Millions ‘knocking on starvation’s door’ after Ukraine war, warns UN

·36-min read
Russia Ukraine grain exports war sanctions UN starvation poverty - John Moore/Getty Images
Russia Ukraine grain exports war sanctions UN starvation poverty - John Moore/Getty Images

Vladimir Putin’s blockade of Ukrainian ports “is a declaration of war on global food security,” a top UN official has warned, as 43m people are “knocking on starvation’s door” without exports from Europe’s breadbasket.

David Beasley, head of the UN’s World Food Programme, said the world was facing “the worst humanitarian crisis since World War Two”, with tragic shortages already engulfing countries including Ethiopia and Afghanistan even before Russia invaded its neighbour with catastrophic consequences for grain exports.

Speaking at an event in Davos, he said: “Because of this crisis we are taking food from the hungry to give to the starving.

“What do you think is going to happen when you take a nation that normally grows enough food to feed 400m people and you sideline that? You add fuel costs, food costs, shipping costs - it is devastating not just to our operations but global food security.”

Mr Beasley warned of civil unrest among hungry populations, urging world leaders to look back to the Arab Spring and other periods of protest and uprisings spurred by painful shortages.

05:29 PM

Wrapping up

That's all from us, thank you for following! We will see you tomorrow, but before you go, have a look at the latest stories from our reporters:

05:23 PM

Beer shortage warning as strike talk brews

Beer drinkers are facing a “thirsty summer”, a union has warned as strike action involving hundreds of brewery staff threatens to hit supplies, writes Claudia Rowan.

Workers at the Budweiser Brewing Group’s Lancashire site, which brews Budweiser, Stella Artois, Becks, Boddingtons and Export Pale Ale, have signalled industrial action across several days in June following a row over pay.

The GMB union said that the first day of strike action will be June 6, with more dates to follow as it warned drinkers “could go thirsty this summer” as a result.

Stephen Boden, GMB organiser, said: “The last thing these workers want to do is jeopardise beer supplies just as the hot weather kicks in. But they’ve been pushed into this by bosses essentially slashing their wages during a cost-of-living crisis."

Read Claudia's full story here.

05:08 PM

Klarna cuts 10pc of jobs amid 'very tumultuous year'

Klarna - Hollie Adams/Bloomberg
Klarna - Hollie Adams/Bloomberg

‘Buy now, pay later’ company Klarna is cutting 10pc of jobs, saying it could "not turn a blind eye to reality" after a wave of pressures.

The Swedish fintech told more than 7,000 staff that the jobs cuts were coming because it was operating "a very different world" from where it was at last autumn.

Sebastian Siemiatkowski, Klarna’s CEO and co-founder,  said: "Since then, we have seen a tragic and unnecessary war in Ukraine unfold, a shift in consumer sentiment, a steep increase in inflation, a highly volatile stock market and a likely recession. All of which have marked the beginning of a very tumultuous year."

It said the decisions by senior leaders had been "some of the hardest ones we have ever had to make", but that they would "make sure we can continue to deliver on our ambitious targets".

The announcement comes months after it emerged that Klarna was weighing plans to raise new money in a funding round that could see its valuation shoot to $60bn (£44.3bn). Klarna is already Europe’s most valuable start-up.

04:45 PM

Zuckerberg sued over Cambridge Analytica data scandal

The District of Columbia has sued Mark Zuckerberg over allegations he played a role in the 2016 Cambridge Analytica data scandal.

Facebook, now called Meta, became engulfed in the scandal after it was discovered that the data of 87 million people was mined from the social media site and used for political advertising during elections.

D.C. Attorney General Karl Racine has now filed a lawsuit against Meta CEO and co-founder Mark Zuckerberg, who the state alleges played a role in the scandal.

Racine said: “We continue to persist and have followed the evidence right to Mr Zuckerberg.

“The evidence shows Mr. Zuckerberg was personally involved in Facebook’s failure to protect the privacy and data of its users leading directly to the Cambridge Analytica incident."

Meta did not immediately respond to requests for comment.

04:28 PM

Tortilla snaps up rival Mexican chain Chilango

Chilango - Heathcliff O'Malley
Chilango - Heathcliff O'Malley

Mexican restaurant group Tortilla has bought eight-strong burrito chain Chilango in a deal worth up to £2.7m.

Tortilla, which floated on the stock exchange last October, said the acquisition will boost its presence in central London and adds to its existing five-year target to open 45 sites.

It snaps up Chilango from investment firm RDCP Group, which bought the firm out of administration in August 2020.

Chilango made revenues of £7.3m in the year to December 26 2021, but reported pre-tax losses of £200,000. It has sites across London, Croydon and Manchester.

