Aurelia Butler

The focus will be on hybrid and alternative propulsion, aircraft systems, the transition to alternative fuels, and aircraft support infrastructure, he said in a statement.”(This) … will help drive and accelerate the green industrial transformation of Canada’s aerospace industry, generating high-value jobs while strengthening supply chains and supporting the transition to a net-zero economy,” he said.Earlier this month, global airlines called for broad co-operation to reach “very tough” emission targets. Aviation, which produces around 2% of the world’s emissions, is considered one of the hardest sectors to decarbonise.The C$350 million includes a C$49 million aerospace innovation investment announced in 2019.Airbus said in 2021 it was working on hybrid-electric propulsion among the options for reducing jetliner emissions. It has pledged to introduce the first hydrogen-powered commercial plane in 2035.In 2019, Vancouver-based seaplane operator Harbour Air carried out the world’s first fully electric, commercial flight.($1 = 1.3202 Canadian dollars) More

Today’s top storiesThe cost of a two-year fixed-rate mortgage in the UK rose above 6 per cent and two-year gilt yields rose to their highest level for 15 years. Mortgage costs have been rising sharply over the past week, ahead of an expected increase in interest rates from the Bank of England on Thursday.China’s president Xi Jinping said he saw “progress” in China-US ties at a meeting with Antony Blinken, US secretary of state. German chancellor Olaf Scholz is welcoming a large Chinese delegation to Berlin.Indian low-cost carrier IndiGo will buy a record 500 aircraft from Europe’s Airbus, as the country’s aviation market rebounds from the Covid pandemic. The order is the largest ever by number of aircraft.For up-to-the-minute news updates, visit our live blogGood evening.The Labour party’s “mission” to turn the UK into a clean energy leader by 2030, more details of which were unveiled today, is an early instance of a political battle increasingly being fought all over the world. In the words of columnist Martin Sandbu, it is the battle over whether today’s economic demands on governments require them to “go big” or move incrementally.The party’s leader Sir Keir Starmer reiterated plans for a new publicly owned company, Great British Energy, based in Scotland, to fund infrastructure, cut bills, create jobs and provide energy security and a National Wealth Fund to funnel public and private money to projects such as battery gigafactories and clean steel plants.The party will also forge ahead with wind power, reversing the current government’s de facto ban on onshore wind farms, forcing councils to “proactively identify” suitable areas. Labour plans to stop issuing new North Sea oil or gas licences but allow planned developments, such as the huge Rosebank field, west of the Shetland islands, to continue, in order to provide certainty for investors. Critics include unions, which are worried about the effect on jobs, while environmentalists say projects such as Rosebank are inconsistent with the UK’s 2050 net zero emissions target.The opposition party has made no secret of looking across the Atlantic for inspiration, although its plan to borrow £28bn a year to fund the green transition has now been delayed until halfway through the next five-year parliament. Still, “go big or go home” seems to be Labour’s message, even as some experts warn that its clean energy targets are too much of a stretch. As Sandbu points out, Labour’s £28bn dwarfs America’s green measures, amounting to 1.1 per cent of British GDP — proportionately seven times bigger than the IRA’s 0.15 per cent of US GDP. It would also be nearly double the size of the EU’s post-pandemic recovery facility. Tensions around the green transition are not confined to the UK. EU energy ministers, meeting today to agree an overhaul of the bloc’s electricity market, hit out at Poland’s plans to extend subsidies for coal power plants for giving “contradictory signals to the market” although they did agree to France’s request for a greater role for nuclear. In Norway, the government is caught up in a battle between combating climate and protecting nature, while in Switzerland, a fractious referendum on cutting carbon emissions has showed populist nimbyism is still alive and kicking.Meanwhile oil majors such as Shell are determined to keep investing in new oil and gas production for years to come, even as their attempts to justify fossil fuel expansion with carbon capture technology are attacked by the UN.Another point of tension is the knock-on effect of western green energy subsidies on developing countries where some see them as protectionist. Raj Kumar Singh, India’s power minister, yesterday accused developed economies of hypocrisy for advocating the phasing out of coal, India’s primary energy source, more aggressively than other fossil fuels, including oil and gas.