Aurelia Butler

One of Britain’s biggest energy suppliers has warned households to brace for a further rise of more than £900 in their annual bills this year and appealed to the government to enter emergency talks over tackling the “crisis” of soaring electricity and gas costs.ScottishPower said it expected Britain’s energy price cap to go up by about 47 per cent to an average of £2,900 a year per household when it is next adjusted by regulator Ofgem in October. The price cap was increased by 54 per cent to £1,971 a year in April, reflecting sharp increases in wholesale gas and electricity prices that began last year following concerns over gas supplies in Europe. It dictates bills for more than 22mn households not on fixed-price deals and is currently recalculated twice a year.High energy bills are contributing to a wider cost of living crisis in the UK that the Bank of England has warned will push the country into recession this year.

ScottishPower’s chief executive Keith Anderson urged Boris Johnson’s government to begin discussions immediately over how to take the pressure off those households that would be hit hardest by the October rise. Energy groups have warned that 30-40 per cent of households could end up in fuel poverty in the coming winter.Anderson stressed it would take time to design and introduce new support mechanisms.“What’s about to happen to people, you cannot describe in any other way than saying it’s a crisis,” he told the Financial Times. “All of a sudden a whole host of people who have never found themselves in debt and have never struggled to pay their bills are going to get hit by this crisis. Time is running out fast. Let’s get in a room and come up with the solutions now.” The government came under fire at the end of last year for being slow to act against soaring energy prices. Chancellor Rishi Sunak in February announced a £9bn energy support package but one of the key elements — a £200 discount to be applied to all customers’ electricity bills — will not come into force until October and is still in a consultation process on its design.ScottishPower has proposed a “deficit fund” that would knock £1,000 off the energy bills of those most in need. This could include the 8mn-11mn households that will find themselves in fuel poverty, or those in receipt of universal credit.Potentially costing more than £10bn in total, the fund would be recovered via a levy on all households’ energy bills over 10 years under the company’s proposals.Anderson argued that if regulated by Ofgem, the scheme could potentially be financed by the private sector which would be able to borrow the sums required. “Because you’re recovering it through a regulated levy . . . [retail companies] can go and securitise the debt and borrow money against that fund,” Anderson said, although he added the government could also decide to part or fully finance the scheme itself.Ofgem allowed challengers to launch bearing minimal risk, report findsEstimates of October’s expected price cap increase have varied. ScottishPower’s own forecast is subject to change as wholesale prices could decrease in the coming months. However, Anderson warned that forward prices suggested bills would not come down “in the next 12 to 24 months”. Energy suppliers are under investigation by Ofgem after business secretary Kwasi Kwarteng said some had been increasing households’ direct debits “beyond what is required”.Anderson said direct debit calculations could vary according to households’ energy usage but insisted the algorithm ScottishPower used was “the same algorithm we used . . . last year and the year before and the year before that”. More

TOKYO (Reuters) -Japan’s airlines are betting on a travel recovery this summer after the COVID-19 doldrums, as many Japanese look to head overseas for the first time in years now that fully vaccinated residents no longer face quarantine curbs on their return.After encouraging demand for flights to Hawaii during a just concluded popular holiday season, Japan Airlines Co Ltd (JAL) and ANA Holdings Inc are hoping the outbound rise will help fill some of the gap from Japan’s ongoing ban on foreign tourist arrivals.Japan on March 1 waived all quarantine and isolation requirements for triple-vaccinated residents returning from the United States and a range of other countries. It also lowered its U.S. infection travel warning from April 1.”The fact that you don’t have to quarantine upon return is a big reason why we chose Hawaii,” said Masahiro Sugiyama, who was travelling with his wife and two children. An upswing in demand for flights to Hawaii, a long-favoured destination for many Japanese, is seen as a bellwether for the overall travel sector. It also shows that the airlines are keen to capitalise on pent up demand – even though higher fuel costs, a weak yen and expensive testing requirements are driving up costs for travellers.”If I don’t go when I can, I don’t know when I’ll have another chance,” said Kaori Sato, a college student about to depart on a week-long trip to Hawaii with her mother and sister. “I’m still worried about corona, but I’ve had three vaccine shots, so I think I’ll be fine.”BOOKINGS JUMPLast year, just 510,000 Japanese went abroad, according to government statistics, down from more than 20 million in 2019.But international bookings before the start of the recent holiday break, known in Japan as ‘Golden Week’, surged: At ANA they jumped more than five-fold and JAL more than four-fold, the airlines said before the start of the holidays.ANA said it aims to bring back more flights to Los Angeles, New York and other destinations popular with Japanese tourists. There are also hopes a ban on inbound tourists could be lifted soon after Japanese Prime Minister Fumio Kishida said on Thursday that border measures would be reviewed next month.JAL plans to resume daily flights to Hawaii from June, while ANA said it will return to using its largest planes, the 520-seater Airbus A380, for some Hawaii routes from July.Meanwhile, customers will have to pay as much as 62,000 yen ($475) per ticket as a fuel surcharge.Hawaii-bound Angie Matsuo said she and her parents also had to pay more than 100,000 yen combined for PCR tests required before leaving, equating to more than $250 each. Another test is needed before returning home.”The testing is a hassle because it takes a lot of money, time, and effort,” Matsuo said. “The depreciation of the yen and various price hikes are also a pain. But I don’t know when I’ll be able to go again, so it’s now or never.”($1 = 130.6200 yen) More

