Aurelia Butler

DOHA (Reuters) – Two high-tech Airbus A350 jets sit idle with their windows taped and engines covered in a floodlit hangar in the Gulf, hobbled by an international legal dispute between European industrial giant Airbus and Qatar’s national carrier.From a distance, the planes might seem like any other long-haul jetliners crowding the busy Doha hub. But a rare on-site visit by Reuters journalists showed what appeared to be evidence of damage to the surface of parts of the wings, tail and hull.The two planes, worth around $300 million combined according to analysts, are among 23 grounded A350s at the centre of a $1 billion London court battle over whether the damage represents a potential safety risk, something Airbus strongly denies.The planes were grounded by Qatar’s regulator after premature paint erosion exposed damage to a metallic sub-layer that provides protection to the fuselage from lightning strikes.Other airlines continue to fly the A350 after European regulators declared the aircraft safe. Reuters journalists were granted rare first-hand access after requesting the visit on the sidelines of an airline industry meeting in the Qatari capital, Doha, this week.Sporadic surface flaws on the A350s viewed by Reuters included an elongated stretch of blistered and cracked or missing paint along the roof or crown of the jets. In some areas including on the curved wingtips, the protective lightning mesh that sits between the hull and the paint appeared exposed and corroded. In other parts it appeared to be missing, leaving areas of the composite hull exposed. The paint on the tail of one of the A350s emblazoned with Qatar Airways’ maroon Arabian Oryx emblem was pockmarked by cracked and missing paint that exposed the layer beneath.Reuters saw small areas of what appeared to be fraying or delaminated carbon threads on the hull and so-called ‘rivet rash’ or lost paint from fastener heads on the main wing areas.Airbus and Qatar Airways had no immediate comment on Reuters’ findings.Shares in Airbus were down 3% on Wednesday morning.EROSIONAirbus acknowledges quality flaws to the A350s, but denies they pose any safety risk because of the number of backup systems and tolerance built into the design. Qatar Airways has argued this can’t be known until further analysis, and is refusing to take more of the planes.Airbus has argued that some paint erosion is a feature of the carbon-composite technology used to build all modern long-haul jets – a necessary trade-off for weight savings.It says the cracks are caused by the way paint, anti-lightning material called ECF and the composite structure interact. The tail does not all contain the ECF foil, prompting a debate over whether damage there comes from the same problem. Qatar Airways has questioned Airbus’ explanation, telling a UK court its similar Boeing (NYSE:BA) 787s do not have the same problems.Amid hundreds of pages of conflicting technical court filings presented by both sides, Reuters has not been able to verify independently the cause of the damage.Qatar Airways’ Chief Executive Akbar Al Baker and Airbus Chief Executive Guillaume Faury had the opportunity to mingle during the three-day industry gathering in Qatar this week.Asked whether the relationship had improved after the event, which included the two men seated next to each other over dinner, Al Baker suggested the two sides remain far apart.”On a personal level I am friends with everyone but when it comes to an issue with my company, then it’s a different story. If things were settled, we would not be still waiting for a trial to happen next year,” he told a news conference.Faury said this week he was in discussion with the airline and reported “progress in the sense that we are communicating”.One of the airline industry’s most senior officials voiced concerns after the Doha meeting that the dispute could have a toxic effect on contractual ties across the industry.”It would be much better if we were dealing with friends that than dealing in the courts,” Willie Walsh, director general of the International Air Transport Association, told reporters. More

The UK’s main teaching unions are threatening strike action this autumn if the government does not agree to an inflation-busting 12 per cent pay rise for their members.The National Education Union and the NASUWT-The Teachers’ Union made the demands to Nadhim Zahawi, the education secretary, citing the soaring cost of living and the impact of a decade of real-terms cuts to teachers’ pay.The strike threat sets up a clash up with Boris Johnson’s Conservative government as it tries to keep a lid on public sector pay demands, as overall CPI inflation hit 9.1 per cent on Wednesday, with increases for fuel and many basic foods running into double-digits. The NEU set out its reasoning behind its demand for an 11.7 per cent increase in a letter to