Economy

US president Joe Biden will invoke Korean war-era powers to boost the domestic supply of minerals crucial for electric vehicles and large capacity batteries, as his administration tries to reduce its dependence on overseas energy. Biden will use a presidential determination as soon as this week to invoke the Defense Production Act to help increase the availability of lithium, nickel, cobalt, graphite and manganese in the US.Under the terms of the DPA, an administration can compel companies to prioritise government contracts over private ones, for instance, or to provide loans and grants to boost manufacturing.A person familiar with the White House’s plans said the administration was not contemplating making direct purchases of the minerals, but would aim to make government funding available for mining feasibility studies and safety upgrades, as well as producing minerals from existing mining waste.The person said triggering the DPA would not allow mining companies to bypass or expedite any permitting or environmental review processes.Currently, the US imports the vast majority of the minerals the White House intends to add to the list of items covered by the DPA. Biden ordered a review of critical supply chains early last year as he sought to reduce US dependence on China for a range of imports deemed important to national security, including minerals, pharmaceuticals and computer chips. The US Department of Energy last year released a blueprint specifically aimed at reviving the US’s domestic battery supply chain, and forecast that a boom in electric vehicles would lead to a surge in demand for batteries over the next decade.It proposed securing US access to the raw minerals needed to make batteries by providing incentives for “safe, equitable and sustainable” domestic mining, and devoting money to researching ways to capture minerals through recycling waste or expired batteries.In its paper, the DoE noted that China dominates the supply chain for the manufacturing of lithium batteries, including the processing of minerals.Last month, the DoE said it would make nearly $3bn available to companies in the US battery manufacturing supply chain to help scale up production. Biden’s infrastructure bill, which passed through Congress last year, also made $7bn available over five years for the processing of minerals and for recycling end-of-life batteries. The DPA was invoked by former president Donald Trump to boost the production of coronavirus-related medical supplies during the height of the pandemic. More

Saudi Arabia has deposited $5bn in Egypt’s central bank in an effort to shore up the economy of the most-populous Arab state, which has come under intense pressure as a result of the Russia’s invasion of Ukraine.The state-run Saudi Press Agency said the funds deposited were part of the kingdom’s “tireless efforts” to support Egypt. Cairo announced last week it was seeking IMF support after the war sent the prices of wheat, cooking oil and fuel soaring and cut the flow of tourists from Russia and Ukraine — both important markets for its crucial tourism sector.Egypt is one of the IMF’s biggest borrowers after Argentina and analysts said the country, which had resorted to the fund twice in the last six years, had exceeded its quota of IMF borrowing rights and would probably be required by the lender to secure co-financing from other sources. The deposit from Saudi Arabia would help meet this condition.In addition to the cash from Saudi Arabia, the kingdom, Qatar and the United Arab Emirates have also signalled a willingness to invest billions in Egypt’s economy.“Gulf states are offering different kinds of support to Egypt whether in investments or the cash deposit,” said Mohamed Abu Basha, head of macroeconomic analysis at EFG-Hermes, the Cairo-based regional investment bank. The Egyptian cabinet on Wednesday said Cairo and Riyadh had signed an agreement to encourage investments in Egypt by Saudi Arabia’s sovereign wealth fund. Mostafa Madbouly, Egypt’s prime minister, said there will be measures over the “coming period” for up to $10bn of Saudi investments from the Kingdom’s Public Investment Fund.This came a day after an announcement that Qatar had signed an agreement to invest $5bn in Egypt during a visit by Doha’s ministers of foreign affairs and finance.Bloomberg last week reported that UAE was discussing acquiring Egyptian government stakes worth $2bn in successful companies listed on the Egyptian stock exchange. These include 18 per cent of Commercial International Bank, Egypt’s biggest private lender, and 13 per cent of Fawry, an e-payments company. Saudi Arabia and the Emirates stepped in to support Egypt’s economy in 2013 after Abdel Fattah al-Sisi, the current president and a former defence minister ousted Mohamed Morsi, his elected predecessor who came from the Muslim Brotherhood group. The Islamist organisation, now outlawed in Egypt and accused of terrorism, has been seen as a threat by the Gulf monarchies which welcomed Morsi’s toppling.Cairo’s relations with Qatar have been strained for most of the past decade because of its support for the Brotherhood but the two countries mended their rift last year as part of a wider Arab reconciliation.Spiralling commodity prices and the withdrawal of billions of dollars from the debt market forced Egypt to devalue its currency last week just ahead of its announcement that it had gone to the IMF. Cairo is the world’s biggest wheat importer with a subsidised bread programme that serves some 70mn people — about two-thirds of the population. In recent years Egypt has been reliant on attracting “hot money” or foreign inflows into its short-term debt market by offering one of the highest real interest rates in the world. More