04:09 PM

Mamsa & Papas unveils UK expansion plans

Baby and toddler brand Mamas & Papas is set to create up to 200 jobs over the next year amid a renewed expansion plan.

The high street retailer said it will launch the recruitment drive as part of plans to open 19 new concessions across the country through its partnership with fashion giant Next, opening in locations including Maidstone, Chelmsford, Crawley, Oxford, Ipswich, Peterborough, Cheltenham and Poole.

The Huddersfield-based business said it is launching new sites after a jump in sales following the easing of pandemic rules. The retailer currently has 14 concessions within next stores as well as 22 standalone shops.

03:56 PM

EU stalemate deepens as Hungary digs in over Russian oil ban

Hungarian Prime Minister Viktor Orban - ATTILA KISBENEDEK/AFP
Hungarian Prime Minister Viktor Orban - ATTILA KISBENEDEK/AFP

It’s looking less and less likely that the EU will approve a ban on Russian oil imports as Hungary continues to block the move.

Hungary’s populist leader Viktor Orban has said it would take a summit of European leaders to reach an agreement on the sanctions.

But while the bloc’s leaders are meeting next week, his government is now suggesting that any progress wouldn’t take place until next month at the earliest, Bloomberg reports.

The EU has been locked in a stalemate over its plans to phase out Russian oil by earlier 2023, despite the bloc offering concessions to Hungary, Slovakia and the Czech Republic.

03:41 PM

Ukraine urges Musk’s Starlink to keep providing satellite support

As Russia’s invasion enters its fourth month, keeping up Ukraine’s defence will require not only more weapons, but also Elon Musk’s satellite internet services.

Mykhailo Fedorov, Ukraine’s information minister, said the SpaceX founder had provided over 12,000 Starlink dishes to Ukraine so far.

Mr Fedorov added that Ukraine is getting the help from Musk free of charge. In turn, the world’s richest man is able to test his satellites in new circumstances.

The co-operation was prompted after the Ukrainian minister appealed to Musk for help on Twitter shortly after the invasion started.

03:32 PM

Russia eases rouble conversion order amid currency rebound

Russia has decided to lower the level of mandatory conversion of foreign currency for exporter-focused companies after the capital controls sparked a strong rebound in the rouble.

The finance ministry says companies will only have to convert 50pc of their revenues to the local currency, instead of the 80pc previously ordered.

The move became possible as the rouble has stabilised and forex liquidity on the domestic market reached sufficient levels, the ministry said.

The rouble has been the world's best performing currency this year, largely due to tough capital control measures rolled out by the Kremlin to prop up the market.

03:19 PM

Public 'must be seen' in BBC consultation, says director general

Tim Davie BBC  - House of Lords/PA Wire
Tim Davie BBC - House of Lords/PA Wire

The director-general of the BBC has said any consultation into its future funding should ensure the licence fee-paying public is "heard and seen" and outline a "clear set of principles" for the broadcaster.

Tim Davie told the Lords Communications and Digital Committee that the BBC's senior team would be putting proposals forward in the coming weeks that address both "principles and consultation" central to the discussion.

Earlier this year, Culture Minister Nadine Dorries announced the corporation's licence fee will be frozen for the next two years.

The minister said she wants to find a new funding model before the current deal expires in 2027 as it is "completely outdated".

A review of the BBC's funding model is expected to begin before the Commons summer recess.

02:52 PM

Russia's VEB pays bond in roubles as default fears mount

Russia's state development bank VEB said it had made payments on its dollar-denominated Eurobond in roubles because it could not transfer funds in foreign currency.

VEB said it has fully paid the equivalent of $68.2m (£54.2m) in roubles on two Eurobond series issued by its VEB Finance arm.

Russia's ability to service its debt is under scrutiny as the country faces the prospect of its first default in a century as western sanctions wreak havoc through the economy.

02:42 PM

Andrew Bailey defends Bank of England's money printing

Andrew Bailey has defended the Bank of England amid claims it stoked inflation by letting demand get out of hand in response to the pandemic.

Speaking at a conference in Austria, the Bank Governor said: "The facts simply do not support this. On the latest number, UK GDP in March was only 0.6pc above its pre-Covid level, and it is substantially below the path it was expected to follow pre-Covid."

He said the UK had a tight labour market, but was not experiences rapid growth in demand.

Mr Bailey also warned that the cost-of-living crisis was depressing demand and that policy makers would take that into account when deciding how much to raise interest rates.

He said: "In the UK we are facing a very big negative impact on real incomes caused by the rise in prices of things we import, notably energy.

