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Kwasi Kwarteng, UK business secretary, has insisted there is “no question of the lights going out” this winter as ministers struggle to contain a growing crisis sparked by spiralling gas prices.
He told the House of Commons it was “alarmist” to suggest people would struggle to heat their homes in the winter and said Britain had “sufficient capacity” to meet household demand.
Ministers are in talks to set up an emergency scheme offering UK energy companies state-backed loans to take on unprofitable customers from failed smaller rivals. Five energy suppliers have collapsed in recent weeks, with more expected within days.
Surging gas and electricity costs are forcing European governments to discuss billions of euros in aid for households and stricken suppliers.
In the latest Road to Recovery, we explore how the crisis is set to push up inflation across Europe and hold back economic progress. Sign up here to receive the revamped newsletter on how the pandemic is reshaping the global economy.
Five more stories in the news
1. Evergrande triggers global market sell-off Wall Street added to the global stock sell-off yesterday as a liquidity crisis at the Chinese property developer shook Asia, Europe and US markets. The S&P 500 fell 1.7 per cent, marking its worst trading day since May, while the Nasdaq Composite slid 2.2 per cent. Losses continued in Asia today, with Japan’s benchmark Topix index leading the region lower with a fall of 1.4 per cent. Read our latest coverage of the crisis on FT.com.
There’s more: Six senior executives face “severe punishment” for securing early redemptions on investment products that Evergrande subsequently told retail investors it could not repay on time, the company has said.
Opinion: Beijing’s property pain threshold is holding the indebted group hostage, writes James Kynge.
2. Sky plans to launch its own smart TVs The UK-based broadcaster, which has 23m customers in six European countries, is preparing to launch its own smart televisions in one of the company’s boldest moves yet to win viewers in an intensifying battle with streaming services.
3. Coinbase abandons lending product Coinbase has dropped its plans to launch a new digital asset lending product, bowing to pressure from US securities regulators who had warned that it constituted an unregistered security that would have prompted them to take legal action.
4. Kremlin-controlled party retains grip on Russian parliament United Russia, the main vehicle for president Vladimir Putin’s policies, has retained its supermajority in the 450-seat chamber after an electoral campaign marred by accusations of fraud and a crackdown on opposition.
5. Trudeau projected to win Canada snap election Justin Trudeau is forecast to be re-elected as prime minister, according to Canadian media predictions. But it was unclear if his Liberal party had secured enough votes to form a majority government.
What do you think about the US decision to relax travel restrictions? Are you planning a trip? Let me know at email@example.com. Thank you for reading FirstFT Europe/Africa.
The day ahead
Universal Music Group begins trade on Euronext Vivendi has spun out 60 per cent of Universal, listing it on the Euronext Amsterdam exchange today. The prospectus gives Universal an indicative valuation of €33bn, but analysts believe it is worth much more — JPMorgan puts it at €54bn.
UN General Assembly opens This year’s summit is expected to largely focus on climate change and Covid-19 vaccines. US president Joe Biden will address the UN as he seeks to reinforce that “America’s back”, while he also faces questions about America’s global leadership. Later, Biden will host UK prime minister Boris Johnson at the White House. (Reuters, NPR, FT)
Federal Open Market Committee meets The two-day meeting should shed light on the fate of the enormous bond-buying programme it put in place last year to stabilise financial markets and shore up the economy.
Earnings round-up With coronavirus still disrupting business, Adobe is expected to continue to show strong revenue growth in third-quarter results. FedEx, a beneficiary of the pandemic-driven ecommerce boom, is set to report healthy growth with first-quarter numbers.
What else we’re reading
Garage scientists’ DNA gamble The growing accessibility of gene-editing tools has led to an explosion of unchecked experimentation in biological self-improvement in recent years. Once a quirky subculture, garage scientists’ rogue mindsets are starting to generate consternation among specialists and international bodies.
The hidden cost of powerful buyers and cheap prices There has been a cost to supply chain resilience. A system without slack, where suppliers and workers are stretched to the max by powerful buyers, may be efficient most of the time. But, as we have just discovered, when there is a shock, such a system can quickly fall apart, writes Sarah O’Connor.
Phones, cars and the future The car has proved stubbornly slow to change in more than a century. Similarly, the conventional thinking around smartphones is that innovation has stalled. Yet the more Tim Bradshaw thinks about their evolution, the more he sees parallels that point to the way ahead.
Germany’s debt debate As voters prepare for Sunday’s general election, economists are trying to figure whether to expect a return to strict fiscal discipline, as well as what the consequences will be for a debate in Brussels on resetting the EU’s own fiscal rules. Here are three big questions facing Berlin.
China’s CPTPP membership bid Joining the trade group would be a real coup for Beijing in its global competition with the US. But it may also be impossible because of a series of vindictive actions the Chinese Communist party has directed over recent years at CPTPP members, Tom Mitchell explains in Trade Secrets. Sign up to receive the newsletter here.
At Jeff Koons’s exhibition, Shine, at the Palazzo Strozzi in Florence, the art is not in any of the objects. It’s in the viewer, Koons writes in How to Spend It:
“It’s that sense of the essence of their own potential as a human being. That is what is of value and the only thing that has any relevance. And so, automatically, art becomes this dialogue with the community,” said Koons.
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