Economy

WASHINGTON (Reuters) -The U.S. Commerce Department said on Monday it had issued an order denying export privileges to Russian carrier Ural Airlines, citing what it said were ongoing export violations.The order terminates the right of Ural to participate in transactions subject to U.S. export regulations. President Joe Biden’s administration has stepped up the crackdown against Russian airlines that followed the invasion of Ukraine, seeking to deny them access to spare parts, refueling and other services.The department said Ural was still advertising flights within Russia as well as international flights from Moscow, to Bishkek and Osh, Kyrgyzstan, and Kulyab, Tajikistan.To date, Commerce has issued 10 orders against Russia and Belarus’s biggest airlines, said Assistant Secretary of Commerce for Export Enforcement Matthew S. Axelrod.”Today’s action highlights the peril and consequences of attempting to circumvent our comprehensive export controls, and further impairs Russia’s aviation sector,” Axelrod said, adding “U.S. legal authorities are substantial, far-reaching, and have a meaningful impact on access to global commerce by parties found to be in violation of U.S. law.”Last month the department added three Iranian cargo planes serving Russia to a list of aircraft believed to violate U.S. export controls.The Commerce Department identified Boeing (NYSE:BA) 747s operated by Mahan Air, Qeshm Fars Air and Iran Air transporting goods, to Russia in apparent violation of stringent U.S. export controls.The department has warned that any refueling, maintenance, repair, spare parts or services violate U.S. export controls and subject companies to U.S. enforcement actions.With the additions, there were 183 Boeing and Airbus aircraft on the list mostly operated by Russian airlines for apparent violations of U.S. export controls, the department said.Also last month, the department added 50 Russian entities to an economic blacklist, including the Moscow Aviation Institute and a number of aviation repair plants. More

Good morning. China has delayed at the last minute the release of eagerly anticipated third quarter economic data, including its closely watched gross domestic product growth rate, which were due to be issued in the middle of the 20th Communist party conference. No explanation for the postponement was given in an update to an official statistics calendar and no new dates were provided. The National Bureau of Statistics did not immediately respond to a request for comment. The latest figures were originally set to be published today at a politically sensitive time, with President Xi Jinping expected to use the party congress to extend his powers for a third term and outline Chain’s overarching policy approach. The economic data were expected to highlight China’s continued economic weaknesses, including a worsening property crisis and the impact of strict zero-Covid policies that this year locked down dozens of big cities, stifled consumption and effectively closed the country off from the rest of the world. Economists polled by Bloomberg had forecast GDP growth of 3.3 per cent year on year in the third quarter, compared with a 5.5 per cent full-year growth target that was already the lowest in three decades.More on the Communist party conference:As the party congress got under way yesterday, China’s state banks stepped up selling of the dollar, supporting the renminbi against the surging US currency. Xi Jinping is steering China towards confrontation with west in his “great rejuvenation” push.Thanks for reading FirstFT Asia. What’s your reaction to China delaying the release of its third quarter economic data? Tell me what you think at [email protected]. — EmilyFive more stories in the news1. Hunt rips up Truss’s economic policy in bid to calm markets Jeremy Hunt, the new UK chancellor, scrapped two-thirds of the controversial £45bn of unfunded tax cuts announced by his predecessor Kwasi Kwarteng and warned of “eye-wateringly difficult” decisions still to come to balance the books. The move reassured markets, but left the future of prime minister Liz Truss hanging by a thread.Go deeper: In a knifing fit for Shakespeare’s Julius Caesar, the chancellor vanquished the rightwing “mini” Budget.2. EU ministers advised to take tougher line on China The EU’s foreign service has advised the bloc’s members to toughen up its attitude towards China and limit areas of potential engagement, ahead of talks on recalibrating Brussels’ strategy towards Beijing. It recommended that the EU work more closely with the US, strengthen its cyber and hybrid threat defences, and diversify its supply chains away from China.3. Blasts heard as suspected Russian drones strike Kyiv At least five explosions were heard in the centre of Kyiv early today as Russia conducted renewed strikes on the Ukrainian capital with Iran-suppled kamikaze drones. The attacks hit a building and the area near the central railway station in the Shevchenkivsky district of the capital, the target of last week’s strikes.Sanctions: EU member states have signalled their support to impose fresh sanctions on Iran if its military backing for Russia’s