"We expect that to weigh heavily on demand. We judge the appropriate degree of monetary tightening taking that into account."

02:34 PM

Ocado to buy robotics startup Myrmex

Ocado robots - REUTERS/Paul Childs
Ocado robots - REUTERS/Paul Childs

Online retail giant Ocado has inked a €10.2m (£8.6m) deal to buy robotics start-up Myrmex.

The grocer said the acquisition of the US-Greek business, which is expected to complete on June 6, will help it accelerate the development of asset handling systems for its Ocado Smart Platform.

Ocado had already held a minority stake in the business, following an investment in October 2020.

The acquisition will now allow the retail technology firm to more quickly rollout automated systems across its global network of distribution sites.

James Gralton, chief engineering officer at Ocado Technology, said:

This acquisition is another important step on our automation journey and provides an opportunity to further grow and expand our engineering presence in Southern Europe.

02:23 PM

Households brace for internet blackout from wave of bankruptcies

Households risk being cut off from the internet as runaway inflation threatens to cause a wave of bankruptcies among broadband networks, writes Ben Woods.

Ofcom is drawing up contingency plans with BT which could take on thousands of customers if a number of the smaller suppliers, so-called 'alt-nets', begin to fail.

More than 150 BT challengers backed with billions of pounds of private investment have entered the market to try and capitalise on the upgrade to ultrafast speeds.

Private equity, pension funds and sovereign wealth have been pouring money into broadband start-ups in the hope of securing steady, long-term returns from the shift to speedier connectivity.

However, concerns are mounting that the fierce levels of competition will begin pushing some firms to the brink, as they struggle to compete with the might of BT's Openreach and Virgin Media O2.

An industry source said: "It seems to be a bit of a red flashing light that Ofcom is thinking about it at all. It cannot be entirely sustainable when you already have big network builders."

​Read Ben's full story here

02:04 PM

China lockdowns worse for supply chains than war, says DHL boss

DHL China lockdowns supply chain - REUTERS/Andrew Kelly
DHL China lockdowns supply chain - REUTERS/Andrew Kelly

Lockdowns in China are having a greater impact on global supply chains than the war in Ukraine and will be felt even after they're lifted.

That's according to Tim Scharwath, head of DHL's freight business, who said: "After an opening, traffic jams will probably form in front of US and European ports."

He warned "it will take longer than we had thought until the trade system normalises again".

Mr Scharwath told Reuters that global supply chain problems would probably continue beyond the key Christmas shopping period and into next year.

01:55 PM

Rouble surges as Russia mulls looser capital controls

The rouble's rapid rebound has picked up pace, ramping up the pressure on Putin to ease capital controls that have propped up the currency.

With the gains now threatening to hurt budget revenue and exporters, Moscow is set to cut the share of foreign earnings that exporters must convert into roubles.

The proportion could be reduced to 50pc from 80pc, Bloomberg reports.

The rouble's rebound has left it more than 30pc stronger against the dollar than it was before the invasion as authorities imposed strict limits on transactions to stem a sharp sell-off.

01:37 PM

Wall Street rises as stocks rebound

Wall Street's three main indices have started in positive territory, helped by a rebound in tech and banking stocks after last week's sell-off.

The benchmark S&P 500 opened 0.5pc higher, while the Dow Jones and tech-heavy Nasdaq were up 0.4pc.

01:31 PM

Starbucks pulls out of Russia after 15 years

Starbucks Coffee Russia - AFP PHOTO / NATALIA KOLESNIKOV
Starbucks Coffee Russia - AFP PHOTO / NATALIA KOLESNIKOV

Starbucks has become the latest major brand to ditch Russia as it announced it's pulling out of the country after nearly 15 years.

Seattle-based Starbucks has 130 stores in Russia, wholly owned and operated by its licensee Alshaya Group, with nearly 2,000 employees in the country.

The chain, which opened its first outlet in Russia in 2007, shut stores and suspended all activity in early March. It said it will continue to support its employees there, including paying them for six months.

It comes a week after McDonald's withdrew from Russia by selling its restaurants to local licensee Alexander Govor to be rebranded under a new name.

Starbucks did not say how much the exit would cost. McDonald's said it would take a primarily non-cash charge of up to $1.4bn.

01:21 PM

Rio Tinto to use recycled cooking oil in green push

Rio Tinto will start using recycled cooking oil to help power a key iron ore tanker as part of a trial to cut carbon emissions from shipping its products.

Rachel Millard has more details:

The FTSE 100 miner’s RTM Tasman tanker will be powered with biofuel supplied by BP in a 12-month trial which Rio Tinto says is one of the longest of its kind.

