Aurelia Butler

NEW DELHI (Reuters) -At least five superyachts owned by Russian billionaires were anchored or cruising on Wednesday in Maldives, an Indian Ocean island nation that does not have an extradition treaty with the United States, ship tracking data showed.The vessels’ arrival in the archipelago off the coast of Sri Lanka follows the imposition of severe Western sanctions on Russia in reprisal for its Feb. 24 invasion of Ukraine. Late on Wednesday Forbes reported that Germany had seized Russian billionaire Alisher Usmanov’s mega yacht in a Hamburg shipyard.Usmanov was on a list of billionaires to face sanctions from the European Union on Monday. A Forbes report based on three sources in the yacht industry said his 512-foot yacht Dilbar, valued at $600 million, was seized by German authorities. German authorities did not immediately respond to Reuters inquiries. Forbes said representatives for Usmanov did not immediately respond to a request for comment.Earlier, the Clio superyacht, owned by Oleg Deripaska, the founder of aluminium giant Rusal, who was sanctioned by the United States in 2018, was anchored off the capital Male on Wednesday, according to shipping database MarineTraffic. The Titan, owned by Alexander Abramov, a co-founder of steel producer Evraz, arrived on Feb. 28. Three further yachts owned by Russian billionaires were seen cruising in Maldives waters on Wednesday, the data showed. They include the 88-metre (288 ft) Nirvana owned by Russia’s richest man, Vladimir Potanin. Most vessels were last seen anchored in Middle Eastern ports earlier in the year. A spokesperson for Maldives’ government did not respond to a request for comment. The United States has said it will take strict action to seize property of sanctioned Russians.”This coming week, we will launch a multilateral Transatlantic task force to identify, hunt down, and freeze the assets of sanctioned Russian companies and oligarchs – their yachts, their mansions, and any other ill-gotten gains that we can find and freeze under the law,” the White House said in a tweet on Sunday. Washington imposed sanctions on Deripaska and other influential Russians in 2018 because of their ties to President Vladimir Putin after alleged Russian interference in the 2016 U.S. election, which Moscow denies. More

Ten major car and motorcycle groups announced factory closures or froze sales to Russia as the industrial fallout from the country’s invasion of Ukraine spread on Wednesday.Porsche and BMW became the latest carmakers to shut European plants because of a lack of parts from Ukraine, while Toyota, Mercedes-Benz and Hyundai, which is one of the largest brands in Russia, said they would cease manufacturing in the country. Ford, Renault and BMW have already closed Russian plants.In addition, Mercedes-Benz, Toyota, Honda, Bentley, Aston Martin, Harley-Davidson and Rolls-Royce all froze sales to Russia, joining a growing list that encompasses brands from Volvo and Jaguar Land Rover to Volkswagen. Only a handful of brands, including Hyundai and Nissan, were still importing vehicles to the country as of Wednesday evening. Avtovaz, which is owned by Renault, was also still selling its Lada brand. Renault has stopped sales while its Moscow plant is shut, because of difficulties sourcing parts from Europe.On Tuesday, Carlos Tavares, chief of Stellantis which owns brands from Jeep and Peugeot to Fiat, said he was determined to keep selling into the country “as long as the sanctions allow it”.With the Russian invasion running into its seventh day, essential parts from closed Ukrainian plants have begun to dry up, forcing carmakers across Europe to curtail production while they seek to secure new supplies.At the same time, an increasing number of car brands that import to Russia are cancelling sales because of sanctions, lack of payment or reputational damage from operating in a country that risks becoming a pariah.Bentley and Rolls-Royce’s decision to suspend sales to the country followed a similar announcement from Aston Martin late on Tuesday evening.Bentley said that the Russian market accounted for about 2 per cent of its business, while Aston said it was 1 per cent of sales.McLaren and Lotus, two other luxury UK sports brands, do not have sales operations in Russia, the companies told the Financial Times.Honda, which cancelled sales on Wednesday, had already said in December 2020 that it planned to leave the Russian market this year.