war in Ukraine is proved in the wake of attacks on Kyiv allegedly using Iranian-made drones.4. SoftBank writes off £450mn after dumping THG stake The Japanese technology investment group is dumping its entire stake in troubled UK ecommerce company THG, crystallising a £450mn loss for SoftBank. The disposal comes as the company is liquidating its internal hedge fund after a series of bad bets, including an 8 per cent stake it bought in THG in May 2021 for about £481mn.5. Fumio Kishida orders probe of Moonies The Japanese government will launch an investigation into the Unification Church amid a public outcry over close ties between politicians and the South Korean religious group that came to light following the assassination of former prime minister Shinzo Abe. The probe into the church, commonly known as the “Moonies”, is unusual in Japan, where a guarantee of religious freedom makes it difficult for authorities to investigate such groups.The day aheadOpening of Qatar’s Al-Kharsaah plant The solar power plant is a key part of the country’s ambition to host the first net zero football World Cup, which begins next month. UK cabinet meeting Cuts and “efficiency savings” will be discussed by ministers at a Downing Street reception at a formal cabinet meeting today.Earnings Results season continues with Goldman Sachs, Hasbro, Johnson & Johnson, Lockheed Martin, Netflix, Roche and State Street among the companies reporting on Tuesday. Join FT journalists for a subscriber-exclusive webinar on October 26 exploring what the outcome of the Communist party’s congress means for China and the world. Register for your free pass here.What else we’re readingAll the Emperor’s men Use our interactive story to explore how Xi Jinping became China’s unrivalled leader — and how he plans to expand his power base. The most powerful ruler of China since Mao, Xi has centralised decision-making in his own hands in a way his recent predecessors could not have dreamt.

Hong Kongers at home in Britain Yowin Mo and her husband Eddie’s YouTube channel, the name of which roughly translates as “Fleeing to the UK” has nearly 40,000 subscribers. On it, they document their experience relocating from Hong Kong to the UK, as thousands of citizens of the city take advantage of Britain’s new visa.The global race to tap Bolivia’s lithium As a global race for supplies of lithium heats up, companies from China and Russia are dominating the competition to unlock the vast potential of Bolivia, the country with the world’s biggest resource of the critical metal for electric vehicle batteries.US Democrats’ midterms hopes falter For a brief window this summer, the Democrats’ prospects in the midterm elections were looking up. But with just under a month to go before the crucial vote, there are increasing signs that Democratic momentum has stalled. “Both chambers [of Congress] are still in play . . . but the headwinds are pretty strong,” said one Democratic strategist.The world needs more ‘desk-bombers’ The act of approaching someone at their desk without warning has become so offensive that a buzzword has been invented to describe it. It’s part of an increasing pattern at work: an outbreak of overweening shyness, or intolerance of interruption, that is at best self-destructive and at worst unproductive, writes Pilita Clark. StyleDisposable clothing and careless spending have inflated our wardrobes, as a new exhibit at the Designmuseum Danmark shows. The collection is part of a temporary display about the environmental consequences of the contemporary fashion industry. More

“I do want to accept responsibility and say sorry for the mistakes that have been made,” Truss told the BBC. “I wanted to act but to help people with their energy bills to deal with the issue of high taxes, but we went too far and too fast.”Finance Minister Jeremy Hunt, who was appointed on Friday after Truss sacked her close ally Kwasi Kwarteng, jettisoned the remaining major planks of her tax-cutting agenda on Monday, including scaling back her vast energy support scheme.Asked if she was now prime minister in name only, Truss said she had appointed Hunt because she knew she had to change direction. “It would have been completely irresponsible for me not to act in the national interest in the way where I have,” she said.”It was right that we changed policy.”Truss and Kwarteng attempted to upend British fiscal policy by unveiling 45 billion pounds of unfunded tax cuts last month to snap the economy out of stagnation.But the response from bond investors was brutal and borrowing costs surged. Lenders pulled mortgage offers and the Bank of England eventually had to step in to stop pension funds going under. Asked about the impact of her policies, Truss said she understood it was “very difficult” for families across the country and that she would do what she could to help them.Her two-year energy package, however, was drastically scaled back by Hunt and will now last only until April.”The most vulnerable will be protected into next winter,” she said. “We’re looking at exactly how we can do that.”Truss, who became leader less than six weeks ago, is facing a possible revolt from her lawmakers as soon as this week, according to reports. But she remained defiant on Monday, saying she would lead her Conservatives into the next election. “I’m sticking around because I was elected to deliver for this country,” she said. “And that is what I am determined to do.” More