The RTM Tasman will collect iron ore from Canada for shipping around the world.

The ship will use BP’s B30 biofuel which contains a blend of renewable or recycled oils such as waste cooking oil and vegetable oil, as well as about 70pc low sulphur diesel.

Rio Tinto says it can cut carbon dioxide emissions by up to 26pc compared to standard marine oil, which is distilled from crude oil.

Cutting emissions from heavy goods shipping is a major challenge given the time ships spend at sea and energy required to power them. Global shipping accounts for about 3pc of global carbon emissions.

01:08 PM

Michael Dell in line for $20bn if chipmaker Broadcom buys VMware

Michael Dell VMware Broadcom - Matthew Busch/Bloomberg
Michael Dell VMware Broadcom - Matthew Busch/Bloomberg

Michael Dell, one of the world’s richest technology entrepreneurs, is in line for up to $20bn (£12bn) if Broadcom, a semiconductor company, pushes ahead with a $50bn takeover of VMware.

James Titcomb has the details:

Broadcom is in talks to buy the US cloud computing company, Bloomberg reported, sending shares in VMware up by 15pc in early trading on Monday.

The deal would be one of the biggest in the tech industry’s history. It comes amid a historic rout in software company shares as interest rates rise and inflation soars.

Broadcom, best known for wireless internet and Bluetooth chips that feature in smartphones and routers, has grown to become one of the world’s biggest technology companies through a string of acquisitions. VMware provides “virtual software” allowing users to access a remote version of systems such as Windows over the internet.

Dell, the computer maker founded and run by Mr Dell, acquired a majority stake in VMware in 2016 when it bought storage company EMC, which owned 81pc of the company.

Dell subsequently spun off the company by distributing shares to shareholders, with Mr Dell, who currently owns around 47pc of Dell, receiving a 40pc stake in VMware.

Mr Dell is currently the 26th richest person in the world, according to Bloomberg, with a fortune of $44bn.

Read James' full story here

12:50 PM

Oil pushes higher amid squeeze on supplies

Oil has extended four weeks of gains amid a squeeze on fuel supplies, although rampant inflation is fuelling concerns that the economy could be headed for a recession.

Benchmark Brent crude pushed above $113 a barrel, while West Texas Intermediate was trading at around $111.

The market is under strain as a boycott of Russian oil constricts supply, while demand is picking up ahead of the key summer season.

But rising energy costs have fanned inflation, which in turn has stoked concerns about a recession.

Fatih Birol, head of the International Energy Agency, told Bloomberg: “We may see prices even going higher, being much more volatile and becoming a major risk for recession for the global economy.”

12:27 PM

Kainos shares jump on growth hopes

Kainos Group is flying high at the top of the FTSE 250 today after analysts welcomed its full-year results.

Canaccord Genuity raised its rating on the stock to buy from hold, saying cost inflation headwinds were priced in and the IT services group could get back to profit growth.

Analysts said forecasts of 16pc sales growth in 2023 was "likely conservative" and that strong sales and stabilising operating margins could lead to a return to double-digit earnings per share growth.

Shares in Kainos jumped 23pc – their biggest increase since January 2021.

12:09 PM

Duke of Westminster's Grosvenor swings back to profit

Hugh Grosvenor, Duke of Westminster - Max Mumby/Indigo/Getty Images
Hugh Grosvenor, Duke of Westminster - Max Mumby/Indigo/Getty Images

Grosvenor, the property empire owned by the Duke of Westminster, swung back to a profit last year thanks to a boost from returning shoppers, tourists and office workers.

The group, which owns around 300 acres of land in Mayfair and Belgravia, reported a £437.5m pre-tax profit in 2021 after tumbling to a £322.8m loss in the previous year.

The improved performance, driven by the easing of Covid restrictions, prompted the company to return its dividend for the duke and his family to pre-pandemic levels, with the board taking a £47.8m payout last year.

Mark Preston, chief executive of Grosvenor, said the company was making more international investments in an effort to keep its portfolio more robust.

He said:

Despite ongoing restrictions and lockdowns remaining a feature across our markets, decisive action in response, coupled with an improving economic environment, helped us achieve a significantly improved financial performance compared to the previous year.

This reignited activity went hand in hand with a continued commitment to supporting and finding new ways to help our tenants, get closer to our customers, and to assist the wider communities of which we are a part.

11:54 AM

Facial recognition company used by Met Police fined millions by information watchdog

A facial recognition company used by the Metropolitan Police has been ordered to delete billions of Facebook photos and fined £7.5m after breaking data protection laws.

