Russia’s economy has plunged into its worst crisis for almost three decades as the country is battered by Western sanctions, a leaked copy of the Kremlin’s own forecasts shows.
The Russian finance ministry is predicting a 12pc collapse in GDP this year, the biggest contraction since 1994 when it was shifting towards capitalism under Boris Yeltsin, the first post-Soviet president.
A collapse would wipe out around a decade of economic growth.
The leak will pile pressure on Vladimir Putin, who on Monday presided over a scaled-down version of Russia’s annual Victory Day parade marking the end of the Second World War in Europe.
Russia has been hammered by heavy sanctions following the invasion of Ukraine, which are about to be ratcheted up further as Brussels discusses a ban on oil from the country.
It has left the Kremlin teetering on the edge of a default after it last week narrowly avoided a failure to pay foreign debts for the first time since the Bolshevik revolution a century ago.
The Kremlin has yet to issue a public economic outlook, but the finance ministry’s figures – seen by Bloomberg – are more pessimistic than the central bank’s forecasts of a contraction between 8pc and 10pc this year.
The International Monetary Fund expects an 8.5pc decline. The dire figures emerged as Mr Putin appeared at a Victory Day parade in Moscow.
The president did not use a speech to formally declare war against Ukraine or announce a larger-scale mobilisation, continuing to refer to the conflict as a “special operation”.
Krishna Guha, an analyst at Evercore, said Mr Putin “is wary of risking domestic support for the war through mass conscription”.
Meanwhile, European officials are locked in talks over how to press ahead with a mooted buying ban on Russian oil and gas.
The European Commission is reportedly mulling offering more money to landlocked eastern European countries to build support for a ban, which is facing stiff opposition from Hungary.
Britain and the UShave already vowed to ditch Russian oil, and European countries are also seeking to wean themselves off gas supplies from Moscow. Russia’s central bank has repeatedly slashed interest rates in recent weeks after raising them at the onset of conflict.
The cuts, aimed at driving spending, came despite a surge in inflation to 17.7pc.
Speaking in late April, governor Elvira Nabiullina warned of a severe recession, soaring prices and severe disruption to Russia’s labour market. She said the Russian economy would likely then remain stagnant in 2023.
Official figures showed Russia’s economy grew by 3.7pc in the first quarter, but Ms Nabiullina said this was a temporary boost driven by people stocking up on the goods.
Russia’s economy shrank by 3pc during 2020, the first year of the pandemic, and 7.8pc in 2009 amid the global financial crisis. Business surveys suggest activity is continuing to contract as sanctions cause demand to dry up.
Bosses are increasingly pessimistic about the conditions they face as they whittle down work backlogs amid falling orders.
Companies are firing staff and trying to cut costs as they grapple with soaring cost inflation, according to the latest purchasing managers’ index data from S&P Global.
Several of the world’s biggest shipping companies are boycotting Russia, piling further inflationary and supply pressure on the country.
Survey data tracked by Goldman Sachs suggests Russian economic activity is stabilising at about 10pc below pre-invasion levels.
“Overall, mid-term developments will depend on how effectively Russia can substitute imports and redirect (energy) exports,” said analyst Clemens Grafe.
05:14 PM
Wrapping up
That’s all from us today, thank you for following! Before you go, have a look at the latest stories from our business reporters:
05:12 PM
Philip Morris in talks to buy smokeless tobacco products maker in multi-billion deal
Philip Morris is in talks to buy Swedish Match, a maker of smokeless tobacco products, in a deal that would speed up the Marlboro maker’s push into cigarette alternatives.
The pair confirmed the discussions in statements Monday. Discussions are advanced and a deal could be announced in the coming days, Bloomberg reported.
Swedish Match has a market valuation of about $11.5bn (£9.3bn).