The council, which includes Mexico’s finance minister, central bank governor and head of the banking commission, said a credit rating action on Pemex has been mitigated by measures to improve the tax take and higher oil prices. More

Good evening,As the poet once said: April is the cruellest month.Britons are braced for what Bank of England chief Andrew Bailey referred to this week as a “historic shock” to incomes, as the war in Ukraine exacerbates a growing cost of living crisis. This is set to worsen from Friday when the new month ushers in an intense period of price rises and tax increases.New survey data from the Office for National Statistics this morning showed 83 per cent of adults reporting an increase in the cost of living in March. Some 90 per cent blamed the price of food, followed by gas or electricity bills (79 per cent) and the price of fuel (71 per cent).Surging energy prices, one of the key drivers behind inflation’s leap to a 30-year high of 6.2 per cent in February, are set to increase further in April as the regulatory price cap rises by more than 50 per cent to nearly £2,000 a year. The Office for Budget Responsibility predicts that this could even hit £2,800 in October when the cap is next adjusted.Bailey said the shock from energy prices would be “larger than any single year in the 1970s”, with the BoE now expecting inflation to hit 8 per cent in the second quarter and potentially even higher in the autumn.These concerns are set to be compounded by April’s rise in National Insurance. In last week’s Spring Statement, UK chancellor Rishi Sunak made changes that he said amounted to the “biggest net cut to personal taxes in over a quarter of a century”, an assertion repeated by Prime Minister Boris Johnson in parliament today. However, the OBR has said the measures would only give back £1 for every £6 in higher taxes already announced by Sunak. Think-tanks have also challenged the claim, arguing that the majority of workers would see their taxes rise.The OBR says the squeeze on living standards in 2022-23 would be the largest fall in a single financial year since records began in 1956-57.The squeeze is also showing up in other official statistics. UK credit card debt hit a record high in February, according to BoE data published yesterday, as individuals borrowed a net £1.5bn — the highest monthly amount since records began in 1993. Businesses, too, have a difficult month ahead. Aside from growing increases in costs, they also have to pay an increased national living wage and higher National Insurance contributions, while pandemic support such as cuts to VAT for hospitality businesses and a moratorium on eviction for unpaid rent comes to an end.Latest newsGerman inflation hits 40-year high of 7.6% in MarchHolland & Barrett payment held up by HSBC over sanction concernsBioNTech to return almost €2bn to shareholders after Covid vaccine successFor up-to-the-minute news updates, visit our live blogNeed to know: the economyGermany has taken the first step towards gas rationing as it prepares for a halt in supplies from Russia over Moscow’s insistence on payment in roubles, a move firmly rejected by EU and G7 leaders. Our new explainer explores whether US natural gas could relieve Europe from its dependence on Russia. And here’s one explanation of how sanctions on Russian energy exports could work.European Central Bank president Christine Lagarde has warned that the “supply shock” from the war in Ukraine would push up prices and hit growth in her gloomiest assessment yet of the crisis. She said higher energy prices had already cut eurozone income by 1.2 per cent in the fourth quarter of 2021, implying a “loss of about €150bn in one year”. New EU data this morning showed “plummeting consumer confidence” since the invasion of Ukraine.Latest for the UK and EuropeThe UK is considering yet another delay to post-Brexit border checks to prevent what industry has warned could be a supply chain disaster. Chancellor Rishi Sunak admitted earlier this week that recent dismal trade figures “might” be linked to leaving the EU. Trade Secrets writer Alan Beattie says the EU has also suffered from the UK’s departure.Spain approved a €16bn “shock plan” to address the effects of the Ukraine crisis, including fuel price cuts and proposals to reduce electricity costs, as well as increasing spending from the EU’s €800bn pandemic recovery fund.Global latestThe World Bank has warned that the war in Ukraine could cause a debt crisis and tip millions of people in low and middle-income countries into poverty. High commodity prices, particularly for oil and wheat, along with collapsing trade growth, rising interest rates and a stronger US dollar would all make it harder for net importers to service mounting debts, it said, shaving a percentage point off growth rates the bank forecast just a month ago.A strict new lockdown in Shanghai — which yesterday reported a record 4,477 Covid cases, more than any other Chinese city in the pandemic apart from Hong Kong — is causing severe disruption. The FT editorial board said China’s zero-Covid goal was no longer sustainable and that it needed a new strategy for living with coronavirus.The Lex column described President Joe Biden’s plans for a US wealth tax as a “worthwhile work in progress towards a fairer split”. Here’s an explanation of how the proposed tax, which would hit households worth more than $100mn, would work in practice.Seiji Kihara, one of Prime Minister Fumio Kishida’s most powerful aides, told the Financial Times that Japan needed to hit its 2 per cent inflation target and do so through higher domestic demand rather than surging commodity prices. “The most important thing is to end deflation,” he said.Australia has announced a giveaway budget with a focus on easing cost of living pressures ahead of a general election in May. Measures included a cut in petrol tax and a one-off payment to 6mn low-income citizens. We know what you did during lockdown, an FT film written by James Graham that explores the tension between the need for data to track and trace and the right to privacy and justice, has been nominated for a Bafta.

