FirstFT: The Magnitude of Truss Economic Challenging Forces Smash

good morning. The pound has fallen to its weakest level since 1985, an indication of the scale of the economic challenge Liz Truss’ new prime minister faces as he prepares to announce an emergency energy package today. It reflects.

Truss outlines details of state interventions planned to protect homes and businesses from rising energy prices. A government insider said the combined total cost for the two winters he could reach £150bn, while the minister was yesterday trying to finalize details of support for the business sector.

The package is financed by government borrowing, and increases demand in the economy during times of inflation above 10%. The bond market is already nervous about rising interest rates.

Bank of England Governor Andrew Bailey said the central bank had no intention of destabilizing the market when asked whether the sale of government bonds could reach “undigestible” levels. “Our team is looking into this very closely,” he said.

Truss’ contingency package is estimated to cost £90bn over two years, with business elements likely to cost £60bn, capping the average household electricity bill to around £2,500 per year. