Aurelia Butler

Russia is no longer requesting Ukraine be “denazified” and is prepared to let Kyiv join the EU if it remains militarily non-aligned as part of continuing ceasefire negotiations, according to four people briefed on the discussions.Moscow and Kyiv are discussing a pause in hostilities as part of a possible deal that would involve Ukraine abandoning its drive for Nato membership in exchange for security guarantees and the prospect to join the EU, the people said under the condition of anonymity because the matter is not yet finalised. The draft ceasefire document does not contain any discussion of three of Russia’s initial core demands — “denazification”, “demilitarisation”, and legal protection for the Russian language in Ukraine — the people added. Envoys from both sides are to meet in Istanbul on Tuesday in a fourth round of peace talks designed to end president Vladimir Putin’s full-scale invasion of Ukraine. The concessions on Russia’s side come as its month-long ground offensive has largely stalled as a result of fiercer Ukrainian resistance than expected and Russian operational deficiencies. But Ukraine and its western backers remain sceptical of Putin’s intentions, worrying that the Russian president could be using the talks as a smokescreen to replenish his exhausted forces and plan a fresh offensive.In other developments:Banking: HSBC has repeatedly edited its analysts’ research publications to remove references to a “war” in Ukraine. Meanwhile other lenders are stuck in legal tangle over Russian corporate bond payments.Energy: Energy ministers of the G7 group of major economies rejected Vladimir Putin’s demand that Russian gas should be paid for in roubles.News: Roman Abramovich, the Russian owner of Chelsea Football Club, and two Ukrainian officials suffered poisoning symptoms in Kyiv in early March after peace talks with Russia, according to three people familiar with the matter.US: President Joe Biden said he was expressing “moral outrage” and not a call for regime change when he said Russian president Vladimir Putin must go. Biden has proposed increasing the country’s military funding by 9.8 per cent as part of a sweeping $5.8tn budget plan.Opinion: China is less likely to back Russia while it is facing troubles of its own, says Ruchir Sharma. Are you personally affected by the War in Ukraine? We want to hear from you. Tell us via a short survey. Thanks for reading FirstFT Asia. Here’s the rest of today’s news — Emily.Five more stories in the news1. US and Australia boost security co-operation to counter China The two nations are set to boost co-operation in space and the cyber domain as the Indo-Pacific allies strengthen efforts to counter China, which is investing heavily in space and weapons such as hypersonic missiles.2. Yen hits 7-year low after Bank of Japan sticks to stimulus The Japanese currency yesterday dropped more than 2 per cent against the dollar to reach ¥125, as the Bank of Japan bucked the global trend for tighter monetary policy. The decision stoked speculation that the central bank could intervene to prop up the currency for the first time since 1998.3. Trump ‘more likely than not’ committed crime on January 6, judge says Judge David Carter in California wrote that former president Donald Trump and attorney John Eastman “launched a campaign to overturn a democratic election, an action unprecedented in American history” as they “corruptly” attempted to obstruct Congress on January 6.4. Middle East ministers hold talks in Israel on ‘common enemies’ Foreign ministers from across the Middle East have met for a summit in the Negev desert, the first such meeting to take place on Israeli soil, as they try to co-ordinate their response to regional security threats including Iran.5. Will Smith under ‘formal review’ by Academy The Academy of Motion Picture Arts and Sciences has launched a “formal review” after actor Will Smith struck comedian Chris Rock on stage during the Oscars awards show. Rock had made a joke about Smith’s wife, Jada Pinkett Smith, who has a shaved head and has spoken publicly about her hair loss.