(Reuters) -Australia’s Westpac Banking (NYSE:WBK) Corp on Monday said continued margin pressure from competition in mortgage lending caused its first-half earnings to drop over 12% from a year-ago, but Westpac forecast lower expenses in the second half of the year with its cost reset plan in full swing.Australia’s “Big Four” banks enjoyed a boom in home lending helped by low interest rates and a pandemic-fuelled shift to remote working that buoyed property markets. But their margins have been hit by competition and by borrowers’ moving to fixed-rate loans.Westpac said net interest margin, a key profitability indicator, fell 15 basis points to 1.91% in the first half. It booked an impairment charge of A$139 million ($98.1 million) as it set aside more funds to cover bad debts related to recent floods in Australia and broader global uncertainty.”The first half of 2022 has been challenging for many customers. Floods, the lingering effects of the pandemic and the impact of the war in Ukraine have set many customers back and created uncertainty,” Chief Executive Peter King said.However, the country’s third-largest bank forecast second-half costs to be flat to 2% lower sequentially, a sign that its bold cost restructuring strategy was beginning to pay off.Westpac, which is emerging from a costly turnaround to fix outdated software and convoluted procedures, said it cut more than 4,000 jobs in the first half and expenses fell 27% from the 2021 second half, putting it on track for its annual cost target of A$8 billion by fiscal 2024.Cash earnings fell to A$3.10 billion ($2.19 billion) for the six months ended March 31 from A$3.54 billion reported a year earlier, but beat a Visible Alpha consensus forecast of A$2.83 billion.Westpac declared an interim dividend of 61 Australian cents per share, compared with 58 Australian cents last year.Last week, its peers National Australian Bank and Australia and New Zealand Banking Group forecast that their margins would benefit after the country’s central bank hiked rates and signalled more to come.($1 = 1.4154 Australian dollars) More

The US sought to tighten sanctions on Russia yesterday by blacklisting a swath of financial executives at Gazprombank for the first time, and barring companies from providing Russia with corporate services such as accounting and consulting.A senior Biden administration official said the new US sanctions targeted 27 executives of Gazprombank, Russia’s third-largest lender and a subsidiary of state-owned energy company Gazprom. But the measures did not freeze the company’s assets or prohibit transactions with it since it is the main way Russia sells gas to Europe. “We’re sanctioning some of their top business executives, they’re the people who sit at the top of the organisation, to create a chilling effect . . . we don’t want Gazprombank to be seen as a safe haven,” the senior Biden administration official said.The new sanctions come even as the EU struggled to finalise its latest package of penalties. Diplomats said Hungary continued to hold back progress in Brussels on the EU’s proposed sixth package of sanctions, which will include a phased-in oil embargo aimed at squeezing Moscow’s sources of cash. With Russia preparing for today’s Victory Day celebrations, the G7 and its allies are seeking to harden the economic pressure on President Vladimir Putin’s regime. US president Joe Biden met his G7 counterparts and Ukraine’s leader Volodymyr Zelensky yesterday as part of a co-ordinated show of support for the war-torn country. Happy Monday, and thanks for reading FirstFT Asia. Here’s the rest of the day’s news. — SophiaFive more stories in the news1. China has been ‘unsettled’ by Ukraine war Bill Burns, director of the CIA, said this weekend that Chinese president Xi Jinping is “unsettled” by Russia’s continuing aggression, demonstrating that the friendship between Beijing and Moscow has “limits”. The conflict may be affecting the Chinese leadership’s calculations with respect to Taiwan.2. John Lee chosen as Hong Kong’s next leader Following a campaign that critics labelled as absurd, John Lee has been confirmed as Hong Kong’s next chief executive after Beijing backed his candidacy and no one else ran for election. Residents’ voting power has been steadily disenfranchised, and most political opposition has either fled or is in jail.

