Aurelia Butler

The United Arab Emirates has agreed a deal to supply liquefied natural gas to Germany as chancellor Olaf Scholz visited the Gulf state as part of a regional tour seeking to drum up alternatives to Russian energy.Abu Dhabi National Oil Company will supply Germany utility RWE with 137,000 cubic metres of LNG later this year, which will be the first delivery to the under-construction import terminal on the north-west coast at Brunsbüttel, RWE and the UAE state media said.Adnoc was expected to reserve another five LNG cargoes for German customers in 2023, a person briefed on the matter said on Sunday.Germany has been seeking to secure energy imports from sources outside Russia since the invasion of Ukraine began in February. The oil-rich UAE, while a relatively modest gas exporter, has plans to double its LNG production to 12mn tonnes a year by 2026. “We need to make sure that the production of LNG in the world is advanced to the point where the high demand that exists can be met without having to resort to the production capacity that exists in Russia,” Scholz said before the deal was announced, according to Reuters.RWE said the deal marked “an important milestone” in creating LNG supply infrastructure.But the amount of LNG so far secured by Scholz during his visit to the Gulf — starting with just one tanker in December — is tiny compared with the quantities Germany needs in order to replace the natural gas Russia has stopped supplying. Before Moscow’s invasion of Ukraine, Russian natural gas accounted for more than half of Germany’s total supplies.Scholz, who met the Saudi crown prince, Mohammed bin Salman, in Jeddah on Saturday, headed to Qatar on Sunday for meetings that could yet unlock larger gas supplies for Europe’s largest economy.Qatar, the world’s largest exporter of LNG, has already signed a provisional LNG supply agreement with Germany, but talks over the contracts have run into difficulties over issues such as pricing and the length of contracts.In Doha, the German chancellor met Qatari Emir Sheikh Tamim bin Hamad Al Thani, and said he wanted to “achieve further progress” in LNG deliveries to Germany, Reuters reported.The bilateral deal with the UAE, signed with UAE president Mohammed bin Zayed al-Nahyan, also covered other energy agreements, including a deal with Germany’s Steag and Aurubis for the supply of low-carbon ammonia to fuel hydrogen, with the aim of decarbonising industrial sectors. The first cargo arrived in Hamburg this month.Masdar, the UAE’s renewables vehicle, will explore offshore wind projects in the North Sea and the Baltic Sea off the German coast in an effort to generate 10GW of renewable energy output by 2030.Adnoc also delivered its first diesel delivery to Germany this month as part of an agreement to supply 250,000 tons of diesel a month next year to a German company. “This landmark new agreement reinforces the rapidly growing energy partnership between the UAE and Germany,” said Sultan Al Jaber, chief executive of Adnoc.The deal comes after some difficult years in the bilateral relationship since Germany halted arms exports to the UAE’s regional ally Saudi Arabia in the wake of the murder of Saudi journalist Jamal Khashoggi.The UAE’s involvement in the war in Yemen also exacerbated tensions with Berlin, where many have criticised moves to overlook human rights issues for the sake of facilitating energy supplies.In a statement on Sunday, Robert Habeck, the German economy and climate minister, said companies and citizens urgently needed help to “survive the crisis caused by the Russian war of aggression”.“Gas prices must be reduced, the costs for the economy and households must be limited,” he said. “Overall, in this complex crisis, these are hard times.” Additional reporting by Martin Arnold in Frankfurt More

Hello and welcome to the working week.Or should that be the voting week? The next seven days certainly has a bumper crop of elections. On Monday we will be picking over the fallout from Italy’s lurch to the right after the completion of a bad-tempered election campaign. The Financial Times got in early with a Big Read on what a far right administration means for the rest of Europe. On Tuesday, from 1-2pm BST, you can join FT correspondents and a special guest for a subscriber-only virtual briefing on the election results. Get your pass at ft.com/italianelection and submit your questions for the panellists.We also have elections in Latvia, Bulgaria, Kuwait, and Bosnia and Herzegovina this week. But the big one will be on Sunday with the first round of the Brazilian presidential election. The race frontrunner is leftwing former president Luiz Inácio Lula da Silva, but incumbent Jair Bolsonaro is far from out of the race. Tensions are running high.A smaller but nonetheless significant ballot takes place on Thursday, when the alderman of the City of London will decide the next lord mayor. This largely ceremonial role will be key to promoting the UK’s financial centre, so it’s important. Hopefully the ballot