Aurelia Butler

(Reuters) -Berkshire Hathaway’s stock price set a record high on Monday, rising 3.4% after the conglomerate run by billionaire investor Warren Buffett said quarterly operating profit topped $10 billion for the first time.In its second-quarter earnings report on Saturday, Berkshire said rising interest rates boosted profit from fixed-income investments, including a cash stake that grew to $147.4 billion, while fewer accident claims bolstered Geico car insurance.That helped offset declining profit at the BNSF railroad, and lower earnings from building products companies such as Clayton Homes as well as consumer businesses such as Forest River recreational vehicles and Duracell batteries.Buffett’s company, based in Omaha, Nebraska, also posted quarterly net income of $35.9 billion, reflecting unrealized gains on investments such as Apple (NASDAQ:AAPL), whose stock price rose 17.6% in the quarter.Berkshire owned $177.6 billion of the iPhone maker’s shares at the end of June.Class A shares of Berkshire rose $18,320 to $551,920 on Monday, giving Berkshire a market value of about $799 billion.The shares earlier reached $555,800, surpassing the previous high $544,000 set on March 28, 2022.Buffett owns about 15% of Berkshire’s stock. He passed Microsoft (NASDAQ:MSFT) co-founder Bill Gates on Monday to become the world’s fifth-richest person, with a $121.5 billion fortune, according to Forbes magazine.UBS analyst Brian Meredith (NYSE:MDP), who rates Berkshire “buy,” raised his 12-month price target for the Class A shares to $621,591 from $608,000, calling the stock “an attractive play in an uncertain macro environment.”Keefe, Bruyette & Woods analyst Meyer Shields, who rates Berkshire “market perform,” raised his price target to $565,000 from $545,000.Berkshire has never split its Class A shares. Its Class B shares normally trade at about 1/1,500th as much.In 2023, Berkshire shares have risen 18%, the same as the Standard & Poor’s 500.The shares no longer routinely trounce the index as they did when Berkshire was smaller, but over long periods can match or slightly outperform the index with less volatility.Buffett, 92, has run Berkshire since 1965.His conglomerate also includes namesake energy, car dealership and real estate brokerage businesses, several manufacturing and industrial businesses, and consumer brands such as Dairy Queen, Fruit of the Loom and See’s Candies. More

The days of cheap food may be over, the Bank of England’s chief economist said on Monday, warning that supermarket prices would still be rising much faster at the end of the year than overall inflation.In its latest monetary policy report, published last week, the central bank set out the findings of recent meetings it held with food producers, processors and retailers, who said they still faced higher inflation on input costs than usual. This was partly because some had entered long-term contracts to secure supplies when global commodity prices were at a peak, but also reflected continuing energy and wage pressures.Huw Pill, during a live Q&A session on Monday, said price cuts for staples such as eggs and milk could become more widespread but no “transformation” would arrive to take the pressure off poorer households. Food price inflation was likely to remain in double digits at around 10 per cent at the end of the year before falling further in 2024.“That’s still not a very comfortable level — certainly for us when we’re looking at trying to reduce the overall level of inflation down to our 2 per cent target. Having food price inflation running at 10 per cent is clearly not really compatible with that on a lasting basis,” he said.Even when food price inflation had subsided, he added, the level of supermarket prices would still remain much higher than when the price shocks started, bringing associated “social and other stresses”.“Unfortunately, the days of seeing food prices fall . . . does seem to be something we may not be seeing for a little while yet if in the future at all,” he said.

Speaking days after the BoE raised interest rates to a fresh 15-year high of 5.25 per cent, Pill described monetary policy as a “powerful” but “blunt” tool to fight inflation — with central banks unable to mount “surgical strikes” at particular sectors or to protect certain groups in society.Seeking to avoid the controversy stirred earlier in the year, when he suggested people would need to stop seeking higher wages to cope with higher living costs, Pill said, “I don’t think it’s the case that we should be pointing fingers or assigning blame to individual parts of the UK economy.”The BoE thinks there has been no significant change in the share of national income going to either wages or profits since inflation began to shoot up, and does not want to describe the current persistence of inflation as being a result either of a so-called “wage price spiral” or of “greedflation”.“It’s not a question of blame,” Pill said, adding that the task for monetary policy was to balance the aggregate level of demand and supply in the economy, in order to return inflation to target.   More