Zahawi on Wednesday, saying the figure matched current retail price inflation (RPI), which it argued is a better measure of the price of goods in the shops. It added that the pay rise was essential to address a sharp rise in teacher vacancies in secondary schools and arrest the high number of staff quitting the profession within five years of qualifying. Mary Bousted and Kevin Courtney, joint general secretaries of the NEU, said that without “sufficient action” by the government they would ballot members for strike action and be “strongly encouraging” them to vote in favour. “You must respond to the new economic reality of double-digit inflation and the threat this poses to teacher living standards. We call on you to commit to an inflation-plus increase for all teachers,” they wrote. The demand comes two days after the NASUWT asked for a 12 per cent pay rise this year, warning the profession faced an “existential emergency” following 12 years of real-terms pay cuts that it said had shrunk the value of salaries by 20 per cent in real terms.“We will not allow cuts to our members’ pay and attacks on their pensions,” said Patrick Roach, NASUWT general secretary. “If a pay rise is not awarded, it will be won by our members in workplaces through industrial action.”Unions have said the combination of eroded pay and increased workload is responsible for a rise in teacher vacancies and early departures from the profession that were undermining the government efforts to increase staff numbers.“One in four teachers have left by the end of three years, one in three by the end of five,” Bousted and Courtney wrote to Zahawi. “You cannot afford to turn away from these figures and the reality behind them.” Both unions have said they will wait for the government’s response to pay recommendations from the School Teachers’ Review Body, which is expected at the end of the school year.

The government has suggested a 3 per cent rise in its evidence to the body, but unions said this predated the recent surge in inflation. The STRB’s recommendations are not binding on ministers.Zahawi said the government would consider the independent pay body recommendations, but warned that strikes would damage the chances of pupils who have already suffered lost learning during the Covid-19 pandemic.“We have proposed the highest pay awards in a generation for new teachers — 16.7 per cent over the next two years — alongside further pay awards for more experienced teachers and leaders.“Young people have suffered more disruption to their education than any generation that’s gone before, and it’s the vital work of teachers that is helping them get back on track. The last thing I — or any parent — want to see is anything that would risk undoing that progress,” he said. More

It would be easy to react to the string of Brexit supporters belatedly admitting that leaving the EU’s single market and customs union was bad for the British economy by saying “told you so”. So here goes: told you so.Inexorably, year by year, evidence accumulates of the damage done. Not just did the fall in the exchange rate after the referendum inflict a painful shock, but overall trade has lagged behind that of similar economies, and business investment has been strikingly weak.Is there a way to undo this damage in the short to medium term? Unfortunately, the political toxicity of the UK’s relationship with the EU, and the Labour opposition’s tactic of being at least half as mule-headed as the government at all times, means any dismantling of barriers with the single market will be slow and piecemeal. A Horizon Europe research programme here, a labour mobility agreement there, a veterinary deal somewhere down the line. And all subject to the EU’s unhelpful aversion to smudging the hard line between the easy market access afforded to member states inside its legal order and the tough border bureaucracy for those without.The maddening thing is it’s not as if the UK has given in to mindlessly constructing trade barriers across the board. So far, the rest of Britain’s trade policy (the prince-free parts of Hamlet, you might say) is pretty sensible and for the most part fairly well executed.The UK’s ability to run two trade policies animated by different philosophies under one government is startling. At a World Trade Organization summit last week, British ministers and officials paraded their progressive free-trade internationalist credentials. Anne-Marie Trevelyan, the UK trade secretary, told the FT that other (unnamed) governments at the meeting had told her “how important UK leadership is in support of the values of free and fair trade in the rules-based order”.At one point, the UK made a big show of its independence of mind by being the last government to hold out against a proposal to override a WTO agreement on intellectual property rights regarding Covid vaccines. In