Wind energy power prices Covid – Owen Humphreys/PA Wire
Unilever shares fall 7pc after GSK rejects three takeover approaches
Antonio Horta-Osorio forced out at Credit Suisse after rule-breaking Wimbledon trip
FTSE 100 jumps 0.7pc; GSK leads risers while Unilever tumbles
Lucy Burton: Militant HR departments are the new trade unions
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Low wind levels have sent power prices soaring to their highest in a month as Britain struggles to keep up with a rebound in demand.
Power prices for Monday evening jumped to £1,161 a megawatt-hour – the highest since 16 December. At the same time, wind output is forecast to slide below 1.5 gigawatts, down from a 10-day average of 6.3 gigawatts.
The surging prices highlight the battle to keep up with post-lockdown demand as ageing power stations fall out of use and coal-fired power plants are shut down amid a shift away from fossil fuels.
Last week the International Energy Agency warned that both power prices and carbon emissions would continue to rise unless more money was invested in renewables.
12:54 PMRussian gas curbs show no sign of easing
Russia is continuing to limit gas supplies to Europe, with the country's initial transit plans for the next month offering no respite.
State energy giant Gazprom has once again opted not to book any additional pipeline space to ship the fuel to the continent via Ukraine.
What's more, no capacity was booked for February to deliver gas to Germany via the Mallnow station, where Russia’s Yamal-Europe pipeline terminates.
Benchmark Dutch prices briefly pared losses following the auction, but were still trading down 4.2pc. The UK equivalent was also down around 4pc.
Shipments of liquified natural gas from the US have helped to ease prices in recent weeks. But flows from Russia remain well below normal levels and the rising threat of war with Ukraine is fuelling further uncertainty.
12:40 PMMaersk lifts forecasts as supply troubles boost shippingMaersk shipping Covid freight – REUTERS/Murad Sezer/File Photo
AP Moller-Maersk has raised its profit forecast for 2021 as global supply disruptions helped to drive up demand for cargo ships.
Maersk, the world's largest container line by number of vessels, said its earnings before interest, tax, depreciation, and amortization came in at $24bn (£17.6bn) last year. That's up from previous predications of between $22bn and $23bn.
The container shipping industry had its most profitable year ever in 2021 amid a boom in demand for consumer goods during the pandemic. This meant companies could hike the rates charged to customers.
12:31 PMUnilever shares extend fall
Let's check in on Unilever, which has extended its early losses amid the fallout from its failed £50bn bid for GSK's consumer arm.
Shares are now down around 8pc, marking the consumer goods giant's biggest fall in almost five years.
It comes after GSK rebuffed Unilever's takeover offer, saying the £50bn price tag "fundamentally undervalues" the business.
Unilever this morning outlined a new strategy update that will see it refocus on healthy, beauty and hygiene, prompting speculation it could sell off food brands such as Marmite.
12:21 PMRenault sales fall for third year as chip shortages biteRenault sales semiconductor shortage – DPPI Media
French car giant Renault said its sales fell for a third consecutive year in 2021 due to global semiconductor shortages and a strategy overhaul.
Renault's sales fell by 4.5pc last year even as rivals fared better as the market began to recover from a torrid year in 2020.
The company trimmed costs and its workforce and adopted a strategy of targeting more profitable sales instead of large volumes, contrasting with its record sales of low-cost vehicles in recent years.
Renault's vehicle sales in 2021 reached almost 2.7m – 1.2m fewer than in 2018. Rivals Volkswagen, Stellantis, Toyota and Hyundai-Kia have all suffered less significant falls or recorded higher sales.
Chief executive Luca de Meo also pointed to shortages of electronic components, which he said led to a production shortfall of around 500,000 cars.
12:04 PMBBC hits back in licence fee funding row
The BBC has hit back at the Government in an escalating row over the future of its licence fee funding model.
