Gareth Corfield got hands on with Microsoft’s AI search – with some surprising results.

He explains here what the new Bing Chat tool is like.

10:48 AM

Pound drops further amid ‘compelling case’ for strong US rate rise

The pound has continued its slide against the dollar as markets respond to comments from US Federal Reserve chiefs suggesting that interest rates will rise higher than expected.

Federal Reserve Bank of Cleveland President Loretta Mester said she had seen a “compelling economic case” for rolling out another 50 basis-point increase in the US, while St Louis President James Bullard said he would not rule out supporting a half-percentage-point increase at the March meeting.

Adding to central bank-related gloom, Bank of England Chief Economist Huw Pill said the central bank is likely to raise interest rates at a slower pace this year, but it needs to take care not to end its cycle of hikes too soon.

Sterling has dropped 0.3pc against the dollar so far today and is headed towards $1.19.

It has fallen 2.2pc since hitting a high of £1.22 on Tuesday.

10:25 AM

Oil declines as dollar strengthens

Oil is heading for a modest weekly decline amid rising US supplies and the prospect of further interest rate rises by the Federal Reserve.

Brent crude, the international benchmark, has fallen 1.6pc today to below $84 a barrel and is 5.5pc lower since the start of the year.

US-produced West Texas Intermediate has slipped 1.7pc and is headed towards $77, dropping for a fourth day in the longest run of losses this year.

The US crude benchmark has declined by about 2pc this week, and is lower year-to-date. Data this week showed another build in US inventories, which swelled to the most since 2021.

Traders are factoring in the prospect of far tighter monetary policy as the US central bank seeks to drive down inflation.

Two policymakers, Loretta Mester and James Bullard, have signaled they may favour returning to sharper rate increases.

That is aiding the dollar, which makes most commodities more expensive.

10:06 AM

Russia will be forced to cut output again this year, say economists

Russia will likely cut its oil output by an additional 200,000 barrels per day as the year progresses, according to economists, as the Kremlin struggles to find buyers amid Western sanctions.

Moscow announced last week that it would cut production by 500,000 barrels per day from March, sending oil prices surging.

However, the cut could be the first concrete sign that Russia is concerned about its ability to maintain output capacity, according to Capital Economics. Commodities economist Bill Weatherburn said:

We suspect Russia may have been concerned that finding buyers for its petroleum products would be more difficult than its crude oil after the EU’s import ban and Western price cap came into effect on February 5.

The EU’s share of Russia’s product exports was larger than its share of Russia’s crude exports.

What’s more, major buyers of Russia’s crude, China and India, are themselves typically net exporters of petroleum products.

Rather than risk being seen to struggle to sell petroleum products, and with only limited crude oil and product storage facilities, Russia may have pre‑emptively cut oil production. It would also be aware that pre-announced output cuts typically give a boost to prices.

We think Russia’s crude oil production will decline by an additional 200,000 barrels per day to 400,000 barrels per day by the end of this year.

A worker walks past a drilling rig at a well pad of the Rosneft-owned Prirazlomnoye oil field outside Nefteyugansk – REUTERS/Sergei Karpukhin

09:44 AM

NatWest boss says customers face ‘real challenges’

Dame Alison Rose, who has become the first NatWest chief executive to receive a bonus since 2008, has been talking about the cost of living crisis. She told Bloomberg TV:

People are facing real challenges with the squeeze of the cost-of-living, with higher interest rates, with higher inflation.

In the UK one in four people have less than £100 in savings. That means their financial resilience, when you do get hits as we have in the economy are tough.

09:25 AM

Russia’s foreign reserves to be sold off as it fights budget deficit

Russia is selling the equivalent of £100m worth of foreign currency a day in a bid to balance its books amid towering spending and slumping energy revenues as it fights its war in Ukraine.

Moscow’s finance ministry has pledged to stick to running a budget deficit of no more than 2pc of gross domestic product (GDP) this year, even as its spending outweighed income by nearly $25bn (£21bn) in January.

However, analysts had predicted that falling oil and gas revenues, the lifeblood of Russia’s economy, would see its deficit widen to 5.5 trillion roubles ($73.2bn, £61.4bn), equivalent to 3.8pc of GDP, unless oil prices recover.

Russia is selling 8.9 billion roubles (£100m) worth of foreign currency per day to cover the deficit and the government plans to levy a one-off “voluntary” tax on big business.

Finance Minister Anton Siluanov told state-owned Rossiya 24: “The main thing is to look at the budget balance, which will be formed at the end of the year.

“And for the end of the year, our plan is 2pc of GDP, no one has cancelled it, and these parameters will be maintained.”