“We’ve had the developed world lecturing the rest of the world on how important free trade is . . . And here they themselves are erecting barriers,” he said.Need to know: UK and Europe economyAn FT Big Read details the UK’s economic malaise as inflation remains stubbornly high and Britons prepare for another rise in interest rates and possible long-term stagnation. One of the remedies, chancellor Jeremy Hunt has told ministers, is to quicken adoption of AI.BlackRock and JPMorgan Chase are helping Ukraine set up a reconstruction bank for rebuilding projects that hope to attract hundreds of billions of dollars in private investment. UN officials are pressing the EU and other national governments to fund the effort to clean up debris and restore ecosystems destroyed by the war. The FT editorial board said Germany needed to update its economic model as the basis of its past competitiveness and resilience is challenged. The OECD is now expecting its growth to be the lowest among major economies in 2023.Need to know: Global economyFrom technology to energy to capital markets and universities, the EU is falling further behind the US, writes chief foreign affairs commentator Gideon Rachman. In 2008, the EU and the US economies were roughly the same size, but since the global financial crisis, their economic fortunes have dramatically diverged, he says.An FT Big Read examines President Xi Jinping’s efforts to promote “military-civil fusion”, harnessing new technologies from the private sector to modernise China’s military. Goldman Sachs has cut its forecasts for Chinese economic growth.Asian emerging markets may have been hurt by risks associated with their giant neighbour China, but their resilient fundamentals are set to support long-term gains, writes the Bank of Singapore’s Eli Lee.Need to know: businessAnglo-Swedish drugmaker AstraZeneca is drafting a plan to spin off its China business and list it separately in Hong Kong to shelter the company from geopolitical tensions. Asia business editor Leo Lewis says Hong Kong’s multinationals and global funds are preparing for the worst. Western manufacturers will be able to de-risk their operations in China but will find it impossible to cut ties completely from the country, according to the head of Raytheon, one of America’s largest aerospace and defence companies.The refusal of other UK business lobby groups to attend meetings with the CBI is complicating its attempts to relaunch after a misconduct scandal. The four other members of the “B5” are the British Chambers of Commerce, the Federation of Small Businesses, the Institute of Directors and Make UK. The accounting firms PwC and KPMG have been drawn deeper into a scandal that has rocked corporate Brazil over collapsed retailer Americanas after internal correspondence showed how the company hid billions of dollars of debt.Forget the doom-mongering around AI for a moment: one of the world’s biggest toymakers says ChatGPT-enabled teddy bears could befriend children and tell them personalised bedtime stories, instilling in them their parent’s values.Join FT journalists and guests including Matthias Holweg, the director of Oxford business school’s AI programme at our subscriber webinar on Thursday https://ai-revolution.live.ft.comThe World of WorkFT reporters examine how artificial intelligence is shaking up work in three sectors: professional services, film-making and coding. The authors of ‘The Future of the Professions’ say sectors such as law and medicine will no longer be able to just rely on selling the time of their people.Does AI in recruitment mean the end of the CV? An AI bot known as Prepper, offered by the job search engine Adzuna, can generate interview questions and answers for roles at a range of large companies. Columnist Pilita Clark offers some advice on one of the more fraught moments in modern working life: a request to recommend someone you never rated.The Working It newsletter poses the question: are we doing hybrid wrong?Some good newsAfter years of preparations by the Saving Wildcats conservation project, 22 wildcats have been released into Scotland’s Cairngorms National Park as part of efforts to save the species from extinction.More than 20 wildcats have been released into a Scottish national park © Royal Zoological Society of Scotland More