Amid growing scrutiny over Boris Johnson's lockdown parties over the weekend, Culture Secretary Nadine Dorries declared an end to the licence fee, prompting the corporation to accuse her of plunging the broadcaster into a “spiral of decline”.
In an email to staff seen by the Times, director general Tim Davie and chairman Richard Sharp insisted negotiations were ongoing and said they'd continue to argue for further investment in the BBC.
Read more on this story: Nadine Dorries declares an end to TV licence fee – but BBC warns move will have 'serious implications'
This content is not available due to your privacy preferences.Update your settings here to see it.11:51 AMXi Jinping sounds the alarm over inflationXi Jinping China Davos – SALVATORE DI NOLFI/EPA-EFE/Shutterstock
Chinese president Xi Jinping has kicked off virtual Davos by warning the recovery is under threat from surging inflation worldwide as its economy faces “tremendous pressure”.
My colleague Tom Rees was listening in:
Mr Xi warned the global economy is “emerging from the depth, yet it still faces many constraints” after the low inflation backdrop “notably changed”.
“If major economies slam on the brakes or take a U-turn in the monetary policies, there will be serious negative spillovers,” Mr Xi told the summit, which was moved online following the emergence of omicron.
“They will present challenges to global economic and financial stability, and developing countries would bear the brunt of it.”
He insisted that the Chinese economy will be resilient against growing headwinds but warned that “shifts in the domestic and international economic environment have brought tremendous pressure”.
11:39 AMHydrogen company lines up £50m Aim float
A Doncaster-based maker of equipment to produce hydrogen will join the stock market to capitalise on booming demand for the clean-burning gas.
Rachel Millard reports:
Clean Power Hydrogen Group (CPH2) said its electrolysers can produce hydrogen in a cheaper and more sustainable way by ditching the membranes typically used in the process.
It is expecting to join Aim, London’s junior market, next month to raise £50m. An announcement about its intention to float is expected today.
Founders Nigel Williamson and Joe Scott spent several years working on research and development before moving into commercial production over the latest two years.
The company sold its first unit in Northern Ireland last year and is aiming to hit 4 gigawatts of electrolyser production by 2030 as a global brand.
Read Rachel's full story here
11:36 AMBrighton Pier owner gets New Year boostBrighton Pier Group – Daniel LEAL / AFP
Shares in the owner of Brighton Pier jumped as much as 11pc this morning after it said trading had bounced back in the New Year.
Brighton Pier Group, which also owns Embargo Republica and Le Fez nightclubs and eight indoor mini-golf sites, said that while restrictions had hit trading in December, bar sales had recovered in the New Year and were up 9pc on pre-Covid levels.
It said sales at Brighton Palace Pier were up 15pc in the first half of the year compared to 2019, while its mini-golf businesses jumped by a third. Sales at bars grew by more than a quarter, while Lightwater Valley theme park – which it acquired in June – was trading ahead of expectations.
Overall, the group, which is backed by restaurant entrepreneur Luke Johnson, expects total sales of £22.7m for the first half, up 31pc against the same pre-Covid period in 2019.
11:06 AMILO downgrades forecasts for labour market recovery
The International Labour Organization (ILO) has downgraded its forecast for the recovery in the labour market in 2022, predicting a deficit in hours worked globally equivalent to 52m full-time jobs.
The forecast, which is relative to pre-Covid levels in the fourth quarter of 2019, compares to previous projections in May of a deficit of 26m full-time jobs.
While the numbers are an improvement on the situation in 2021, it remains almost 2pc below the number of global hours worked pre-pandemic, according to the latest ILO report.
Global unemployment is expected to remain above pre-Covid levels until at least 2023. The 2022 level is estimated at 207m, compared to 186m in 2019.
The ILO’s report also warns that the overall impact on employment is significantly greater than represented in these figures because many people have left the labour force. In 2022, the global labour force participation rate is projected to remain 1.2 percentage points below that of 2019.
