Kremlin gas profits plunge as tide turns in Putin’s energy war

Gazprom blamed the decline on the Kremlin’s windfall tax imposed on Russia's energy sector to help fund Putin’s war on Ukraine. - TATIANA BARYBINA/Press service of the governor of/AFP via Getty Images

Gazprom blamed the decline on the Kremlin’s windfall tax imposed on Russia’s energy sector to help fund Putin’s war on Ukraine. – TATIANA BARYBINA/Press service of the governor of/AFP via Getty Images

Russian gas giant Gazprom’s net profit dropped over 40pc last year in another blow to Vladimir Putin’s attempts to weaponise gas supplies.

The state-owned natural gas company said that net profit fell 41pc to 1.226 trillion roubles (£12.3bn) from 2.093 trillion roubles in 2021.

It blamed the decline on the Kremlin’s windfall tax imposed on Russia’s energy sector to help fund Putin’s war on Ukraine.

Although Gazprom’s gas exports have not been directly targeted in Western sanctions against Russia and state companies, the company has lost most of its European customers and has been forced to boost its export business with increased supplies to China and other markets.

The amount of gas exports, a key source of Gazprom’s revenues, almost halved last year to 101bn cubic metres.

Gazprom’s share price fell around 4pc after the company added that its board has decided not to pay shareholders a full-year dividend, despite allocating a half-year dividend of 1.2 trillion roubles.

Deputy chief executive Famil Sadygov noted that the six-month dividend payment was already higher than the target 50pc of net profit.

He said: “We did not wait for the results of the year, but gave the shareholders the opportunity to receive such a significant amount in advance. Due to this, the received dividend has a higher real value than the payment of the same amount at the end of the year.”

07:00 PM

Signing off

That’s all from us, we’ll be back first thing tomorrow.

06:59 PM

Ofwat launches probe into South West Water over leakage reporting

Ofwat has launched an investigation into South West Water over the accuracy of data it provides on leakage and water consumption.

The UK water services regulator said it will conduct a “thorough” investigation into how South West calculated its performance on leakage and per capita consumption, or average household use.

South West, owned by Pennon Group, faces a financial penalty worth 10pc of its revenue if found to have misreported the data.

Ofwat chief executive David Black said: “We are committed to holding companies to account for performance and for sharing timely, accurate, and complete data with us and their customers. We want to ensure that is the case here.”

Pennon Group said it will work “openly and constructively” with Ofwat.

The British water utility giant added that South West’s performance data was included in its annual report, which is “subject to rigorous assurance processes”.

06:30 PM

IMF calls for Jeremy Hunt to scrap stamp duty to boost the economy

The International Monetary Fund (IMF) has urged Jeremy Hunt to scrap stamp duty as it warned the tax was clogging up the housing market and stopping people from switching jobs.

Economics editor Szu Ping Chan has the details:

The Fund said the Chancellor should consider a move away from “transaction taxes which constrain housing and labour mobility”. Instead of a property sales tax, the Fund suggested adopting a new levy based on the value of a property.

It came as the Fund admitted it was wrong to predict a UK recession this year, upgrading its growth forecasts for the second time in as many months.

Britain is now expected to grow 0.4pc this year, the IMF said. This is in contrast to a 0.3pc contraction projected just last month, which itself was an upgrade from an even more dour forecast made in the wake of October’s mini-budget.

Rishi Sunak accused the IMF of being too gloomy. Here’s what he said…

05:46 PM

Lebedev calls in former GQ editor in attempt to revive London Evening Standard

The Russian-born owner of the London Evening Standard has called in the former editor of men’s magazine GQ as he tries to salvage the newspaper’s floundering efforts to adapt to a digital future.

The Telegraph understands that Evgeny Lebedev has appointed Dylan Jones, a prominent journalist who ran GQ from 1999 until 2021, as editorial consultant.

Senior business reporter James Warrington has the story here…

05:12 PM

Net zero goals are unrealistic, says Qatar Airways boss

The chief executive of Qatar Airways has said he is “very sceptical” about hopes that the aviation industry will become carbon neutral by 2050.

Akbar Al Baker told the Qatar Economic Forum that not enough sustainable aviation fuel is being produced to reach the International Air Transport Association’s net zero goals.

He said: “I don’t think that we will be able to achieve net zero emissions by 2050. Everybody’s talking about it but let us be realistic.”

The chief executive also highlighted that technological hurdles remain to using hydrogen as a replacement, a project which he said was “in its infancy”.

Akbar Al Baker told the Qatar Economic Forum that not enough sustainable aviation fuel is being produced to reach the International Air Transport Association's net zero goals. - Christopher Pike/Bloomberg

Akbar Al Baker told the Qatar Economic Forum that not enough sustainable aviation fuel is being produced to reach the International Air Transport Association’s net zero goals. – Christopher Pike/Bloomberg

05:02 PM

FTSE 100 closes in the red

The FTSE 100 has closed 0.10pc lower to 7,762.95, while the mid-cap FTSE 250 index ended 0.34pc lower at 19,208.31.

04:35 PM

Deliveroo riders to challenge bosses over pay at annual general meeting

Deliveroo riders are preparing to challenge the takeaway delivery company over pay and working conditions at its annual general meeting, according to the Independent Workers’ Union of Great Britain.

The trade union, which has the largest membership of app-based couriers in the UK, and corporate responsibility charity ShareAction have arranged for couriers to confront Deliveroo’s board at the meeting on Wednesday.

Riders have said they want to raise concerns over their pay levels and worries related to their “independent worker” status.

It comes after the IWGB appealed to the Supreme Court to secure collective bargaining rights for Deliveroo’s riders.

Last year, Deliveroo formed a voluntary partnership with the GMB union but faced criticism from the IWGB, who argued that it does not guarantee drivers to sick or holiday pay.

Dan Howard, head of good work at ShareAction, said:

Gig economy workers have been disproportionately affected by the cost-of-living crisis as job insecurity and poor conditions are exacerbated.

The riders today are making it clear to Deliveroo and to shareholders that more protections need to be put in place for workers, both because it is the right thing to do and because Deliveroo’s current business model poses a risk to investors.

Riders have said they want to raise concerns over their pay levels and worries related to their "independent worker" status. - David Davies/PA Wire

Riders have said they want to raise concerns over their pay levels and worries related to their “independent worker” status. – David Davies/PA Wire

04:15 PM

BP, Shell and Total face further disruption as 1650 offshore announce new strikes

BP, Shell and Total are among the oil and gas companies facing further disruption after offshore workers announce new 48-hour strikes in their dispute over pay.