will not prove as contentious as last year’s.Aside from elections, it is a strong week for space travel. On Monday, Nasa will be crashing a spacecraft into an asteroid at 23,000kph in order to divert its path. The $300mn Dart mission, short for Double Asteroid Redirection Test, has picked as its target an asteroid called Dimorphos because it orbits another asteroid rather than the sun.The US space agency will be busy again the next day with the launch of Artemis I, the first in a series of increasingly complex missions to establish a permanent human base on the moon.If that were not uplifting enough the week will end with the return of the London Marathon, albeit six months later than its usual April slot to enable it to take place at all after the disruption the pandemic brought. In another unusual change, I will be running it (also, almost certainly for one year only) in aid of an old school adventure playground located along the route — you can read about the playground in a piece I penned on importance of play for the Weekend FT. You can give by clicking here.Thank you for your responses to this newsletter. Get in touch at [email protected] or hit reply to the email.CompaniesContinuing the theme of play, Lego (the name is derived from the Danish phrase leg godt, or play well) reports half-yearly results on Wednesday. The toymaker has guided analysts to expect a normalising of sales after its pandemic boom but expectations are high that sales will continue to outpace rivals in the sector.For petrol heads, Thursday is an exciting day because shares in Porsche will begin trading on the Frankfurt stock exchange after the long-awaited flotation of the luxury car brand.It’s a more sombre week for lovers of the silver screen. Ailing movie house chain Cineworld will report its half-year results on Friday. Although the group is expected to post a profit, contrasting with last year’s loss, focus will turn to its latest cash position and net debt level after the company filed for bankruptcy protection in the US earlier this month.Economic dataThis will be a week of finding out how economies are performing and how the public expect them to perform with gross domestic product figures from the US, Canada and the UK as well as several consumer confidence surveys.We will also get further insights into the battle in Europe to calm inflation with the release of consumer price index and producer price index readings from Germany, France and Italy.Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayEuropean Central Bank president Christine Lagarde attends the Committee on Economic and Monetary Affairs of the European Parliament in BrusselsOECD publishes its forecast of the near-term prospects for the global economy in its interim economic outlookGermany, Ifo business climate indexJapan, S&P Global composite (services and manufacturing) purchasing managers’ index (PMI)TuesdayFrance, monthly unemployment benefit claimsNigeria, monthly interest rate-setting meetingUK, Bank of England chief economist Huw Pill speaks at the CEPR/Barclays Monetary Policy ForumUS, Federal Housing Finance Agency monthly housing price index plus residential home sale figuresUS, consumer confidence dataResults: AG Barr H1, Ferguson Q4, Saga H1WednesdayFrance, monthly consumer confidence figuresGermany, GfK monthly consumer confidence surveyJapan, Bank of Japan publishes the minutes of its last monetary policy meetingUK, British Retail Consortium Nielsen monthly shop price indexUK, keynote speech by Sir Jon Cunliffe, deputy governor for Financial Stability at the Bank of England, at the AFME Operations, Post-trade, Technology & Innovation conference on “The role of technology in changing the landscape for payments and settlement systems”Results: Boohoo H1, Lego H1, Media for Europe H1, Shepherd Neame FYThursdayCanada, July GDP figureGermany, consumer price index (CPI) inflation rateItaly, August producer price index (PPI) inflation rateShares in Porsche due to begin trading on the Frankfurt Stock ExchangeUK, Bank of England lending dataUS, Q2 GDP (third estimate) figuresResults: Autogrill revenue performance up to August 31, H&M Q3, Next H1, Nike Q1FridayChina, Caixin general manufacturing and services PMI dataEU, eurozone inflation and unemployment figuresFrance, provisional monthly CPI and PPI inflation rate dataGermany, monthly unemployment, import prices and retail sales dataItaly, August unemployment figures and CPI inflation rate dataJapan, monthly unemployment rate, industrial production and retail sales dataUK, British Retail Consortium monthly economic briefingUK, updated Q2 and monthly GDP figuresUS, Federal Reserve vice chair Lael Brainard gives opening remarks at the Financial Stability Considerations for Monetary Policy ConferenceResults: Cineworld H1World eventsFinally, here is a rundown of other events and milestones this week. MondayAustria, the annual General Conference of the International Atomic Energy Agency’s member states begins in ViennaNew Zealand, a public holiday and state