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Today’s top stories
The Palestinian Authority is working with US officials on a plan to run Gaza once the war between Israel and Hamas is over, the Palestinian Prime Minister Mohammad Shtayyeh said.
US employers added 199,000 jobs in November, compared to 150,000 in the previous month, in another sign that supports the Federal Reserve view that interest rates need to remain high for some time.
The UK’s competition regulator has taken its first steps to investigate Microsoft’s multibillion-dollar partnership with OpenAI. The Competition and Markets Authority said it had begun an “information gathering process”, a necessary precursor to an investigation that is likely to begin next year.
For up-to-the-minute news updates, visit our live blog
Good evening.
EU member states will be granted powers to end gas imports from Russia and Belarus nearly two years after Moscow’s full-scale invasion of Ukraine, according to a draft legal text proposed by Brussels and seen by the Financial Times.
The proposal would allow any member state to ban companies from Russia and Belarus from buying capacity in its gas pipelines and liquefied natural gas terminals.
EU member states would be allowed to “partially or, where justified, completely limit” access to infrastructure to gas operators from Russia and Belarus “where necessary to protect their essential security interests”, according to the draft legislation.
As western companies continue to grapple with the consequences of cutting ties with Russia, a senior bloc official said it could make it possible for EU energy companies to get out of contracts with Russian gas providers without having to pay hefty compensation.
It comes after the FT reported in August that the EU was set to import record volumes of liquefied natural gas from Russia this year, despite aiming for the bloc to wean itself off Russian fossil fuels by 2027.
Other western industries have felt the pain of attempting to distance themselves from Russia in recent months.
French dairy group Danone had been close to finalising a Rothschild-brokered deal to leave Russia when the Kremlin declared its local operations, along with those of Danish brewer Carlsberg, had been placed under “temporary external management”.
Two of Carlsberg’s top former executives now sit in prison and a group of Chechens with links to warlord Ramzan Kadyrov are running much of Danone’s Russian dairy operations.
Meanwhile, co-ordinated western trade restrictions on Russia are yet to succeed in crippling their target, with the effectiveness of G7 and EU attempts to throttle Moscow’s oil export revenues by imposing a $60 price cap diminishing over time due to Russia’s “dark fleet” of traders.
The EU’s move to tighten its grip on Russian oil and gas exports comes as the Kremlin is fostering greater ties with the Gulf states.
In a trip to the region this week, Russian president Vladimir Putin met Saudi crown prince Mohammed bin Salman in Riyadh after visiting the UAE. After meeting Sheikh Mohammed bin Zayed al-Nahyan in Abu Dhabi he thanked the ruler for the “UAE’s stance”, saying this had allowed relations between the two countries to reach “an unprecedentedly high level”.
Putin used his trip to the Gulf to discuss a range of issues, from energy and trade co-operation to the war in Ukraine and the Israel-Hamas conflict.
Need to know: UK and Europe economy
The UK Labour party’s shadow City minister Tulip Siddiq said that the party is no longer ‘sneering at business’ and unveiled 10 City advisers. She told the FT that Labour had worked hard over the past two years to eradicate memories of Jeremy Corbyn’s leftwing leadership and to embrace the City.
EU finance ministers meeting in France failed to reach an agreement on reforming EU rules on government debt and deficits. Their failure highlights deep divisions between EU countries on fiscal policy, as rules suspended during the Covid-19 pandemic are set to restart in January.
The UK public’s inflation expectations have fallen to a two-year low, supporting the view that the Bank of England will not need to raise interest rates at its meeting next week. The average expectations of the rate of inflation over the next 12 months dropped to 3.3 per cent in November, from 3.6 per cent in August, according to the BoE.
The UK Treasury has come under fire for a lack of progress on post-Brexit financial reforms and for exaggerating the effects of its plan to reinvigorate the City. Harriett Baldwin, head of the Treasury select committee, told the FT that reforms had not proved as “major as had been presented” and that headway had been slow.
Spain’s deputy prime minister Nadia Calviño is set to become president of the European Investment Bank early next year after she won the backing of EU finance ministers on Friday.
Need to know: Global economy
Stock futures dipped and Treasury bond yields rose today after the US economy added more jobs than estimated in November and unemployment came in lower than expected. The US unemployment rate fell to 3.7 per cent from 3.9 per cent, the Bureau of Labor Statistics said.
China’s economic recovery is “still at a critical stage” said President Xi Jinping, as Communist party leaders pledged to support growth with further “proactive” fiscal and “effective” monetary policy in the new year. In a speech to a political gathering in Beijing he said that China faced an adverse international political and economic environment and overlapping domestic cyclical and structural challenges.
However, China’s exports rose for the first time in six months in November, giving a boost to policymakers looking to revive a flagging recovery in the world’s second-largest economy.
Leading Gulf AI company G24 said it is cutting ties with Chinese hardware suppliers in favour of US counterparts, in a sign of the growing geopolitical struggle over the new technology. “We are in a position where we have to make a choice,” said chief executive Peng Xiao, adding that the company is making the move to ensure its access to US-made semiconductors.
Need to know: business
Commodity trader Trafigura will pay out a record dividend of $5.9bn to the company’s 1,200 shareholders after reporting its highest net profit. The payout to executives and traders was more than triple last year’s $1.7bn figure and takes total payments since 2020 to more than $9bn.
Paris Saint-Germain’s Qatari owners have agreed to sell a minority stake to US investment group Arctos Partners, in a deal that values the French football club at more than €4bn. Arctos will buy up to 12.5 per cent of the French champions, according to two people with knowledge of the matter.
UK commodities broker and clearer Marex has filed confidential paperwork to list in the US, snubbing London after planning two years ago to list on its home stock market. The targeted valuation is set to be between $2.2bn and $2.8bn, approximately three to four times more than its previous goal for the London Stock Exchange in 2021.
KPMG is planning to merge its UK and Swiss businesses in a tie-up as executives hope to boost growth and profits at the smallest of accounting’s Big Four. Partners in KPMG’s operations in the two countries were told last Friday that discussions over a possible combination were taking place, people familiar with the matter told the Financial Times.
Science round-up
Quantum computing is starting to fulfil its promise as a crucial scientific research tool, IBM researchers claim. The company is due to unveil 10 projects on Monday, said Dario Gil, its head of research. “For the first time now we have large enough systems, capable enough systems, that you can do useful technical and scientific work with it,” Gil said in an interview.
Britain’s science secretary is to launch a PR and marketing blitz to plug the UK’s scientists back into the EU’s €95.5bn Horizon scheme, after several years in the cold. Michelle Donelan was in Brussels this week to oversee the formal signing of the post-Brexit deal that will see Britain return to the pre-Brexit situation as an associate member of Horizon.
New research shows that global carbon dioxide emissions from burning coal, oil and gas have reached a record and are set to rise at a faster rate in 2023 than the 10-year average. The research highlights how the goals of the Paris agreement to limit global warming are increasingly in jeopardy.
AstraZeneca has signed a deal with Absci of the US to design an antibody to fight cancer, the latest tie-up in efforts to use artificial intelligence for drug discovery.
The Tech Tonic podcast series on AI unearths the futuristic objectives that are at the centre of the AI industry’s quest for superintelligence.
Some good news
This year’s only multicoloured meteor shower, the Geminids, is set to peak next week from December 13 to 14.
Something for the weekend
Try your hand at the range of FT Weekend and daily cryptic crosswords.
Interactive crosswords on the FT app
Subscribers can now solve the FT’s Daily Cryptic, Polymath and FT Weekend crosswords on the iOS and Android apps
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Source: Economy - ft.com