this way it struck the somewhat paradoxical pose of being a lone fighter for multilateralist principles.Outside the WTO, the UK’s preferred gang in world trade is the Asia-Pacific, where its attitudes and conduct are pretty sound. On top of its bilateral deals with Australia and New Zealand, a digital agreement with Singapore has just gone into force and the UK is closing in on an agreement with India.In some areas, such as its willingness to embrace agricultural liberalisation and address digital issues such as data flow in trade deals, its activities mark a constructive change from EU trade policy. In others, including its eagerness to accept a weak trade deal from India rather than emulate the EU’s determination to hold out for something more substantive from New Delhi, it’s a sign of geostrategic expedience driving commercial policy.But, either way, the UK in its non-EU dealings is proving, broadly speaking, a competent negotiator and constructive participant in line with the country’s internationalist free-trade tradition. By contrast, its dealings with Brussels since Brexit have been reactionary and damaging. The commitment to the international rule of law on which it prides itself in the WTO is entirely absent in its threats against the Northern Ireland protocol. Its neurotic aversion to co-operation is childish and self-destructive.A common Brexiter argument was that opportunities elsewhere would offset and ultimately outweigh the shock to trade with the EU. It’s theoretically possible that this could still happen, or that the government’s hunt for domestic deregulatory Brexit dividends will at some point bag some substantive game. But so far, the net effect of the UK leaving the customs union and single market is very clearly negative. The Asia-Pacific remains far away, however hard you squint. The UK’s dysfunctional relationship with its largest and closest trading partner greatly outweighs anything constructive it is doing elsewhere, including at a multilateral level. Again: told you so.The broad weakness in UK business investment, including by domestic companies, and of trade with non-EU economies, is particularly striking. It suggests that it isn’t just border frictions with the continent that have hurt the economy, but a general uncertainty among companies and a sense that economic policy is in the hands of a government that doesn’t know or care what it’s doing.A digital partnership with Singapore — which in any case needn’t be incompatible with EU single market membership — is fine. But it’s not a substitute for an open and constructive relationship with the trading area the UK so recklessly [email protected] More

Investing.com — The global market rally runs into a familiar pattern of fresh selling on recession fears. Fed Chair Jerome Powell heads to Capitol Hill for two days of testimony. President Joe Biden is expected to call for a suspension of the federal gasoline tax. Further afield, inflation in the U.K. hits a new high and the IEA warns of a total shut-off of Russian gas to Europe. Here’s what you need to know in financial markets on Wednesday, June 22.1. Global market rally fadesThe global rally in stock markets quickly ran into a familiar pattern of fresh selling as recession fears once again took the upper hand.Asian and European equities sank overnight and bonds rallied, with European markets underperforming as the International Energy Agency warned regional leaders to prepare for a total cut-off of Russian gas supplies.  By 06:15 a.m. ET (1015 GMT), the yield on the U.S. 10-Year Treasury was down 8 basis points at 3.22%, while the 2-year note was down 7 basis points at 3.13%.The fading of risk appetite was also evident in cryptocurrencies, where Bitcoin fell 4.0% to $20,441.2. Powell in Congress; mortgage data dueFederal Reserve Chair Jerome Powell will begin two days of testimony to Congress on the state of the economy, addressing the Senate Banking Committee from 08:30 a.m. ET onward.He’s likely to be grilled over the trade-offs between bringing inflation down and the risk of driving the U.S. into a recession (Citigroup analysts raised their estimate of recession risk to 50% on Tuesday).Powell’s recent meeting with President Joe Biden had appeared to leave him with all the leeway necessary to bring inflation down from its 4-decade high. However, Congressmen and -women facing re-election in five months’ time may be less generous.Signs of the U.S. economy starting to cool are already multiplying, with existing home sales falling for a fourth straight month in May as rising interest rates hit affordability metrics. MBA data on mortgage applications are due at 07:00 a.m. ET.3. Stocks set to open lower U.S. stock markets are set to give up most of their Tuesday gains at opening, pending any sign from Powell that the economic trajectory will end up with the Fed tightening policy by