04:56 PM
Elon Musk responds to analysts’ concerns on Twitter deal
Elon Musk said that analysts at Hindenburg should “look on the bright side of life sometimes” after they said there is “significant risk” his $44bn (£35bn) takeover deal for Twitter is priced again with a lower offer.
The research house, which shorts shares in the social media, said that “multiple developments have weakened the company’s position” since the bid was announced, “threatening the current deal dynamic.”
Shares have fallen as much as 4pc today.
Interesting. Don’t forget to look on the bright side of life sometimes!
— Elon Musk (@elonmusk) May 9, 2022
04:36 PM
FTSE 100 closes lower
The FTSE 100 has closed lower as tightening lockdowns in China added to investors’ concerns about a recession amid the Bank of England’s dour economic outlook last week.
The index fell 2.3pc to record its lowest closing since March 16, with miners and oil majors Shell, BP leading losses as commodity prices retreated on demand concerns.
“The biggest concern that markets have at the moment about UK is that we’re likely to see fewer rate hikes over the course of the next 12-18 months and much slower growth, but I don’t think we’re going to be unique in that,” said Michael Hewson at CMC Markets.
04:18 PM
Warehouse workers at Oxford Mini plant to strike
Warehouse workers at the Mini plant in Oxford are planning to strike this month after rejecting a pay increase proposed by their employers, logistics firm Rudolph & Hellman.
Workers’ union Unite said 200 staff will strike on 10, 12, 17 and 19 May after 91pc of its members voted against the pay rise, with a 98pc turnout.
The workers, made up of warehouse staff and shunter drivers, handle components for BMW and the strikes are expected to impact production at the Mini plant.
The company offered a rate of £11.33 per hour for day shifts and £12.27 for late shifts, but the workers demanded £12.50 and £13.50 respectively.
03:42 PM
Noble and Maersk Drilling get a step closer to $3.4bn merger approval
Noble and Maersk Drilling have offered to sell some of their offshore operation platforms to avoid a probe from the Competition and Markets Authority over their proposed $3.4bn (£2.6bn) merger, potentially smoothing the way for approval.
The watchdog said it had “reasonable grounds” for believing the concessions might be accepted and it’ll make a further decision on the proposals to address competition concerns.
The CMA initially found that the tie-up could increase operating costs for oil and gas producers in the North Sea. A final decision is expected by July 6.
03:22 PM
‘Put money back into the pockets of people’ by postponing national insurance raid, bosses say
Rishi Sunak should reverse the National Insurance hike to “put money back into the pockets of people” amid the cost of living crisis, business leaders have said. Louis Ashworth has the story:
The British Chambers of Commerce(BCC) called for an “emergency budget” including the reversal of the recent increase to National Insurance Contributions as part of efforts to reduce cost pressures on businesses. The business group said the Chancellor should also cut the VAT on firms’ energy bills from 20pc to 5pc for at least a year.
Companies are facing cost pressures from a variety of corners, including rising prices for energy and raw materials, and a sustained elevation in freight transport costs.
Shevaun Haviland, BCC director general, said: “The costs crises facing firms and people in the street are two sides of the same coin. If we can ease the pressure on businesses then they can keep a lid on the price rises being driven by surging energy bills, staff shortages and higher taxes.
“Firms will then have the breathing space they need to raise productivity and strengthen the economy. But a change of course is needed now, if the government does not act immediately then rising costs will put our economic recovery in a stranglehold that will have repercussions for years to come.”
03:16 PM
Handing over
That’s all from me today – thanks for following along! Giulia Bottaro will take the reins from here.
03:02 PM
Software firm Ideagen agrees £1.1bn takeover
Software company Ideagen has agreed to be bought for £1.1bn, but said it is also still in talks with a second potential suitor.
The business employs 5,000 people and counts seven of the top 10 accounting firms in the UK among its clients, as well as many of the world’s biggest defence and pharmaceutical companies.
The deal with Hg Pooled Management was announced this morning and values the company’s shares at 350p each.