In the 1960s, more than a third of older Americans lived in poverty. With the aid of federal programs like Medicare to help the elderly, the situation improved significantly. But last year, the poverty rate for those 65 or older increased, even as it sank for everyone else.The uptick offers new evidence that elderly people haven’t fared as well as younger generations in recent years, and some experts worry that it may signal a broader setback in the financial security of those past their prime working years.While 9.5 percent of the elderly population lived in poverty in 2020, that figure rose to 10.7 percent last year, the Census Bureau reported. The coronavirus pandemic was a central driver, disproportionately disrupting the employment and income of older people.They usually weren’t eligible for as much pandemic relief as families with children. And older workers left the labor force at higher rates than others as Covid-19 spread, and can have difficulty returning.That’s the situation that Walter Cox, 64, may find himself in. As an automotive technician at a car dealership in Tulsa, Okla., he never made more than $9.50 an hour, and wasn’t able to save money while raising two children. Nevertheless, he retired in 2020, as the physical labor — and rude customers — took a toll. He also got married, and he and his wife had about $2,000 in combined monthly income for most of 2021, which made for a comfortable if modest living.But when his wife had to leave for New Mexico to take care of her mother, the couple divorced, leaving Mr. Cox with a $765 Social Security check to cover all of his bills. That will leave him below the official poverty threshold of $12,996 for a person 65 or older living alone. He has been mowing yards for some extra income, but can’t do anything he had imagined doing in retirement, like a road trip to Yellowstone National Park.“I literally cannot afford to do anything but put gas in my car, buy groceries and pay my utility bills,” Mr. Cox said. “Because of the divorce, it’s looking pretty grim. But I’m hopeful that things improve.”For many older Americans, an inflation adjustment to Social Security payments — an 8.7 percent increase for 2023 was announced last week — will help next year. But people hitting retirement today often depend on Social Security as their only source of income, which wasn’t the program’s original intention.Poverty Rates by Age GroupIn 2021, even as the poverty rate sank for everyone else, it increased among seniors — rising above younger age groups for the first time in 15 years.

Source: Census Bureau and Columbia Center on Poverty and Social PolicyBy The New York TimesOlder workers’ wages have grown more slowly compared with other groups over the past few years, and many didn’t have 401(k) accounts, or didn’t contribute enough to them, as companies closed their defined-benefit pension plans over the last couple of decades.“We’re getting more and more older people who lived through this experiment with do-it-yourself pensions, and they’re coming into this age group without the same kind of incomes that older people have,” said Teresa Ghilarducci, an economics professor at the New School who specializes in retirement policy. “I don’t think it’s a blip.”More on Social Security and RetirementMedicare Costs: Low-income Americans on Medicare can get assistance paying their premiums and other expenses. This is how to apply.Downsizing in Retirement: People selling their homes often have to shell out more to spend less. Here’s what to consider.Claiming Social Security: Looking to make the most of this benefit? These online tools can help you figure out your income needs and when to file.Even though the share of elderly people officially below the poverty line is low by historical standards in the United States, it remains among the highest in the developed world, according to the Organization for Economic Cooperation and Development. The average poverty rate for older Americans also masks far higher shares among more vulnerable groups, with nearly one in five Black and Hispanic women 65 or older falling below the official poverty threshold in 2021. It’s higher for single people, too — a reality forced on hundreds of thousands of older Americans whose spouses died of Covid-19.The poverty rate is also not a bright line when it comes to financial hardship. It doesn’t take into account debt, which more seniors have accumulated since the Great Recession. Moreover, nearly one in four people 65 or older make less than 150 percent of the federal poverty line, or $19,494 on average for those living alone. Another measure, developed by the Gerontology Institute at the University of Massachusetts Boston and called the Elder Index, finds that it takes $22,476 for a single older person in good health with no mortgage to cover basic needs, with the cost escalating for renters and those with health problems.