Around 1650 offshore contractors working for Bilfinger UK, Stork Technical Services and Sparrows Offshore Services will walkout for 48-hours, from June 1 and from June 8.

The industrial action includes electrical, production and mechanical technicians in addition to deck crew, scaffolders, crane operators, pipefitters, platers, and riggers, according to trade union Unite.

The strikes will also disrupt oil and gas majors Apache, Harbour Energy, Enquest, Ithaca, Repsol, Shell and TAQA.

It follows previous strike action in April and earlier this month.

03:37 PM

Handing over

That’s all from me on a busy day on the business blog. Adam Mawardi will keep you informed into the evening.

I leave you with another of the striking images of the protesters being removed from Shell’s annual general meeting by our photographer Belinda Jiao:

A climate protester is removed from the Shell AGM - Belinda Jiao

A climate protester is removed from the Shell AGM – Belinda Jiao

03:30 PM

Higher migration will boost UK economy, says Bank economist

It’s worth quickly going back to a point made by Bank of England chief economist Huw Pill in front of MPs today.

He said higher-than-expected migration had added 20 basis points to the Bank’s economic growth forecasts, underscoring the UK’s need for workers to fill jobs.

Appearing in front of the Treasury select committee, Mr Pill said upward revisions to the Office for National Statistics’ population projections — driven by net immigration — “led to an increase in the level of GDP of about two tenths of a percentage point” by the end of 2025 relative to its previous forecast.

Figures due out on Thursday are expected to show net migration rising again to another all- time record, jarring with Rishi Sunak’s ambition to bring down numbers.

Earlier, Mr Pill’s predecessor Andy Haldane said “acute shortages in both staff and skills being felt by businesses right across the UK right now”.

The Bank’s former chief economist and chief executive of the Royal Society for Arts told BBC Radio 4:

It absolutely makes sense in the short run that we are lenient in our immigration rules and that we are liberal in our visa policies in filling those skills gaps to enable the economy to grow, to enable businesses to flourish.

That does not and should not cut across medium-term attempts to grow the skills of our domestic workforce. Absolutely we should be doing that so that in future we have that workforce and we needn’t rely on overseas skilled workers to fill those skills.

03:10 PM

‘Reasonable statis’ ahead for world economy, says Standard Chartered boss

The chief executive of Standard Chartered has given a sanguine assessment about the state of the world — and his bank’s place in it — despite concerns about a “catastrophic” US default.

Bill Winters said at the Qatar Economic Forum that “the market is not pricing in a bad outcome” regarding the debt ceiling in the US.

While stubborn inflation is his biggest concern, he sees a “reasonable stasis” overall in the global economy, he told Bloomberg.

Mr Winters said the banking system would endure its current issues with plenty of liquidity, though “everyone is looking hard at whether deposits are as sticky as we thought” after the rapid decline of several regional banks in the US.

He said Standard Chartered was attractive in its own right, after receiving preliminary takeover interest from First Abu Dhabi Bank earlier this year.

He said: “The fact is we’re a global bank today, we’re adequately scaled for the environment, we’re growing quite nicely — that’s what I’m focused on.”

Standard Chartered chief executive Bill Winters at the Qatar Economic Forum in Doha - Christopher Pike/Bloomberg

Standard Chartered chief executive Bill Winters at the Qatar Economic Forum in Doha – Christopher Pike/Bloomberg

02:56 PM

Oil rises after warning from Saudi prince

Oil has risen as following a warning to short-sellers from Saudi energy minister Prince Abdulaziz bin Salman, offsetting a lack of tangible progress in US debt-limit talks.

Brent crude, the international benchmark, has climbed 1pc today and is heading towards $77 a barrel.

Saudi Arabia’s top energy official warned oil short-sellers at the Qatar Economic Forum: “I keep advising them that they will be ouching — they did ouch in April.”

Saudi Arabia, the de facto leader of the Opec+ cartel of oil-producing nations, was among the countries that surprised the global crude market recently with a supply cut that started to take effect from this month.

US-produced West Texas Intermediate for July has risen 1.1pc to trade near $73 a barrel, following a 0.5pc gain on Monday.

02:44 PM

Shell hit with ‘shareholder rebellion’ over climate plans

Around one in five votes at Shell’s annual general meeting has been cast against the company’s green plan and for a shareholder suggestion which was designed to speed up the oil giant’s decarbonisation.

Shell said its energy transition progress update was passed with 80pc of the preliminary vote, showing significant discontent from some of its shareholders.

The company also said the shareholder resolution which was proposed by activist group Follow This secured 20.2pc of the vote.

The company said that 6.9pc of votes were cast against the re-election of chairman Sir Andrew Mackenzie and 5.3pc voted against the directors’ pay package.

Follow This founder Mark van Baal said his climate resolution receiving 20.2pc of the votes is “still a shareholder rebellion”.

He added that it was a pity more investors from the Climate 100+ group did not back the resolution after its engagement leads for Shell – PGGM and MN – publicly did so.

A climate activist is removed after disrupting Shell's annual general meeting in London - REUTERS/Ron Bousso

A climate activist is removed after disrupting Shell’s annual general meeting in London – REUTERS/Ron Bousso

02:34 PM

US markets mainly down after opening bell

Markets were mixed on Wall Street as talks over the US debt ceiling offered something for optimists and pessimists.

President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the US government’s $31.4trn debt ceiling with just 10 days before a possible default.

However, both sides stressed the need to avoid default with a bipartisan deal and said they would continue to talk, leaving investors cautious about making large bets either way.

The Dow Jones Industrial Average opened 0.4pc lower at 33,170.06 while the S&P 500 fell 0.4pc to 4,177.21 after the opening bell.

The tech-heavy Nasdaq Composite climbed 0.1pc to 12,675.49.

02:22 PM

BT dumped from £398m EU contract amid fears over EU secrets

BT Group has been dumped from a €458m (£398m) European Union contract to handle sensitive communications between the bloc’s governments in a post-Brexit spat.

The European Commission has cancelled the eight-year contract with the British telecoms giant’s Belgian unit in its entirety over the its potential access to EU secrets.

The move comes despite an EU court previously only suspending the award pending a full ruling.

BT’s Spanish and German rivals Telefonica and Deutsche Telekom had complained about the way the contract had been awarded to company from outside the EU.

The commission said in a statement: “Legal proceedings have prevented the commission from entering into the contract and the economic, technical and operational context for such services has fundamentally changed.”

It gave no further details about whether BT would be allowed to take part in a new tender.

A BT spokesman said the company was disappointed and is considering its position following the cancellation.