memorial service to mark the death of Queen Elizabeth IIRosh Hashana, the Jewish New Year, one of Judaism’s holiest days, commemorating the creation of the world, is celebratedUS, Nasa’s Double Asteroid Redirection Test (Dart) mission to deliberately crash a spacecraft into an asteroid is expected to beginUS, Elizabeth Holmes scheduled to be sentenced in a San Jose court after she was convicted in January of defrauding investors in her Theranos companyTuesdayJapan, state funeral at the Nippon Budokan in Tokyo for former prime minister Shinzo Abe, who was gunned down at a campaign rally in JulyUK, Labour leader Sir Keir Starmer to speak and take questions from delegates, at his party’s conference in Liverpool with pressure on him to present himself as a prime minister in waitingUK, 1,900 Unite members employed at Felixstowe’s port, responsible for 48 per cent of the UK’s container goods, will begin a second eight-day strikeUS, Artemis I, the largest and most powerful rocket launched by Nasa, is scheduled to lift off from Kennedy Space Center in Florida. This will be the first in a series of increasingly complex missions to build a long-term human presence at the Moon for decades to come.WednesdayUS, President Joe Biden hosts the first US-Pacific Island Country summit in WashingtonThursdayKuwait, parliamentary electionUK, election of the lord mayor of the City of LondonFridayUK, last day when paper £20 and £50 notes will be legal tender, having been replaced by polymer notesUK, members of the Communications Workers Union employed by Royal Mail begin two-day walkoutSaturdayChina, National Day to commemorate the founding of the People’s Republic of China, beginning the Golden Week national holidayGermany, minimum wage increases to €12 an hourLatvia, parliamentary electionNigeria, National Day holidayUK, rail workers in the RMT and Aslef unions begin the first of two 24-hour strikes over payUK, NHS surgeries in England will be required to provide enhanced access appointments between 6.30pm and 8pm Mondays to Fridays and between 9am and 5pm on Saturdays under new general practitioner contracts imposed by the government in April.UK, energy regulator Ofgem’s price cap comes into effectSundayAustralia, daylight saving time beginsBosnia and Herzegovina, general electionBrazil, first round of the presidential election. If no one wins more than 50 per cent of the valid votes, a second-round run-off will be held on October 30 between the top two candidates.Bulgaria, parliamentary elections, the country’s fourth in two yearsUK, the London MarathonUK, the Conservative party conference begins in Birmingham More

“If you look over history … there is a really good chance that if we have job losses it will be smaller” than in past slowdowns, Bostic said on CBS’s “Face the Nation” program. “Inflation is high. It is too high. And we need to do all we can to make it come down,” Bostic said of the Fed’s plans to continue with aggressive interest rate increases meant to slow the economy, bring the demand for goods and services more in line with supply, and lower inflation running at a four-decade high.How deep and enduring a slow down is needed – and the job losses that might entail – remains a matter of debate, with Fed officials continuing to argue that companies will be unlikely to lay off workers that have been hard to hire during the COVID-19 pandemic. Citing continued strong growth in payroll jobs, Bostic said there is “a lot of positive momentum. … There is some ability for the economy to absorb our actions and slow in a relatively orderly way.”Bostic also said, “We need to have a slowdown. … We are going to do all that we can at the Federal Reserve to avoid deep, deep pain.” Bostic spoke after a volatile week in global financial markets.The Fed on Wednesday approved its third consecutive three-quarter point interest rate increase and issued projections that showed rates rising higher, and staying there longer, than investors had anticipated. Along with similar moves by a host of other central banks, the news triggered a sharp sell-off in equity markets and warnings that with so many monetary officials tightening policy at once the risks of global recession were rising.Other cracks appeared.Japan, its import prices and therefore local inflation buffeted by a rising dollar, intervened for the first time in nearly a quarter century to strengthen the yen.The United Kingdom proposed tax cuts seemed to put fiscal policy at odds with efforts by the Bank of England to tame inflation with interest rate increases. The pound fell about 3.5% against the dollar to its lowest level since 1985.Despite the global concerns, Fed chair Jerome Powell said the central bank would keep its focus on U.S. inflation and would need to see a convincing drop in the pace of price increases “over coming months” to change its outlook. More