“To some extent we’re splitting hairs when we talk about people who fall just above and just below, because they’re all struggling,” said Jan Mutchler, a demographer at the University of Massachusetts at Boston who helped devise the Elder Index. “The assumptions that go into what we’re calling hardship are just flawed.”That’s true for Juanita Brown, 77, who lives on her own in Galax, a small town in Virginia’s Blue Ridge Mountains. A farmer’s daughter, she worked as a nanny, and then a certified nursing assistant, and then a preschool teacher. Her husband worked in the local textile industry, and after raising two children, they had built a substantial nest egg.But then Ms. Brown’s mother developed Alzheimer’s disease and couldn’t support herself. Ms. Brown stopped working to take care of her, which cost another $500 per month in expenses. Her husband got prostate cancer, which required extended trips to the hospital in Winston-Salem, N.C.“That depleted us,” Ms. Brown said. After her husband died in 2019, she was left with a car payment and more bills that went unpaid during his illness. She took out another mortgage on her home to help cover them, along with the $1,465 she gets from Social Security on the fourth Wednesday of every month.Family photos on display in Ms. Brown’s home in Galax, Va.“When you sit down and look at your income, and what you got to pay for every month, you got to cut corners,” Ms. Brown said.That technically puts her above the poverty line. But that hasn’t left enough money to replace the dentures she lost three years ago, or to replenish her heating oil, which now costs up to $250 a tank. She uses her wood stove as much as she can, but it gets too cold at night, which aggravates her arthritis. She records every expense in a little booklet.“When you sit down and look at your income, and what you got to pay for every month, you got to cut corners,” Ms. Brown said. Sometimes, one of her sons will visit and leave her with $50, even though she knows they can’t afford it either.Many times before, Ms. Brown has leaned on the support of District Three Governmental Cooperative, a local agency that provides transportation, help navigating government benefits, opportunities to socialize and other services for older residents. Debbie Spencer, the agency’s director of aging and disability services, has seen more clients struggle over the last year to pay for groceries. Covid-19 also made it more difficult to reach her more isolated clients, who often lack internet connections.“We’re seeing people who don’t know whether to pay their utility bills, to buy food, or to buy medicine,” Ms. Spencer said. “They’re having to make decisions about what they’re going to do. We helped people last year, but we see more and more people calling us this year for help.”The agency also runs a training program for older workers, popular with people who’ve found their Social Security income inadequate to live on.To prevent the poverty rate from rising further, advocates for the elderly recommend three types of actions: shoring up employer-sponsored retirement programs, helping older people earn more by working longer if they need to, and basing eligibility for public benefits on a more realistic definition of economic hardship.In 2022, the Labor Department reported that while 72 percent of civilian workers had access to an employer-sponsored retirement plan, only about 56 percent took part in one. That, in part, is why the lowest one-fifth of the income distribution in households headed by seniors gets 80 percent of its income from Social Security.For those retiring today who do have a 401(k), a swooning stock market is forcing them to recalibrate what income they can expect going forward. And the millennial generation is likely to retire less prepared than its predecessors, because of higher loads of student debt.Those without adequate retirement savings often have to keep working late into their 60s and 70s. Emily Allen, interim president of the AARP Foundation, says too many seniors overestimate their ability to take a break — or are pushed out of jobs — and end up in a difficult situation.Becky Freeman, an employee of District Three Governmental Cooperative, a local agency that provides services to seniors, made a home delivery in Meadowview, Va.Ms. Freeman, right, reviewing bills with Mildred Sneed during a home visit.