Gareth Corfield has more details:

Clearview AI harvested images from UK social media accounts without the owner's permission and used them to train its computer algorithms to recognise faces.

Its database has around three billion faces and its service is used to identify people and track their movements.

The Information Commissioner has branded Clearview's business model "unacceptable". John Edwards said: "It not only enables identification of those people, but effectively monitors their behaviour and offers it as a commercial service.”

It ordered Clearview to stop taking photos from sites including Facebook and Twitter, delete pictures of faces of UK residents from its servers and fined the company £7,552,800.

Police forces including the Met, North Yorkshire, Northamptonshire, Suffolk, and Surrey, as well as the Ministry of Defence and the National Crime Agency, have all used Clearview AI’s technology.

​Read Gareth's full story here

11:12 AM

US futures rise on Biden tariff comments

Wall Street looks set to open higher this afternoon after President Joe Biden said tariffs imposed on China under the Trump administration were being reviewed.

Traders interpreted Biden’s comments that he’ll discuss the US tariffs on Chinese imports with Treasury Secretary Janet Yellen when he returns from his Asia trip as a signal there could be a reversal of some Trump-imposed measures.

President Biden also said the US military would intervene to defend Taiwan from any attack by China, though White House officials later walked back the comments.

Stocks were also given a boost by expected bargain hunting after a brutal sell-off on Wall Street last week.

Futures tracking the S&P 500 jumped 0.9pc, while the Dow Jones was up 0.8pc. The tech-heavy Nasdaq gained 0.7pc.

10:54 AM

Boris Johnson: 'No option off the table' on windfall tax

Boris Johnson has said he's not attracted to new taxes as calls mount for a windfall tax on energy giants, though he admitted that no options were off the table.

Speaking to reporters this morning, the Prime Minister said: "No option is off the table, let's be absolutely clear about that.

"I'm not attracted, intrinsically, to new taxes. But as I have said throughout, we have got to do what we can – and we will – to look after people through the aftershocks of Covid, through the current pressures on energy prices that we are seeing post-Covid and with what's going on in Russia and we are going to put our arms round people, just as we did during the pandemic."

He said there was "more that we are going to do" but "you'll just have to wait a little bit longer".

10:40 AM

World at risk of famine and mass migration, IMF warns

Catastrophic wheat shortages risk sending millions to the brink of starvation and setting off a wave of migration as the world’s poor take to the road in search of food, the International Monetary Fund has warned.

Ben Woods has more:

The crunch caused by Covid and the Russian invasion of Ukraine risks being compounded by misplaced protectionism as dozens of governments around the world impose restrictions on the trade of essentials including energy and food, the economic watchdog said.

"The costs of further disintegration would be enormous across countries,” the IMF’s managing director, Kristalina Georgieva, and chief economist, Gita Gopinath, wrote in a blog post.

“And people at every income level would be hurt – from highly-paid professionals and middle-income factory workers who export, to low-paid workers who depend on food imports to survive. More people will embark on perilous journeys to seek opportunity elsewhere."

​Read Ben's full story here

10:28 AM

Kremlin: West triggered global food crisis with sanctions

The Kremlin has hit back at Volodymyr Zelensky over the risk of global food shortages, insisting it was western sanctions that had triggered the crisis.

Putin's warmongering in Ukraine and ensuing sanctions against Russia have driven up the price of grain and cooking oil, as well as fertiliser and energy.

Russia and Ukraine together account for nearly a third of global wheat supplies.

Antonio Guterres, UN Secretary-General,  said last week that he was in intense contact with Russia, Ukraine, Turkey, the US and the EU in an effort to restore grain exports from Ukraine as a global food crisis worsens.

The Kremlin said Putin agreed with the UN assessment that the world faced a food crisis that could cause famine but pointed the finger at the West.

Spokesman Dmitry Peskov said: "Russia has always been a rather reliable grain exporter.

"We are not the source of the problem. The source of the problem that leads to world hunger are those who imposed sanctions against us, and the sanctions themselves."

10:18 AM

Zelensky: Earlier sanctions could have stopped war

Here's some more from Zelensky's rousing speech at Davos:

Putin’s invasion of Ukraine could have been prevented if the west had acted sooner to impose sanctions, Volodymyr Zelensky has said.

Speaking at the World Economic Forum in Davos, the Ukrainian President said tens of thousands of lives could have been saved if “preventative” measures had been taken last year.

He said: “We are grateful for this support, but if that had happened back then… would Russia start this full-scale war? I’m sure that the answer to this question is also no.”

Addressing the world’s business and political elite, Mr Zelensky repeated calls for “maximum” sanctions against Moscow, calling for a Russian oil embargo and sanctions against all banks, adding: “There should not be any trade with Russia.”