Will Smith slaps Chris Rock after the comedian made a joke about Jada Pinkett Smith © Chris Pizzello/Invision/AP

Coronavirus digest Shanghai authorities have divided China’s biggest city into two zones, as it locks one area down amid the struggles to contain an outbreak of Covid-19. Britons face a “historic shock” to their incomes this year sparked by surging energy prices, Bank of England governor Andrew Bailey warned.Sign up here for Disrupted Times (formerly known as Road to Recovery), your essential FT newsletter about the changes in business and the economy between Covid and conflict.The day aheadJoe Biden hosts Singapore PM The US president is set to welcome Prime Minister Lee Hsien Loong to the White House on Tuesday. The pair will discuss the war in Ukraine as well as plans to maintain a free and open Indo-Pacific. (Reuters) Japan unemployment figures February joblessness data will shed light on the country’s recovery from Covid-19. Results Earnings are expected from the Bank of China, Bellway, Boku and Ten Entertainment.What else we’re reading and listening toUS-China tech race In the first episode of a new series of our Tech Tonic podcast, the FT’s Global China Editor James Kynge tracks China’s dramatic transformation from the manufacturing workshop of the world to the next global superpower. Women at the Start Are you just at the beginning of your career or do you fancy a change of job? This special report is full of tips for new recruits. It also includes advice for women starting their own business and a guide to reverse mentoring schemes.More from work and careers: Read these tips to becoming an understanding manager, but not a therapist.War with Russia? Finland has a plan for that What the Nordic nation calls its strategy of “comprehensive security” offers an example of how countries can create rigorous, society-wide systems to protect themselves ahead of time — planning not just for a potential invasion, but also for natural disasters or cyber attacks or a pandemic.Secret schools keep Afghan girls learning Rule-breaking teachers are defying the Taliban to provide lessons to women and girls. Together, volunteers from a network of three schools, with 18 teachers and more than 200 students aged from 10 to 18, take part in the programme that serves many poor or disadvantaged neighbourhoods.Black Americans cheer as Jackson nears Supreme Court About 115 justices have served on the country’s highest court since its inception in 1789. Only five of those justices have been women, none of whom identified as black. Ketanji Brown Jackson’s confirmation would also bring the court the closest it has ever been to gender parity, with five men and four women.

Ketanji Brown Jackson would be the first black woman to serve on the US Supreme Court if confirmed © AP

BooksJournalist-turned-author Adam LeBor rounds up the best new thrillers. From spies, secrets and a Stasi “Romeo” in cold war Berlin to a dangerous haul of diamonds in Basel. More

WASHINGTON (Reuters) -The U.S. Transportation Department budget released on Monday calls for an initial $100 million for a $12.3-billion project that aims to build a new railway tunnel between New York City and New Jersey and reconstruct an existing one.The Biden administration is also calling for increasing U.S. passenger railroad Amtrak’s funding on top of the $22 billion approved under the $1 trillion bipartisan infrastructure bill.The administration wants $3 billion in annual funding for Amtrak for the 2023 budget year, up from $2.33 billion in prior annual funding.Amtrak, which would get $7.4 billion in total for 2023 including the infrastructure bill funding, wants to expand dramatically across the United States and add up to 39 corridor routes and up to 166 cities by 2035.The $100 million would mark the first-time federal support for the Hudson (NYSE:HUD) Tunnel project. The Biden administration is also proposing $400 million for the $6.9 billion Second Avenue Subway extension.”Public transit creates jobs, reduces traffic and pollution, and lowers the cost of living for people in the community,” said U.S. Transportation Secretary Pete Buttigieg.The Hudson tunnel project has been the subject of a decade-long debate in Washington since a more than century-old New York City-area rail tunnel was damaged in 2012 when a massive storm flooded parts of the city.The tunnel project is one of a series of improvements known as “Gateway” to the New York City-area part of the northeast rail corridor, which runs from Washington, D.C., through New York to Boston.The Hudson River tunnel project would double the number of tracks in the tunnel from two to four and permit closing the existing tunnels one at a time for critical repairs.Former Republican President Donald Trump sparred with Democrats over the Hudson River tunnel project and he did not agree to fund it. More