“Older workers who stepped away and want to get back into the work force often have to take jobs at a lower wage than they earned in the past,” Ms. Allen said. “It’s easier to get a job when you have a job. So often we encourage individuals just to get back into the work force, but then work to advance their skills.”To supplement low wages, the American Rescue Plan of 2021 temporarily made people over 65 eligible for the earned-income tax credit, for which they otherwise don’t qualify. Advocates for the elderly have pushed to make that change permanent, since the wage supplement is often enough to lift people out of poverty.Older people low on financial resources can also look forward to the drug pricing provisions of the Inflation Reduction Act, which will reduce the cost of medications in the coming years and provide subsidies for those living close to the poverty line.Meanwhile, though, most aid programs that had been created or strengthened in 2020 and 2021 are gone. Gail Gorlen, 77, started leaning more on her credit card after the Supplemental Nutrition Assistance Program went from sending her $170 each month — an amount increased during the pandemic — to $115. She feels lucky to have found an apartment in a subsidized senior housing complex in Joplin, Mo., when she and her longtime partner split up last year, and is hoping that her Medicare Advantage program will provide some extra help with food.But for now, even cooking all her food at home, the days before her benefit card arrives on the 20th of the month are stressful.“I’ve gotten to the point where I can only pay a percentage of my Visa — I can’t pay the whole thing off, I don’t have enough money in the month,” Ms. Gorlen said. “I keep charging, charging, charging.” More

(Reuters) – A look at the day ahead in Asian markets from Jamie McGeeverWhile most financial assets can fall to zero, there usually comes a point where so much bearishness is factored into the price that there’s limited scope for further losses, and the alarm bells turn to screaming ‘buy’ signals for investors.Could we be at that point for major stocks and bonds markets? Could the permagloom of 2022 be about to lift?Monday’s powerful surge on Wall Street – the second in three sessions, again without an obvious catalyst – is yet another classic bear-market rally, or a sign investors may be in the process of carving out a market bottom.Let’s run with the bullish hypothesis. For a start, it would be difficult for investors to get any more bearish. Bank of America (NYSE:BAC)’s ‘Bull & Bear’ has been at “max bearish” for an unprecedented four weeks in a row and, according to the bank’s strategists, investors with traditional “60/40” portfolios are facing the worst returns this year for a century. It doesn’t get much gloomier than that.Similarly, can the market’s Fed view get any more hawkish than a terminal rate of 5% and 10-year yield of 4%? Possibly, but that may require a catalyst not baked into current forecasts – and recession next year is pretty much the consensus view.In any case, the economic data is actually not as bad as feared. Citi’s U.S. and G10 economic surprises indexes are the highest since May, and the global surprises index on Friday crept up to its highest since June. Emerging market indexes are the only ones still lagging.Maybe the bar of expectations has been set too low. But that’s what financial markets are pricing against, and if the economic outlook isn’t quite so bleak, that could bode well for earnings and therefore equities more broadly. Key developments that could provide more direction to markets on Tuesday:Australia RBA minutes Germany ZEW index (October)U.S. industrial production (September)U.S. TICs data (August) More

NEW YORK (Reuters) – Foreign bank units have been accumulating cash reserves at the Federal Reserve, likely reflecting concerns that a dollar funding crunch could be looming as the U.S. central bank reduces its balance sheet and global economies face recession risks.While their reserves were drawn down in September, probably due to quarter-end rebalancing, analysts expect foreign banks to ramp them up again in coming weeks, which could help them avert a disruptive scramble for dollars like the one that occurred three years ago. This may also have implications for how the Fed manages overnight reserves.The latest Fed data on banks’ assets and liabilities showed cash holdings of foreign banking organizations (FBOs), a proxy for their reserve balances, rose back to $1.2907 trillion as of Oct. 5. The August peak of $1.405 trillion was up roughly 18% from the same period last year.”Foreign banks’ behavior is consistent with an expectation of funding pressure at some point, whether it’s the Fed in the midst of balance sheet reduction or the year-end demand for liquidity,” said Isfar Munir, U.S. economist at Citi in New York. (Graphic: Foreign bank reserves at the Fed, https://fingfx.thomsonreuters.com/gfx/mkt/dwvkroxggpm/Foreign%20bank%20reserves.PNG) Analysts are not seeing signs of a serious funding crisis just yet, but said financial institutions could be anticipating one.The International Monetary Fund warned last week of a disorderly repricing in markets, as global financial instability has increased, raising contagion risks and spillovers of stress between markets. INFLOWS INTO FBOS FROM PARENT BANKSInflows to FBOs from their parent banks, has also grown, Fed data showed. As of Oct. 5, “Net due to related foreign offices” was $650.5 billion, up 14% from the previous week and just below $673 billion hit in early September, which exceeded the highs seen in 2014.Analysts believe foreign parent banks are likely borrowing dollars from offshore sources, such as the cross-currency swaps market, which has seen huge dollar demand, and funneling them to their U.S. branches. FX swaps allow investors to raise funds in a particular currency, such as the dollar, from other funding units like the