BT - Hollie Adams/Bloomberg

BT – Hollie Adams/Bloomberg

02:04 PM

Meta offloads Giphy for £211m loss after UK watchdog’s ruling

Facebook owner Meta has sold off Giphy for a $262m (£211m) loss after a ruling by Britain’s competition regulator.

Shutterstock will buy digital sticker library Giphy from Facebook owner Meta for $53m (£42.8m), after the social media giant was forced to divest of the company by the Competition and Markets Authority.

Meta bought Giphy, which gives users access to millions of short, animated video clips, for $315m (£254.4m) in 2020.

But the Competition and Markets Authority ordered Meta to unwind that purchase the following year because it said the deal could attract even more users to Meta’s portfolio of products.

It was the first time a major global regulator weighed in against a Silicon Valley giant and ordered it to reverse a deal after completion.

It was part of a broader movement among regulators that have rued lost opportunities to limit the scale of big tech giants.

Giphy’s library of GIFs and stickers draws more than 1.3bn search queries daily, the company said. The purchase will be net of cash, paid at closing, according to terms of the deal, which is expected to close in June.

Meta has sold Giphy for a $262m loss - REUTERS/Dado Ruvic

Meta has sold Giphy for a $262m loss – REUTERS/Dado Ruvic

01:54 PM

Evening Standard chief executive quits

The boss of the Evening Standard has resigned with immediate effect after three years leading the newspaper business.

Charles Yardley, who joined the company at the beginning of the pandemic, “admirably steered the business through some of the most challenging times in recent years,” according to an email sent by interim chairman Paul Kanareck to staff.

No reason has been given for his departure but efforts have been made to make it appear to be on amicable terms, as Mr Kanareck referred to giving him a good send off and the leadership team expecting to miss his “energy, passion and entrepreneurial approach”.

01:46 PM

US markets poised to fall as debt deal alludes Biden

Wall Street is expected to dip when markets open after talks in Washington on government debt ended with no deal to avoid a default.

S&P 500 and Dow Jones Industrial Average futures were off 0.2pc before the bell, while the Nasdaq 100 is poised to fall 0.3pc.

Worries about a potential US debt default have added to investor unease about the health of the global economy following interest rate hikes to cool inflation and high-profile bank failures in the United States and Switzerland.

President Joe Biden and House Speaker Kevin McCarthy said they had a productive discussion Monday at the White House but reached no agreement.

01:35 PM

Protesters ‘not interested in constructive engagement,’ says Shell

Following disruption at its annual general meeting, a spokesperson for oil giant Shell said:

We respect people’s right to express their point of view and welcome any constructive engagement on our strategy and the energy transition.

However, yet again protestors have shown that they are not interested in constructive engagement.

We agree that society needs to take action on climate change.

Shell has a clear target to become a net-zero emissions energy business by 2050 and we believe our climate targets are aligned with the more ambitious goal of the Paris Agreement on climate change: to limit the increase in the global average temperature to 1.5C above pre-industrial levels.

01:20 PM

Waitrose wins back shoppers after cutting prices

Waitrose has clawed back some shoppers after earlier this year vowing to offer more value for money as it slashed prices.

Retail editor Hannah Boland has the details:

The supermarket posted its strongest sales growth since April 2021, according to new figures from Kantar, recording a 4.8pc rise over the 12 weeks to May 14.

It takes its share of the grocery market to 4.6pc, compared to 4.5pc at April 16.

Waitrose in February slashed prices across hundreds of grocery staples in a move analysts said was geared to “stop the rot” of shoppers moving away.

The latest figures came as part of Kantar’s monthly supermarket data, in which it said like-for-like grocery inflation had fallen for the second month in a row.

Kantar’s Fraser McKevitt said this was “without doubt welcome news for shoppers but it is still incredibly high – 17.2pc is the third fastest rate of grocery inflation we’ve seen since 2008”.

Waitrose has won back shoppers after cutting prices - Waitrose/PA Wire

Waitrose has won back shoppers after cutting prices – Waitrose/PA Wire

01:09 PM

Pound slips as Fed chiefs hint rates will be higher for longer

With so much going on today, there has not been much time to keep you up to speed with the markets.

The pound has fallen 0.4pc against the dollar to below $1.24, after comments from US Federal Reserve chiefs this week indicating that interest rates will remain higher for longer.

Minneapolis Fed President Neel Kashkari said that US rates may have to go “north of 6pc” for inflation to return to the Fed’s 2pc target, while St. Louis Fed President James Bullard said the central bank may still need to raise by another half-point this year.

The ongoing debt ceiling negotiations have also kept investors on edge.

Against the euro, the pound is down 0.1pc, making a euro worth just less than 87p.

12:59 PM

Shell ‘can be aligned’ to Paris Climate Agreement, says chairman

Shell chairman Sir Andrew Mackenzie said he believes the company is aligned with the 2015 Paris Agreement on climate change.

Proceedings at the oil giant’s annual general meeting finally well underway after heavy disruption earlier caused by climate protesters who at one point tried to rush onto the stage where the board were sitting.

In response to an activist shareholder, Sir Andrew said:

I think we can be Paris aligned, and we are. You glossed over in many ways the tremendous progress we’ve made with our scope one and two absolute emissions.

And I would make the same points about the progress that we’ve made on cutting methane emissions. As you know, that’s a very important greenhouse gas as well.

But the other part of being Paris-aligned is to enable the whole of society to change.

And we enable the whole of society to change towards a lower carbon way of being by owning customers and by working with them and… to offer them lower and lower carbon alternatives to the fuel that they require to go about their lives.

He added: “I think we also enable Paris by our advocacy, not just our marketing with our customers, backed up on the technology and innovation we do which is also enabling, but also the way in which we talk with governments as to how they can provide a much greater move towards low carbon alternatives for society at large because then there will be the demand.”

Security guards cordon off members of Shell's board at the oil giant's annual general meeting after climate activists tried to storm the stage - REUTERS/Ron Bousso

Security guards cordon off members of Shell’s board at the oil giant’s annual general meeting after climate activists tried to storm the stage – REUTERS/Ron Bousso

12:49 PM

Upper Crust owner bounces back as travellers returns

Upper Crust owner SSP has increased its annual earnings guidance thanks to an ongoing bounce-back in travel and soaring trade in the US, but revealed rail strikes held back progress in the UK.

The group, which runs food outlets at transport sites including airports and railway stations, said it swung to a £15.8m pre-tax profit in the six months to March 31, against losses of £2.3m a year earlier.

It said sales surged by 64.1pc year-on-year and were 104pc higher than pre-Covid levels in 2019, as it received a boost from the travel recovery and its expansion across the US.