Porsche, which as of Wednesday was still delivering cars to the country, will close its factory in Leipzig, Germany, until the end of next week, the VW-backed sports car brand announced.It comes after BMW late on Tuesday evening said that factories in Munich and Dingolfing in Germany, and the Mini plant in the UK, would be forced to close next week.VW, which owns Porsche, has already shut two facilities in Europe and warned of further cuts because of difficulty in sourcing parts.As the component flow from Ukraine dries up, carmakers are assessing the best ways to keep their European facilities running.One other major car brand in Europe told the Financial Times that it had enough parts to keep its factories running until next week, but may be forced to close afterwards.Tavares said on Tuesday that the impact on the company’s plants — which include sites across France, Italy, Germany, Spain and the UK — was currently “very limited” because it sourced fewer parts than German rivals from eastern Europe.Ukraine is a key producer of wiring harnesses that hold the electronic cables within a car. Factories in the country have been shut for the past week.While other sites across eastern Europe and north Africa make similar components, supply chain experts say it will take time for car plants to resource the parts they need, which may involve moving some equipment out of the country.Parts group Aptiv, which has two Ukrainian facilities, has already moved some kit out of the country into other sites to try to maintain production. More

Russia’s invasion of Ukraine threatens to reshape the world, carving two rival camps out of today’s highly interconnected international order. On one side would be Russia and its “strategic partner” China. On the other would be the US and also a Europe that has tended to consider its relationship with China primarily in terms of commerce.Just over a week ago such a scenario might have been seen as paranoid. But so much has changed since Vladimir Putin launched a full-scale attack on Ukraine that a return to cold war dynamics, more complex than 30 years ago, seems in prospect.Already, the sanctions on Russia imposed by the US, EU and UK are unprecedented. They include planned measures against leading figures — including Putin himself — as well as sanctions on Russia’s central bank and the removal of some of its lenders from the Swift payments system. Other nations also announced moves. In this context, China’s role is crucial. Beijing should be aware that a failure to condemn Russia risks portraying China as an enemy in the eyes of European powers. That may sound extreme, but is in fact logical when Putin is issuing veiled nuclear threats. So far, China’s statements suggest a clear affinity with Russia, in spite of signs that it may be growing cooler towards its neighbour. China should follow through with urgency on signals this week that it is ready to play a role in finding a ceasefire. It should also make clear that it condemns Russia’s killing of civilians. If it does not, the west may regard it as complicit in slaughter. Hua Chunying, spokesperson for Beijing’s foreign ministry, declined to describe Moscow’s attack as an invasion. Before the fighting started, Hua also described the US as the “culprit” in the crisis, “heightening tensions, creating panic and even hyping up the possibility of warfare”.At the Winter Olympics, Putin met with Xi Jinping, China’s president, and declared that their countries’ friendship had “no limits”, with no forbidden areas of co-operation. Beijing abstained from a draft UN resolution last week that would have deplored Russia’s invasion of Ukraine — though it did not join Moscow’s veto.The west’s focus now will be on whether and to what extent China steps up economic support for Russia, helping it to withstand sanctions. When Putin met Xi this month, the two sides signed a raft of deals, including a 30-year contract for Russia to supply gas to China via a new pipeline.Yet Beijing should realise that if its state-owned banks provide direct support to sanctioned Russian lenders, they will risk western sanctions on their own international business. The fact that Ukraine’s invasion has not been the pushover Russia may have planned for should also be a salutary lesson for China when it comes to Taiwan.More broadly, China’s general attitude in this crisis will do much to determine how it is viewed. The Ukraine crisis strikes a visceral chord, especially in Europe. A China that backs a brutal regime waging an unprovoked war with democratic Ukraine cannot be excused. Beijing should start clearly and deliberately setting limits on its ties with Putin’s Russia.It should reflect that if cold war dynamics do start to take hold and China finds itself hemmed in to a Russia-China axis, it risks cutting itself off from the most lucrative trading relationships it has. Although its trade with Russia grew last year by 36 per cent to $147bn, this figure amounted to no more than one-tenth of its combined trade with the US and EU. For its own sake, Beijing should be wary of going too far in its support for Putin’s war. More