The president of the European Commission has promised a beefed-up trade policy to combat China’s global influence. But when Ursula von der Leyen announced her plans, she made no mention of the stalled trade pact with Latin America’s biggest trade bloc.Speaking in Strasbourg this month, von der Leyen said she would submit trade agreements with Mexico, Chile and New Zealand for ratification by the European parliament and member states and pursue talks with Australia and India. But the sweeping 2019 pact with the South American Mercosur bloc was ignored. Mercosur includes Brazil and Argentina, two of the biggest economies in a region where Chinese trade and investment have grown significantly over the past two decades.Brussels is awaiting the result of Brazil’s October presidential election, insisting Brasília sign a separate commitment to protect the Amazon, before it ratifies the Mercosur deal. Polls suggest leftwinger Luiz Inácio Lula da Silva will defeat rightwing populist Jair Bolsonaro, who has strained relations with most EU leaders because of his failure to rein in deforestation and support indigenous rights.But the lack of progress has worried Josep Borrell, the EU’s foreign policy chief. In July, the Spaniard prepared a confidential paper for foreign ministers, seen by the Financial Times, which mapped out the need for a “qualitative leap in relations” with Latin America and the Caribbean within 18 months. It warned of a “sense of EU disengagement”. The failure to complete trade deals “undermined the EU’s credibility” while “China’s presence and influence in the region has risen exponentially”.Ursula von der Leyen speaking in Strasbourg earlier this month. Brussels is awaiting the result of Brazil’s October presidential election before it ratifies the Mercosur deal © Yves Herman/ReutersWhile Lula generally favours closer ties with the EU, one of his close allies told the Financial Times that a new Lula administration would try to renegotiate parts of the Mercosur deal.Lula, who was president for two terms from 2003-10, regards partnership with the EU as “strategic for Brazil and for Latin America”, said Celso Amorim, his foreign minister during that time. But Amorim, who has advised Lula on foreign policy after stepping down, said a Lula government would be likely to “want some adjustments” to the text of the pact and had concerns over areas such as intellectual property protection and government procurement. “We want to be sure that nothing impedes the technical or industrial development of Brazil,” he said. “We don’t want to remain just a producer of raw materials.” Any changes would need to be agreed by Brazil’s Mercosur partners Argentina, Uruguay and Paraguay as well as the 27 EU member states. A Lula government, Amorim added, was open to changes wanted by the Europeans to strengthen provisions on climate and human rights “as long as this does not interfere with Brazilian sovereignty”.Latin America, a big copper and lithium producer, is also a source of minerals vital for the EU’s green energy transition © Anita Pouchard Serra/BloombergLula suggested last month that the EU-Mercosur treaty was unfavourable to Brazil in some areas. “Negotiations must be something in which everyone wins . . . what we want in the discussion with Europe is to not give way on our interest in reindustrialising [Brazil]”, he told foreign journalists.However, one EU official said reopening an agreement that took years to conclude would be a “nightmare”, especially as many member states have become more sceptical about doing new trade deals since 2019. Pedro Miguel da Costa e Silva, Brazil’s ambassador to the EU, said Brazil had signed up to all the relevant international treaties: “You should not take the agreement hostage because you have these other issues,” he said in an interview.Brasília could discuss signing a joint agreement to curb deforestation, but it must be “balanced and equitable”, he said, pointing out that his country had other suitors. “The strategic partnership we forged with the EU has been inactive. Latin America is off the map for the EU.”The stalled Mercosur deal is not the only wrinkle in the EU’s trade relations with Latin America.A trade and partnership deal with Mexico has sat unratified for four years because of concerns in Europe over environmental and labour rights. Chile’s is still awaiting sign-off after Paris blocked the EU deal because of French farmers’ concerns about increased chicken imports. EU trade commissioner Valdis Dombrovskis is travelling to Latin America later this year. One EU official, speaking on condition of anonymity, said the war in Ukraine had demonstrated that the EU needed a wider range of allies, especially the democratic countries of Latin America. “If you want to win votes in the UN you cannot just rely on the EU, US, Canada, South Korea and Japan. We need to work with many more countries”. Latin America, a big copper and lithium producer, is also a source of minerals vital for the EU’s green energy transition.“Africa is already leased out to China because they have been more strategic than democracies have. We cannot allow the same to happen to Latin America,” the official said.