Video: People You May Know. An FT Film written by James Graham

Need to know: businessDespite the chaos in commodity markets and downward revisions to economic growth, the global financial system has proved to be remarkably resilient against the shock of war in Ukraine, our Big Read explains. Global stocks are back at prewar levels and volatility has slipped back to its long-term average, but analysts warn there could still be an upset.Brussels has called for sanctioned oligarchs to lose rights to EU citizenship granted by some member states to attract wealthy investors. The US warned that it was closely monitoring any attempts by individuals or businesses to evade sanctions by shifting assets.FT deputy editor Patrick Jenkins, in a call for a more moral capitalism, says investors have so far resisted the temptation to pick up distressed Russian assets but due as much to realpolitik as to ethics. “Shareholder pressure and financial pragmatism have supplemented murderous geopolitics to make a powerful cocktail of deterrence,” he writes.Some of the world’s biggest banks are still heavily financing fossil fuels, despite pledges to address climate change. Campaigners say fuel financing is dominated by JPMorgan Chase, Wells Fargo, Citi and Bank of America — all of whom are members of the Net-Zero Banking Alliance. US environment agency chief Michael Regan said increased production of fossil fuels and the transition to clean energy were not “mutually exclusive”. Join us for the Energy Source Live Summit on April 7, where we will take a deep dive into the issues set to reshape the US energy industry in the years to come. Register hereTui, Europe’s largest tour operator, said it would repay Covid state aid, mainly from German state-owned investment bank KfW, as bookings returned to near pre-pandemic levels.The head of Avolon, one of the world’s largest aircraft leasing companies, warned of “very significant write-offs” from the likely loss of hundreds of jets leased to Russian carriers. Overseas leasing groups have more than 500 aircraft, worth an estimated $10bn, stuck in Russia.The Ukraine crisis is hammering tech supply chains and in particular those of Apple, reports our final #techAsia newsletter.The World of WorkNew starters during the pandemic have had the unenviable task of trying to forge contacts with colleagues over a screen rather than in person. But now the great return is under way, what’s the best way to navigate office life? Here are some practical pointers in our guide for young recruits.Legal staff returning to the office in London can look forward to some swanky new premises as law firms snap up sustainable, high-spec workplaces. Developers and landlords have fretted about the future of the office since the start of the pandemic and the trend towards hybrid working, but are increasingly bullish about the prospects for modern, green offices.Our Working It podcast discusses a trend that took off during the pandemic and has now turned into one of the workplace’s most divisive issues: bringing your dog to the office. Are dogs the key to workplace happiness?If you’d like to experience Working It in a live setting, sign up for the Breakfast Series event in London on Wednesday April 6, where work and careers editor Isabel Berwick and columnist Pilita Clark will be discussing The Great Resignation. All ticket proceeds go to the Choose Love Ukraine fundraiser.Get the latest worldwide picture with our vaccine trackerAnd finally . . . Coffee, that traditional method of delivering a quick brain boost, is being challenged by a new range of “cognitive enhancers” or smart drugs. Explore the strange new world of nootropics. © Super Freak More