less than currently expected.By 06:15 a.m. ET, Dow Jones futures were down 361 points, or 1.2%, while S&P 500 futures were down 1.4% and Nasdaq 100 futures were down 1.7%.Stocks likely to be in focus later include Altria (NYSE:MO), after the Biden administration published a plan that would force tobacco companies to remove most of the nicotine from cigarettes, weakening their habit-forming tendencies. Also of interest will be Toyota, which flagged attempts to raise output through September, despite ongoing problems with supply chains.4. U.K. CPI hits new high as rail strikes continueInflation in the U.K. rose to another 4-decade high of 9.1% in May, as food and energy prices continued to take big bites out of consumers’ disposable income. Core inflation undershot expectations, accordingly, as spending on non-essentials was pared back.Pipeline pressure in the system remains high, with factory gate prices rising 15.7% on the year and another 1.6% on the month. Developments aren’t being helped by the sustained weakness in sterling, which fell as low as $1.2176 before paring losses.The U.K. is in the middle of a three-day national rail strike, one that could set an important precedent for this year’s round of public-sector wage increases. One regional chapter of the train drivers’ union RMT has agreed in principle to accept an offer of a 7.1% pay increase.Separately, a new study found that Brexit had left the U.K. economy less open and competitive than before.5. Oil lower as recession fears bite; Biden gas tax appeal seen likelyCrude oil prices continued to come off the boil as global recession fears clouded the demand outlook. Reports of a COVID-19 outbreak in the Chinese gambling hub of Macau did nothing to improve the mood.By 06:30 a.m. ET, U.S. crude prices were down 4.7% at $104.71 a barrel, while Brent was down 4.2% at $109.84.U.S. President Joe Biden is expected to call on Congress later to vote for a suspension of the federal gasoline tax, and to rally support for other measures that will cut prices across the U.S. As the measures are aimed at sustaining demand, it’s not clear that they will ultimately put downward pressure on global prices.The American Petroleum Institute will report its weekly inventory data at 04:30 p.m. ET, a day later than usual due to Monday’s holiday. More

Joe Biden will today call on Congress to suspend the federal tax on petrol and diesel for three months in a bid to provide some temporary relief to American households grappling with high inflation. Petrol costs have soared to about $5 per gallon in recent weeks and consumer prices are rising at their fastest pace for decades, souring Americans’ perceptions of the strength of the US recovery and threatening Democratic chances in midterm elections later this year.The so-called gas tax holiday would involve scrapping the 18.4 cent federal levy on every gallon of petrol, and 24 cent levy on diesel that consumers pay at the pump. But critics say the policy could backfire, boosting demand and contributing to inflation, while failing to provide meaningful relief to families. There is also no guarantee that it would be approved by Congress.The Biden announcement comes a day after the president hit out at Chevron chief executive Mike Wirth, calling the oil major boss “sensitive” after he criticised the US administration’s energy policy.The president, who will meet oil company executives on Thursday, has increased his criticism of domestic producers in recent weeks. He said ExxonMobil was “making more than God this year” and told the oil supermajor to “start investing more”. He also criticised the industry’s elevated profits as “unacceptable” during “a time of war”, as conflict rages in Ukraine.The president’s comments are part of a strategy to alleviate pressure at the pumps for US consumers. Earlier this year he ordered the biggest ever release of oil from the US strategic petroleum reserve and next month will travel to Saudi Arabia for talks with a regime he once considered a “pariah”. The Biden announcement comes on the same day that the head of the International Energy Administration, a western energy watchdog, warned Europe to prepare for Russia to cut off exports of gas this winter. “Europe should be ready in case Russian gas is completely cut off,” Fatih Birol told the Financial Times in an interview.The briefing from the White House ahead of Biden’s announcement appeared to bring lower US oil prices. US West Texas Intermediate, the US benchmark, was down nearly 6 per cent earlier today at $104.15 a barrel. Brent crude, the international benchmark, was 4.5 per cent lower at $109.55 a barrel.Thanks for reading FirstFT Americas. Here is the rest of the day’s news — GordonFive more stories in the news1. Donald Trump pressed state officials to overturn election, committee hears Local officials described being put under intense pressure by the former president and his lawyers as part of a scheme to have him declared the winner of the 2020 election. Several witnesses at yesterday’s hearing described receiving death threats while another said he was deluged with 4,000 text messages after Trump tweeted his personal phone number. 