Good evening from chilly Cambridge, where autumn has kicked in and soaring gas prices have consumers considering when (and how high) to switch on their central heating.
The UK and Europe’s natural gas crunch is poised to intensify after Beijing ordered Chinese state-backed companies to secure their energy supplies at any cost.
Energy prices were also a factor in eurozone inflation hitting 3.4 per cent in September — the highest for 13 years — piling pressure on the European Central Bank to scale back its monetary stimulus. Germany’s inflation hit 4.1 per cent in September — its highest level for 29 years.
Yet surging gas prices will soon reverse course, according to Mike Fulwood, a senior research fellow at the Oxford Institute for Energy Studies, who argues that it would require a longer and colder winter than last year to see prices sustained above current levels.
Meanwhile, the price of Brent crude oil touched $80 per barrel this week for the first time in three years and the UK’s panic buying of petrol has led to fears of the country running out of fuel.
Latest news
US Covid-19 cases and hospitalisations eased in September — a potentially encouraging trend heading into the colder months
A key US inflation measure remained at its highest level in about three decades, while consumer spending rebounded last month
Australia will allow vaccinated citizens to quarantine at home from as early as November, marking the first big relaxation of its border restrictions
For up-to-the-minute coronavirus updates, visit our live blog
Need to know: the economy
US Congressional Democrats have delayed a make-or-break vote on Joe Biden’s flagship $1.3tn infrastructure package, dealing a blow to the White House as divisions within the president’s party threaten to torpedo his legislative agenda. Biden’s $3.5tn social safety net and climate change bill also remains in doubt because a group of moderate Democrats object to its size and some key details.
The dollar touched a 12-month high against major currencies as traders bet that persistent inflation would drive the US Federal Reserve closer to its first pandemic-era interest rate rise.
Latest for the UK and Europe
The seasonal gloom is expected to deteriorate further with British business leaders warning that the UK is facing an “autumn storm” of rising taxes, escalating costs, labour shortages and supply disruption, as the UK government’s Covid-19 support schemes end.
While the UK’s economy grew faster than projected in the second quarter, with GDP rising 5.5 per cent in the second quarter after an initial estimate of 4.8 per cent, the supply chain is hamstrung by a lack of lorry drivers.
In response, supermarkets and big retailers are offering salary rises and “golden hello” payments to drivers, making it increasingly tough for hauliers and food suppliers to cling on to staff.
The driver shortage knocked nearly one-fifth off shares in AO World on Friday after the electronics retailer said supply chain disruptions were holding it back.
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Global latest
The Financial Times has waved a sad goodbye to Philip Stephens, whose final column reflects on how global policymakers’ challenges have evolved over the past quarter of a century. When his column first appeared in the FT, “the world belonged to liberalism”, he writes. Now, western democracies are threatened by a lack of public trust.
Vietnam has abandoned its zero-Covid strategy after lockdown led to a record drop in GDP, while both Mexico and Colombia have raised interest rates in a bid to calm inflation.
Need to know: business
Capital markets have never been so hot, with companies across the globe tapping investors for more than $1tn worth of share sales and nearly $4tn of bond issuance.
On the subject of bonds, distressed debt funds have flocked to bonds issued by Evergrande, betting that Beijing will rescue the Chinese property developer to avoid fears of contagion in the real estate market and the global financial system.
If Evergrande’s executives are keen to drown their sorrows, their custom may be appreciated at JD Wetherspoon, which reported a record annual loss of £154.7m. Tim Martin, founder and chair of the pub chain, has blamed the loss on lockdowns and called the UK government’s Covid-19 measures “draconian”.
Science round up
Drugmaker Merck said it would ask US regulators to authorise the first antiviral pill to treat Covid-19 after a late-stage clinical trial showed that the drug cut the risk of hospitalisation or death in half. If the US Food and Drug Administration authorises the drug called Molnupiravir, it would be the first treatment of its kind, a twice-daily pill prescribed for five days to patients who have recently been diagnosed with Covid-19.
The hole in the ozone layer this year has widened to among the largest on record, according to data from EU observation programme Copernicus. The hole above Antarctica stretched across 24m square kilometres in September, rivalling the 27m sq km recorded in 2006.
The Covid-19 pandemic has triggered the largest fall in life expectancy since the second world war in most developed nations, with American men suffering the most severely. Research found that 27 of 29 countries, spanning most of Europe, the US and Chile, experienced reductions in life expectancy in 2020 at a scale that wiped out years of progress on mortality.
Get the latest worldwide picture with our vaccine tracker
And finally . . . some hot stuff
A dramatic volcanic eruption on La Palma, one of the Canary Islands off the coast of north-west Africa, is attracting “lava chasers”. While volcanoes are a thrilling (and potentially dangerous) draw, whether they should become a tourist attraction is being hotly debated.
Source: Economy - ft.com