Russia’s Finance Minister Anton Siluanov – Alexander Astafyev\TASS via Getty Images

09:04 AM

Gas prices fall to lowest level since 2021

European natural gas prices have fallen below €50 for the first time in 17 months as the continent gets used to life without Russian energy.

Prices have plunged more than 80pc from their August peak when Russian gas cuts hit Europe with about $1trn in costs, sending inflation surging to its highest levels in decades.

Prices have since turned around sharply thanks to relatively mild weather over winter and efforts to reduce consumption and boost reserves.

Benchmark front-month futures dropped as much as 4.8pc to €49.5 a megawatt-hour, to the lowest intra-day level since September 1, 2021.

Tobias Davis, head of LNG for Asia at brokerage Tullet Prebon, said: “The market absorbs patches of demand appearing in Far East markets just as Europe remains unseasonably warm, windy and well supplied to meet a slowing demand profile.”

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08:49 AM

NatWest drags down the FTSE 100

The FTSE 100 edged lower as investors weighed up the impact of stronger than expected retail sales on the Bank of England’s interest rate plans, while NatWest fell to the bottom of the index after its full-year results.

The blue-chip index lost 0.6pc but is set to post a weekly gain. The index recorded its highest closing level on Thursday.

Data showed British retail sales volumes unexpectedly rose in monthly terms in January, but the overall picture remained one of weak demand from inflation-hit consumers.

Shares of NatWest tumbled as much as 9.5pc despite reporting a 33pc jump in its 2022 profit, dragging the banking sector down 1.2pc.

The bank reported higher costs and an outlook for profit that was below what some analysts had expected.

The more domestically focussed FTSE 250 midcap index fell 0.8pc.

08:34 AM

ECB chief warns markets risk underestimating inflation

One of the European Central Bank’s most senior officials said that investors risk underestimating the persistence of inflation, and the response needed to bring it under control.

Executive Board member Isabel Schnabel said “we are still far away from claiming victory,” blaming the strength of underlying price pressures and faster wage increases.

She said the economy’s reaction to interest-rate increases may prove weaker than in prior episodes, and if that transpires, “we may have to act more forcefully”.

The central bank has all but promised another half-point step in March, a hawkish stance that chimes with the US Federal Reserve’s own approach to continue steady increases.

Questioned if economists and investors are justified in assuming the ECB will halt tightening at a rate of 3.5pc, Ms Schnabel signaled that may be too optimistic.

It comes as retail sales figures in Britain showed an unexpected increase by 0.5pc in January, indicating the Bank of England may have more work to do to tame inflation.

European Central Bank executive board member Isabel Schnabel – Ben Kilb/Bloomberg

08:18 AM

EDF suffers record annual loss in wake of Ukraine war

EDF reported a record annual loss and massive debt as the fallout from the Ukraine conflict and idling of several nuclear reactors weighed on the company.

However, its UK profits climbed to £1.1bn, following a loss of £21m in the previous year, due to stronger performance from its nuclear fleet and higher prices.

Debt at France’s state-controlled energy giant ballooned to €64.5bn (£57.5bn) in 2022 while losses totalled €17.9bn (£16bn).

EDF struggled with a drop in electricity output last year as it had to close several of France’s 56 nuclear reactors to fix corrosion problems and a heatwave reduced hydro-power production.

After Russia’s invasion of Ukraine sent energy prices soaring, the French government required EDF to sell energy at below cost to consumers to help them pay utility bills.

Chief executive Luc Remont said: “The 2022 results were significantly affected by the decline in our electricity output, and also by exceptional regulatory measures introduced in France in difficult market conditions.”

EDF’s revenue rose by 70pc to €143.5bn (£128bn) last year due to the rising energy prices.

In Britain, it plans investment of more than £13bn over the next two years, largely at Hinkley Point C, with about £2bn is earmarked for its existing nuclear fleet and renewables projects.

EDF – REUTERS/Benoit Tessier

08:10 AM

Markets fall after strong retail sales

The FTSE 100 has fallen back after its record close on Thursday following data showing stronger than expected retail sales in January.

It increases the chance that the Bank of England will tighten monetary policy and raise interest rates higher for longer to tame inflation.

The FTSE 100 has fallen 0.5pc to 7,969.82 while the midcap FTSE 250, which is more exposed to the UK market, has dropped 0.7pc to 20,046.07.

07:49 AM

Retailers will remain ‘mindful’ despite unexpected sales boost

After UK retail sales unexpectedly rose 0.5pc in January, Aled Patchett, head of retail and consumer goods at Lloyds Bank, said:

Retailers will be hoping a rise in sales, though still some way below pre-Covid-19 levels, signals the beginning of a recovery in consumer spending.

Yet they’re also mindful that spending habits won’t recover fully until cost-of-living pressures have subsided. In the short term, inflation could push prices up further and reduce discounts offered by retailers.