2. Kellogg’s to split into three food businesses Kellogg is splitting into three public companies, keeping its core global snacks business while spinning off the North American cereal brands where the Cornflakes maker’s origins lie and a business selling plant-based foods.Go deeper: The three-way split creates an opportunity for hungry private equity firms, argues the Lex column.3. Exclusive: UK weighs move to force London IPO for Arm The UK government has debated using national security legislation to convince SoftBank to list Arm in London, as the Japanese investor reconsiders holding an IPO for the chip designer exclusively in the US.4. Democrats question Reckitt Benckiser’s plan to sell baby formula unit Lawmakers are urging the top US antitrust enforcer to scrutinise a proposed sale of Reckitt Benckiser’s baby formula unit to a private equity firm, warning that it “could shallow out” the market during a national supply shortage.5. Crypto exchange FTX bails out lending platform Sam Bankman-Fried has delivered his second bailout of a struggling digital assets firm in as many weeks. The 30-year-old chief executive of crypto trading platform FTX has extended a $250mn loan to lending platform BlockFi. It comes just a week after he helped crypto broker Voyager Digital to pull back from the brink.More crypto news: Chen Boliang, a former senior manager at Huobi, one of the world’s largest crypto exchanges, is being prosecuted in Hong Kong after accusations that he made $5mn by secretly trading against a company account he controlled.The day aheadFed chair testifies Federal Reserve chair Jay Powell begins two days of testimony in Congress by delivering his semi-annual monetary policy report to the Senate banking committee after the US central bank last week raised its main interest rate by 0.75 percentage points, its biggest increase since 1994.Markets outlook Investors will be watching the Powell testimony closely as they assess the risks to the US economy and company earnings of rapid interest rate rises. Futures trading ahead of Powell’s appearance on Capitol Hill suggests US share gauges will open lower. Earnings Canadian grocer Empire Co and US homebuilder KB Home will report before the bell. Empire is expected to report a profit of 69 Canadian cents a share on C$8bn ($6.2bn) in revenues. KB is expected to report earnings of $2.03 a share on $1.64bn in revenues. On Tuesday, US homebuilder Lennar surpassed consensus estimates despite rising mortgage rates.International relations Saudi Crown Prince Mohammed bin Salman is scheduled to make his first visit to Turkey since the murder of Saudi columnist Jamal Khashoggi in Istanbul. The de facto leader of Saudi Arabia will meet Turkey’s president Recep Tayyip Erdoğan on the final leg of a Middle East tour that also took him to Egypt and Jordan.What else we’re readingThe big mistakes of anti-globalisers Globalisation is not dead. It may not even be dying. But it is changing, writes Martin Wolf. From treating trade as optional to overstating the merits of self-sufficiency, Martin outlines the anti-globalisers’ big mistakes.A corporate feud over satellites pits the west against China In February, European financiers and entrepreneurs gathered for a late-night online meeting to resolve a boardroom dispute over prized satellite permits. At its core was the question: who controls an asset in orbit? Here’s how a clash of cultures and geostrategic interests sank a German-Chinese joint venture.Anarchy is a likelier future for the west than tyranny The story of our species is mostly one of disorder, not too much order. Even now, the state, a recent invention, is patchy and provisional in much of the world. Janan Ganesh argues that the trend of events is not towards strongmen but towards ungovernability.How boards can keep up with climate action expectations HSBC’s bus stop adverts. BlackRock’s investment plans. BP and Microsoft’s carbon offsets. Green policy is turning into the fast-fashion of business strategy. Pilita Clark explains how to navigate this shifting landscape.Regrets? We’ve all had a few but they can help your career In this week’s Working It podcast, senior business writer Andrew Hill talks to the bestselling author Daniel Pink. In The Power of Regret, Pink urges us to think differently about our workplace regrets and reframe our past to show us the path to a better future.BooksEarlier this year, we published a rundown of private libraries around the globe. It promoted a flurry of responses regarding remarkable reading rooms. Here are some of your favourites.