But shares were trading higher than this after leaping 46.5pc, indicating that investors might expect a separate bid from France’s Astorg. Ideagen said it was still in discussions with Astorg.
02:45 PM
Bruised pound falls to new two-year low
Struggling sterling dropped to a two-year low for the third straight day as traders’ mood turned increasingly negative on the economic outlook.
In a volatile session that saw the pound briefly jump higher, sentiment remained overwhelmingly downbeat after the Bank of England warned the economy will contract in 2023.
Weak export growth data from China compounded these fears, with Beijing’s zero-Covid policy sending shockwaves through the wider global economy.
The pound last was last trading down 0.2pc against the dollar at $1.2325, having dropped to its lowest since June 2020. Against the euro, it slipped 0.1pc to 85.53p.
02:32 PM
Shares in Tesla rival Rivian tumble as IPO lock-up expires
Shares in Tesla rival Rivian slumped more than 14pc in early trading this afternoon as some early investors got their first chance to offload shares.
Selling restrictions on certain investors and insiders ended on Sunday, freeing up a sizeable chunk of Rivian’s float for public trading. Shares have collapsed 82pc from their November highs.
All eyes will now be on Rivian’s two biggest corporate backers – Amazon and Ford – to see if they start reducing their stakes. Amazon owns about 17.7pc of Rivian, while Ford owns 11.4pc.
Few on Wall Street expect Amazon to lighten its position, but Ford is a different story. CNBC reported over the weekend that Ford plans to sell 8m Rivian shares through Goldman Sachs.
02:13 PM
EU mulls more money to win over Russian oil ban sceptics
The European Commission is said to be considering offering more money to landlocked eastern European states in a bid to convince them to agree to a Russian oil ban.
The measures are part of a wider package of new sanctions against Russia, but the size of the investment still needs to be agreed, Reuters reports.
Another potential sticking point is said to be Cyprus’ concerns about a proposed ban on the sale of real estate to Russians.
The EU is also said to be watering down its sanctions by dropping a ban on EU tankers carrying Russian oil. That follows opposition from member states including Greece.
01:58 PM
Bank of England official calls for rapid interest rate rises
Raising interest rates quickly may spare households an even bigger squeeze on living standards, according to a top Bank of England policy maker.
Speaking to the Resolution Foundation think tank, Michael Saunders said he feared inflation expectations may take off unless the Bank acts firmly now.
Mr Saunders was one of only three members who voted for an aggressive 50 basis point increase last week. The Bank raised rates by 25 basis points to 1pc.
The MPC member, who steps down in August, warned that inflation was “uncomfortably high” and that failing to act swiftly “could require a sharper adjustment in monetary policy… and result in an even worse outcome for real incomes and living standards”.
The Bank of England is grappling with soaring inflation – which it forecast will top 10pc in inflation – as well as a slowdown in growth, as it warned the UK economy will shrink by 0.25pc next year.
01:42 PM
Wall Street slides at the open
Wall Street’s major indices slid at the opening bell as investors are gripped by concerns over the economic outlook.
The tech-heavy Nasdaq led the declines, dropping 1.8pc. The S&P 500 fell 1pc, while the Dow Jones shed 0.7pc.
01:27 PM
Billions pledged for Britain’s Trident replacement as new Cold War era dawns
Britain has invested £2bn to forge ahead with its new nuclear deterrent amid the rising threat from Vladimir Putin’s invasion of Ukraine.
Helen Cahill has more details:
The Ministry of Defence has awarded contracts to BAE Systems and Rolls Royce to build the Dreadnought submarines which will replace the current Vanguard submarines carrying Britain’s nuclear warheads.
The third phase of the programme is projected to cost nearly £10bn in total and will deliver the first submarine for trials at sea.
BAE and Rolls Royce are manufacturing four Dreadnought submarines, which will be the largest ever built for the Royal Navy.