Guy Ryder, director general of the ILO, said:
There can be no real recovery from this pandemic without a broad-based labour market recovery. And to be sustainable, this recovery must be based on the principles of decent work – including health and safety, equity, social protection and social dialogue.
10:56 AMEconomic forecasters to strike in row over inflation
The National Institute of Economic and Social Research (NIESR) is well-versed in making predictions about inflation. But now staff at the famous forecaster are experiencing the cost of living crisis first hand.
Economists and researchers at the institute have been embroiled in a row over two years of sub-inflation pay – and they're now planning a two-week strike.
Union Unite said the walkout would begin on Friday 21 January and last until Friday 4 February. It warned there was a "very real possibility" that forthcoming forecasts for the UK and global economies would not go ahead.
It comes after bosses refused to budge on an offer to increase salaries by only 2pc for 2021-2022 following a pay freeze the previous year. Inflation stood at 5.1pc in November, according to the Bank of England's consumer price index.
Sharon Graham, general secretary at Unite, said:
Staff at the NIESR know full well that a pay freeze combined with a pay offer well below inflation is not good enough. Like many workers across the country the economists and researchers are increasingly concerned about the cost of living.
Unite is determined to fight for workers' pay, terms and conditions. The staff at the NIESR have their union's full support.
10:45 AMOil prices climb close to highest since 2014
Oil prices pushed close to the highest level since 2014 as concerns about omicron eased and supplies came under strain.
Benchmark Brent crude held at around $86 a barrel following a fourth weekly advance on Friday, though gains were capped by fears over slowing Chinese growth.
Oil has rallied more than 10pc so far this year, in part due to outages in Opec producing nations including Libya.
The International Energy Agency said last week that global consumption had turned out to be stronger than expected, while the physical market is booming as buyers look beyond the spread of omicron.
10:29 AMAmazon U-turns on Visa credit card ban
Amazon has backed down over plans to ban the use of Visa credit cards in the UK, saying it was working on a solution to the stand-off.
The ecommerce giant had been set to block the cards from 19 January following a row over fees. But in an email to customers this morning, it said the ban would not go ahead.
"We are working closely with Visa on a potential solution that will enable customers to continue using their Visa credit cards on Amazon.co.uk," the company said.
This content is not available due to your privacy preferences.Update your settings here to see it.10:23 AMWatchdog extends investigation into PwC's Babcock audits
The accounting watchdog has broadened its investigation into PwC's audits of defence giant Babcock.
The Financial Reporting Council (FRC) said it had started looking into Babcock's statutory audits for 2019 and 2020. It's already examining aspects of PwC's audits for 2017 and 2018.
The FRC said it made the decision after Babcock announced a review into contract profitability and its balance sheet.
The review resulted in Babcock suffering a writedown of around £1.7bn relating to previous accounting errors, changes in estimates and a new accounting policy.
10:16 AMPound pushes up towards recent highs
Sterling has edged higher this morning, pushing up towards its highest level in two-and-a-half months as investors ramp up their bets on a Bank of England interest rate rise.
The pound rose 0.2pc against the dollar to $1.3683 after hitting its highest since late October last week. Against the euro, it's broadly flat at 83.51p.
GDP figures last week showed the economy bounced back above pre-pandemic levels in November, while employment data due tomorrow is expected to be robust.
Money markets are fully pricing in one rate hike by next month and one full percentage point increase in interest rates by the end of 2022.
10:07 AMITV secures new £500m ESG-linked loan
ITV has inked an agreement for a new £500m line of credit linked to its carbon emissions targets.
The revolving credit facility, secured with lenders Barclays, BNP Paribas, Credit Suisse, Mizuho Bank, NatWest and Wells Fargo, will run until January 2027. It replaces the existing facility, which was due to mature in 2023.
The new loan is linked to ITV's environmental, social and corporate governance (ESG) targets, with the broadcaster benefiting from lower interest rates if it reduces emissions in line with its previously-announced aims.
Shares ticked up 2.3pc in morning trading.
Chris Kennedy, chief operating officer and chief financial officer of ITV, said: "The inclusion of ESG targets within this important financing demonstrates ITV's further commitment to achieve net zero targets by 2030."
09:52 AMChina cuts rates as growth weakensChina interest rates GDP – PETER PARKS
China has slashed its key interest rate for the first time in almost two years as a property crisis and fresh Covid outbreaks slammed the brakes on economic growth.
In a move that contrast with other major economies, China's central bank lowered the rate at which it provides one-year loans to banks by 10 basis points – the first reduction since April 2020.
While central banks in Europe and the US are focusing on inflation, policymakers in China have shifted to boosting growth.
New data released this morning showed GDP grew 4pc last quarter from a year earlier – the weakest since early 2020.
For 2021 as a whole, China's economy expanded 8.1pc, which was well ahead of expectations. However, economists have warned of a weak 2022 amid continued falls in property sales and sporadic outbreaks of the omicron variant.
09:42 AMSecond homes in Spain are popular once again
With Covid travel restrictions easing, Brits are once again on the hunt for second homes in sunnier climes.
In its trading update this morning, Taylor Wimpey revealed sales of second homes in Spain rose 13pc in 2021 compared to the previous year. Its order book for homes in the country has also grown – up to 324 at the end of the year from just 126 in 2020.
“The anticipated gradual easing of travel restrictions, allowing prospective second home buyers to travel to Spain, has resulted in an increased level of demand,” the company said.
It comes as the UK scales back testing requirements for international travel, helping to reignite demand after a wave of fresh restrictions at the end of last year.
09:25 AMBritish Gas pension cash 'used to buy Israeli spyware group'NSO Group Pegasus British Gas Centrica – Sebastian Scheiner
The pension fund for British Gas workers was reportedly used to buy Israeli technology group NSO, known for its controversial spyware Pegasus.
The Centrica Combined Common Investment Fund, the parent company of British Gas, was among the biggest contributors to the €1bn (£840m) fund that bought a stake in NSO in 2019, the Financial Times reports.
The fund is said to have allocated pension cash to Novalpina Capital, which owns a 70pc stake in NSO.
NSO was put on a trade blacklist last year by the US Commerce Department, which said there was evidence it had supplied spyware to foreign governments that had used it maliciously.
The Pegasus spyware has been found on the phones of human rights activists and journalists, including at least three people close to murdered Saudi journalist Jamal Khashoggi.
09:14 AMNumber of households under 'fuel stress' to triple, warns think tank
The number of households in Britain struggling to pay their energy bills is set to triple in April when the price cap increases.
That's according to think tank the Resolution Foundation, which predicts the number of homes under "fuel stress" – those spending at least 10pc of income on energy bills – will rise to 6.3m households.
A surge in wholesale gas prices is starting to feed through into bills and the Government is weighing up possible interventions to help ease the cost of living crisis.
According to the report, the number of households under fuel street will leap to 27pc in April – up from just 9pc now. It will follow an expected 50pc leap in the price cap to around £2,000 per year.
The Resolution Foundation said: "The sheer scale of energy bill increases mean that fuel street will no longer be confined to the poorest households. Low and middle-income families will find it hardest to cope."
This content is not available due to your privacy preferences.Update your settings here to see it.09:01 AMSotheby's to accept crypto for auction of Enigma diamondSotheby’s cryptocurrency The Enigma – Neville Hopwood
Sotheby's has said it will accept payments in cryptocurrencies for the sale of a rare black diamond dubbed 'The Enigma'.
Bitcoin, ethereum and the stablecoin USDC will all be valid payment methods when the 555.55-carat diamond – the largest faceted diamond ever to come to auction – goes under the hammer at the iconic auction house.
Sotheby's said the decision followed the success of a previous auction in July, when an anonymous buyer purchased a rare diamond known as “The Key 10138” for $12.3m (£8.9m) in cryptocurrency in Hong Kong.
Nikita Binani at Sotheby's told CoinDesk: “This present sale is a continuation of our efforts to strive to lead the market given the strong cryptocurrency community. I would hope that we’re able to attract them towards this diamond.”
08:48 AMDarktrace shares slide as short seller circles
While the overall sentiment this morning is positive, things aren't looking so rosy for Darktrace.
Shares in the cybersecurity firm slid 7.3pc to the bottom of the FTSE 250.
It comes after the Telegraph revealed short seller ShadowFall had launched an assault on Darktrace, levelling a barrage of criticisms of the company's performance, accounting and culture.
Read more on this story: Short seller launches assault on tech star Darktrace
08:42 AMFTSE risers and fallers
It's a bright start to the week for the FTSE 100, which is now up 0.6pc.
GlaxoSmithKline is leading the pack, up around 4.7pc after it rejected Unilever's £50bn bid for its consumer health division.
Meanwhile, Unilever's shares dropped more than 6pc, making it the worst performer on the index.
Elsewhere, there was a positive boost from miner Glencore as well as oil giants BP and Shell.
The domestically-focused FTSE 250 rose 0.3pc, with Darktrace slumping more than 7pc after the Telegraph revealed an attack from short seller ShadowFall.
08:35 AMUnilever slides after failed GSK bid
Shares in Unilever have slumped in early trading after its £50bn bid for GSK's consumer health arm was rebuffed.
The company dropped 6pc as investors digested the news. A new strategy update – which said the group will refocus on health, beauty and hygiene and sell off lower-growth brands – failed to ease jitters.
Analysts at Barclays and Bernstein both downgraded their ratings on the stock, with the latter saying the deal was "very bad" for shareholders.
Meanwhile, it was a much brighter start for GSK, which gained 4.9pc. Speculation is mounting that the pharmaceutical giant is holding out for a higher bid.
08:22 AMPower prices surge as wind generation tumbles
Power prices have surged to their highest level in a month as an extreme lull in wind threatens to hit supply.
Prices for Monday evening jumped to £1,161 a megawatt-hour – the highest since December 16. At the same time, wind output is set to slide below 1.5 gigawatts, compared to a 10-day average of 6.3 gigawatts.
The surge in prices highlights the pressure on the UK power market as ageing nuclear reactors are shut down and aren't immediately replaced.
Gas was meeting 39pc of demand, wind 26pc and coal 4pc this morning, according to data from National Grid.
08:04 AMFTSE 100 opens higher
The FTSE 100 has pushed higher at the open, following on from last week's gains.
The blue-chip index rose 0.4pc to 7,569 points.
07:57 AMTaylor Wimpey cashes in on house price boomTaylor Wimpey housebuilder house prices – Eddie Keogh
Taylor Wimpey has delivered a bullish update for full-year trading, saying the sharp rise in house prices had offset inflation in building costs.
The FTSE 100 housebuilder completed 14,000 homes in 2021, an increase of nearly half from 2020, when building sites had been temporarily closed due to the pandemic.
Meanwhile, the average price for one of its homes rose by £12,000 to £300,000, allowing it to weather the impact of supply chain disruptions and higher material costs.
Taylor Wimpey said it was starting the year in a "very strong position", saying it expected strong demand and robust prices in 2022 despite the wider economic uncertainty.
The company confirmed plans to return cash to shareholders at the end of the financial year in March – most likely through a share buyback.
07:46 AMUnilever vows restructuring after failed GSK bid
Elsewhere, Unilever has defended its £50bn bid for GlaxoSmithKline's consumer healthcare business and vowed to restructure its business as it weighs up a higher offer.
The Marmite maker said it was "bringing forward a planned update" after news emerged of its unsuccessful approach for GSK's unit, which makes products including Aquafresh toothpaste.
Unilever said it will refocus on health, beauty and hygiene and sell off slower growth brands. This suggests it could offload some of its food operations, which include the Ben & Jerry's and Magnum ice cream brands.
It comes amid speculation Unilever could be preparing a sweetened offer for the GSK division.
Read more on this story: Unilever faces £14bn hurdle to sweeten Glaxo bid
07:32 AMSwiss lender hit by latest scandalCredit Suisse Antonio Horta-Osorio – Stephen Kelly/Bloomberg
Credit Suisse's Covid crisis is the latest scandal to befall Switzerland's second largest bank.
Mr Horta-Osario was brought into Credit Suisse less than a year ago as it grappled with the fallout from the collapse of investment firm Archegos and the insolvency of scandal-hit supply chain financing firm Greensill Capital.
It was also still reeling from the 2020 departure of chief executive Tidjane Thiam amid a spying scandal.
The controversies sparked heavy losses and sackings at Credit Suisse, and Mr Horta-Osario unveiled a new strategy in November in a bid to turn its fortunes around.
The bank said it would push ahead with its transformation plan under Mr Lehmann.
Severin Schwan, vice chairman of Credit Suisse, said:
We respect Antonio’s decision and owe him considerable thanks for his leadership in defining the new strategy, which we will continue to implement over the coming months and years.
Axel Lehmann as the new chairman, with his extensive international and Swiss industry experience, is ideally suited to drive forward the strategic and cultural transformation of the bank.
We wish Axel every success in his new role and Antonio all the best for the future.
07:24 AMCredit Suisse boss out after Wimbledon scandal
The abrupt departure of Antonio Horta-Osorio follows reports that an internal investigation at Credit Suisse found the bank boss broke quarantine rules twice.
Mr Horta-Osorio reportedly flew into London and attended Wimbledon on July 10 and 11. Covid rules at the time meant he should have been in quarantine.
That followed a previously reported breach of Swiss rules when he flouted quarantine to fly from London to Zurich and then back again within three days.
Credit Suisse hasn't released the findings of its investigation, and Mr Horta-Osorio's resignation statement makes reference only to "a number of my personal actions".
07:14 AMHorta-Osorio resigns
It's a dramatic start to the week, as Credit Suisse reveals its chairman Antonio Horta-Osorio has resigned with immediate effect.
Mr Horta-Osorio, who joined the Swiss lender just eight months ago, has come under fire amid reports he broke Covid quarantine rules twice in 2021.
In a statement late last night, Credit Suisse said he had resigned with immediate effect following an internal investigation.
He will be replaced by board member Axel P Lehmann.
Five things to start your day
1. Unilever faces £14bn hurdle to sweeten Glaxo bid Analysts question the strategic and financial reasoning behind £50bn offer for Glaxo's consumer healthcare division
2. Issa brothers plot multi-billion bid for Boots New owners of Asda are considering entering the race for the high street pharmacy chain and its 2,200 stores
3. End of the ‘great resignation’ threatens to wipe out rising wages Cost of living crisis is likely to put more people off changing jobs this year, says economist
4. Paul Myners, who helped Gordon Brown save Britain’s banks, dies aged 73 Baron Myners of Truro, a former Marks & Spencer chairman and City minister, was as a key architect of the 2008 banking bailout
5. Mario Draghi’s presidential bid spooks Italian investors There are fears the former ECB boss’s plan to kickstart the Italian economy will suffer if he ends his stint as prime minister
What happened overnight
Asian share markets were choppy on Monday as a slew of Chinese economic data confirmed the deadening effect of Covid restrictions on consumer spending, prompting Beijing to again ease monetary policy.
MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.2pc, while Japan's Nikkei bounced 0.8pc after losing 1.2pc last week
Coming up today
Corporate: Ashmore Group, Rio Tinto, Taylor Wimpey (trading update)
Economics: Rightmove house price index (UK); GDP, retail sales, industrial production (China)