The group saw sales in North America jump by 124pc versus 2019, making the region its strongest performer.

SSP said in light of the pace of recovery in passengers travelling and strong performance across the US, it now expects annual underlying earnings to be at the upper end of previous guidance for between £250m to £280m.

Shares in the firm lifted more than 3pc on Tuesday afternoon trading.

SSP said: “The continued improvement in our trading performance in recent months has been encouraging and has been driven by a further recovery in passenger numbers.

Upper Crust has swung back to profit - Jeffrey Greenberg/Universal Images Group via Getty Images

Upper Crust has swung back to profit – Jeffrey Greenberg/Universal Images Group via Getty Images

12:37 PM

UK likely to perform better than Germany, says IMF boss

The latest International Monetary Fund forecast reflects “favourably” on the UK in comparison to the rest of the G7, managing director Kristalina Georgieva said.

She was asked at a press conference how the latest IMF report places the UK compared to the other major economies of the G7.

“It compares favourably,” she said.

“We are seeing an improvement in the position of the UK in terms of growth prospects. We are likely to see UK performing better than Germany, for example.

But she also cautioned that there is often a focus on single years “and one year is not the very best way to judge performance of a country”.

“If you look at the last three years, then actually the UK’s performance is quite good vis-a-vis the rest of the G7,” she said.

IMF managing director Kristalina Georgieva in Downing Street earlier - NEIL HALL/EPA-EFE/Shutterstock

IMF managing director Kristalina Georgieva in Downing Street earlier – NEIL HALL/EPA-EFE/Shutterstock

12:26 PM

IMF boss deflects criticism it keeps getting UK forecasts wrong

IMF managing director Kristalina Georgieva defended the organisation from suggestions that it was consistently getting UK forecasts wrong.

She told a press conference that the IMF projections are “slightly less pessimistic” than similar forecasts by the Bank of England and others.

“We have gone through a very turbulent time over the last years,” she said.

“We have experienced shock, upon shock, upon shock. That has created exceptional uncertainty.”

She said that IMF economists “deserve credit” for being “agile in how we look at changing conditions and being fast to adjust projections so we can give as clear a picture as we can at a time, you will agree, is the foggiest we have seen in many decades”.

12:21 PM

Bank of England has ‘very big lessons’ to learn from inflation, admits Bailey

That was quite a session for the Bank of England in front of the Treasury select committee, with some significant admissions.

Proceedings have now come to an end after Andrew Bailey said the Bank has some “very big” lessons to learn in terms of how it operates monetary policy.

The Governor responded to scrutiny by MPs over whether the Bank has lost the confidence of the public in its economic modelling and interest rate decisions. He said:

I think there are some very big lessons in how we operate monetary policy in the face of very big shocks. Because the shocks that we have faced have been unprecedented.

I think there are big lessons about how we operate policy in that world – in a world of very big uncertainty.

We have to make policy in real time. We don’t make policy with the benefit of hindsight.

12:11 PM

UK’s ‘responsible action’ praised by IMF boss

IMF managing director Kristalina Georgieva praised the work of the Treasury and Bank of England amid global economic headwinds, but warned that there were “significant risks” to the agency’s outlook for the UK.

At a press conference in London, she said that the “global economy remains highly uncertain”.

“What we have in this challenging context is a very responsible action from the Bank of England, tightening of monetary policy and the spring and autumn budgets that are aligning fiscal policy with the objectives of monetary policy to fight inflation.”

Speaking alongside the Chancellor, Ms Georgieva said: “We would like to stress that a lot of credit is due to the re-establishing of financial stability in the UK.”

She also praised how “decisively authorities here acted at the first sign of financial distress in the US”, while adding that the IMF strongly welcomed the Windsor Framework.

Pointing to Jeremy Hunt’s priorities and reforms, she said: “We see that as being a concept that practically would make a difference for the competitiveness and growth potential of the UK.”

IMF managing director Kristalina Georgieva leaves No 11 Downing Street after the IMF boosted its UK growth forecast - Leon Neal/Getty Images

IMF managing director Kristalina Georgieva leaves No 11 Downing Street after the IMF boosted its UK growth forecast – Leon Neal/Getty Images

12:05 PM

UK economy ‘on the right track,’ says Hunt after IMF upgrade

Jeremy Hunt said that the IMF’s latest report “provided a timely, independent assessment of the UK economy”, as he pointed to a global economic backdrop of “challenge and opportunity”.

Speaking in London at the launch of the report, which no longer predicts the UK will fall into recession, the Chancellor said that it showed that the UK was “on the right track”.

He said: “Together these forecasts demonstrate we are on the right path but the job is not done yet.”

He said that the IMF agreed “with the need for ambitious, evidence-based structural reforms to support growth”.

“We are working every day to grow our economy,” Mr Hunt said at a press conference following the publication of the IMF report.

12:02 PM

Shops keeping prices high to rebuild margins, says Bailey

Food prices in shops are staying high despite falling costs because some producers are rebuilding their profit margins, said Bank of England Governor Andrew Bailey.

Economics reporter Melissa Lawford has the latest on his appearance in front of the Treasury select committee:

Mr Bailey said: “Many food prices, nearly all, sugar probably the exception, peaked actually last summer.”

But although input food price inflation has since cooled, this has not yet brought lower prices for consumers.

This is partly because some producers are keeping prices higher to try and make up for earlier losses earlier in the year, Mr Bailey said.

“Our agents are starting to pick up a story about margins. It’s a story about rebuilding margins that were squeezed particularly last year,” Mr Bailey said.

Other producers are keeping prices high because they made forward purchases, such as locking in their energy bills, while input costs were high, he added.

11:54 AM

Shell boss insists ‘investment in oil and gas is needed’

Shell’s new chief executive Wael Sawan has implored shareholders not to vote through a resolution proposed by activist group Follow This, which wants absolute cuts to carbon emissions from 2030 rather than intensity reduction.

He said “significant investment in oil and gas is needed” to keep supply constant.

He conceded that “it is also clear the world is underinvesting in low to zero carbon energy”. He added:

I think our role is clear, at Shell we are investing in low carbon energy and oil and gas

Shell needs business models that are profitable and scalable.

As we have seen all too well in the last year cutting supply while demand is unchanged does not work.

Forcing Shell to adopt this target will send buyers into the arms of its competition, he said, adding: “Adopting the resolution will not reduce worldwide emissions.”

11:44 AM

Bank of England modelling to blame for inflation underestimate, says Bank chief

The Bank of England has questioned the effectiveness of its modelling as policymakers tried to explain to MPs why they underestimated the persistence of food price inflation.