First Sea Lord Admiral Sir Ben Key said the continuous defence system would provide “the ultimate guarantee of security” for Britain over the next fifty years.
The first submarine is under construction in the Barrow-in-Furness shipyard and is due to be delivered in 2030.
BAE has described the project as “one of the world’s most complex engineering challenges”. The submarine will be 153.6 metres in length, equivalent to three Olympic swimming pools, and will be manned by 130 crew members.
01:14 PM
Russia poised for worst economic slump since Yeltsin
The dire internal forecasts from Russia’s Finance Ministry suggest the country could be on track for its worst economic decline since 1994.
A 12pc contraction in GDP would be the deepest since the days of Boris Yeltsin, who served as Russia’s first president after the collapse of the Soviet Union.
Yeltsin, who presided over Russia’s faltering move to capitalism, was a controversial figure who came under fire for his handling of the country’s economy, not to mention his erratic behaviour and heavy drinking.
12:43 PM
Made.com snaps up online marketplace Trouva
Made.com has snapped up online homeware platform Trouva in a bid to ramp up its growth plans.
The furniture retailer said the deal will help expand its online marketplace business. Terms were not disclosed.
London-based Trouva was launched in 2015 and has relationships with more than 700 boutiques across Europe. It will continue to operate as a standalone business, led by current bosses Alex Loizou and Dimple Patel.
Made added that the acquisition means it will be able to “avoid some” anticipated investment spending on its marketplace business.
It therefore expects capital expenditure of up to £18m for 2022, having previously forecast spending of up to £20m.
Shares in Made jumped 4pc after the announcement.
12:25 PM
Bitcoin drops to lowest level since July 2021
Bitcoin has slumped to its lowest level in almost a year amid a sell-off in cryptocurrencies as investors flee riskier assets.
The world’s largest digital coin fell as much as 4.6pc and was trading at around $32,800 – its lowest since July 2021.
Most cryptocurrencies have come under pressure as fears about tightening monetary policy and a slowdown in global economic growth rattled investors.
12:12 PM
EU chief: Unanimity voting no longer makes sense
European Commission President Ursula von der Leyen has warned that unanimity voting on key policy areas no longer made sense if the EU wanted to move quickly.
She told the European Parliament: “I have always argued that unanimity voting in some key areas simply no longer makes sense if we want to be able to move faster. Or that Europe should play a greater role – for example in health or defence.”
The EU chief also said that she would be ready to back treaty change where needed to deliver on EU citizens’ ideas on the bloc’s future.
It comes amid divisions between members states over the EU’s plans to block oil imports from Russia.
11:59 AM
Apple exec quits over working from home row
An Apple executive has quit the company in protest over the tech giant’s demands that staff return to the office for three days a week.
James Titcomb reports:
Ian Goodfellow, Apple’s director of machine learning, told staff on leaving that he disagreed with the company’s insistence on staff returning to its Silicon Valley headquarters, according to technology website The Verge.
He is reported to have said: “I believe strongly that more flexibility would have been the best policy for my team.”
Apple staff must currently work at least one day in the office and from May 23, they will be required to come into work on Monday, Tuesday and Thursday. Staff will be able to work from home or in the office on Wednesday and Friday and work remotely for four weeks a year.
The policy is stricter than many of those at Silicon Valley firms such as Meta, Google and Twitter, where staff have been told they can work remotely permanently or have been given more flexibility over when they work in an office.
Apple staff have protested over the company’s demands and said that employees are leaving because of the requirements, but Mr Goodfellow is the most senior reported departure.
11:11 AM
Nasdaq set to slide 2pc as Wall Street sell-off continues
Wall Street looks set to continue its slump this afternoon as investors fear aggressive interest rate rises by the Federal Reserve, while a slowdown in China is fuelling recession fears.
The tech-heavy Nasdaq led the declines, with futures tumbling 2pc. Tech giants Microsoft, Apple, Amazon, Google owner Alphabet, Meta and Tesla were all down between 2pc and 3pc in pre-market trading.
