Aurelia Butler

The US and Germany will send main battle tanks to Kyiv, a significant increase of western military aid that was condemned by Russia and prompted cheers throughout Ukraine. The US will be sending 31 M1 Abrams tanks to Ukraine — or the equivalent of one Ukrainian tank battalion, senior Biden administration officials confirmed on Wednesday. Earlier in the day, Germany announced it would send 14 Leopard 2A6 tanks from stocks held by its army. Berlin also announced plans to team up with other European countries to create two tank battalions of the German-made Leopard 2s, which equates to about 90 tanks. Both the Abrams and the Leopard are among the best-rated modern main battle tanks in the world and Kyiv has argued it needs them to break through a front line that has barely budged in recent weeks and reconquer occupied territory. It also says it needs western tanks to deter a renewed Russian offensive that is expected in the early spring.Related read: The US-German decision to send tanks to Ukraine has reignited early-stage discussions among European allies on providing Kyiv with fighter jets. Lockheed Martin has said it stands ready to meet demand for its F-16 aircraft.Are the US and Germany right to supply tanks to Ukraine or does the move risk further escalating Ukraine’s war with Russia? Tell us in our latest poll.

Five more stories in the news1. Adani shares take $10.8bn hit Shares in listed companies tied to India’s sprawling Adani Group shed $10.8bn in value after short seller Hindenburg Research released a report targeting the conglomerate controlled by billionaire business magnate Gautam Adani. Shares in seven listed Adani Group companies fell more than 5 per cent on average.2. Taiwan’s Tsai names new premier to shore up support President Tsai Ing-wen has chosen former vice-president Chen Chien-jen as her new premier, handing the soft-spoken epidemiologist responsibility for tackling an economic downturn amid sliding support for the ruling Democratic Progressive party. The DPP is seeking to stem falling support ahead of presidential and parliamentary elections next January.3. Chinese migrant workers face crackdown over wage protests Chinese migrant workers demanding overdue wages from their employers are facing a crackdown by local governments over alleged “malicious” labour activism. More than a dozen cities across China have in recent weeks threatened to punish workers who take “extremist” measures, such as protests blocking traffic or outside government offices, to get the money they are owed.More news from China: Weaker international demand for Chinese goods has led to a rise in shipping cancellations at the country’s biggest ports. Get the latest news and analysis on Asia’s biggest economy with our China hub.4. Apple beefs up smartphone services Apple is taking steps to separate its mobile operating system from features offered by Google parent Alphabet, making advances in maps, search and advertising. The two Silicon Valley companies have been rivals in the smartphone market since Google acquired the Android operating system in the 2000s, which Apple co-founder Steve Jobs called “a stolen product”.5. Murdoch scraps Fox and News Corp merger Media tycoon Rupert Murdoch has scrapped a proposal to combine Fox and News Corp after his attempt to bring the two halves of his media empire back together was resisted by shareholders. News Corp is also in advanced talks to sell its 80 per cent share of digital property group Move to rival CoStar, valued in the “low billions” of dollars.For Premium subscribers: News Corp should continue to split off distracting subsidiaries, writes Lex. The failed merger has at least demonstrated that these are a drag on its valuation as a standalone business.The day ahead India’s Republic Day India marks its 74th Republic Day, commemorating the country’s constitution coming into effect. Domestic stock markets will be closed. (Times of India) Australia Day national holiday Australia today marks the date when Britain’s First Fleet landed in Australia in 1788. In recent years, however, there has been increased opposition to celebrating the date, which is when the era of colonisation began. (BBC News) US economic data The US today will publish consumer spending figures along with its first estimate for gross domestic product movement in the fourth quarter. GDP is expected to have grown by 2.6 per cent in the three months to December 31, according to a Bloomberg poll of economists.The FT will be holding its second annual Future of Business Education Series in February. This virtual one-day event will provide the opportunity for ambitious individuals looking to enhance their skill set, accelerate their careers, and discuss