Economics reporter Melissa Lawford is covering the Treasury select committee meeting:

Catherine Mann, the most hawkish member of the Monetary Policy Committee, said models based on 30 years of historical data, which does not encompass another major inflationary period, have been a major limiting factor in forecasts.

She told MPs: “I have tended to vote for higher bank rate changes at most of the meetings last year.

“That’s because in my view, we were under estimating the degree of persistence, the persistence of persistence.

“In our judgment, the model was never telling us about persistence, primarily because it was estimated on historical data.

“It is linear, and therefore cannot address some of these behavioral changes that we observed at the micro level.”

11:31 AM

Shareholders ‘have the key to press Shell to change,’ say protesters

After more than an hour, the Shell annual meeting has finally got underway. Industry editor Howard Mustoe has the latest:

Outside the auditorium, protesters holding placards are still gathered in peaceful protest.

Hannah Metcalfe, 47, a community organiser from London, said she wants faster progress on climate change in the wake of the flooding in Pakistan and she wants Shell to take action on oil leaks in the Niger Delta.

She says there has been too little progress since the greenhouse effect was raised as a problem in the 1980s.

She said: “When I was a child I thought the adults will fix this. They didn’t and now I’m the grown-up. I now want to do what I can.”

Also outside speaking to fellow protesters was Lazarus Tamana of the movement for the survival of the Ogoni people, who live in the Niger delta where there have been a number of damaging oil spills.

He said: “I’m appealing to Shell shareholders, they have the key to press Shell to change their image.”

On climate change he said: “Let us be honest about the situation. Let us take a steps that can address this issue and deal with the situation as soon as possible.”

11:13 AM

Bank of England ‘hold our hand up’ on inflation mistakes, says Bailey

Bank of England officials have given their clearest admission yet that they were slow to act on inflation and have lots to learn from the recent string of economic shocks.

Questioned by the Treasury select committee, Governor Andrew Bailey acknowledged that inflation had already been on the rise before Russia’s invasion of Ukraine.

The Monetary Policy Committee had been worried about the possibility of rising unemployment as the jobs-supporting furlough program deployed during the pandemic came to an end in 2021, he said.

He told MPs: “We hold our hand up and say that’s a judgment we had to make and it didn’t turn out right.”

The Bank’s chief economist Huw Pill said there were questions over whether policymakers’ modeling needed to change given the unexpected persistence of inflation in the aftermath of a series of shocks, from Covid to the energy-price crisis.

Mr Bailey said officials now think economic forecasting models are “too symmetric,” as they have predicted that inflation would fall at broadly the same rate that it rose. This has not been the case.

Andrew Bailey has admitted the Bank of England got calls wrong as it tried to battle inflation - House of Commons/UK Parliament/PA Wire

Andrew Bailey has admitted the Bank of England got calls wrong as it tried to battle inflation – House of Commons/UK Parliament/PA Wire

11:03 AM

Climate protesters try to storm stage at Shell meeting

Security staff can be seen here climbing onto the stage to shield Shell’s chief executive Wael Sawan.

Climate protesters tried to storm the stage at the energy giant’s annual shareholder meeting in London:

10:55 AM

Suited protesters rush stage at Shell annual meeting

Shell shareholders are still waiting for things to resume and a group of suited protesters have rushed toward the stage at the oil giant’s annual general meeting.

Industry editor Howard Mustoe has the latest from inside the room at the Excel in London:

Jane White, a retired tax adviser from London and Shell shareholder said: “You can’t blame people, it’s democracy after all. We stand for free speech in this country but there could be a better way of doing things.”

She’s now a veteran of AGM protests but this year admits to enjoying a rendition of the Spice Girls’ Stop Right Now aimed by protestors at the board of Barclays bank.

A shareholder stands to ask for the meeting to proceed, and narrowly avoids being chucked out, to a ripple of laughter.

“To the gentleman over there I apologise for the misunderstanding” says Shell chairman Sir Andrew Mackenzie.

He is interrupted again. This is the 10th protester secreted among the audience by my count.

Then there is a sudden rush of more than a dozen suited protesters towards the stage, followed by security running to intercept them. Security are now on the stage to prevent any invasion.

Sir Andrew adds: “That last incident went a further stage… I would only say if anyone attempts to move towards the stage again in the manner which was chosen we will remove you.”

A Shell protester is led out of the AGM - Belinda Jiao

A Shell protester is led out of the AGM – Belinda Jiao

10:48 AM

Farmers ‘buying ahead’ helped fuel food price inflation, says Bailey

Andrew Bailey has tried to explain to MPs why food prices did not peak in February as expected, writes economics reporter Melissa Lawford. He said:

Perhaps where the prediction issue comes in, I think what was possibly underestimated is the degree to which food producers have purchased more forwards in terms of raw materials suppliers than they would normally do.

And then it was they’ve locked in higher prices for somewhat longer.

And the reason they did that is related to Russia-Ukraine actually, which is they were worried about actually getting hold of [things].

The farmer [who] was on last week said they bought fertiliser further forward than they would normally do locked in a higher price than that.

He added: “It should have been possible to identify that.”

Other factors in the price rises were weather, which caused the vegetable shortages from Morocco, and avian flu, which could not have been forecast.

10:39 AM

Protesters ejected from Shell meeting

Protesters are still singing as they are being escorted out of the conference hall at the Shell AGM.

Our industry editor Howard Mustoe has the very latest:

At least three people have been carried out by security – and we have had 30 minutes of protest so far.

Another protester is now making a point about oil leaks in the Niger delta, where Shell operates a pipeline which has had numerous spills.

Shell has said it is sabotage but people local to the pipeline say it is not properly maintained and that the oil is ruining their fishing livelihood.

“How dare you poison someone’s fresh water?” she asked before being ejected.

Chairman Sir Andrew Mackenzie said: “We want to have a civilised debate”.

It’s fair to say he has been patient. Each removed group of protestors chanting or making a speech is being replaced by another somewhere else in the auditorium.

A protester is removed from the Shell AGM - Belinda Jiao

A protester is removed from the Shell AGM – Belinda Jiao

A protester is ejected from the Shell AGM - Belinda Jiao

A protester is ejected from the Shell AGM – Belinda Jiao

10:33 AM

Bank of England has underestimated food prices rises, admits Bailey

Andrew Bailey has told MPs that the Bank of England has underestimated the levels of food price inflation, a year after he told the same committee that Britain faced “apocalyptic” grocery cost increases.

The Governor of the Bank of England and several of his colleagues are appearing in front of the Treasury select committee.

Mr Bailey also said further monetary tightening would be needed if inflation persists.