Good eveningCrude oil at an eight-year high, European natural gas at an all-time record and wheat at its most expensive in 14 years: it was another day of records as the crisis in Ukraine drove commodities prices to their highest level in more than a decade.But the Russian invasion has not just pushed up prices in already-strained markets; it has also highlighted the use of raw materials as a foreign policy weapon.“Commodities have been weaponised for a long, long time . . . it’s always a question of when does a state pull the trigger,” says Frank Fannon, former assistant US secretary of state for energy resources.As our Big Read explains, this began a decade ago with US fears of China’s control of supplies of rare earths — the metals used in many aspects of manufacturing. The reliance on a handful of countries or companies for raw materials was then highlighted by the pandemic. And now the Ukraine crisis has focused minds on Russia’s position as a key supplier of oil, gas, wheat, aluminium and palladium. Although it is the world’s third-biggest producer after the US and Saudi Arabia, demand for Russia’s oil has collapsed as big users turn away following the invasion of Ukraine. This has left 70 per cent of its crude “struggling to find buyers” and helped drive up prices and pose a serious risk to global recovery.“Brent crude is the biggest fear factor for equity markets,” said one investment executive. “If it goes ballistic and moves towards $150 or more a barrel, then [economic] growth really gets hammered.” Moves by the US and others to tap into reserves failed to stop the price passing the $113 mark earlier today.As columnist Helen Thomas points out, the current crisis puts paid to the notion, if it still existed, that investors could ignore geopolitical risk, citing BP’s cutting of ties with Russia as a significant moment. ExxonMobil and Shell have followed suit, while Total is under similar pressure. The UK meanwhile has started an urgent review of exposure to Russian gas and energy groups. Prime minister Boris Johnson has warned that households would have to live with higher energy prices as the cost of inflicting “pain” on Russia through sanctions.Writing in the FT, Robin Brooks, chief economist at the Institute of International Finance, underlines the point that the war on Ukraine is not only a watershed for European politics, but also a big turning point for markets.“All that anxiety about inflation is now old news,” he says. “What’s unfolding is a major negative shock to Europe.”Latest newsThe White House unveiled a new road map for living with Covid (NPR)A World Bank adviser has become the first Russian official to resign from a prominent position at an international body in protest at the invasion of UkraineTrafigura, one of the world’s biggest energy traders, is reviewing its investment in a project being developed by Russian oil producer RosneftFor up-to-the-minute news updates, visit our live blogNeed to know: the economyEurozone inflation hit a new record of 5.8 per cent in February, adding to pressure on the European Central Bank to speed up the unwinding of its stimulus programme and raise interest rates. Energy prices rose a record 31.7 per cent, while unprocessed food prices climbed 6.1 per cent. The highest national annual rate was in Lithuania at 13.9 per cent, while France had the lowest at 4.1 per cent. Compare inflation rates across the world with our global tracker.US Federal Reserve chair Jay Powell told Congress that a rate rise would go ahead this month, despite the Ukraine war. Investors have been betting that the crisis would slow moves to tighten policy at the Fed and the ECB, a view also reflected by the head of Man Group, the world’s largest hedge fund.Latest for the UK and EuropeUK chancellor Rishi Sunak told a parliamentary committee that the economy and public finances were “vulnerable” to higher inflation and interest rates, suggesting that tough decisions could be required in the months ahead. Business groups have called for tax breaks, but Sunak is not expected to make big changes to taxation or public spending in his spring statement on March 23.One area that seems to be unruffled by the surge in inflation is the UK housing market: prices rose again in February in the biggest increase in cash terms since 1991, making the average house price £29,000 more expensive than a year ago.The Italian economy grew a better than expected 6.6 per cent last year after a 9 per cent contraction in 2020, with a lower fiscal deficit than expected as investment, consumption and exports all bounced back. Italy is set to be the largest recipient of the EU’s Covid recovery fund, and will potentially be eligible for nearly €200bn in grants and loans. Global latestAustralia’s economy is now bigger than it was pre-pandemic after a strong recovery in the fourth quarter when consumers emerged from lockdown. GDP grew 3.4 per cent in the final three months of 2021, compared with a 1.9 per cent contraction in the third quarter, when restrictions to quell an outbreak of the Delta variant threatened to push the country into recession.Panic buying broke out in Hong Kong as local residents prepared for a new and stricter lockdown. South China correspondent Primrose Riordan says tightened restrictions are likely to threaten its airport’s status as Asia’s key regional hub. Need to know: businessThe pace of multinationals quitting or suspending business with Russia has accelerated. Apple, Boeing and Siemens have now joined Ford, Nike and others in the corporate boycott, while PR firms and support services such as accountants and consultants are cutting ties for fear of reputational damage. Russian businesses have started to withdraw from Europe as sanctions bite. Attempts to cut off Russia from global financial markets are having a knock-on effect on fund managers that hold Russian assets. Russia-exposed funds with more than €4bn in assets have been frozen in Europe, meaning investors have no idea when they might be able to withdraw their money. The Austrian division of Russia’s Sberbank today became the first banking victim of international sanctions. Brussels is considering cutting VTB, Russia’s second-largest bank, and six others from the Swift international network. Russian shares traded abroad have plunged as sanctions trigger ‘panicky’ selling. MSC and Maersk, the world’s two largest container shipping groups are suspending Russian cargo bookings as sanctions put more pressure on already strained global supply chains. Disruption has also spread to the air cargo market, where prices are expected to rise as aircraft are forced to reroute.US retailer Target gave a bullish outlook for this year after recording growth during the pandemic and an increase in revenues of nearly $28bn, or 35 per cent. The company, which is benefiting from shoppers becoming more cost-conscious as inflation rises, was also able to stay open during lockdowns as a seller of essential goods. Last year was a bumper one for dividends as companies recovered from the depths of the pandemic, but growth is forecast to slow sharply this year as the Ukraine crisis adds to inflationary pressures to depress company confidence.The World of WorkThe pandemic has accelerated a shift in childcare towards fathers playing a more active role. Our Working It podcast discusses the latest trends in parental leave and whether we’re still hard-wired to think about men as breadwinners and women as caregivers.Get the latest worldwide picture with our vaccine trackerAnd finally…The pandemic for many has seen medical treatment postponed as health services prioritised the fight against coronavirus. In this deeply moving account, FT journalist Miranda Green recounts her struggle with cancer care.The FT’s Miranda Green on ‘negative outcomes’: ‘As a country, there is no more time for euphemisms’ © Nick Runge More