euro. The cross-currency basis swap, or relative premium for swapping foreign currencies into dollars has widened over the last few weeks. The three-month euro cross rate hit -43.625 basis points (bps) on Monday, not far from the two-year peak of -55.50 touched last week. “I think parent banks believe it’s cheaper to get dollar funding right now and hold it at the Fed through the branches in case they need it later if there is a funding problem,” Citi’s Munar said.QUANTITATIVE TIGHTENINGThe Fed has embarked on a quantitative tightening (QT) program, meant to drain pandemic-era stimulus from the financial system. Yet, as it continues with QT, its balance sheet remains huge at $8.759 trillion, as of last week.Quantitative easing (QE) during the pandemic expanded the Fed’s balance sheet by trading Treasury and other securities for cash, boosting bank reserves deposited at the central bank as well. So when the Fed embarked on QT, the expectation was that bank reserves held at the Fed would decline.But the decline in bank reserves has been more rapid than what some had anticipated. As of Oct. 5, bank reserves at the Fed fell under $3 trillion to $2.972 trillion, down roughly $1.3 trillion from a peak of $4.3 trillion in December 2021. In the Fed’s previous QT cycle, $1.3 trillion in liquidity was withdrawn in five years, analysts said. In September 2019, reserves dwindled to dangerous levels due to heavy withdrawals for tax payments and settlement of Treasury purchases at auctions. That forced the Fed to provide additional reserves to the banking system.As bank reserves decline during QT, the Fed’s presumption is that a lot of that surplus cash will come from the overnight reverse repo (RRP) facility, analysts said.In a domestic RRP, investors lend overnight cash to the Fed at an interest rate of 3.05%, in exchange for Treasuries or other government securities, with a promise to buy them back.RRP demand, however, has proven to be sticky, with daily volume hitting north of $2 trillion in the last several months. “Attempts to lower RRP usage by reducing counterparty limits or the rates on offer, may undermine efforts to tighten monetary policy by pushing down short-term rates,” said Andrew Hunter, senior U.S. economist at Capital Economics.As domestic bank reserves diminish, those held by FBOs at the Fed have gotten more scrutiny. Analysts said foreign banks’ increased appetite for dollar liquidity could also be a function of the 3.15% paid by the Fed for those assets, or the so-called interest on reserve balances (IORB). “If there are structural reasons that make foreign banks more eager to hold reserves while large domestic banks’ reserves declined, then there may be a risk of another inadvertent case of gridlock,” said Lou Crandall, chief economist, at money market research firm Wrightson.”We’re not at that point yet…But it’s something to look out for.” More

Good evening.RIP Trussonomics.“No government can control markets. But every government can give certainty about the sustainability of public finances.” So began chancellor Jeremy Hunt’s extraordinary intervention today as he reversed almost all the tax measures of the September 23 “mini” Budget.On top of the previously announced U-turns on corporate tax and the top rate of income tax, Hunt — appointed by prime minister Liz Truss just three days ago — ditched the proposed cut in the basic rate of income tax from 20 per cent to 19 per cent and changes to dividend income, IR35 off-payroll rules, alcohol duty and VAT-free shopping. Cuts to national insurance and stamp duty will go ahead. The other key plank of the “mini” Budget was the package of measures to limit energy bill rises. Here, the chancellor said the “energy price guarantee” to help households and businesses with soaring bills would only last until April, when it would be reviewed and refocused on targeted help.The markets, the primary audience for Hunt’s morning announcement, appeared to welcome the news, with sterling rising and gilt yields trading lower. Business chiefs were left stunned, with some angry at the chopping and changing of tax policies and others wondering where the “pro-business” rhetoric had gone. Others feared the effects of the energy U-turn, leaving it entirely unclear who will be supported, at what prices and in what way come spring.Today’s measures have filled some of the £70bn hole in the public finances, leaving around £38bn still to be found through spending cuts, with cabinet discussions starting this evening. Elaborating on the “eye-watering difficulty” of the decisions he had to take in an update to parliament this afternoon, Hunt also announced four members of a new Economic Advisory Council to provide independent advice to the government. He also defended the decision to scrap the cap on bankers’ bonuses “because the policy didn’t work, and we will get more tax from rich bankers with the policy we now have”.Whether today’s intervention by the chancellor will save the Truss premiership however is unclear. Her programme for government has come under ferocious criticism from all quarters, including her own party members and former Bank of England chief Mark