ASUNCION (Reuters) – Paraguay will end 2022 with inflation close to 6%, the country’s central bank head told Reuters on Monday, right at the ceiling of the entity’s tolerance range as it battles fast-rising prices propelled by global supply crunches of grains and energy.The South American country’s central bank president, José Cantero, added in an interview that the benchmark interest rate should end the year at a similar level to the current 6.25%.The country has experienced a sharp rise in consumer prices, due to the global rise in fuel and food prices, sharpened by the Russian invasion of Ukraine. Year-on-year inflation in February was 9.3%, the highest in the last 11 years.”We are seeing that levels are going to tend towards 6% by the end of the year and the expectation is that by the middle of next year will converge towards the 4% target,” said Cantero.Cantero said that in April the bank would revise downward its projection of economic growth for this year of 3.7% and would also revise downward last year’s official figure of 5%, due to the impact of drought on agricultural production in the world’s fourth-largest exporter of soybeans.”Given the drought that has an impact on the 2021/2022 campaign, we are expecting that 2021 growth to be less than 5% and at the same time the projection we had made for 2022 … the revision is going to be downward,” he said.Fast-rising prices in Paraguay have forced the country’s central bank, like others in the region, into a series of interest rate hikes. The benchmark rate has risen a total of 550 basis points in the last eight monetary policy meetings. More

Britons face a “historic shock” to their incomes this year sparked by surging energy prices that will hit UK economic growth and consumer demand, Bank of England governor Andrew Bailey warned on Monday.Bailey said Russia’s invasion of Ukraine would fuel the UK cost of living crunch, adding the energy price shock in 2022 would be larger than during any single year in the 1970s.The BoE governor sounded the alarm on so-called stagflation, suggesting slowing economic growth and soaring inflation posed the biggest challenge to the central bank’s Monetary Policy Committee since its creation in 1997.Surging energy prices are a key factor behind UK consumer price inflation reaching a 30-year high of 6.2 per cent in February, more than three times the BoE’s 2 per cent target.The BoE expects Russia’s war in Ukraine to help push inflation to about 8 per cent in the second quarter of this year. It said this month inflation could potentially climb even higher in the autumn, when regulated energy prices are due to increase further.

Bailey said Britons were facing a “very large shock to aggregate real income and spending” from rising prices of energy and imported goods.He told an event organised by Bruegel, the think-tank, in Brussels: “This is really an historic shock to real incomes.”Bailey said Russia’s invasion of Ukraine had exacerbated the energy supply shock, adding: “The shock from energy prices this year will be larger than any single year in the 1970s. The caveat is that the 1970s had a succession of years and we very much hope that would not be the case now. But as a single year, this is a very, very big shock.” UK inflation spiralled upwards during the 1970s after Arab members of Opec, the cartel of oil producers, imposed a crude embargo on countries that had supported Israel in the Yom Kippur war.Bailey said the UK and the eurozone were confronting a similar energy shock, because they both relied on the same gas market, adding it was different for the US because of its bigger domestic supply.He also said the US was experiencing a stronger rebound in demand after the worst of the coronavirus pandemic compared with the UK and Europe.Last week, the Office for Budget Responsibility, Britain’s fiscal watchdog, predicted that UK household real income this year would contract at the sharpest rate since records began in the 1950s.Bailey said: “We expect it to cause growth and demand to slow. We’re beginning to see the evidence of that in both consumer and business surveys.”The OBR has cut its UK growth forecast for 2022 from 6 per cent to 3.8 per cent.

Slower economic growth and higher inflation are often referred to as stagflation: a relatively uncommon situation as prices of goods and services tend to rise most sharply in periods of robust consumer demand and strong expansion of output.Bailey said the BoE had a variety of monetary policy tools to deal with the current situation, but warned of the challenges given growth and inflation were “pulling in different directions”.“This is a big trade-off,” he added. “I think it’s the biggest trade-off the Monetary Policy Committee has faced in its now approaching 25 years life.”Meanwhile chancellor Rishi Sunak told the House of Commons Treasury select committee he was determined to hold down public borrowing and spending, saying he feared that looser fiscal policy could further fuel inflation.Sunak said a 1 percentage point rise in inflation and interest rates could “wipe out” the headroom he had built into his tax and spending plans in the run-up to the next election. More