what life after an MBA might look like. Register today.What else we’re readingHow will the new machine learning era affect you? ChatGPT, a query-answering and text-generating system released at the end of November, has burst into the public consciousness in a way seldom seen outside the realm of science fiction. It is the most visible of a new wave of “generative” artificial intelligence systems that can produce content to order, threatening not just jobs but a surge of misinformation.India’s electric vehicle market glides into focus Boosted by state subsidies, some early sales of delivery vehicles and buses and paranoia among businesses and politicians about China’s high-tech dominance, a “Made in India” EV industry is starting to take shape.China’s palace politics: Xi loyalists compete for power Chinese leader Xi Jinping will use the March lianghui — the joint sessions of China’s rubber-stamp parliament and political advisory body — to confirm a batch of appointments to critical roles. The promotions will mark the completion of Xi’s consolidation of power but also signal the emergence of a new set of factions among his acolytes and loyalists.🎧 Listen: Shanghai correspondent Tom Hale and Global China Editor James Kynge break down President Xi Jinping’s main goals and whether they are enough to jump-start the country’s economy in this episode of the Behind the Money podcast. West grapples with dilemma over Iran nuclear talks Even as relations between Iran and the west touch new lows, US and European officials are keeping the door open to diplomacy. But that’s not because they are optimistic. Rather, it is a reflection of the limited options western powers face as they attempt to stop Iran from expanding its aggressive nuclear programme.Slimmer profit margins are here for a while With positive news on inflation and improving growth prospects in the US and eurozone there was growing optimism among investors in consumer goods companies. But, writes Brooke Masters, Procter & Gamble was quick to throw cold water on the idea of an easy recovery.Take a break from the newsCult favourite Everything Everywhere All at Once has been nominated for 11 Oscars, maxing out the list for this year’s awards. Here is the full list of nominations announced in Los Angeles.

Michelle Yeoh in ‘Everything Everywhere All At Once’ © David Bornfriend More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeever.South Korea and the Philippines’ GDP data are on the Asian data docket for investors on Thursday, as the upbeat mood that has propelled global stocks and risk assets higher this year shows signs of fading. Some gloomy signals from the latest U.S. earnings reports, a stream of tech sector layoffs and worries over global growth are overshadowing hopes that the Fed and other central banks will take their foot off the monetary tightening pedal. The Bank of Canada was the latest to signal a pause, indicating on Wednesday it would likely halt further hikes after lifting its key interest rate to 4.5%. Some Asian central banks have done likewise in recent weeks.Of course, the end of the tightening cycle could be in sight for many central banks because the lagged effects of previous rate hikes have not yet been fully felt and policymakers expect growth to slow. Investors on Thursday will get the latest snapshot on the health of two Asian economies – the Philippines and South Korea – before world markets get the first estimate of U.S. growth in the October to December period later in the day. South Korea’s economy is expected to have shrunk 0.3% in the fourth quarter of last year, the first quarterly contraction since the onset of COVID-19 in early 2020. South Korea’s fortunes are closely tied to the global tech sector and its largest trading partner, China. Both are navigating choppy waters.Still, Asian stocks are flying. MSCI’s broadest index of Asia-Pacific shares ex-Japan hit a seven-month high on Wednesday. Remarkably, the index is up 30% from an October low struck exactly three months ago, and it has risen 11 out of the last 13 weeks.It may be due a correction, and if that comes on Thursday, it will be on greater volume than the three days of gains this week as some Asian markets re-open after the Lunar New Year holidays. China, however, is still closed. Three key developments that could provide more direction to markets on Thursday:- South Korea GDP (Q4)- The Philippines GDP (Q4)- U.S. GDP (Q4 advance estimate) More