The Federal Reserve is prepared to push ahead with a “series” of interest rate increases from March, despite a highly uncertain economic outlook as a result of Russia’s invasion of Ukraine, Jay Powell told US lawmakers on Wednesday.The Fed chair confirmed his support for a quarter-point rate rise at the central bank’s March meeting as he laid out the case for tightening monetary policy amid heightened geopolitical tensions, in testimony delivered to the House Financial Services Committee. Powell said he expects a “series” of interest rate increases this year, and also hinted that he could support raising rates by larger increments later on if inflation fails to moderate sufficiently.“I’m inclined to propose and support a 25bp rate hike,” he said. “The bottom line is that we will proceed, but we will proceed carefully as we learn more about the implications of the Ukraine war for the economy.”He said separately: “To the extent inflation comes in higher or is more persistent . . . then we would be prepared to move more aggressively by raising the federal funds rate by more than 25bp” at one or more meetings.In justifying his thinking, Powell highlighted the broad-based employment gains that have accrued over the past six months in what has been an “extremely tight” labour market that has led to rapidly rising wages. He also called attention to consumer price increases “spreading to a broader range of goods and services” that have driven inflation up to the fastest pace in 40 years.The Fed still expects inflation to moderate this year as severe supply-demand mismatches subside, but Powell said he is “humble” about being able to forecast when that may happen. “Inflation is indisputably too high,” the chair said, adding that the phenomenon is not just strong across the goods sector, but also “too high” in services. “We are using our tools to bring inflation back down to levels of price stability, and we will accomplish that task.”He also pushed back on the notion that a series of interest rate increases would imperil the economy, even as he floated the idea of eventually raising rates to a level that begins to constrain activity.“I think it’s more likely than not that we can achieve what we call a soft landing,” he said. Powell’s positive assessment of the economy and pledge to act more forcefully to counter mounting price pressures, come despite a sharp escalation in Russia’s attacks on Ukraine, with the Kremlin stepping up bombardments on the country’s biggest cities. The war in Ukraine has clouded the growth outlook, but is also forecast to exacerbate inflation — energy prices have surged with Brent crude climbing to its highest level in eight years, at roughly $111 a barrel — and could potentially force the Fed to be more aggressive later this year than markets currently anticipate.

Powell said the near-term economic implications from the invasion and the sanctions levied by Washington and its western allies — which US president Joe Biden called “powerful” during his State of the Union address on Tuesday — remain “highly uncertain”, but vowed to monitor the situation closely.“Making appropriate monetary policy in this environment requires a recognition that the economy evolves in unexpected ways,” Powell said. “We will need to be nimble in responding to incoming data and the evolving outlook.”Markets are pricing in just over five quarter-point interest rate increases during the course of 2022 compared with the six that were pencilled in before Russia’s invasion of Ukraine.Given current expectations and recent market gyrations, Powell said the rate increases “have already happened in effect and we have to ratify them”.Alongside plans to raise rates, the Fed will also begin scaling back its $9tn balance sheet. While no details have yet been provided about when that process may begin and at what pace, Powell on Wednesday suggested a roughly three-year timeline to shrink it to levels where “it needs to be”. More