St Gallen Abbey Library, Switzerland © St Gallen Abbey Library, Switzerland More

Investing.com — The risk premium on Italy’s bonds increased on Wednesday after one of the parties that Prime Minister Mario Draghi depends on for his parliamentary majority split over its policy toward Ukraine. Foreign Minister Luigi di Maio confirmed on Tuesday that he will leave the 5 Star Movement, the biggest party in Draghi’s de facto coalition, over the refusal of its leader Giuseppe Conte to support the shipment of arms to Ukraine to defend itself against the invading Russian forces. The split raises the likelihood that 5 Star, under Conte, will leave Draghi’s government, narrowing the political base for a government that has no direct democratic mandate.By 05:45 a.m. ET (0945 GMT), the Spread between Italian and German 10-year bond yields, a traditional barometer of Eurozone breakup risk, had widened to 206 basis points, from 199 at Tuesday’s close. Italy’s benchmark stock index, the FTSE MIB, was also the worst performer among the main European indices, with a drop of 2.5%. Draghi was called upon to take over as Prime Minister in 2021 after the previous coalition collapsed under the strain of managing Italy’s response to the pandemic. While the pandemic emergency initially guaranteed Draghi a huge majority in parliament which was unusual for Italy, support for it has frayed in recent months, as Draghi’s outspoken support for Ukraine has gone against the traditional sympathy for Russia found on both the left and right-wing fringes of Italian politics. Elections aren’t due until 2023. The Italian economy – which is almost completely dependent on imported fossil fuels – has come under intense pressure from the surge in oil and gas prices this year. Despite that, Draghi has supported all of the western initiatives to sanction and isolate Russia. Italy’s Senate approved a bill shipping more weapons to Ukraine earlier this week. Financial markets have seen the presence of the former European Central Bank President as an essential condition for preventing renewed stress between Italy and the rest of the Eurozone at a time when government budget deficits have widened sharply, exposing the chronic weakness of Italy’s sovereign balance sheet. The BTP-Bund spread has soared in recent weeks as the ECB ended a bond-buying policy that allowed it to give more support to the Eurozone’s weaker members. Tighter monetary policy in the U.S. has also had the effect of dragging Eurozone yields higher in that time. The benchmark 10-year yield had hit a nine-year high of 4.28% last week, approaching a level that analysts say will be difficult to sustain in the long term given Italy’s low growth over the last two decades. It has since eased to 3.73%, as fears of a recession have triggered inflows to bonds, which are still regarded as lower-risk than equities. More

The country may also increase subsidies for cooking oil from the planned 4 billion ringgit planned for this year, Ismail Sabri Yaakob said in a televised address.Malaysia is set to abolish subsidies for some bottled cooking oil products from July 1, because the policy had been abused by the industry and led to smuggling, Ismail Sabri said.But the government will continue subsidising 60,000 metric tonnes of cooking oil a month in the form of 1 kg (2.2 lb)packets, which has been in place since 2007, he said.The government on Tuesday said it would also lift the ceiling prices for chicken and eggs in July after measures to control food inflation created market distortions.To help citizens cope with higher living costs, Ismail Sabri said authorities will distribute an additional 630 million ringgit in cash aid on top of existing allocations, bringing the total disbursement to 1.74 billion ringgit.Earlier this month, Malaysia said an increase in government revenue from rising commodity prices was insufficient to offset an expected spike in subsidy spending this year. More