GGood morning Germany faces an industrial shutdown if Russian gas supplies don’t improve, one of its top ministers warned today.
Economics Minister Robert Habeck said in an interview: “Companies would have to stop production, lay off their workers, supply chains would collapse, people would go into debt to pay their heating bills, people would become poorer.”
The boss of German energy group RWE also warned that the continent could face “chaos” if the Kremlin cut off energy supplies.
“I’m really afraid that if we don’t sort it out before the situation arises, European solidarity will come under significant pressure,” Markus Krebber told the Financial Times.
Meanwhile, retail sales fell 0.5 percent in May as Brits cut food spending amid the fastest price increases in over a decade.
Overall sales volumes are still above pre-Covid levels but have been steadily declining since last summer.
It came as the deepening cost of living crisis pushed household confidence to a new record low in June, prompting warnings that the UK is “facing a whole new economic reality”.
GfK’s closely watched confidence tracker slipped for the sixth straight month, falling from minus 40 to a new all-time low of minus 41.
5 things to start the day off right
1) Employers across the country are preparing to cut wages for homeworkers One in ten companies plan to cut salaries or benefits for employees working from home
2) Debt time bomb a disaster for Tory hopes for economic recovery The country’s finances are at risk of running away from Sunak as the economy teeters on the brink of reversal
3) In a private meeting, oil managers are turning against the chancellor over the windfall tax Rishi Sunak warned that the levy would make Britain less attractive
4) Retired public sector workers will get a £2,000 pension increase if inflation rises Former civil servants’ salaries are set to rise by 10 per cent as ministers urge working people to accept real pay cuts
5) Klarna and Barclays at odds over Buy Now, Pay Later The government is preparing to hit the fast-growing sector with tougher rules
what happened overnight
Both stocks and bonds headed for their first weekly gains in a month on Friday as investors bet central banks would get inflation under control even as growth fears weighed on commodities.
Copper, a leitmotif of economic output with its wide range of industrial and construction uses, slid 3 percent in Shanghai and is down more than 7 percent this week — the sharpest weekly decline since the pandemic-induced financial meltdown in March 2020.
Oil also fell overnight, with Brent crude futures down 2 percent on the week to $110.62 a barrel, while benchmark grain prices fell, with Chicago wheat down nearly 9 percent on the week and at 9.42 $ a bushel fell to its lowest level since March.
The declines have provided some relief for equities as energy and food have been the drivers of inflation. After some heavy losses lately, the MSCI World stock index is up 2 percent this week.
MSCI’s broadest index of Asia-Pacific stocks outside of Japan rose 1% on Friday, flattered by short sellers exiting Alibaba — which rose 5% — amid signs China’s tech crackdown is easing.
Japan’s Nikkei rose 0.8 percent for a 1.6 percent weekly gain and S&P 500 futures were flat after the index rose about 1 percent overnight.
- Company: No scheduled updates
- Business: retail sale (UNITED KINGDOM)Summit of EU heads of state and government (EU)Consumer sentiment in Michigan (US)Sale of new homes (US)
https://www.telegraph.co.uk/business/2022/06/24/markets-live-latest-coronavirus-news-pound-euro-ftse-100/ Germany warns of industrial shutdown if Putin turns off gas taps – live updates