The benchmark S&P 500 fell 1.6pc, while the Dow Jones was down 1.4pc.
Traders are expecting the Fed to raise interest rates by 75 basis points at its next meeting, after announcing a 50 basis point increase this month.
Tech stocks have borne the brunt of the recent sell-off, as their returns and yields are discounted more heavily when US Treasury yields rise.
10:57 AM
Commodity trader Trafigura backs new UK lithium plant
Commodity trader Trafigura is investing in a project to develop the UK’s first lithium refinery as it bets on surging demand for the metal used in electric vehicle batteries.
Trafigura will invest in the plant, which is being developed by Green Lithium, and will also supply feedstock.
The project aims to sell batter-grade lithium chemicals to electric vehicle makers across Europe, with initial production targeted for the end of 2024.
Sean Sargent, chief executive of Green Lithium, said:
The electric revolution is fundamental to reducing the carbon emissions that contribute to global climate change and ensuring net-zero targets can be met.
Green Lithium’s refinery will accelerate the adoption of electric vehicles and sustainable energy storage through the increased supply of low-carbon, battery-grade lithium chemicals – a key component of lithium-ion batteries.
10:41 AM
China faces ‘complicated and grim’ future as zero-Covid hits economy
China’s premier has warned its job market faces a “complicated and grim” outlook as the country’s zero-Covid strategy causes trade exports to plunge, writes Louis Ashworth.
Li Keqiang warned of job losses as Beijing and Shanghai tightened curbs on residents as part of efforts to contain the pandemic.
He instructed government departments and regional authorities to focus on measures aimed at helping businesses avoid shedding jobs.
New figures released by China’s National Bureau of Statistics showed joblessness rose to 5.8pc in March, the highest since May 2020.
Mr Li said: “Stabilising employment matters to people’s livelihoods, it is also a key support for the economy to operate within a reasonable range.”
It came as data showed China saw a further trade slowdown in April as local lockdowns curb demand, hit production and spur logistics issues in the world’s second-biggest economy.
10:23 AM
EU industry chief to meet Elon Musk
EU industry chief Thierry Breton will meet Elon Musk in Texas today to discuss global supply chain issues and new rules on policing online content.
The pair will meet this afternoon in Austin, where his electric vehicle firm Tesla is headquartered. It comes weeks after the world’s richest man secured a $44bn deal to buy Twitter.
Musk has put free speech at the heart of his pledge to revitalise Twitter, but his comments sparked a response from Mr Breton that the platform must comply with the EU’s new Digital Services Act tackling illegal online content.
A spokesman for the EU chief said:
Tech and supply chains will be high on the agenda at Tesla with Elon Musk.
Free speech will also be on the menu between Thierry Breton and Elon Musk. So will EU regulation. Expect exchange on the Digital Services Act and how ‘new’ Twitter will play by European rules.
10:08 AM
FTSE 100 drops on China growth fears
The FTSE 100 has extended its losses in morning trading to mark a downbeat start to the week.
The blue-chip index slumped 1.2pc, with the decline fuelled by China growth worries and the Bank of England’s grim outlook for the UK economy.
Miners were the biggest drag, with Glencore, Rio Tino and Anglo American all losing ground.
Investors were already rattled after the Bank of England issued a warning over the double risks of a recession and inflation surging past 10pc.
This was compounded by the slowest growth in Chinese exports in two years as Beijing’s zero-Covid policy takes its toll.
09:57 AM
Northern Line to reopen next week
The Bank branch of the Northern Line will reopen next week after months of works that disrupted a key commuting route into the City of London.
Transport for London confirmed services from Kennington to Moorgate will resume in full on May 16 after shutting down in January.
The closure allowed for works to increase capacity at Bank station, which has been plagued by overcrowding at peak times, as well as making the stop more accessible for passengers with disabilites.