Today’s top storiesGermany is to supply 14 Leopard 2 tanks to Ukraine as well as allowing allies to send their own, marking a significant increase in western military aid. Russia’s ambassador to Germany said the move was an “extremely dangerous decision” that “raises the conflict to a new level of hostilities”.US states stepped up efforts to entice European clean energy businesses such as Germany’s Marvel Fusion, with the promise of deep tax breaks, despite opposition from Brussels. The Netherlands opposes new EU money for subsidies, but the FT editorial board said the two blocs needed to find common ground on subsidies and avoid beggar-thy-neighbour measures. MSC and Maersk, the world’s two largest container shipping lines that together control two-fifths of seaborne freight, are ending their alliance as competition for transporting global trade heats up. Meanwhile, in China, weaker international demand for its goods has led to a rise in shipping cancellations at its biggest ports, limiting the economic boom expected from its reopening.For up-to-the-minute news updates, visit our live blogGood evening.EasyJet’s forecast today of a return to profit after three years of a pandemic-induced slowdown is the latest in a string of announcements confirming that air travel is well and truly bouncing back.Shares in the low-cost carrier surged 10 per cent, spurring rises in other airlines such as Ryanair, Wizz Air and BA owner International Airlines Group. EasyJet chief executive Johan Lundgren said customers appeared to be “prioritising spending on holidays” and added that the company was selling enough seats to fill five aircraft every minute during the busiest periods of its recent winter sale.Ryanair told a similar tale last week, reporting record bookings at the start of the year. “All the indicators are very strong,” company boss Michael O’Leary told the FT. “There is a lot of spending going on out there. Hotels are full, restaurants are full.”The global picture is equally encouraging. Last week Avolon, the world’s second-largest jet lessor, said that China’s reopening would help drive air traffic to pre-pandemic levels by the middle of the year. For every two seats of airline capacity added worldwide, one is in Asia, the company said. Company chiefs until recently had warned that a recovery to 2019 levels would not come before 2024 at the earliest.The return of the globetrotting Chinese, the world’s largest tourism population that had been cut off by zero-Covid restrictions, is probably the single best piece of news for the world’s airlines so far. In 2019, before the pandemic hit, 155mn travelled abroad and spent $255bn. The China Outbound Tourism Research Institute estimates 18mn will travel internationally in the first half of the year, followed by 40mn in the second. Asian airlines had already begun to expand their flight options at the end of last year, forming new partnerships to cash in on the expected boom in demand. Bain Capital, meanwhile, is preparing to relist Virgin Australia after it had collapsed during the pandemic.Profits at aerospace companies such as Raytheon are also soaring as demand for jet engines and parts takes off. Today Boeing reported that a flurry of jet deliveries last month was helping to repair its finances after the blow of two fatal crashes.However, there could still be some turbulence ahead. Air travellers in Europe face “major” disruption as skies become congested because of the war in Ukraine, while volatile oil prices could pose a problem. But as airline results season gets under way, easyJet is unlikely to be the only carrier forecasting blue skies ahead. Need to know: UK and Europe economyAs we wrote in Monday’s DT, economic indicators for the eurozone are now mainly pointing in the right direction. The S&P Global PMI survey showed an unexpected return to growth in business activity for the first time since June, while German business confidence is bouncing back.The UK economy, however, continues to diverge from the brightening outlook in the EU and the US. The Treasury is trying to damp down calls for tax cuts after a new downgrade to growth forecasts. The UK PMI reading has hit a two-year low, businesses face a growing risk of insolvency and public borrowing has hit its highest level since monthly records began in 1993. Meanwhile, producer price inflation has fallen to its lowest rate in almost a year. Damage from Brexit continues to become more apparent. The Eurostar boss said peak trains were being left a third empty because of new border arrangements. Italian petrol station owners have shut their pumps in a dispute with the government over the ending of fuel subsidies that shielded motorists from surging costs. Need to know: Global economyChinese households managed to save a record $2.6tn last year as pandemic restrictions crushed consumer demand, but it is unclear so far if this may lead them to splash the cash in “revenge spending”. US Treasury secretary Janet Yellen said China was a “barrier” to