As the labour market tightens, there’s a risk that retailers will be drawn into a race to raise employees’ salaries.

This could fuel inflation, which although likely to temper towards the second half of the year, will still remain uncomfortably high for many households and continue to erode disposable incomes.

07:45 AM

Retail sales show ‘clearly still life in the consumer’

It is fair to say this morning’s retail sales figures for Britain have given businesses and investors a real surprise – and made the outlook more uncertain for the Bank of England’s path of raising interest rates.

Neil Birrell, chief investment officer at Premier Miton Investors, said:

There is clearly still life in the consumer, despite ongoing pressures from impending increases in council tax, amongst other things.

Those thinking that the Bank of England might start moderating policy in the short term will be disappointed by this number.

Although, overall, the economic data is ambiguous, making the short and medium-term outlook really very uncertain.

07:33 AM

Rising fuel sales boost retail, says ONS

ONS director of economic statistics Darren Morgan said:

After December’s steep fall, retail sales picked up slightly in January, although the general trend remains one of decline.

In the latest month, as prices continue to fall at the pumps, fuel sales have risen.

Meanwhile, discounting helped boost sales for online retailers as well as jewellers, cosmetic stores and carpet and furnishing shops.

However, after four months of consecutive growth, clothing store sales fell back sharply.

07:31 AM

NatWest chief executive handed bonus for first time since 2008 bailout

NatWest’s chief executive will receive a bonus for the first time since its 2008 bailout amid criticism over the generosity of the bank’s savings rates.

The banking group, which is still 45pc state-owned, revealed its profits surged by more than a third to reach £5.1bn last year as it ramped up mortgage lending amid higher interest rates.

NatWest gave a total payout of £5.25m to its chief executive, Dame Alison Rose, last year, handing out an annual bonus for the first time since its bailout in 2008.

Dame Alison was paid a salary of £2.4m, with a bonus of £643,000, with the rest of her remuneration made up of share-based awards under a long-term incentive plan.

NatWest also ramped up the bonus pool for its bankers by nearly £70m in 2022, to total £367.5m.

The lender said it handed back £2.6bn to the UK Government over 2022 as it moves closer to being private again.

Earlier this month, MPs summoned bosses of Britain’s four biggest banks to answer questions on why some had been slow to pass on the Bank of England’s rate rises to savers.

The Treasury Select Committee also quizzed bosses on why mortgage rates were rising more rapidly than the return offered to savers when the base rate went up.

NatWest was rescued by a £45.5bn government bailout during the 2008 financial crisis when it was known as Royal Bank of Scotland.

NatWest – Vuk Valcic/SOPA Images/LightRocket via Getty Images

07:24 AM

Retail sales increased by 0.5pc in January

Retail sales rose unexpectedly last month as the January sales brought people into stores.

The volume of goods sold in stores and online increased by 0.5pc after a 1.2pc decline in December, according to the Office for National Statistics (ONS).

Economists had expected a drop of 0.3pc indicating that British consumers are weathering the cost of living crisis better than feared.

The ONS said discounting helped boost sales, although retailers that sold food and clothing suffered.

It is the first rise in retail sales in three months.

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07:17 AM

Good morning

Retailers recorded an unexpected rise in sales last month as online shops were boosted by demand for discounts, according to official figures.

The Office for National Statistics (ONS) said retailer sales volumes increased by 0.5pc in January, following a fall of 1.2pci n December.

The rise was beyond the expectations of analysts, who had predicted a decline in for the month.

Retail sales volumes are, nevertheless, still 1.4pc lower than pre-pandemic levels from February 2022.

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What happened overnight

Tokyo stocks ended lower, tracking Wall Street losses after hot US wholesale price inflation and hawkish comments from a Fed official reignited rate hike fears.

The benchmark Nikkei 225 index was down 0.7pc to end at 27,513.13, while the broader Topix index lost 0.5pc to 1,991.93.

Thursday’s jobless report and hotter-than-expected inflation data have cast a shadow over Asian markets, with MSCI’s broadest index of Asia-Pacific shares outside Japan at its lowest in more than a month and set for a third straight week in the red.

The last time the index had a run like that was back in October, in the midst of peak hawkishness and king dollar’s reign.

Wall Street’s equity indexes closed deep in the red following the higher-than-expected US producer prices data and hints from Federal Reserve officials that interest rates could increase by another 50bp.

The Dow Jones Industrial Average sank 1.3pc to 33,696.85. The broad-based S&P 500 Index dropped 1.4pc to 4,090.41, while the tech-heavy Nasdaq Composite Index fell 1.8pc to 11,855.83.

Meanwhile, yield on the benchmark 10-year Treasury bond surged past 3.8pc to the highest level this year.

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