He also said seized Russian assets around the world should be used to help fund the rebuilding of Ukraine after the war.

09:12 AM

Volodymr Zelensky to give address at Davos

Ukrainian President Volodymr Zelensky will shortly be giving an address at the World Economic Forum in Davos.

In a video posted online last night, Mr Zelensky said: "This is the world's most influential economic platform, where Ukraine has something to say."

His speech is the main event of the day as the WEF kicks off in earnest. We'll keep you up to date with the big news.

09:10 AM

IEA: Energy crisis must not deepen fossil fuel reliance

The energy crisis fuelled by Russia's war in Ukraine must not lead to a deeper dependence on fossil fuels, the head of the International Energy Agency has said.

Speaking in Davos, Fatih Birol said the right investments – especially in renewable energy and nuclear power –would ensure the world doesn't need to choose between energy shortages and accelerated climate change due to fossil fuel emissions.

He said: "We need fossil fuels in the short term, but let's not lock in our future by using the current situation as an excuse to justify some of the investments being done, time-wise it doesn't work and morally in my view it doesn't work as well."

The IEA last year warned investors not to fund new oil, gas and coal supply projects if the world wants to reach net zero emissions by mid-century.

But as countries scramble to wean themselves off Russian energy, there's a risk they'll be forced to turn back to fossil fuels.

09:01 AM

Families to pay extra £400 a month as cost-of-living crunch bites

A typical family is paying £400 a month more on basic necessities such as food and heating as the cost-of-living crisis bites, writes Louis Ashworth.

Families with two children have seen their costs rise about 13pc in a year, far faster than the 9pc rate of annual inflation, according to analysis by the Joseph Rowntree Foundation.

Peter Matejic from the JRF said: “Those on the lowest incomes are now facing dangerously high inflation months ahead of the Bank of England’s projections, and with no adequate support mechanism to protect their families from harm.”

Using data produced by Loughborough University, the charity found families are paying about £120 a month more for energy, £90 more for transport and £65 extra for childcare.

It is the biggest jump since Loughborough started tracking prices through its Minimum Income Standards project in 2008.

08:55 AM

Lagarde: ECB to end negative rates by November

The European Central Bank is likely to start raising interest rates in July and leave negative territory by the end of September.

That's according to President Christine Lagarde, who wrote in a blog post: "I expect net purchases under the APP to end very early in the third quarter.

"This would allow us a rate lift-off at our meeting in July, in line with our forward guidance. Based on the current outlook, we are likely to be in a position to exit negative interest rates by the end of the third quarter."

Within inflation currently four times the ECB's 2pc target, pressure is growing on the central bank to do more to keep a lid on prices.

The comments suggest two increased of 25 basis points each at the July and September policy meetings.

08:42 AM

Andrew Bailey: More staff should return to the office

Andrew Bailey Bank of England -  Joshua Bratt
Andrew Bailey Bank of England - Joshua Bratt

Elsewhere, Andrew Bailey has responded to the controversy over the number of Bank of England staff still working from home.

The Governor came under fire from MPs last week after it emerged the Bank was allowing employees to work from home as much as four days a week – even as it grapples with an inflation crisis.

Mr Bailey said he wanted more staff to return to the office to help pass on skills to people who just joined.

Speaking on the Jimmy's Jobs of the Future podcast, he said: "We do want more of the staff to come back more. You do get benefits of having face to face conversations of the sort that you don't get on screen."

Mr Bailey said he'd try to find a balance between office and home work.

"I worry about the young staff coming in. It's been far more difficult for  them than we want it to be for them to acquire that knowledge. But we're going to balance it."

08:34 AM

Pound pushes higher ahead of Bailey speech

Sterling has gained ground against the dollar this morning as attention turns to a speech by Andrew Bailey later today.

The pound gained 0.6pc against a weakening dollar to hit $1.2560 – its highest level since May 5. Against the euro it was little changed at 84.54p.

Data from Rightmove this morning showed house prices rose to a new record for the fourth consecutive month, but there are signs the market is beginning to slow.

Meanwhile, traders will be looking for hints about future monetary policy direction as the Bank of England Governor speaks at a conference alongside ECB policy makers.

08:23 AM

German business confidence grows

German business confidence edged higher in May even as companies grappled with the fallout from war and renewed supply chain troubles.

The Ifo institute's gauge of expectations rose to 86.9 in May from a revised 86.9 in April, though it remained below its long-term average. An index of current conditions also increased.

That's despite a squeeze on businesses and households from surging energy costs, with Germany particularly exposed to Russian supplies.