The consumer prices index sits at 10.1pc but is expected to fall back into single digits when the latest data is published tomorrow.

Bank of England Governor Andrew Bailey - Jordan Pettitt/PA Wire

Bank of England Governor Andrew Bailey – Jordan Pettitt/PA Wire

10:20 AM

Choir of protesters interrupt Shell meeting

A choir of protesters have begun a rendition of Hit The Road Jack at the Shell annual general meeting.

Our industry editor Howard Mustoe is there:

We are being treated to a song from a dozen or so singers. They are quite good.

“Go to Hell Shell and don’t you come back no more,” they sing to the tune of Hit The Road Jack.

“We can’t afford to heat our homes and you are getting big tax breaks,” is another.

We are 10 minutes in and there has not been much of a meeting, or M, in the AGM so far.

“Be assertive” a shareholder shouts to Sir Andrew Mackenzie, the oil giant’s chairman.

Sir Andrew has asked them to be ejected.

“We are on the highway to hell/We are on the highway to shell” is the next tune.

10:10 AM

Shell investor meeting disrupted minutes after start

Protesters have begun disrupting Shell’s annual general meeting almost immediately after it got underway.

Our industry editor Howard Mustoe is in the room at the Excel centre in London:

That didn’t last long. Minutes into chairman Sir Andrew Mackenzie’s introduction hello to shareholders, a suited protestor has begun his own speech.

He’s accused the board of “overseeing the destruction of the planet” and attempted to start a chant.

He has been given a few minutes to make his point but patience is running out.

“When I say Shell, you say hell,” is one of the chants. There’s a muted response.

“Welcome to hell,” he said in introducing himself.

“I will not stand by while Shell destroys this beautiful planet.”

Sir Andrew told him to sit down now or face ejection.

10:07 AM

IMF forced to tear up UK recession forecast

The International Monetary Fund (IMF) has admitted it was wrong to predict a UK recession this year as it upgraded its UK growth forecasts for the second time in as many months.

The Fund said stronger growth meant the Bank of England may have to keep raising interest rates from the current 4.5pc level as it warned against any “premature celebrations” in the fight against inflation.

The UK economy is now expected to expand by 0.4pc this year.

This is in contrast to a 0.3pc contraction projected just last month which itself was revised up from a forecast that the economy would shrink 0.6pc in the wake of October’s mini-Budget.

This means the UK is no longer predicted to be the worst performing major economy this year, although the IMF warned that the country’s long-term growth prospects were now significantly below pre-financial crisis levels.

The Fund said the near-term upgrade was driven by “higher-than-expected resilience” in demand and supply amid a stronger jobs market and falling energy costs.

“Buoyed by resilient demand in the context of declining energy prices, the UK economy is expected to avoid a recession and maintain positive growth in 2023,” the Fund said in its annual evaluation of the UK economy.

Threadneedle Street has already lifted rates a dozen times in a bid to get a grip on stubbornly high inflation, which stood at 10.1pc in March.

Official figures on Wednesday are expected to show inflation eased to around 8.4pc in April.

However, the IMF said inflation was unlikely to return to the Bank’s 2pc target “only by mid-2025”, as it predicted two more years of rapid inflation.

Chancellor Jeremy Hunt said the IMF forecast is a “big upgrade” for the UK’s growth prospects. He said:

Today’s IMF report shows a big upgrade to the UK’s growth forecast and credits our action to restore stability and tame inflation.

It praises our childcare reforms, the Windsor Framework and business investment incentives. If we stick to the plan, the IMF confirm our long-term growth prospects are stronger than in Germany, France and Italy – but the job is not done yet.

09:57 AM

‘Welcome to hell’, Shell investors told as activists vow to shut oil giant down

Shell shareholders have been told “welcome to hell” as climate protesters gather outside the oil giant’s annual general meeting, writes out industry editor Howard Mustoe.

The annual meeting begins at 10am at the Excel Centre in London’s docklands. Protestors are gathered outside from groups including Extinction Rebellion and The People’ Health Tribunal, which wants recompense for alleged environmental damage.

Shareholders are being ushered past and through airport style security and bag checks.

So far so peaceful, although security are trying to usher the protesters further away from the conference centre’s entrance, arguing that exams are being held inside. Nothing can be heard in the auditorium, however.

Groups gathering outside the investor event include Christian Climate Action, a branch of Extinction Rebellion; Catholic protest group Laudato Si’ Movement; and Quakers for Climate Justice.

Shareholders entering the Excel in London will have to pass banners reading “Welcome to hell”, “Your greed is killing humanity” and “Stand with the Pope. Stand up to fossil fuels.”

Magda Pittaro, in her 70s and from near Venice with the Laudato Si’ Movement, told the PA news agency: “The Pope is really concerned about what is happening to humanity because the poor are dying and the rich are getting richer.”

Shell shareholders have to walk past protesters holding banners on their way to the company's AGM - Belinda Jiao

Shell shareholders have to walk past protesters holding banners on their way to the company’s AGM – Belinda Jiao

Shell shareholders have to walk past protesters holding banners on their way to the company's AGM - Belinda Jiao

Shell shareholders have to walk past protesters holding banners on their way to the company’s AGM – Belinda Jiao

09:47 AM

Private sector growth slows in UK amid ‘tale of two economies’

Growth in the UK’s private sector has slowed so far this month, falling far short of expectations, the S&P Global/CIPS flash UK purchasing managers’ index has suggested.

The closely-followed figure fell to 53.9 in May from 54.9 in April, according to the preliminary flash data.

Although experts expected a much higher score of around 54.7, the PMI figures still showed growth. April’s score had been a 12-month high. Anything above 50 is considered to show the sector is growing.

Chris Williamson, chief business economist at S&P Global Market Intelligence said:

The UK economy enjoyed another month of strong growth in May, with the expansion continuing to be driven by surging post-pandemic demand in the service sector, notably from consumers and for financial services, with hospitality activities buoyed further by the Coronation.

It’s a different story in manufacturing, where spending is being diverted away from goods to services, and many companies are also winding down their inventories, exacerbating the downturn in demand and driving both output and prices lower.

The UK is therefore seeing a tale of two economies, with the divergence between manufacturing and services posing difficulties for policymakers.

However, it’s the far larger service sector that will typically dictate policy, meaning these survey results are nothing but hawkish in suggesting the Bank of England has more work to do to quash stubbornly high inflationary pressures in the services economy.

09:34 AM

Eurozone growth shrinks amid falling factory output

Economic growth in the eurozone edged down in May to a three-month low because of a drop in industrial production, according to a closely watched survey.