Javi López, a Spanish socialist who chairs the European parliament’s delegation for Latin America, claimed a Lula election victory would be a vital opportunity to forge better relations. “We are good friends but we need to invest time and political capital if we want to be allies,” he said, adding that there had not been a summit between the EU and Latin America for seven years.“The Amazon is being used as an excuse to stop trade. Some [EU] countries are protecting their agricultural industries.”The commission said the deals with Mexico and Chile could be presented for ratification to member states and the European parliament this year. As for the Mercosur pact, it added: “We look forward to engaging with Brazilian authorities, as well as with the other Mercosur countries, to bring the ongoing process to a successful conclusion.” More

LIVERPOOL, England (Reuters) -Keir Starmer, leader of Britain’s Labour Party, on Sunday pledged to reverse the abolition of the top rate of income tax, saying tax cuts for the wealthy wouldn’t create economic growth as he made a pitch for power at his party’s annual conference.Starmer, who has led Britain’s main opposition party for the past two years, said he would reintroduce the top rate of income tax to 45% after the government abolished the rate in a mini-budget.Labour suffered a crushing defeat in the last general election in 2019 and Starmer is under pressure to assert himself as the prime minister-in-waiting with clear policies to challenge the ruling Conservatives.The selection of Liz Truss as new Conservative leader on a tax-cutting agenda earlier this month has immediately widened the ideological gulf between Britain’s main parties.”I see a very big political divide,” Starmer told the BBC.”I do not believe in this theory that it’s only those at the very top, the very wealthy, that create and drive our economy. It’s the working people across the country.”Finance minister Kwasi Kwarteng last week unleashed historic tax cuts, ditched the cap on bankers’ bonuses and announced huge increases in borrowing in a fiscal statement which sent markets into a tailspin. Starmer said a move by Kwarteng to cut the top rate of tax was “hugely divisive” and unfair because it handed someone earning 1 million pounds ($1.09 million) a 55,000 pound tax cut and would not trickle down to the rest.”I would reverse the decision they made,” Labour leader Starmer said. “It is hugely risky, it is hugely divisive, and I would reverse it.” However, Starmer said a Labour government would not reverse the government’s decision to cut the basic rate of income tax to 19% from 20%, saying that tax cut would benefit working people.MORE TAX CUTSKwarteng said that he was focused on boosting longer-term growth, not on short-term market moves, when challenged over the sharp fall in sterling and bond prices. He said there will be more tax cuts in the future. “You don’t deal with people’s rising cost of living by taking more of their money in tax,” Kwarteng told the BBC.With the next election expected in 2024, Starmer is bidding to move his party towards the centre and preparing for a more ideologically-focused debate with Truss after his clashes with her predecessor Boris Johnson often focused on character.Starmer has been criticised by some in his party for not spelling out clear policies to challenge the Conservatives, who have been dealing with crises ranging from sleaze to the highest inflation in four decades.Labour is about 10 percentage points ahead of the ruling Conservatives in the opinion polls but with the next election due in two years, some lawmakers said the party should be further ahead.Andy Burnham, the mayor of Greater Manchester, earlier said Labour should oppose all the tax moves outlined by the new government.Starmer led Labour party members in tributes to the Queen and a rendition of the national anthem – the first time the song had been sung at the party’s conference in recent memory.Despite concern that the singing would be likely to attract protests, the speech and anthem passed without any dissent. Starmer said Labour was heading in the right direction, and that the hope that the party would win the next election had turned into a belief.”I’m very pleased with the progress that we’re making,” he said. “To now be in a position where there’s a belief that Labour will win the next general election is real progress for our party.”($1 = 0.9211 pounds) More

The association said in a statement on Sunday that the decision to reopen “was taken after consideration of the current difficult security conditions and the need to maintain the safety of customers and employees alike, in the absence of adequate protection by the state”.It added each bank would determine its own channels for banking operations with commercial and educational institutions, and the health care sector amongst others.A top Lebanese banker on Friday criticised politicians for failing to enact a capital control law, saying this was the way to avoid bank raids by savers demanding funds from frozen accounts and to stop banks’ “discretionary practices”.The holdups reflect savers’ desperation three years after Lebanon’s financial system collapsed due to decades of state corruption and waste, and unsustainable financial policies.The government has agreed neither a financial recovery plan nor enacted reforms deemed vital to get Lebanon out of the crisis. While the government says it is committed to reforms, the International Monetary Fund says progress remains very slow. More

