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It was another day of government efforts to tackle the energy crisis across Europe, including an unprecedented support package for UK businesses and Germany’s biggest corporate bailout since the 2008 financial crisis.
In a long-awaited announcement, the UK said it was cutting back wholesale price of energy for companies and community organizations by more than half this winter, stepping in to “stop business collapse, protect jobs and limit inflation.”
Businesses have been cautious about these proposals, but many still expect significant increases in their bills compared to previous years. The bosses are also worried about what could happen when the six-month scheme ends in March, warning that a lack of clarity could hit investment. In contrast, household support lasts for two years. Business package too is much more difficult and provides little incentive to save energy, says the Lex column.
The EU is also facing questions about its aid package for households and businesses, funded by a €140 billion in windfall tax on energy companies as required by member states more flexibility about how plans are implemented.
Meanwhile, Germany announced the nationalization of p struggling utility Uniper — once the largest importer of Russian gas in Europe. The company was hampered by the need to buy more expensive gas on the spot market after Moscow stopped supplies. Politicians feared that its failure would have serious consequences for Europe’s largest economy.
In parallel with the support of bills, Brussels continues to search for alternative sources of energy. Today, he announced a €5.2 billion government bailout for his second hydrogen projecta sector considered important for the transition to more sustainable energy.
However, environmental ambitions face fierce opposition from fossil fuel companies.
Former vice president of the United States and a long-time fighter for the environment Al Goretold the Financial Times that European governments should abandon corporate efforts to profit from the energy crisis by locking consumers into a long-term dependence on hydrocarbons.
This winter, EU governments plan to spend at least $50 billion on infrastructure and fossil fuel supplies to offset the shortfall from Russia, but Gore insisted the quest for energy security should not stand in the way of a shift to cleaner sources.
“We need to move quickly despite the geopolitical situation we’re faced with—indeed, because of it,” he said.
Another reminder of the power of legacy oil and gas companies comes from Gore’s own country, where lawmakers are investigating “deceptive” PR tactics served on behalf of the oil and gas industry that misled the public about climate change.
Read more about how Russia’s gas arsenal has fueled the quest for cleaner energy in our new special report: Energy transition.
For the latest news, visit our live blog
Need to know: economics
The US Federal Reserve announces its interest rate decision today at 2pm ET (7pm London). Economists are waiting an increase of 0.75 points for the third time in a row. Check again FT.com for details and reaction.
It’s a big week for central banks everywhere. The Bank of England is under pressure to announce a big rate hike tomorrow, while the president of the European Central Bank Christine Lagarde also emphasized the need for rapid promotion. Riksbank of Sweden raised rates by 1 percentage point yesterday, the biggest hike in three decades.
The latest for the UK and Europe
Problems faced Kwasi Kwartengthe UK’s new chancellor, ahead of his ‘mini-budget’ (see this Friday’s Disrupted Times for details) has been highlighted by new data showing government borrowing doubled the level expected in August.
Meanwhile, the Prime Minister of Great Britain Liz Truss said that she is ready to take over “beneficial interests” raise economic growth. But her first meeting today with US President Joe Biden could be a little awkward after he claimed the “trickle down economy” – as some branded her ideology — “never worked”. British-American trade agreement remains as distant as before.
Industrial magnate Carlo de Benedetti told the FT he was concerned about Italy’s relationship with Brussels if, as polls suggest, a hard-right coalition will come to power in Sunday’s general election.
The dollar hit a new one 20 year high in relation to counterparts today after Russian President Vladimir Putin called in additional troops for the war in Ukraine. The greenback is widely perceived as a haven currency during times of geopolitical tension and economic stress.
The Asian Development Bank lowered the growth forecast for 2022 for developing countries in the region, from 5.2 percent to 4.3 percent in the face of blockades in China, war in Ukraine and rising inflation. For China itself, the ADB lowered its forecast from 5 percent to 3.3 percent.
One country in the region bucks this trend Indonesiawhich is currently benefiting from both a booming economy and a period of political stability like ours Big Read explains.
China increasingly competes with the IMF in offering term loans to the affected countries. Ecuadoris $1.4 billion debt restructuring deal is the last one. China, however, is losing its appeal as an investment destination for European companies, reports the local EU Chamber of Commerce.
One of the most serious consequences of the pandemic was its impact on teaching childrenespecially in poor countries where families now face new pressures over rising prices and food insecurity.
The period of the pandemic has also been a period of rising inequality world wealth. The ranks of the ultra-rich — those with more than $100 million — will increase by 21 percent in 2021, according to new data Data from Credit Suisse.
Need to know: business
Vaccine manufacturers there is lost billions in market value after Biden declared that the “pandemic is over” on Sunday night.
CEO of JPMorgan Jamie Dimon warned that the new US Capital Requirements created “significant economic risks” for large banks, making it difficult to meet customer needs at a time when “storm clouds” were gathering over the economy.
Watch this: New movie Scandal! Disable Wirecard, the story of how FT reporters uncovered massive fraud at a German payments firm is now available to watch on Netflix. Catch up reactions on Twitter before the premieres in London, Hong Kong and New York.
The world of work
US investment and industry editor Brooke Masters wonders whether Citigroup’s new center for junior investment bankers in Málagaa Spanish city known more for beaches than finance, ostensibly for providing a better work-life balance, may just be another “Mom’s track“.
Workers in PhilippinesThe $30 billion call center industry has won the wage battle permanent remote work after agreement with the tax authorities.
Middle managers who were under intense pressure looking after staff during the pandemic are facing huge challengesas they match the demands of company managers with workers seeking better pay and flexible working arrangements.
QTWTAIN: Are the British really the worst slackers in the world? There is a problem with low performance, writes columnist Sarah O’Connorbut this is mostly due to a lack of investment in new technologies that help workers do their jobs more efficiently.
Or they might just take a psychedelic. Some Silicon Valley executives believe microdosing the use of drugs such as LSD can increase concentration and productivity. Presenter Isabelle Berwick investigates the claims in the latest episode Working it out podcast.
Cases of covid and vaccination
Total Global Cases: 606.1 mln
Total doses: 12.7 billion
Get the latest world photo with our vaccine tracker
In case you missed it, the World Health Organization became optimistic about the trajectory of the coronavirus after a drop in the number of cases worldwide. “We’ve never been in a better position to stop a pandemic.” WHO said. “We’re not there yet, but the end is in sight.”