- US to send more military aid to Ukraine following plea from Zelensky
- Energy traders call for ‘emergency’ central bank intervention
- Oaktree prepares offer for Chelsea as race to buy football club heats up
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Need to know: the economy
The US Federal Reserve lifted its benchmark interest rate for the first time since 2018 today, with a quarter-point rise expected at all of the six remaining policy meetings. Data released yesterday ahead of the Fed’s decision showed US producer prices rose 10 per cent in February, the fastest year-on-year rate since the data were first collected in 2010. The FT Editorial Board discusses the tough choices for central banks as inflation rages.
Russia will default on its debt for the first time since 1998 if it tries to make interest payments on its dollar bonds in roubles today, the Fitch rating agency said. Here’s our explainer on what to expect.
The International Energy Agency warned of the biggest supply shock in a generation as the search for alternatives to Russian sources continues. UK prime minister Boris Johnson heads to talks with the UAE and Saudi Arabia over increasing oil production, but in the meantime British motorists are set for pain at the pumps. Power supplier Octopus energy said the UK could eliminate its dependence on Russian gas within two years by increasing the number of onshore wind farms.
Latest for the UK and Europe
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Brussels warned the war in Ukraine would cause a “severe” hit to EU growth, which is now predicted to be below the 4 per cent it forecast just a month ago. Investor sentiment in Germany, the bloc’s biggest economy, is now at its lowest level since the pandemic began, according to yesterday’s closely watched Zew survey.
All remaining UK travel restrictions will be scrapped from Friday. Arrivals in the country will no longer need to fill out a passenger locator form and unvaccinated people will not need to take a coronavirus test before departing for the UK or after their arrival. Scotland will not be removing laws requiring face coverings as planned because of the current spike in infections.
Official labour market data showed the number of unfilled vacancies in the UK rising to a record 1.3mn and wages failing to keep up with inflation. Average earnings were 3.8 per cent higher than a year earlier over the November to January period — a real terms fall of 1 per cent — increasing pressure on chancellor Rishi Sunak to address the cost of living crisis in his spring statement next Wednesday.
Listen to our Money Clinic podcast for tips on how to make your household budget stretch further as “awful April” approaches, with its double whammy of UK tax rises and increases in energy bills.
Chief economics commentator Martin Wolf says Russia’s war will remake the world. “Threats of nuclear Armageddon, a mobilised west, an alliance of autocracies, unprecedented economic sanctions and a huge energy and food shock. No one knows what will happen. But we do know this looks to be a disaster,” he laments. Trade Secrets writer Alan Beattie, on the other hand, is sceptical that the anti-Putin coalition will permanently change the way the global economy, trade and energy are governed.
New Zealand’s prime minister Jacinda Ardern has sped up the reopening of the country’s borders after polls suggested that her popularity with voters was on the decline. Ardern said the country had the lowest rate of deaths during the pandemic in the OECD.
The US is running out of money to pay for Covid-19 vaccines, tests and treatments, the White House warned, after Congress rejected a $15bn spending package. Health officials also fear that Europe’s recent surge in infections could soon come to the US.
Need to know: business
The EU and UK unveiled more sanctions against Russian oligarchs as well as targeting imports of goods such as vodka. Brussels also set up “a far-reaching ban on new investment across the Russian energy sector”. But although oil majors such as BP and ExxonMobil pledged to quit Russia, oil services companies Schlumberger, Baker Hughes and Halliburton — partners of Russian state-backed producers Rosneft and Gazprom — have not followed suit.
Europe’s car plants have been hit by a shortage of cheap cabling components made in Ukraine. VW said it would consider expanding outside Europe if the war continued. Our Big Read examines the risks involved for VW and others in relying on authoritarian states such as China.
Intel announced a €30bn investment in European chip manufacturing, as Brussels tries to make the EU a semiconductor leader that is less reliant on chips from Asia. However, UK chip designer Arm is cutting 1,000 jobs after the collapse of its sale to Nvidia.
UK MPs accused the British Business Bank of a “colossal cock-up” for presiding over fraudulent pandemic bounce back loans for companies.
UK restaurant, food and leisure groups warned of the impact of higher input costs because of the war in Ukraine. One analyst said additional increases in value added tax, business rates and the national living wage could “tip some operators over the edge”.
Big banks are on alert for Russian cyber attacks on Swift after seven of the country’s lenders were kicked off the payments messaging system. “During warfare, it’s the most effective place to hit — it’s the nucleus of the global banking system, the node that connects everything,” one senior banker told the FT. Paschal Donohoe, president of the eurogroup and Ireland’s finance minister, wrote in the FT that banking union was essential if the EU was to survive future crises.
The pandemic-fuelled shift towards digital banking and ecommerce continues as HSBC said it would close a tenth of its UK branches after footfall declined. Inditex, the world’s biggest clothing retailer, said it expected online sales to account for 30 per cent of revenues in 2024.
The World of Work
UK retailer Wilko apologised for issuing staff guidance to attend work even if they were Covid-positive. The relaxed rules were an early example of a UK employer using the government’s end to legally enforced self-isolation to get staff back into the workplace.
Rob Bridgman, founder of sofa maker Snug, shares how he dealt with the supply chain problems thrown up by the pandemic and how he changed his business to make people more confident about buying online.
Isabel Berwick will be hosting a live version of our Working It podcast alongside columnist Pilita Clark on Wednesday April 6 in London, with all proceeds going to the Choose Love fundraiser for Ukraine. Get your tickets here.
Covid cases and vaccinations
Total global cases: 453.8mn
Total doses given: 11.0bn
Get the latest worldwide picture with our vaccine tracker
And finally . . .
Art has always been weaponised, one way or another, writes arts editor Jan Dalley. But can boycotting Russian artists, or forcing them to publicly condemn the war, possibly have any effect — especially against a Kremlin leadership unruffled by international disgrace?
Valery Gergiev, centre, was fired as chief conductor of the Munich Philharmonic after refusing to condemn the invasion of Ukraine