The HCOB Flash Eurozone purchasing managers’ index (PMI) survey published by S&P Global fell to 53.3 in May from 54.1 in April.

A figure above 50 indicates growth.

Andrew Kenningham, chief Europe economist at Capital Economics, said:

Growth is being supported almost exclusively by the services sector, where the expansion may have lost a little momentum but remains very strong by historical standards.

In contrast, the manufacturing sector appears to be contracting at an accelerating pace, as new orders and the backlog of work both declined sharply, suggesting that the post-pandemic surge in activity has now ended.

09:23 AM

Consumers help boost Camelot sales amid cost-of-living crisis

National Lottery operator Camelot has revealed a rise in sales over the past year, resulting in record returns to good causes directly from ticket sales.

Camelot UK revealed that sales grew by £99.6m to £8.2bn for the year to March 31.

It comes less than a year before Camelot is set to pass over its licence to run the lottery to Czech firm Allwyn.

Allwyn also acquired Camelot UK earlier this year, closing a bitter legal wrangle between the firms, although the two companies are continuing to operate separately.

Camelot said today that its increase in sales meant that £1.8bn was returned to good causes during the year, reflecting a £6.2m increase year-on-year.

Meanwhile, the National Lottery awarded £4.7bn in prize money to players, creating 382 new millionaires. It said this included five EuroMillions jackpots which were scooped in the UK.

National Lottery operator Camelot revealed rising sales - Andrew Milligan/PA Wire

National Lottery operator Camelot revealed rising sales – Andrew Milligan/PA Wire

09:04 AM

Climate protesters gather at Shell AGM

Members of Fossil Free London and Greenpeace have joined climate protesters outside the venue for Shell’s annual general meeting.

Nuri Syed Corser, 27, an organiser for Fossil Fuel London, told the PA news agency:

We are protesting because we need to shut down Shell.

We are facing a climate crisis. Shell are one of the companies driving it and are making record profits even as people are facing devastating floods and wildfires.

Meanwhile, people in the UK are struggling to pay their energy bills.

Shell are sacrificing the wellbeing of millions to protect their obscene profits.

If we want a safe, secure and prosperous future, then we have to stop the oil and gas drilling. That means taking on the oil and gas giants like Shell who are determined to stonewall climate action and to string out oil and gas drilling for as long as they possibly can.

08:42 AM

French-Israeli billionaire tightens grip on BT

French-Israeli billionaire Patrick Drahi has tightened his grip on BT but insisted he does not intend to take over the British telecoms giant.

His investment group Altice UK said it was “supportive” of the company’s management, which last week unveiled plans to axe up to 55,000 jobs by the end of the decade, replacing up to 10,000 with AI.

Altice has increase its stake in BT to 24.5pc from 18pc, with Mr Drahi adding 650m shares in his latest stock purchase, which is worth about £962m at the average share price over the last three months.

While Mr Drahi has never spoken publicly about his intentions with BT, he has a record of taking what he sees as undervalued telecom companies private or carving out assets for sale.

Under UK rules, an investor must make a mandatory takeover offer if it hits a 30pc ownership threshold.

In May last year, when he was business secretary, Kwasi Kwarteng ordered an investigation into the national security implications of a potential takeover of BT by the French-Israeli billionaire.

In August last year he said the Government would take no further action.

 Franco-Israeli businessman Patrick Drahi - REUTERS/Benoit Tessier

Franco-Israeli businessman Patrick Drahi – REUTERS/Benoit Tessier

08:31 AM

FTSE 100 drops amid uncertainty over US debt talks

The FTSE 100 slipped as uncertainties surrounding the US debt deal weighed on sentiment, but BT Group rose after billionaire Patrick Drahi raised his stake in the telecom giant.

BT rose 1.8pc after Drahi increased his stake in the company to 24.5pc but restated his position that he does not intend to make a full takeover.

The internationally-focused FTSE 100 however has shed 0.1pc as caution gripped investors amid the ongoing US debt ceiling talks.

The mid-cap FTSE 250 has clawed itself back from an earlier drop to be up 0.1pc after being hit by a 3.6pc fall in shares of Pennon Group after water industry regulator Ofwat said it has started an enforcement investigation into the water firm’s leakage performance.

The broader utilities sector fell 0.8pc.

Cranswick added 2pc after the meat producer reported a rise in annual profit benefiting from strong demand.

SSP Group climbed 4.9pc after the snack chain forecast annual profit at the upper end of its expectations.

08:18 AM

Inflation to ‘continue driving up’ Government borrowing

Government borrowing will continue be driven up by persistent inflation, PwC has warned.

The auditor’s economist Divya Sridhar said:

Rising debt interest payments reflect the exposure of public finances to higher RPI inflation and higher interest rates.

The Bank of England raised interest rates again earlier this month to 4.5pc, levels last seen more than a decade ago.

With inflation remaining stubbornly above 10pc, interest payments on index-linked gilts are likely to continue driving up government spending.

Looking ahead, falling energy prices will provide some relief to public spending.

Ofgem’s energy price cap announcement for the summer later this week is expected to reflect energy prices for households falling below the government’s Energy Price Guarantee threshold for the first time.

08:11 AM

Grocery price rises slow down but still add £833 a year

Grocery price inflation has fallen for the second month in a row – but is still adding an extra £833 to the average consumer’s annual bill, according to latest figures.

Prices over the four weeks to May 14 were 17.2pc higher than a year ago, down from April’s 17.3pc, Kantar said.

In the dairy aisle, the average cost of four pints of milk has come down by 8p since last month, but is still 30p higher than this time last year at £1.60.

Fraser McKevitt, head of retail and consumer insight at Kantar, said:

The drop in grocery price inflation, which is down by 0.1 percentage points on last month’s figure, is without doubt welcome news for shoppers but it is still incredibly high – 17.2pc is the third fastest rate of grocery inflation we’ve seen since 2008.

This could add an extra £833 to the average household’s annual grocery bill if consumers don’t shop in different ways.

Shoppers skirting the higher prices sent sales of supermarket own-label items up by 15.2% this month, almost double the 8.3pc rise seen for branded products.

Despite the price pressures, consumers spent an extra £218m on groceries during the week of the coronation, with sales of wine and quiche soaring.

Shopper browses fruit and veg - Dominic Lipinski/Bloomberg

Shopper browses fruit and veg – Dominic Lipinski/Bloomberg

08:04 AM

Markets fall at the open

Markets have fallen in London at the open event as investors stayed cautious over the US debt ceiling negotiations, even after President Joe Biden and House Speaker Kevin McCarthy said they had a productive talk.