The EU has launched a case against the UK at the World Trade Organization over British subsidies for offshore wind farms in a significant escalation of post-Brexit tensions. Brussels claims that new criteria introduced by the UK government in awarding subsidies for offshore wind projects favour those using turbines sourced domestically over imports in breach of WTO rules.The move signals the start of the first dispute between the EU and its former member involving the global trade body, since the end of the Brexit transition period in December 2020. It comes as the two sides remain deadlocked over the implementation of the withdrawal deal.“The criteria used by the UK government in awarding subsidies for offshore wind energy projects favour UK over imported content,” the European Commission said in a statement. “This violates the WTO’s core tenet that imports must be able to compete on an equal footing with domestic products and harms EU suppliers, including many SMEs, in the green energy sector.”The British government said it would “rigorously contest” the claim.The UK’s contracts for difference scheme gives financial support to green energy projects, in practice mostly offshore wind farms, in a bidding process.Since December, the UK has asked bidders to outline how much of the contract’s value will be produced in the UK to determine their eligibility. Payouts then depend on whether the operator sticks to its commitment on that local production. “This incentivises operators to favour UK content in their applications, to the detriment of imported inputs,” the commission said. It added that the WTO’s national treatment principle prohibits members from discriminating against imports in favour of domestic products.“Moreover, such local content criteria lead to losses in efficiency and raise prices for consumers, ultimately making the transition to a secure supply of renewable energy more difficult and costly,” the commission said.The UK is second only to China in terms of installed wind power capacity. But this concentration has not translated into a British jobs and manufacturing boom, which has instead benefited foreign companies, including those in the EU and China. Lobby group RenewableUK estimated that just 29 per cent of capital expenditure on offshore wind projects goes into the UK economy. Prime minister Boris Johnson wants to lift that level of capex spent with UK-based suppliers to between 40 and 50 per cent, and 60 per cent of lifetime spend, including maintenance.One British official said ministers were “puzzled” as to why Brussels was challenging the scheme when EU countries used similar methods. “At a time when the west should be united in defeating Putin, this act of envy by Brussels is ill-judged and ill-timed,” he said. “We should be working together to strengthen European clean energy security, not fighting this out in court.”The two sides have 60 days to reach an agreement at the WTO before Brussels could demand a panel of arbiters rule on the dispute, which could take at least a year. The move by Brussels could add to domestic political pressure on Johnson to suspend parts of the Northern Ireland protocol by invoking its Article 16. Many Conservative MPs have urged him to do so and end checks on trade between Northern Ireland and Great Britain agreed as part of Brexit.The UK government said: “We are disappointed that the commission has taken this course of action at a time when we are focused on increasing our energy security and supply of homegrown renewable energy,” adding: “The UK abides by WTO law and will rigorously contest the EU’s challenge.” More

The lockdown of Shanghai is extreme and unexpected. The two-stage shutdown of China’s financial hub, a city of 26m residents, will have far-reaching consequences. The eight-day lockdown that started on Monday is far more severe than previous measures imposed on the city, China’s second-wealthiest after Beijing. The government, which is fighting its biggest outbreak in two years, imposes pandemic restrictions with an intensity rarely seen elsewhere. City residents cannot leave their homes; bridges, companies and factories are closed; land sales are banned. That means a significant hit to China’s economic growth. The city is home to China’s largest port, which is also the world’s busiest. Even before Shanghai’s lockdown, smaller-scale restrictions in other parts of the country had caused snarl-ups. The number of container ships waiting off China’s main ports almost doubled compared with February, according to Bloomberg data. Global supply chains are highly dependent on shipments from the city, for not just electronics but everything from fertilisers to pharmaceuticals.Shanghai is also a leading financial hub where most multinational companies have their Chinese headquarters and production plants. Tesla, for example, reportedly suspended production at its Shanghai factory on Monday. The disruption will push China further away from hitting its gross domestic product growth target of around 5.5 per cent for this year. Shanghai accounts for 4 per cent of the country’s GDP. Any extension of the lockdown period — and the imposition of similar measures in other cities — would exacerbate the impact on employment, consumer spending and confidence.The CSI 300 Index, a benchmark of Shanghai- and Shenzhen-listed stocks, fell less than 1 per cent on Monday. It has already fallen 16 per cent this year, trading at just 2 times book value. As the number of Covid-19 cases started rising, the risk of lockdowns has to some extent been priced in. Yet the sudden nature of the Shanghai lockdown threatens to have a bigger, lasting impact on local stocks and investor confidence in coming months. Government officials in Shanghai denied plans to lock down the city just one day before the announcement on Sunday. That has left investors to second-guess which companies and cities will be next in line to be affected by a lockdown. More