John Lee has been confirmed as Hong Kong’s next chief executive © Getty Images

3. Sinn Féin wins historic victory in Northern Ireland A jubilant Sinn Féin clinched a historic victory in Northern Ireland’s elections with its laser focus on the cost of living crisis and promises to get the stop-start executive back to work. The victory cements the nationalist party as the region’s biggest political force for the first time in over a century.4. Xi Jinping warns against ‘any slackening’ of zero-Covid policy China’s president has reaffirmed his commitment to the country’s controversial strategy for controlling the spread of Covid-19, triggering a sell-off in Chinese stock markets. The CSI 300 index of Shanghai- and Shenzhen-listed stocks shed 2 per cent today, while the benchmark Hang Seng index in Hong Kong dropped 3.8 per cent. 5. North-Korea backed “crypto mixer” gets hit with US sanctions The US Treasury has sanctioned a “crypto mixing” service used in a hacking group’s attempt to launder $20.5mn in one of the biggest-ever crypto heists. Friday’s announcement is the latest sign of how financial watchdogs are stepping up efforts to stamp out money laundering through digital currencies.The day aheadPulitzer Prize The 106th annual Pulitzer Prize winners and nominated finalists will be announced today for prizes in journalism, drama, letters and music.Philippines election Polls open today as the nation votes in the country’s presidential election.Russia’s Victory Day A parade will be held in Moscow’s Red Square today to celebrate the Soviet Union’s victory over Nazi Germany.FT’s Future of the car summit May 9-12 features Tesla founder Elon Musk, who will be speaking and taking audience questions, along with a host of other industry leaders. Register here.What else we’re reading Shanghai lockdown tests Xi’s loyalties in China’s Communist party Li Qiang, Shanghai’s top official, seemed close to securing a spot on China’s most influential political body as Xi Jinping prepares to secure a third term in November. But weeks of brutal lockdowns in Shanghai have eroded faith in the Communist party’s ability to govern. Many blame Xi — and the future of Li hangs in the balance.Peter Ma, China’s shy insurance tycoon, bursts into the limelight Ping An, the world’s second largest insurance company and the largest investor in HSBC, dropped a bombshell that it would be splitting its Asian and western operations, leading to the largest restructuring in HSBC’s 157-year history. It was also an uncomfortable step into the limelight for 67-year-old Ping An founder Peter Ma, who rarely appears in public.The world needs a 12-step programme for better trade The World Trade Organization is broken, and the first step toward a solution is admitting that there is a problem with the old model of globalisation. The world needs a newer, better, faster way to resolve trade disputes and find a balance between international trade and domestic politics, argues Rana Foroohar.

© Matt Kenyon

Pro-Ukrainian hackers strike back at Russia For more than a decade, Ukraine’s government, financial system and other key infrastructure were pummelled by Russian state-backed hackers. Now, hordes of pro-Ukrainian hackers are matching Russian cyber aggression, leading to an ‘avalanche’ of secret data from state-backed groups and private companies.Networking for a hybrid era As employees return to offices at least part-time, formal work events have resumed, spurring a heady mix of dread and excitement about professional networking. Emma Jacobs explores how to deepen your professional relationships in a hybrid era. Plus: Sign up to Working It, a newsletter which explores workplace trends and the big ideas that are shaping work today. There is also a weekly podcast of the same name.Food & drinkWhy do so few restaurants get their bread right? For starters, cooking and baking are more different than many people realise. There are many factors to consider in bread baking, and the process requires dedicated time, space and money.

A wholegrain sourdough by Little Bread Pedlar More

STOCKHOLM (Reuters) – IKEA stores owner Ingka Group has extended the period it will pay around 12,000 staff in Russia by three months, through August, and may continue to pay workers beyond that, its retail manager said in an interview. The world’s biggest furniture brand in early March said it would temporarily close stores and pause sourcing in Russia, citing supply chain disruption and challenging trading conditions due to Russia’s invasion of Ukraine. At that time, it said all affected staff would be paid, in roubles, at least through May.”We have managed to prolong that to six months,” Ingka’s Retail Manager Tolga Oncu told Reuters. “We keep monitoring, analysing, looking at what’s happening and will make decisions as we go forward.” A flood of Western companies have paused operations in Russia due its invasion of Ukraine and the resulting sanctions against Moscow, and a growing number of businesses have flagged they will exit the country indefinitely.Firms including McDonalds and Renault (EPA:RENA), have said they will continue to pay staff in Russia for the time being. Russia has warned it may nationalise foreign businesses that have shelved operations in the country.IKEA operates through a franchise system with Ingka the main franchisee to Inter IKEA, which is also in charge of supply and in Russia employs 2,500 at three factories. Ingka, also one of the world’s biggest shopping centre owners, has so far kept its 14 malls in Russia, branded “MEGA”, open. Oncu declined to give details on where the money to pay the local wages would come from. “We comply with all the sanctions. We are utilising the assets that we have (in Russia),” he said. Oncu also declined to say whether the furniture retailer was considering exiting Russia altogether. Ingka has 17 stores in Russia and one distribution centre. In its latest fiscal year, Russia was its 10th-biggest market with retail sales of 1.6 billion euros, or 4% of total retail sales.The commitment to extend pay by another three months affects Ingka staff and not Inter IKEA staff, an Ingka spokesperson said. Some employees have been reassigned to work with returns of goods, and store, warehouse and systems maintenance.Russia calls its actions in Ukraine a “special operation.” More