The FTSE 100 has fallen 0.1pc to 7,748.57 while the FTSE 250 has dropped 0.1pc to 19,252.50.

07:54 AM

Barratt chairman Allan steps down amid misconduct claims

Barratt Developments chairman John Allan will step down next month, with Britain’s largest housebuilder saying it wanted to prevent the impact of misconduct allegations against him from becoming disruptive to the company.

His decision comes after Tesco said on Friday that Mr Allan would not seek re-election as a director and would step down as chairman at its annual shareholders’ meeting on June 16.

Earlier this month, the Guardian newspaper reported that Mr Allan was facing claims of inappropriate behaviour from four women.

One of the allegations relates to his conduct at supermarket group Tesco, which he has chaired since 2015, and three to his time at business lobby group the Confederation of British Industry (CBI), where he was president from 2018 to 2020.

Three of these allegations are vigorously denied by Mr Allan, and for the other he has unreservedly apologised for a comment he made.

In a statement on Tuesday, Mr Allan said he regretted having to step down.

He said: “My early departure from Barratt is a result of the anonymous and unsubstantiated allegations made against me, as reported in the Guardian which I vehemently deny.”

Tesco and Barratt Developments have both announced the departure of John Allan amid misconduct allegations - REUTERS/Hannah McKay

Tesco and Barratt Developments have both announced the departure of John Allan amid misconduct allegations – REUTERS/Hannah McKay

07:45 AM

Debt will head toward 100pc of GDP, says Moody’s

Moody’s, the rating agency, warned that the UK’s debt share will begin a permanent march towards 100pc of national output amid demographic pressures and a sicker population.

Economics editor Szu Ping Chan has the details:

The rating agency also warned the next government will find it “difficult to implement” spending cuts planned after the next election amid pressure from unions to raise pay.

Moody’s expects spending on health, social care and pensions to reach around 20pc of GDP by 2045, up from 15pc in 2019.

The agency said: “Health costs dwarf all other long-term ageing costs.

“They mainly reflect the large increase in non-demographic cost pressures like the increased costs of technological advances and the rising prevalence of chronic conditions.”

It warned that pressure on the public purse was likely to be high because the “share of healthcare spending covered by the government, at 83pc in 2021, is among the highest in the OECD.”

07:36 AM

Government on course to overshoot OBR borrowing predictions

April’s public finances figures got the new fiscal year off to a “shaky start,” according to Capital Economics.

Ruth Gregory, deputy chief UK economist, said:

So after one month of the 2023/24 fiscal year, the Chancellor is already on track to overshoot the OBR’s full-year borrowing forecast of £132bn (5.1pc of GDP) by about £3.2bn.

Indeed, given still-high interest rates and weakening GDP growth we doubt borrowing will fall much this year from 2022/23’s £139.2bn (5.5pc of GDP).

As such, while we wouldn’t be at all surprised to see a pre-election giveaway in the Autumn Statement on top of the £21.9bn (0.8pc of GDP) giveaway for 2023/24 already announced in the Budget in March.

But we suspect that much of what the Chancellor gives away will probably be taken away once the election is over, regardless of whether the Conservatives or Labour are in power.

07:21 AM

Debt and borrowing remain too high, says Hunt

As public borrowing rises, Chancellor Jeremy Hunt said:

It is right we borrowed billions to protect families and businesses against the impacts of the pandemic and Putin’s energy crisis.

But debt and borrowing remain too high now – which is why it’s one of our priorities to get debt falling.

We’ve taken difficult but necessary decisions to balance the nation’s books, and if we stick to our plan and get our economy growing, then debt is set to fall.

07:14 AM

Government borrowing surges as debt interest payments hit April record

Public borrowing jumped to its second-highest April level on record as the Government counted the cost of a soaring benefits bill and record debt interest payments.

Borrowing stood at £25.6bn in the first month of the new tax year, according to the Office for National Statistics (ONS).

This is £3.1bn more than predicted by the Government’s tax and spending watchdog and comes amid a double-digit uplift in a range of benefits as well as a 46pc jump in debt interest payments to £9.8bn.

It is also the second-highest borrowing figure for April since records began in 1993.

Jeremy Hunt admitted that “debt and borrowing remain too high” as figures showed targeted energy support schemes still cost the Exchequer £3.9bn, even after the Treasury stopped a blanket £67 monthly subsidy of all energy bills in March.

Other benefits rose by £4.5bn to £25.4bn in April compared with a year earlier, as they were uprated by 10.1pc to match increases in the cost of living.

The ONS also noted that the Government transferred almost £10bn to the Bank of England to cover losses on Threadneedle Street’s quantitative easing (QE) programme as policymakers continued a programme of asset sales.

The Bank has estimated transfers could hit £30bn this year and £200bn over the next decade, although the final amount will depend on how interest rates rise.

Transfers do not increase the deficit, but add to the overall debt pile, which stood at 99.2pc of gross domestic product (GDP) in April. This is the highest debt share since the 1960s.

07:10 AM

Good morning

Higher debt interest and benefit payments sent Government borrowing surging by more than expected last month, even as the public purse cut back the amount it is subsidising household energy bills.

Public sector net borrowing stood at £25.6bn last month, higher than the £19.1bn economists had expected.

The level of borrowing had been expected to fall as the Government stopped paying households £67 toward their energy bills at the end of March.

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What happened overnight

Asian stock markets were mixed Tuesday after more talks in Washington on government debt ended with no deal to avoid a potentially jarring default.

The Shanghai Composite Index sank 0.8pc to 3,270.46 while the Nikkei 225 in Tokyo gained 0.6pc to 31,286.70. The Hang Seng in Hong Kong shed 0.3pc to 19,626.06.

The Kospi in Seoul advanced 0.8pc to 2,576.48 and Sydney’s S&P-ASX 200 added 0.4pc to 61,963.68.

New Zealand declined while Singapore and Jakarta advanced.

Worries about a potential US debt default have added to investor unease about the health of the global economy following interest rate increases to cool inflation and high-profile bank failures in the United States and Switzerland.

Wall Street’s benchmark S&P 500 index edged up less than 0.1pc on Monday as Congress and the White House negotiated over Republican demands to cut social programs in exchange for agreeing to raise the amount the government can borrow.

The Dow Jones Industrial Average fell 0.4pc, to 33,286.58 and the Nasdaq composite rose 0.5pc to 12,720.78.

In the bond market, the 10-year Treasury yield rose to 3.71pc from 3.68pc. It helps set rates for mortgages and other important loans. The two-year yield, which moves more on expectations for the Fed, rose to 4.32pc from 4.28pc.

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