Today’s top storiesGerman chancellor Olaf Scholz is under mounting pressure to provide Ukraine with cruise missiles to boost its counteroffensive against Russian forces. Kyiv’s allies received a boost after “constructive” signals from China at a Saudi forum.HSBC’s head of public affairs apologised for saying the UK government had been “weak” by giving in to US pressure to cut back on its dealings with China. UK house prices edged down in July to an average of £285,044, the fourth consecutive monthly decline, but with the market showing increased activity, according to lender Halifax. The figures suggest the market has so far proved relatively resilient in the face of the sharpest rise in interest rates for 35 years.For up-to-the-minute news updates, visit our live blogGood evening.No one said the green transition would be easy, but as columnist Rana Foroohar points out, several inconvenient truths dog the debate about the move to a carbon-free future, in particular around the west’s relationship with China.First, cheap Chinese materials such as polysilicon for solar panels and critical minerals for batteries are often made or extracted by forced labour in Xinjiang. Second, a lot of what’s advertised as “clean” energy tech coming out of China is made in factories with coal-powered electricity. So, if you add up the real carbon and labour costs of all that, it’s not so “clean” after all.Meanwhile, the renewables sector is having to deal with rising costs and tough competition from China. We report today on the struggles of Siemens to fix its ailing wind turbine business, which has led the German group to rack up a €4.5bn loss this year. “We sold turbines too quickly [that] had not been sufficiently tested,” it said. Changes at household level such as the switch to heat pumps are also proving more costly and complicated than expected.Until the green transition is properly under way, fossil fuel producers continue to play an outsized role in the global economy. The White House, for example, is said to be in “full panic mode” about rising fuel prices just as President Joe Biden steps up his bid for re-election. This morning, because of concerns over the escalation of the fighting in Ukraine and production cuts by Saudi Arabia, oil prices hit their highest levels in almost four months.However, amid the politicking and frustrations voiced by business comes new hope that the dream of limitless zero-carbon power can become a reality.The Financial Times has revealed that US government scientists have achieved net energy gain in a fusion reaction for the second time following a breakthrough in December. Physicists have tried since the 1950s to harness the fusion reaction that powers the sun, but, until last year, no group had been able to produce more energy from the reaction than it consumed — a condition also known as ignition. (Here’s our explainer of how it works).Investor interest is growing rapidly. A German start-up in partnership with Colorado State University has announced that it will develop the first laser facility dedicated to commercial fusion research. This could eventually result in a laser-based fusion power station.There are many hurdles to overcome, as the FT’s Lex column notes (for Premium subscribers). Start-ups will need to stump up billions to build first-generation power plants that will make small amounts of expensive electricity, and the fledgling industry will need generous government support to take off.Still, the process described by US energy secretary Jennifer Granholm as “one of the most impressive science feats of the 21st century” looks one step closer to becoming a reality. Watch the FT film to see how close we are to commercial fusion power.