09:35 AM
Morrisons takes control of McColl’s
Morrisons has emerged victorious in a battle to take control of failed convenience store chain McColl’s, snubbing the billionaire owners of Asda.
The supermarket giant, which is owned by the US private equity firm Clayton, Dubilier & Rice, has seen off competition from petrol station operator EG Group after a dramatic bidding war over the weekend.
The deal, which will be structured as a pre-pack administration, will ensure all of McColl’s stores and workforce is preserved, Sky News reported.
McColl’s, which has a debt pile of around £170m, was left teetering on the brink of collapse after it fell into administration on Friday, putting 16,000 jobs at risk.
Morrisons had been the frontrunner to take control of McColl’s last week before lenders rejected a rescue deal that would have seen £100m of debt rolled into the supermarket chain.
EG Group, whose billionaire owners the Issa brothers also control Asda, launched a rival bid, which it later improved to cover funding for the company’s pension scheme.
This prompted Morrisons to table a second offer last night that included a pledge to repay lenders in full immediately – a key sticking point in its original proposal.
08:37 AM
Gas prices fall as Russia tries to calm buyers over payments
Natural gas prices declined this morning as Russia tried to reassure buyers that they can keep paying for gas without breaching sanctions.
The market has been seized by supply concerns about Putin demanded that “unfriendly” nations pay for gas supplies in roubles. Poland and Bulgaria have already been cut off after they refused the demand.
But in a letter seen by Bloomberg, Gazprom told European clients that a new order published by the Kremlin on May 4 “clarifies the procedure” set out in the initial decree on ruble payments for gas.
It’s not clear whether this will be enough to calm EU fears, however.
Benchmark European prices fell 7.6pc, while the UK equivalent was down 9.4pc.
08:27 AM
BP ‘to buy stake’ in $36bn hydrogen hub
BP is reportedly set to buy a stake in a $36bn (£29bn) green hydrogen project in western Australia and become its developer.
The investment in the Asian Renewable Energy Hub could be announced within days, The Australian newspaper reported.
The project aims to install 26 gigawatts of solar and wind capacity over a 6,500 square kilometre stretch of the Pilbara region. It’s hoping to produce about 1.8m tonnes of hydrogen a year while plotting exports as soon as 2027.
08:15 AM
Pound slides as Sinn Fein win fuels Brexit concerns
Sterling is continued its slide against the dollar after the Bank of England’s grim forecast for the economy, while Sinn Fein’s election victory sparked fresh Brexit worries.
The pound slumped to its lowest in two years last week after the Bank warned the UK economy will contract in 2023 and forecast inflation at more than 10pc later in the year.
Analysts also warned of tensions over the Northern Ireland border after Sinn Fein, whose ultimate goal is a united Ireland, became the biggest party in Northern Ireland’s Assembly for the first time.
The pound dropped 0.5pc against the dollar to $1.2287. Against the euro, it was down 0.1pc at 85.61p.
08:04 AM
Morrisons gatecrashes Issa brothers’ bid for McColl’s
ICYMI – Morrisons sought to gatecrash a takeover for failed convenience store chain McColl’s last night in a snub to the billionaire owners of Asda who were on the brink of securing a deal.
Gareth Corfield has more details:
Morrisons, which is owned by the US private equity firm Clayton, Dubilier & Rice, has made a second offer to buy McColl’s that includes a pledge to repay its lenders in full immediately, one of the key sticking points of the supermarket’s previous bid, Sky News reported.
PwC is understood to have last night taken final offers from Morrisons and EG Group, the petrol forecourt empire owned by the billionaire Issa brothers who are also behind Asda.
McColl’s, which has a debt pile of around £170m, fell into administration Friday, putting 16,000 jobs at risk.
Morrisons had been in pole position to take control of McColl’s last week before lenders rejected a solvent offer that would have involved them rolling over more than £100m of debt into the supermarket chain, but being repaid in full as the loans expired.