There are also fresh logistical strains on its key manufacturing industry as the war and sanctions, as well as Covid lockdowns in China, spark disruption in supply chains.

Clemens Fuest, Ifo President, said:

The German economy has proven itself resilient in the face of inflation concerns, material bottlenecks, and the war in Ukraine. There are currently no observable signs of a recession.

08:12 AM

High street shops pay 755pc more in rates than online rivals

Sticking on the retail theme, there's new research out this morning highlighting the clash between the high street and online rivals ahead of a potential new online sales tax.

Analysis by real estate firm Altus Group found that brick-and-mortar retailers now pay 755pc more in business rates than digital competitors.

It shows that for every £100 earned by large retailers in Britain, excluding non-store sales and fuel, £2.91 of that was due to local councils in business rates.

However, for large online-only retailers, total business rates amounted to just 34p.

Estimates suggest a revenue-based online sales tax of 1pc on the online sale of goods to UK customers above an allowance of £2m for smaller firms could raise around £1bn a year.

Robert Hayton, UK president at Altus Group, said:

Ringfencing that revenue and targeting it to actually cut rates for retail, leisure and hospitality premises could lead to a reduction in rates of about 9pc.

No solution will be easy nor perfect but, if left unchecked, could lead to the substantial extinction of the high street and the erosion of local communities.

07:58 AM

Moonpig jumps as it moves into red letter days

Online card specialist Moonpig is one of the major winners this morning as investors welcomed its move into red letter days.

The UK retailer will pay £124m to buy Smartbox Group, which owns the Red Letter Days and Buyagift brands.

Moonpig said it was tapping into growing demand for experience gifts over physical products, adding that the UK gift experience market was worth about £6bn.

Shares jumped 12pc in early trading.

07:52 AM

Ted Baker picks preferred bidder after Sycamore bows out

Ted Baker retail fashion - Tolga Akmen / AFP
Ted Baker retail fashion - Tolga Akmen / AFP

Ted Baker has said it's selected a preferred bidder after receiving a number of revised takeover proposals, while private equity firm Sycamore dropped out of the process.

The fashion designer said it will begin a due diligence process with the preferred suitor, which will probably take several weeks. Shares jumped as much as 4.6pc.

The mooted takeover comes as chief executive Rachel Osborne looks to turn the retailer around by cutting debt and discounting, boosting online sales and refreshing the brand.

07:38 AM

FTSE risers and fallers

The FTSE 100 has started the week in positive territory this morning as traders shook off some of the inflation and recession woe that dominated last week's trading.

The blue-chip index rose 0.9pc in early trading, boosted by commodity stocks.

Oil giants BP and Shell were the biggest drivers of gains, while miners GlencoreRio Tinto and Anglo American all gained ground thanks to higher energy and metals prices.

B&Q owner Kingfisher was among the biggest rises, gaining 3pc after it posted "resilient" trading and held its full-year forecasts steady.

The domestically-focused FTSE 250 rose more than 1pc. Moonpig jumped 12pc after it agreed to buy Smartbox, a gifting experiences platform, for £124m.

07:30 AM

Davos day one: World Economic Forum kicks off

Davos World Economic Forum - Laurent Gillieron/Keystone 
Davos World Economic Forum - Laurent Gillieron/Keystone

The great and the good are back in Davos after a two-year hiatus due to the pandemic.

The World Economic Forum's annual shindig gets underway today in the Swiss ski resort, albeit with fewer big names from Wall Street and politics (and no snow).

Still, there's plenty to chew over, with Ukraine, rampant inflation and the risks from food shortages and climate change all high on the agenda.

We'll keep you up to date with all the big news. Today's main event is a special address from Volodymyr Zelensky later this morning.

07:24 AM

House price frenzy shows signs of slowing

UK house prices rose to a new record for a fourth straight month in May, though there are signs the red-hot market is starting to cool.

Asking prices rose 2.pc to £375,501 – the highest level for the month since 2014, according to the latest figures from Rightmove.

That marks a £55,551 jump since the housing market was halted at the start of the pandemic – almost 10 times the £6.218 increase in the two previous years.

But the frenzy is expected to come to an end as rising interest rates add to the cost-of-living crisis and slam the brakes on the market.

Tim Bannister at Rightmove said:

We anticipate that the effects of the increased cost of living and rising interest rates will filter through to the market later in the year.

A combination of more supply of homes and people weighing up what they can afford will help to moderate the market.

07:18 AM

Poland urges Norway to share 'gigantic' energy profits

Poland has called on Norway to share the "gigantic" profits it's made recently from higher oil and gas prices – especially with Ukraine.