The frantic search for a Brexit dividend is one of the few growth areas in the UK economy, at least when measured by the consumption of government time and effort rather than by the resulting output. A less obvious truth is that the EU’s trade policy would also be better if the UK were still a member.The entries in the UK’s Brexit debit column are clear. This week it emerged British exports have seriously underperformed during the global post-lockdown trade rebound since early 2021. Even chancellor of the exchequer Rishi Sunak, a longtime Brexit enthusiast, took time out from counting the number of cars and varieties of bread consumed in his household grudgingly to accept the damage his project had done. The UK doesn’t even have the capacity to check imports from the EU, repeatedly deferring the introduction of full border controls. In its obsession with showing gains from Brexit, Boris Johnson’s government is mulishly pressing ahead with puerile symbolism like setting up an entirely separate “UKCA” safety and quality mark for products to rival the EU’s “CE” mark — duplication without deregulation. The UK’s attempts to diverge are also constrained by the trade deals by which it is bound. The EU this week started a case against the UK at the World Trade Organization over discrimination in the way Britain subsidises offshore windpower.There may, of course, be some real dividends in the future. The UK is authorising gene editing of crops, a welcome departure from the EU’s fear of gene science, for example.But so far, the one gain the government can reasonably claim is its relative speed in procuring Covid vaccines in late 2020 and early 2021. In theory, the UK could have done this within the EU. It obtained regulatory authorisation while still under the aegis of the European Medicines Agency, and it was not compulsory for EU members to join the centralised procurement programme. But in practice it might have been difficult to ignore an EU-wide project from the inside.However, the procurement only got the UK a couple of months’ start on the EU, an advantage which probably won’t be replicated in future. The UK’s edge with Covid rested on a research tie-in between Oxford university and AstraZeneca, together with nifty contracting which prioritised supplying the UK. Britain has long experience in large-scale public health procurement, while Brussels was learning on the job.In any future pandemic the UK will struggle to reproduce that relative overperformance. The EU frequently makes a shambles of unfamiliar problems — the eurozone debt crisis, for example — but then learns quite quickly.Next time, you can bet Brussels will be primed with big budgets and watertight procurement contracts — and if necessary another export authorisation scheme to focus manufacturers’ minds on supplying the EU market. If you’re a big pharma business and you’re concerned about another round of vaccine nationalism, whose market do you want to be trapped in? One with a population of 67mn or one with a population of 447mn?There’s an obvious temptation in the EU to feel schadenfreude about the UK’s content-free Brexit triumphalism. But if you care about good policy rather than descending to Johnson’s point-scoring level, it’s an instinct worth resisting.Certainly, there are policy areas in which the EU is freer to move in the right direction now the UK has gone, such as centralising fiscal policy. Trade, however, is not one of them. EU trade policy is at serious risk of protectionist drift, and some liberal Nordic and central and eastern European member states privately bemoan the loss of the traditionally free-trading UK as a constraint. One obvious sign is the anti-coercion instrument (ACI) that the EU is currently developing. Its intentions are good — to deter the kind of intimidation China has tried on Lithuania. (It’s not really relevant to a situation as extreme as Russia, where the EU has correctly leapt straight to massive sanctions.) But the ACI is currently being drawn up with a lot of leeway to interpret “coercion” and design a response, leaving it open to protectionist lobbying. Krister Nilsson, Swedish state secretary for foreign trade, last month told a seminar at the European Council on Foreign Relations: “Our businesses, the companies that actually live their daily life in trade . . . they see this as a too broad, too strong, too weaponised an instrument.”Another example is the EU Chips Act, where money is being shovelled into the semiconductor supply chain without enough care being given to how it gets spent — plus provisions on preferential domestic supply that could easily slide into de facto export restrictions. The post-Brexit UK may be all about giving itself more space to throw public cash around, but it was a strong voice against abuse of state aid when it was in the EU.Traditional economic theory emphasises the mutual gains from trade. The whole surpasses the parts. The same appears to be true with trade policy and Brexit. Britain, so far, is definitely worse off outside the EU, but then the EU would also be having a more balanced and reasonable debate if the UK were still in the [email protected] More