Carney as well as US president Joe Biden. Chief UK political commentator Robert Shrimsley says some Tory MPs may believe it is better for the time being to pretend that Hunt, and not Truss, is in charge and see how far it takes them. “But even if they do choose to hold off for the time being,” he concludes, “her premiership is done. She has lost all authority. The execution may be stayed but the verdict, and the sentence, are in.” Latest newsUS and UK agree to bolster co-operation on Russia sanctionsNational Grid chief warns British households of blackoutsBP speeds up greener fuels push with $4.1bn deal for biogas producerFor up-to-the-minute news updates, visit our live blogNeed to know: the economyChina made a last-minute postponement of what were expected to be disappointing third-quarter economic data in the middle of a landmark leadership congress that is set to confirm a third term for president Xi Jinping. China’s state banks stepped up dollar sales to support the renminbi. There were also signs from the EU that it would recalibrate its strategy towards Beijing.Latest for the UK and EuropeEU foreign ministers warned Iran would face more sanctions if it was proved that Tehran was providing military support for Russia’s war in Ukraine in the form of “kamikaze” drones.Brussels is planning a temporary ceiling on gas prices ahead of an EU summit on Thursday and Friday aimed at finding joint solutions to the energy crisis. Ukraine says Russia is trying to cripple its power networks as winter approaches. Croatia is hoping its Adria oil pipeline can help eastern Europe fill the regional void left by Russian cuts.Soaring gas prices meanwhile have revived interest in exploring the UK’s North Sea sources, particularly from smaller companies such as IOG, Neptune, Kistos and Serica. Gas remains essential to the UK because of the intermittency of wind and solar power and limited battery storage and is used to heat 85 per cent of homes and generate 40 per cent of electricity.Scotland’s first minister Nicola Sturgeon said an independent Scotland would establish a new Scottish currency “as soon as possible” alongside its own central bank and debt management office, and seek a fair settlement with the rest of the UK on debt. The City of London is spending millions of pounds to attract new visitors as the return to work plateaus at less than two-thirds of pre-pandemic levels. Authorities hope to transform the financial district into a weekend destination for day trippers and tourists.Global latestWorld Bank chief David Malpass warned of a “learning and skills crisis” alongside climate and food emergencies.Japan is hoping a surge in spending from international tourists will offer an upside to the country’s sinking currency now that pandemic restrictions have been lifted.Brazilian president Jair Bolsonaro attacked challenger Luiz Inácio Lula da Silva over corruption in the first head-to-head TV debate ahead of their election run-off on October 30.Free trade has not made us free, argues columnist Rana Foroohar. The idea that trade was primarily a pathway to global peace and unity, rather than a necessary way of balancing both domestic and global concerns, is over, she writes.Need to know: businessBank of America reported better than expected third-quarter earnings, as “resilient” consumers offset declining investment banking revenues. Goldman Sachs is merging its asset and wealth management divisions and shifting part of its lossmaking consumer business into the new unit as boss David Solomon tries to close the gap in stock market valuations with rival banks.UK banks are set for bumper profits as interest rates rise, writes head of Lex Jonathan Guthrie, but the bonanza will coincide with serious financial stress for some mortgage borrowers, a situation which could make them prime targets for higher taxes. Disney warned France that future blockbuster movies would go straight to streaming unless the country reformed its “anti-consumer” distribution rules. UK broadcaster ITV is considering whether to cash in on the demand for new content by selling a stake in its production arm.Pharma companies are hunting for new revenue streams as demand for Covid jabs drops off.The World of WorkThe pandemic changed our approach to the office but this has yet to filter through into how those workspaces are designed, writes Andrew Hill. Organisations need to move away from the beige cubicle farms of the past to more elastic models, optimised for creativity.One of the big differences between working in the office and working at home (unless of course you have a cat) is desk bombing — the act of approaching someone at their desk without warning and talking to them. Columnist Pilita Clark says we should embrace the idea: we’re all becoming too shy and intolerant of interruption.Applications for MBAs soared during the pandemic as workers looked to learn new skills and adapt for new career challenges but will this trend survive the economic downturn? Browse our new business school rankings.Get the latest worldwide picture with our vaccine trackerSome good newsOne Health, a holistic initiative from global health, food and animal welfare organisations, launches today. The project aims “to reduce the risk and impact of health threats and at the same time sustainably balance and optimise the health of humans, animals, plants and the environment”.A woman takes her family goats to drink water at Hula Hula Springs in Marsabit County, Kenya © WHO / Billy Miaron More