07:56 AM
Shaftesbury and Capco in talks over real estate merger
Here’s some more on the story behind Capco’s share price movement this morning:
Shaftesbury and Capital & Countries have confirmed they’re in advance discussions to create a real estate giant that would own assets across some of London’s most sought-after areas.
The merger would create a REIT (real estate investment trust) focused on the West End, including Covent Garden, Carnaby, Chinatown and Soho.
Under the proposed terms of the deals, Shaftesbury would own 53pc of the combined company, while Capco would own 47pc. Capco currently holds a stake of around 25pc in Shaftesbury.
The two firms said Norway’s sovereign wealth fund – a major investor in both – had backed the all-stock deal.
Ian Hawksworth, chief executive of Capco, would lead the combined group, which could be worth around £3.6bn.
07:44 AM
FTSE risers and fallers
The FTSE 100 has dipped at the open, following Asian markets lower as lockdowns in China added to investor concerns after the Bank of England’s dire warnings last week.
The blue-chip index fell 0.2pc in early trading, with miners leading losses as metal prices dropped on demand concerns.
Rio Tinto, Glencore and Anglo American were the biggest drags on the index. Rightmove was the largest faller, sliding more than 4pc after it announced the departure of its chief executive.
Bucking the trend were energy giants Shell and BP, which rose amid ongoing concerns about an EU oil embargo.
The domestically-focused FTSE 250 slumped 1pc. Capital & Countries dropped more than 6pc amid merger talks with real estate rival Shaftesbury.
07:33 AM
Activist Dan Loeb boosts stake in Shell
Activist investor Dan Loeb has boosted his stake in Shell amid booming profits for the oil giant.
His hedge fund Third Point added to its position in the first quarter and also took a long position in miner Glencore, citing demand for copper and nickel for the transition to renewable energy.
Mr Loeb revealed his stake in Shell in October and called for a break-up of the company, with its renewables operations separated from its legacy business.
It comes after Shell reported that its profit nearly tripled to a record in the first quarter as it cashed in on surging energy prices.
07:20 AM
China’s export growth slumps to two-year low
China’s export growth has slumped to its slowest in almost two years as the fallout from Beijing’s zero-Covid policy adds to global economic woes.
Exports in dollar terms grew 3.9pc in April from a year earlier, dropping sharply from the 14.7pc growth reported in March. It was the slowest pace since June 2020.
Imports were broadly stable year-on-year, improving slightly from a 0.1pc fall in March.
The lacklustre figures show China’s trade sector, which accounts for about a third of total GDP, is losing momentum as lockdowns in cities such as Shanghai hammered supply chains.
The problems heighten the risk of a deeper economic slowdown in the world’s second-largest economy and beyond.
07:11 AM
Rightmove boss to step down after 16 years
In corporate news this morning, Rightmove chief executive Peter Brooks-Johnson has announced he’s stepping down after more than 16 years at the firm.
The UK’s largest property website said Mr Brooks-Johnson will remain in the role until its full-year figures are published in February 2023. The company is now starting the search for his successor.
The Rightmove chief joined the company in 2006 and rose to the top job in May 2017. He was previously a management consultant with Accenture and the Berkeley Partnership.
Shares slid 4.8pc following the announcement.
Mr Brooks-Johnson said: “With Rightmove progressing well on its mission to make home moving easier and our strong trading from 2021 continuing into 2022, I have decided it is an appropriate time to seek a new challenge.”
Andrew Fisher, chairman of Rightmove, said: “Peter has made a significant contribution to the success of Rightmove over the past 16 years and whilst we are disappointed that he will be leaving the business, we understand his decision.”
07:03 AM
FTSE 100 dips at the open
The FTSE 100 has started the week in negative territory after a grim outlook from the Bank of England rattled investors last week.
The blue-chip index fell 0.2pc at the open to 7,374 points.