As ructions in the US banking sector demonstrated in March, higher interest rates affect economies in a way that is neither smooth nor linear. Indeed, central bankers have been wary of breaking things as they have rapidly pushed up the cost of credit over the past two years in order to tackle sticky prices. Given the time it takes to hit those who fixed loans at lower rates, a lot of the pain is yet to come. Nowhere is that more true than in the UK, where concerns are mounting over the coming hit to homeowners.British inflation has proved more persistent than in peer nations. After higher-than-expected price and wage growth data, financial markets now expect the Bank of England’s base rate to rise from 4.5 per cent now to near 5.75 per cent by the end of the year. In turn, banks have briskly pulled and repriced mortgage products. On Monday, two-year fixed-rate mortgages rose above 6 per cent, the highest since December, in the wake of Liz Truss’s infamous “mini” Budget.Higher mortgage costs will rub salt into the wounds of households already strained by the high cost of living. Overall inflation is at 8.7 per cent, still above wage growth, with food price inflation even higher. The Resolution Foundation, a think-tank, reckons 4.2mn households will have experienced an average annual repayment increase of £1,500 since the BoE’s rate-raising cycle began in December 2021. But it estimates that three-fifths of the projected total increase in repayment costs is still to come. Next year households remortgaging could face a £2,900 average increase in annual payments. This will come as a severe shock to homeowners accustomed to low rates over the preceding decade. Budgets will tighten significantly, and consumer spending across the economy will slow. Many first-time buyers will rethink their plans, and house prices could well drop further as high borrowing costs curtail demand.How bad might this get for the wider economy? About 1.3mn people have a fixed-rate mortgage deal that will expire in the 12 months from July 1, or about one-sixth of all households with mortgages. The proportion of homeowners who have mortgages has fallen over recent decades to about 30 per cent, so the pain may be more contained. Rates may also not need to go as high as markets expect, and Britain’s limited housing supply will keep some upward pressure on prices. So a crunch rather than a widespread crash may be most likely.Higher mortgage costs will still be a political concern for the government ahead of next year’s election, but prime minister Rishi Sunak has rightly ruled out direct support for mortgage holders. Higher mortgage rates are not the same as the systemic and unforeseeable events of the pandemic and energy price surge, which warranted government support. The increase in mortgage payments will be steep, but rules oblige lenders to ensure new borrowers are aware of the risks of rates moving higher.Financial support would also be misguided in monetary policy terms. The BoE relies on the notion that raising the cost of borrowing will absorb demand. Handing out public money impedes that harsh but necessary process. Rates would need to rise even higher to stamp out inflation, and higher borrowing could push gilt yields up further. That does not mean mortgage holders should get no help, however. Banks should continue to look at how they can support households most at risk of distress — through, for example, temporary adjustments to their mortgage terms, alongside access to budgeting advice.Ultimately the best way to support mortgage holders is for the BoE to get inflation back down. It has a chance to show it is getting a grip at its meeting on Thursday, when another quarter-point rate rise is expected. Unfortunately for homeowners, things will have to get worse before they get better. More

The median forecast in a poll of 17 analysts is for the bank to maintain its deposit rate at 18.25% and its lending rate at 19.25% when its regular monetary policy committee (MPC) meets. None of the analysts expected rates to change.The MPC also left rates steady at its last meeting on May 18 despite surging inflation. Annual urban inflation accelerated to 32.7% in May, just short of an all-time high, from 30.6% in April. Month-on-month, inflation jumped to 2.7% from 1.7% in April.The president seemed to rule out a further currency devaluation anytime soon in remarks made to a youth conference last week, saying such a move could harm national security and hurt Egyptian citizens.”The authorities seem keen to keep the currency steady for now, which removes a possible trigger for higher rates,” Noaman Khalid of NBK said. The apparent shift away from policies agreed with the International Monetary Fund in December suggested Egypt would at least temporarily abandon other painful IMF prescriptions such as tightening interest rates, analysts have said. (We) “expect the CBE to keep rates on hold given expected better FX liquidity in the short term and lower probability of another EGP devaluation,” Pascal Devaux of BNP Paribas (OTC:BNPQY) said. Since Russia invaded Ukraine in February 2022, the central bank has allowed the Egyptian pound to lose half of its value against the dollar. More