Millions of British households’ energy bills will rise by more than £100 a month from April next year, after new chancellor Jeremy Hunt signalled big changes to the government’s support package.Hunt on Monday confirmed that the energy price guarantee, which was announced in September and limits average annual household bills to £2,500, would continue through the winter. But he said that from April support would target “the most vulnerable”.The decision to reduce support to six months — Liz Truss had promised the price freeze would last for two years — comes as the prime minister seeks to calm financial markets destabilised by her “mini” Budget. A full Treasury-led review will determine how the government will ration support in future, but timings have yet to be confirmed. Hunt said the new measures would cost “significantly less” than the previous £150bn estimate for helping households and businesses over the next two years and prioritise energy efficiency measures.The revised programme is expected to help at least the 8mn low-income households on benefits such as universal credit, tax credit and pension credit. Last year, they were given a £1,200 one-off payment to help them amid the cost of living crisis. All households will continue to receive a £400 credit on energy bills between October and next April. Beyond that, however, ministers face a test in identifying which households deserve to have their energy bills capped, especially since millions of middle-class families are struggling with rising mortgage rates. Wholesale natural gas and electricity prices remain at exceptionally high levels, meaning bills would rise significantly for any household cut off from government support next year. Investment bank Investec on Monday said the average yearly household bill without government subsidy would probably near £4,000 between next April and June — 60 per cent higher than the government’s current cap. Energy consultancy BFY Group forecast the typical yearly bill would, based on current forward prices, be £4,500 in April. It warned that the rise risks hitting middle-class households not included as part of the targeted support. “While a targeted scheme could provide more sustainable support in the longer term, there is a ‘stretched middle’ who earn too much for typical support yet not enough to face £4,500 energy bills,” said Matt Turner, a consultant at BFY.Adam Scorer, head of the charity National Energy Action, said that “in seeking the confidence of markets, the government has created huge uncertainty for households”. Labour MP Darren Jones, who chairs the House of Commons business, energy and industrial strategy select committee, urged the government to reduce support for households slowly and invest more in cutting energy usage. “Any end to support for all bill payers should be tapered off, instead of facing a cliff-edge,” said Jones, adding that a national home insulation plan should be fast-tracked. As well as rising energy costs, households can no longer look forward to falling income tax bills. Hunt on Monday indefinitely postponed proposals to reduce the basic rate of income tax from 20p in the pound to 19p and reversed a planned cut to dividend tax.

Income tax: the Hunt plan Gross pay (£)Net pay 2022-23Tax saving with Kwarteng’s ‘mini’ Budget 2023-4Tax saving with Hunt plan 2023-420,00017,47921814330,00024,20639121640,00030,93356328950,00037,66073636260,00043,4 1481243580,00054,869958581100,00066,3231,104727120,00073,7771,249872140,00084,2031,3951,018160,00095,1572,0411,164180,000105,61 13,1871,310200,000116,0664,3331456Source: Blick Rothenberg

One of the few “mini” Budget tax measures to survive the cull was the decision to scrap the health and social care levy, meaning national insurance rates for millions of taxpayers will not increase next April.Although Hunt did not commit to uprating benefits in line with inflation next year, he vowed to “prioritise the most vulnerable” and did not rule out future spending cuts or tax rises. “There will be more difficult decisions,” he added.

Tax experts think these tax rises could include reinstating measures to increase national insurance for higher rate taxpayers, when Hunt announces a medium-term debt-cutting plan on October 31.Cuts to stamp duty will also remain. Home buyers in England and Northern Ireland now pay no stamp duty on the first £250,000 of a property’s value — double the previous £125,000 threshold. First-time buyers, meanwhile, pay no tax on the first £425,000, up from £300,000 previously. In another break with his predecessor Kwasi Kwarteng, Hunt vetoed freezing alcohol duty, meaning duty rates will increase in line with the retail price index next February. Plans for VAT-free shopping incentives to draw foreign tourists were also shelved. Additional reporting by Nathalie Thomas in Edinburgh More