Mateusz Morawiecki, Poland's Prime Minister, said added that his country – which is heavily reliant on coal – plans to switch to renewables and nuclear energy, while shedding oil and gas deliveries from Russia and at some point from “Arab” countries as well.

Poland will later this year complete a gas pipeline from Norway that’s set to help it replace the supply of the fuel from Russia, which was cut last month following Poland’s refusal to pay in roubles.

07:10 AM

B&Q owner hails 'resilient' trading as supply issues ease

B&Q Kingfisher DIY - Stu Forster/Getty Images
B&Q Kingfisher DIY - Stu Forster/Getty Images

B&Q owner Kingfisher has reported "resilient" trading in its latest quarter as supply chain troubles began to ease.

The London-listed group, which also owns Screwfix, said sales were in line with expectations as they fell 5.8pc to £3.2bn in the three months to the end of April. This was 16pc higher than pre-pandemic levels.

Kingfisher also said sales had improved in the first two weeks of May, driven by "resilient demand" across both its DIY and trade operations.

Still, the company said it remained "mindful" of the economic and geopolitical uncertainty that had emerged since the start of the year.

Thierry Garnier, chief executive of Kingfisher, said:

We continue to effectively manage inflationary and supply chain pressures.

As a result, our product availability is now very close to 'normal' levels across all our banners, and we continue to deliver value for our customers through our own exclusive brands and competitive prices.

07:02 AM

FTSE 100 pushes higher

The FTSE 100 has posted strong gains at the open, despite wider concerns about inflation and the risk of recession.

The blue-chip index jumped 0.9pc as markets opened to 7,454 points.

07:01 AM

Simon Clarke: UK not ruling out windfall tax

The Government isn't ruling out a windfall tax on oil and gas companies if they fail to invest their profits into boosting capacity, Treasury Secretary Simon Clarke has said.

The Times reported that ministers are drawing up plans for a temporary levy – something campaigners and opposition MPs have been calling for to ease the cost-of-living crisis.

Mr Clarke said the Government wasn't ruling it out, telling Times Radio: "We don’t want to have to do this but if we don’t see the sector reinvesting these profits into something productive for the real economy then all options are clearly on the table."

Asked whether he could confirm one option being looked at was a windfall tax that was more lenient on firms that commit to investment, Mr Clarke refused to either confirm or deny specific proposals.

He said: "We are obviously looking at what needs to be done to support households at what is an exceptionally difficult time and a windfall tax is one of those options that is something that any responsible government would need to look at."

06:52 AM

Gazprom mulls UK rebrand

Good morning.

Gazprom's UK business is said to be planning a subtle rebrand as the company looks to distance itself from its Kremlin-controlled owners.

Gazprom Energy, which supplies gas to British businesses, is considering adopting the name of its UK parent – GM&T – to improve its chances of survival, the Financial Times reports.

The company was teetering on the brink of collapse in March as customers shunned contracts in the wake of Russia's invasion of Ukraine.

The UK was poised to place it into special administration if needed, but Germany stepped in by taking temporary control of parent company Gazprom Germania.

5 things to start your day

1) Windfall tax 'would hit your pension pot', says minister - Cabinet splits deepen over levy on energy companies as four in ten face winter of fuel poverty

2) Britain becoming a less attractive place to do business, says Tory-leaning think tank - Business leaders last week accused Boris Johnson of squandering the post-Brexit opportunity to slash red tape and taxes

3) Pay gap between FTSE bosses and rest of the workforce narrows after Covid puts a lid of executive salaries - The average pay ratio between bosses and workers is widening, says High Pay Centre

4) Government launches £40m competition to jump-start self-driving buses and delivery vans - Autonomous vehicles could be worth £42bn to the UK economy

5) Farmers fear that supermarkets are turning to eggs from Poland - Retailers accused of seeking out cheaper foreign produce

What happened overnight

Asian stocks traded mixed as investors assess the impact of China’s Covid policies on growth and the outlook for the world’s largest economies. The dollar and Treasuries retreated.

Equities rose modestly in Japan, but a slide in Chinese tech stocks and a virus outbreak in Beijing weighed on an MSCI  gauge of the region’s stocks.

Nasdaq 100 and S&P 500 futures jumped about 1pc after the S&P 500 dropped for a seventh straight week in a stretch of weakness not seen since 2001.

Coming up today

Corporate: Big Yellow Group, Kainos Group (full-year results); Pershing Square (interims); Kingfisher (trading statement)

Economics: World Economic Forum, Davos (EU), Rightmove house price index (UK), Chicago Fed national activity index (US)

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