Video: Fusion power: how close are we? | FT Film

Need to know: UK and Europe economyUK business groups are urging Prime Minister Rishi Sunak to rethink a planned increase in visa fees for migrant workers, arguing it will harm competitiveness and hamper efforts to plug labour shortages. The Bank of England is coming under pressure from the finance industry to delay the adoption of new global banking capital rules to avoid a period of regulatory divergence that would affect the City’s ability to compete with Wall Street. Ukraine’s case for EU membership is being taken extremely seriously after its invasion by Russia sparked a profound shift in the bloc’s enlargement policy from “passivity to proactive strategising”. An FT deep dive explains.The EU’s trade chief Valdis Dombrovskis will urge Beijing to reduce barriers to European exports at a meeting next month after the bloc’s trade deficit with China hit “staggering” levels. Need to know: global economyThe new military junta in Niger closed the country’s airspace, citing the threat of military intervention by the Economic Community of West African States. The closure occurred after a deadline set by the bloc passed without the restoration of the pro-western President Mohamed Bazoum, who was ousted last month.An influential South Korean politician voiced disquiet at US intervention in the global semiconductor industry. Yang Hyang-ja told the FT: “If [Washington] continues to try to punish other nations and to pass bills and implement ‘America First’ policies in an unpredictable manner, other countries could form an alliance against the US.”Javier Milei, Argentina’s radical rightwing presidential candidate, told the FT that the austerity imposed by the IMF was “tiny” compared with what the country needed. The South American nation and the IMF reached a deal last week to prevent its economy entering into arrears with the fund after months of intense negotiations.Chinese economists are under pressure to avoid discussing negative trends as concerns mount about the authorities’ ability to bolster the country’s flagging recovery. The Philippines and the US have accused China of illegally targeting two Philippine supply ships in the South China Sea with water cannon in the latest escalation of Beijing’s campaign around a Philippine-occupied shoal in the disputed waters. Need to know: businessPrivate equity groups are increasingly offering sweeteners such as fee discounts to lure reluctant investors in a sign that the industry is facing its toughest-ever fundraising environment. Europe’s biggest companies have been hit by at least €100bn in direct losses from their operations in Russia since the full-scale invasion of Ukraine, according to FT analysis. Energy and utility groups account for half the total losses, although the war has also boosted profits at oil and gas groups as well as defence companies.

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The head of France’s Axa, one of Europe’s biggest insurers, said NHS troubles would present “quite a few business opportunities”. The company is looking to expand its telemedicine business and support services for medical procedures. Copper, “the metal of electrification”, is gaining in importance as the world transitions to cleaner energy for cars. The anticipated surge in demand has led mining groups such as Rio Tinto to re-evaluate their long-term strategy. Forget short-term factors: the big five issues investors should focus on are demography, energy supply, debt, inflation and geopolitics, says Philip Coggan, ex-FT journalist and author of More: The 10,000-Year Rise of the World Economy.The world of workThe impact of an individual’s home background — measured by parental occupation — is greater than any other potential barriers to advancement. Slaughter and May is the first big law firm to try to remedy the situation, aiming to have 25 per cent of its total staff from lower socio-economic backgrounds by 2030.Vacations are rarely straightforward for business leaders but that doesn’t mean they shouldn’t take one, says columnist Pilita Clark on the politics of taking holidays.Some good newsStargazers can breathe easy. Contact with the Voyager 2 craft — the second-most distant object ever built by humans and sent into space — has been restored two weeks after a faulty command caused its antenna to point away from Earth.

Voyager 2 was launched in 1977 as a beacon from humanity to the wider universe © NASA/AFP via Getty Images More

Have you heard the one about the business that claimed defensive qualities in a downturn? Only a million times. One-liners are not Clarkson’s core competence, it seems. Appropriately so: the UK broker operates across a range of shipping businesses. This distinguishes it from Maersk, the Danish containers group that recently forecast a demand drop of 1-4 per cent this year.Consumers are feeling the pinch from inflation and higher interest rates. But broader shipping rates should get a lift from energy insecurity, the green transition and a capacity pinch, Clarkson expects. Revenues rose to £321mn in the six months to June, according to an upbeat statement. Rerouting of oil and fuel shipments due to the war in Ukraine is keeping tanker rates high. Chinese and Indian refineries have stepped in to cover lost Russian supply. Tonne mileage rose almost 10 per cent and 8 per cent for crude and product carriers in the first half of this year, reports trade body Bimco.Supply chain greening adds to the market imbalance. As indirect or Scope 3 emissions grow in importance for customers and investors, shippers are adjusting. Some 60 per cent of the world order book by tonnage is for vessels powered by alternative fuels such as natural gas, not dirty marine diesel. Demand for space on newer, cleaner ships seems certain to rise. A crunch in global shipbuilding capacity may also support earnings from tanker broking.Clarkson thinks there are 40 per cent fewer large shipyards today than a decade ago. Most are busy building container ships and natural gas carriers. Total global tonnage is expected to increase just 2 per cent next year, the slowest in two decades. Orders for new crude oil and product carriers are at historic lows. Clarkson shares have dropped almost one-third from their 2021 peak. The “defensive qualities” claim is a chestnut as old as jokes involving poultry and road crossings. But a structural squeeze on tanker rates should persist beyond the current economic downturn. More