07:02 AM
Japan joins Russian oil ban
Japan has rallied behind its G7 allies in vowing to end imports of Russian oil, though it warned the move would take time.
Prime Minister Fumio Kishida said it was an “extremely difficult” decision, but that G7 unity was important.
It’s likely to have only a limited impact, given Japan imported only 3.6pc of its crude oil from Russia in March. Still, it will add to pressures pushing global energy prices higher.
Japan also said it would retain its stake in the the Sakhalin 1 oil and Sakhalin 2 liquefied natural gas projects in Russia.
06:54 AM
UK targets metals in fresh £1.7bn of Russian sanctions
The UK has announced a fresh round of sanctions against Russia and Belarus – targeting £1.7bn of trade.
The Department of International Trade said the new measures will target goods including platinum and palladium, which are used to make mobile phones and computers.
Import tariffs will cover £1.4bn of goods, while planned export bans will hit £250m in sectors of the Russian economy most reliant on UK products, including chemicals, plastics, rubber, and machinery.
It takes the total value of products subjected to British sanctions to more than £4bn.
Anne-Marie Trevelyan, Secretary of State for International Trade, said:
We are determined to do our utmost to thwart Putin’s aims in Ukraine and undermine his illegal invasion, which has seen barbaric acts perpetrated against the Ukrainian people.
This far-reaching package of sanctions will inflict further damage on the Russian war machine. It is part of a wider coordinated effort by the many countries around the world who are horrified by Russia’s conduct and determined to bring to bear our economic might to persuade Putin to change course.
06:46 AM
EU puts Russian reserves in its sights
Good morning.
A top EU officials has proposed that the bloc should seize $300bn of frozen Russian foreign exchange reserves to help fund the reconstruction of Ukraine.
The West has taken control of around half of Putin’s $600bn of gold and forex reserves, and officials are now considering how these could be used to support Ukraine’s recovery.
The seizure of foreign exchange reserves would be a dramatic move, but EU foreign policy chief Josep Borrell pointed to the US decision to set aside $3.5bn of the Afghan central bank’s assets to pay for humanitarian aid and compensation for victims of the 9/11 attacks.
He told the Financial Times: “I would be very much in favour because it is full of logic. We have the money in our pockets, and someone has to explain to me why it is good for the Afghan money and not good for the Russian money.”
5 things to start your day
1) Bond tremors hit Italy as eurozone risk returns with a vengeance Italian political risk is back on the table, just as the ECB debt shield disappears
2) Bank of England staff in the office just one day a week Staff spend the majority of the week working from home despite ministers urging workers to go back to the office
3) Overhaul ‘outdated’ laws and allow insects to be fed to pigs and chickens, Tesco boss says Plus: From insect feed to vertical farms – we need a bonfire of red tape to deliver the food of the future
4) Morrisons gatecrashes Issa brothers’ bid for McColl’s The supermarket has launched a last-gasp attempt to wrest the convenience store chain from the clutches of Asda’s owners
5) ‘Save less and borrow more’ to avoid recession, economists say Rampant inflation and growing uncertainty mean experts have slashed their forecasts for household consumption
What happened overnight
Tokyo stocks opened lower on Monday, tracking US falls on investor concern over higher interest rates, with focus shifting to Japanese corporate earnings.
The benchmark Nikkei 225 index was down 1.12pc, or 302.68 points, at 26,700.88 in early trade, while the broader Topix index dropped 0.79pc, or 15.12 points, to 1,900.79.
While mainland Chinese stocks dropped at the open over global inflation worries and the toll of Beijing’s Covid lockdown policies.
The Shanghai Composite Index fell 0.16pc, or 4.89 points, to 2,996.67 in early trade, while the Shenzhen Composite Index on China’s second exchange dropped 0.04pc, or 0.68 points, to 1,858.71.
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Corporate: HG Capital Trust, Victrex (interim results)
Source: finance.yahoo.com