ending the debt crisis in Zambia. The restructuring of the debt is seen as indicative of how China, the biggest creditor to the developing world, will respond to a wave of defaults.Argentina will be transformed by gas and mining exports, according to its economy minister. The country is suffering almost 100 per cent inflation and is cut off from international markets after its ninth debt default in 2020.Australian inflation hit a 33-year high of 7.8 per cent in the final quarter of last year, dashing hopes of a pause in interest rate rises.Need to know: businessThe “Big Three” international oilfield services groups — Halliburton, Baker Hughes and SLB — reported their most profitable 12 months since the height of the US shale boom as high energy prices led to global drilling activity. Amazon workers in Coventry are striking today over pay, the first time the company’s UK employees have taken industrial action. British unions have hitherto struggled to recruit in sectors such as logistics that account for a growing chunk of the country’s workforce — often on insecure terms and in difficult working conditions. Tensions are growing in the UK, Europe and the US between governments and pharma companies over drug pricing. An industry spokesperson said authorities had gone from appreciating rapid innovation during the pandemic to needing to “squeeze” drugmakers because of financial pressure elsewhere.The head of Europe’s largest chip company ASML, which plays a critical role in the global industry and has been caught up in US-China tech tensions, said demand for semiconductors would recover in the second half of the year as it reported a record order backlog and forecast sales to increase 25 per cent in 2023. Microsoft gave a downbeat forecast for the current quarter, reporting that demand for its cloud services fell noticeably in December as customers grew more cautious on economic prospects.New “generative” AI systems that can produce content to order are raising concerns about potentially far-reaching social effects including the ability to produce large volumes of misinformation as well as making jobs disappear, as our new Big Read explains.

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The World of WorkThere are lots of stereotypes about millennials (those born between 1981 and 1996), the biggest one suggesting they have an overwhelming sense of entitlement. The new Working It podcast discusses whether the tropes are really true. Some good newsThe British Heart Foundation has sold an 18-carat gold Cartier watch found in a bag of donations for almost £10,000. The sale is a record for BHF, which raises funds for research into heart and circulatory disease.Ticker for tickers: the £10k wristwatch. Picture courtesy of British Heart Foundation More

Here we go again. The recurring political theatrics of raising the US debt ceiling — the maximum the government can legally accumulate — are under way once more. Things usually follow a routine path: after some wrangling Congress eventually agrees to increase or suspend it — the ceiling has been amended 78 times since 1960. But every so often the threat to hold it hostage to extract concessions runs until the last minute, raising the prospect of government shutdowns, missed social security payments and a disastrous default on debt. This year the risks of a crisis are particularly high, at a time of global economic and financial market fragility. A political deal to raise the debt limit is paramount. Better still, the US should consider ditching the ceiling altogether in favour of a saner alternative.Periods when there has been a Democratic president with a Republican-majority House, following a notable rise in debt, have produced some of the most disruptive debt ceiling episodes. This includes 2011, when the US’s credit rating was downgraded. The Republicans were always going to seek concessions to raise the ceiling this year. But the palaver over electing the House speaker, Kevin McCarthy, has only amplified the chances of brinkmanship. To garner hardline Republican votes, McCarthy pledged to attach large spending cuts to any legislation raising the debt limit. That is a non-starter for the Democrats.The clock is ticking to find an agreement. The US hit its statutory $31.4tn debt ceiling last week. Extraordinary measures, cash on hand, and tax receipts could now sustain the government until at least June. The US could then prioritise debt payments to avoid a default, but only at the expense of other obligations — revenues only cover about 80 per cent of spending. Cutting expenditure to balance the budget would push the US economy into recession. By then, waning confidence and higher borrowing rates would have already done