ADP said private payrolls grew by 455,000 in March, slightly more than expected.
Leisure and hospitality led the job gains, adding 161,000 positions.
The release comes two days ahead of the government’s nonfarm payrolls report, which is expected to show growth of 490,000.

Companies added jobs at a solid pace in March, indicating that hiring is strong despite signs of a tightening labor market, payroll processing firm ADP reported Wednesday.
Private payrolls expanded by 455,000 for the month, the firm said, about in line with the Dow Jones estimate of 450,000 though it was the lowest since August 2021. The total was slightly below the upwardly revised 486,000 for February, and brought ADP’s first-quarter jobs count to 1.45 million.

The report comes two days before the more closely watched nonfarm payrolls report, with the Bureau of Labor Statistics expected to show jobs growth of 490,000 for the month, according to the Dow Jones consensus estimate. The ADP and BLS numbers can differ widely, as they did in February when the payroll firm’s count was about 200,000 below the government’s official tally.
ADP’s report for March indicated that hiring was spread evenly around sectors, with leisure and hospitality adding 161,000 to lead the way. Education and health services contributed 72,000 while professional and business services was next with 61,000 new jobs.
On the goods-producing side, manufacturing led with 54,000 while construction added 15,000.
Service-providing companies added 377,000 jobs while goods producers made up the balance of about 79,000.
By size, job gains also were spread fairly evenly, with companies employing 50 to 499 workers up 188,000 and large companies adding 177,000. Small businesses, which saw a decline in February, reversed that and added 90,000 in March.

“Businesses are hiring, specifically among the service providers which had the most ground to make up due to early pandemic losses,” said Nela Richardson, chief economist at ADP. “However, a tight labor supply remains an obstacle for continued growth in consumer-facing industries.”
Indeed, in February there were a record 5 million more jobs than available workers, according to BLS data released Wednesday. Workers continue to leave their jobs in search of better opportunities, with 4.35 million more taking part in the so-called Great Resignation during the month.
Friday’s report is expected to show the unemployment rate contracted further, to 3.7%.
Federal Reserve officials are watching the jobs numbers closely as the central bank battles inflation at 40-year highs. Job growth has come with a sharp acceleration in wages, and the Fed is expected to raise interest rates at a brisk pace this year to combat rising prices.
Correction: Leisure and hospitality added 161,000 jobs in March. An earlier version misstated the figure.