RABAT (Reuters) – The International Monetary Fund (IMF) is working on a platform for central bank digital currencies (CDBCs) to enable transactions between countries, IMF Managing Director Kristalina Georgieva said on Monday. “CBDCs should not be fragmented national propositions… To have more efficient and fairer transactions we need systems that connect countries: we need interoperability,” Georgieva told a conference attended by African central banks in Rabat, Morocco.”For this reason at the IMF, we are working on the concept of a global CBDC platform,” she said.The IMF wants central banks to agree on a common regulatory framework for digital currencies that will allow global interoperability. Failure to agree on a common platform would create a vacuum that would likely be filled by cryptocurrencies, she said.A CBDC is a digital currency controlled by the central bank, while cryptocurrencies are nearly always decentralised. Already 114 central banks are at some stage of CBDC exploration, “with about 10 already crossing the finish line”, she said.”If countries develop CDBCs only for domestic deployment we are underutilizing their capacity,” she added.CBDCs could also help promote financial inclusion and make remittances cheaper, she said, noting that the average cost of money transfers stands at 6.3% amounting to $44 billion annually.Georgieva stressed that CBDCs should be backed by assets and added that cryptocurrencies are an investment opportunity when backed by assets, but when they are not they are a “speculative investment. More

The ECB has raised rates by a combined four percentage points over the past year to stem a historic surge in inflation and said it would likely increase them again in July after its new forecasts put price growth above its 2% target through 2025.”We need to remain highly data-dependent and err on the side of doing too much rather than too little,” ECB board member Isabel Schnabel, an outspoken conservative, or “hawk”, said in a speech.Her fear, shared by Slovak central bank governor Peter Kazimir, is that if the ECB fails to root out inflation now, it could get entrenched in the economy, forcing policy to remain tight for even longer, causing hardship for euro zone consumers beyond what would be necessary. “A continuation of monetary policy tightening is the only reasonable way ahead,” Kazimir, who often sides with Schnabel, said in a blog post. But the ECB’s chief economist Philip Lane had a slightly different take, arguing that being data dependent could also mean not raising rates for one or more meetings and resuming on merit.”Data-dependency could be you decide today not to raise rates, but then one meeting later, two meetings later, three meetings later, the data will say, well actually, you should start hiking again,” he told an event in Madrid.He added the ECB was likely to raise interest rates again next month but it was too early to predict the decision of the September meeting, which will be shaped by incoming data.The comments set up the debate over policy at a time when inflation is falling quickly but rapid nominal wage growth and robust demand for services risk slowing or even reversing disinflation. Policy “doves” argue that rapid rate hikes have yet to work their way through the economy and the higher funding costs, combined with anaemic growth, will naturally cool price growth.But Schnabel said excessive rate hikes can be reversed quickly, so the risk was “comparatively small” since entrenched inflation would mean protracted economic pain.”It is very costly to react only after upside risks to inflation have materialised, as this could destabilise inflation expectations and thus require a sharper contraction in output to restore price stability,” she said. More

The ECB raised euro zone borrowing costs to their highest level in 22 years on Thursday and said stubbornly high inflation all but guaranteed another move next month.Lane put the emphasis on incoming data as the main driver of future decisions.”At this point, we are surely data-driven,” he said. “July is not so far away, we can say unless there’s a material change another hike (is likely).””But to me September is so far away; let’s see in September,” Lane added.ECB policymakers have lined up behind plans to raise interest rates again next month, but views diverge on policy further down the road as underlying inflation remains stubbornly high even as the economy is barely growing. More