damage. Beyond that, a default would be catastrophic. The credibility of US debt — a linchpin of the global economic system — would be shattered. Treasury Secretary Janet Yellen warned of a “global financial crisis”.There are no quick or easy options to circumvent the impasse. Using accounting trickery by minting a $1tn coin and depositing it at the Federal Reserve, issuing very high-interest bonds or innovative forms of government securities have all been suggested. Others propose invoking the 14th amendment, which says the validity of US debt “shall not be questioned”. These paths are untested, have dubious legal grounds and are likely to incur challenges, which will only amplify market anxieties. As it is, liquidity has been drying up in Treasury markets.That such underhand options are being discussed is a measure of just how ludicrous the debt ceiling is. Few countries have limits on nominal government debt, which needs to be raised to due to inflation even if the real level of debt itself does not increase. It also curtails funding for measures already passed into law. Denmark’s high ceiling causes little friction, while Australia repealed its own after similar deadlocks. It is a nonsensical way to set tax and spending decisions. To prevent the size of the state ballooning, targeting debt sustainability measures would be far more suitable. At the very least, parties should agree to automatically authorise any borrowing needed to fund new legislation. A bipartisan commission could also look at longer-term spending reforms. Political will to agree on any changes will be the sticking point. In the near term, Democrats and Republicans must instead find common ground to raise the ceiling. The potentially dire fallout — for both the US and global economy — ought to focus the minds. More

Parents are being encouraged to save more for their children’s future with National Savings & Investments increasing rates on junior cash Isas (Jisas) above pre-pandemic levels. The state-backed savings fund said on Tuesday that it had increased the rate for the tax-free children’s savings product from 2.7 per cent to 3.4 per cent. This puts NS&I at the top of the market for online Jisa accounts, beaten only by rates offered on rivals’ in-branch or postal Jisas. NS&I also announced the rate offered on its adult Isas would rise from 1.75 per cent to 2.15 per cent and it will also improve the prize fund rate for premium bonds to 3.15 per cent, representing its fourth increase in a year. “Today’s changes will provide a welcome boost for savers of all ages across the country, with more premium bonds prizes and some of the highest interest rates we’ve seen in over a decade.” said NS&I’s chief executive Ian Ackerley. Amid a general increase in interest rates, NS&I has moved to market itself more competitively, with an improved offer for Jisa holders that could appeal to rivals’ customers looking to switch to a better rate.Jisas were launched in 2011 as a replacement for child trust funds, offering parents the ability to build a tax-free nest egg for their children before they turned 18, at which point accounts would convert to adult Isas.

Anyone can contribute to a Jisa, though an account must be opened by a parent or guardian and contributions cannot exceed a £9,000 tax-free limit each year. Children can hold one cash and one stocks and shares Jisa at a given time. In 2019, NS&I increased returns on its cash Jisas to 3.25 per cent in an effort to encourage savings among young people, but cut rates to 1.5 per cent the following year, before lifting rates twice last year to 2.7 per cent at the close of 2022. Rachel Springall of comparison site Moneyfacts said that NS&I’s cash Jisa would appeal to individuals looking to open an account online. However, parents prepared to apply in a branch, by post or over the phone could access 3.8 per cent on an equivalent account with Coventry Building Society. Savers wanting greater flexiblity on withdrawals may prefer non-Jisa children’s accounts, though they lose the tax advantages. Leeds building society offers 3.65 per cent on its easy-access child savings account. Little over half of the £7bn held in Jisas between 2020 and 2021 was in cash, according to HM Revenue & Customs. This figure has slowly fallen as a proportion over time as more people invest in stocks and shares Isas.“There are lots of people whose junior Isas or child trust funds are sitting at worse rates,” said Sarah Coles, personal finance analyst at Hargreaves Lansdown, noting that balances could be transferred.Financial records suggest that even though markets fluctuate over time, a stocks and shares Jisa will tend to outperform a cash Jisa, with more chance of beating inflation. More