The IMF’s lending to economically troubled countries has hit a record high as the world’s lender of last resort battles simultaneous crises that have pushed at least five countries into default, with more expected to follow.The pandemic, Russia’s attack on Ukraine and a sharp rise in global interest rates have forced dozens of countries to seek IMF assistance. A Financial Times analysis of IMF data shows that at the end of August the volume of loans disbursed by the fund amounted to $140bn in 44 separate programmes. The figure, which is expected to grow further in the coming months as borrowing costs soar, is already higher than the amount of credit outstanding at the end of 2020 and 2021, when levels reached record annual highs.Experts predict that further large rate rises by major market central banks will push up borrowing costs around the world and risk triggering a severe recession. Some analysts say the IMF’s lending capacity could soon be stretched to its limits, as poor countries which are locked out of international debt market are forced to turn to the fund for support. The IMF’s total commitments, including loans agreed but not yet disbursed, already stand at more than $268bn.Kevin Gallagher of Boston University’s Global Development Policy Center warned that “only so many countries” could receive IMF support without “snapping the IMF balance sheet”.Gallagher is co-author of a report this week warning that 55 of the world’s poorest countries face debt repayments of $436bn between 2022 and 2028, with about $61bn falling due this year and in 2023, and almost $70bn in 2024.The fund downplayed the concerns. Its total commitments are “still a fraction of the [almost] $1tn that could be available”, said Bikas Joshi, division chief in the IMF’s strategy, policy and review department. “The amount of lending is rising commensurate with the increased risks faced by the countries turning to us for support.”The IMF is in negotiations with several countries about support packages which would increase its total commitments further. Zambia and Sri Lanka — which both defaulted in the pandemic along with Lebanon, Russia and Suriname — are negotiating IMF bailouts as part of efforts to restructure their debts. Ghana, Egypt and Tunisia are in early talks for similar support.The IMF approved a $1.1bn bailout for Pakistan at the end of August; Argentina is set to receive $3.9bn in the next few weeks as part of its $41bn programme.Under IMF rules, member countries can usually only get support equal to up to 145 per cent of their IMF quota, or shareholding, which is roughly in line with each country’s share of the global economy.This would leave $370bn available for low and middle income countries out of the IMF’s roughly $940bn total lending capacity.But that limit is often exceeded. Argentina’s support package — approved in March as a restructuring of debts from its record $50bn IMF bailout of 2018 — is equal to more than 10 times its quota. Analysts at Goldman Sachs expect Egypt soon to get a $15bn package, equal to nearly six times its quota.The IMF is making limited additions to its lending capacity. It traditionally lends from two main facilities, the so-called general resources account and the poverty relief and growth trust, which lends at lower interest rates to low-income countries. It recently set up a resilience and sustainability trust, designed to help countries deal with systemic challenges such as climate change, which Joshi said had received funding commitments worth $40bn, against a target of $45bn. A new food shock window, to help countries hit by soaring food costs, is likely to be approved by the IMF’s board before its annual meetings next month. More

Ghana turned to the IMF for help in July as its balance-of-payments deteriorated and hundreds took to the streets to protest against economic hardship. An IMF staff team briefly visited the country two weeks later.Reuters’ reported last week that an IMF team would visit Ghana this week. The IMF, in a statement on Sunday, said the team would arrive on Monday and stay until Oct. 7.The government of Ghana, a major gold and cocoa producer, has been struggling to tame galloping inflation, reduce public debt and shore up the local currency. Its balance-of-payments deficit swelled to nearly $2.5 billion by the end of June from around $935 million in March. A source with knowledge of the matter told Reuters last month that an eventual agreement between Ghana and the IMF will likely consist of $3 billion in financing over a three-year period, and contain elements of both Extended Credit Facility (ECF) and Extended Fund Facility (EFF) programmes. More