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China had already considered the changes in domestic and external environments when making macro policies for this year but it will make preparations for possible and greater uncertainties in the economy, according to the State Council meeting chaired by Premier Li Keqiang.The world’s second-largest economy is grappling with the worst resurgence of COVID-19 cases since early 2020, with more mass testing and virus-related curbs ratcheting up in many cities.Shanghai, home to 26 million people, China’s financial hub, is in the third day of a lockdown as new COVID-19 cases in the city jumped by a third despite stringent measures already in place to try to stop the virus from spreading.China will refrain from introducing measures not conducive to stabilise market expectations, and it will step up the issuance of the rest of the special government bonds.The government has set this year’s quota for local government special bond issuance at 3.65 trillion yuan ($574.73 billion), and 1.46 trillion yuan has already been issued in advance quota.The issuance of the special government bonds will be first given to regions with strong debt repayment ability and large number of projects, according to remarks at the cabinet meeting. It will also encourage foreign capital to purchase government bonds.($1 = 6.3508 Chinese yuan renminbi) More

LONDON (Reuters) -The Kremlin indicated on Wednesday that all of Russia’s energy and commodity exports could be priced in roubles, toughening President Vladimir Putin’s attempt to make the West feel the pain of the sanctions it imposed for the invasion of Ukraine. With Russia’s economy facing its gravest crisis since the 1991 collapse of the Soviet Union, Putin on March 23 hit back at the West, ordering that Russian gas exports should be paid for in roubles.That move forced Germany, Europe’s biggest economy, to declare on Wednesday an “early warning” that it could be heading for a supply emergency. Germany imported 55% of its gas from Russia last year.In the strongest signal yet that Russia could be preparing an even tougher response to the West’s sanctions, Russia’s top lawmaker suggested on Wednesday that almost Russia’s entire energy and commodity exports could soon be priced in roubles. Asked about the comments by parliament speaker Vyacheslav Volodin, Kremlin spokesman Dmitry Peskov said: “This is an idea that should definitely be worked on.””It may well be worked out,” Peskov said of the proposal.Peskov said that the U.S. dollar’s role as a global reserve currency had already taken a hit, and that a move to pricing Russia’s biggest exports in roubles would be “in our interests and the interests of our partners.”Europe, which imports about 40% of its gas from Russia and pays mostly in euros, says Russia’s state-controlled gas giant Gazprom (MCX:GAZP) is not entitled to redraw contracts.”If you want gas, find roubles,” Volodin said in a post on Telegram. “Moreover, it would be right – where it is beneficial for our country – to widen the list of export products priced in roubles to include: fertiliser, grain, food oil, oil, coal, metals, timber etc.”Russia exports several hundred billion dollars worth of natural gas to Europe each year. Euros account for 58% of Gazprom exports, U.S. dollars 39% and sterling around 3%, according to the company.Still, the exact way in which payments could be made remained unclear as of Wednesday. Peskov said Russia will not immediately demand that buyers pay for its gas exports in roubles, promising a gradual shift.SANCTIONS ‘BOOMERANG’ Russian officials have repeatedly said the West’s attempt to isolate one of the world’s biggest producers of natural resources is an irrational act of self harm that will lead to soaring prices for consumers and tip Europe and the United States into recession.Russia says the sanctions – and in particular the freezing of about $300 billion in Russian central bank reserves – amount to a declaration of economic war. Putin says the freezing of the reserves was a default on the West’s obligations to Russia that would hurt confidence in the U.S. dollar and the euro.Former President Dmitry Medvedev said the sanctions had “boomeranged” back to undermine European and North America economies, driving up prices for fuel and heating and eroding confidence in the dollar and euro.”The world is waking up: confidence in reserve currencies is melting like a morning fog,” Medvedev said. “Abandoning the dollar and the euro as the world’s main reserves no longer looks like a fantasy.”Medvedev said “crazy politicians” in the West had sacrificed the money of their taxpayers on the altar of an unknown victory in Ukraine. “The era of regional currencies is coming.”Russia has long sought to reduce dependence on the U.S. dollar, though its main exports – oil, gas and metals – are priced in dollars on global markets.Globally, the dollar is by far the most traded currency, followed by the euro, yen and British pound. More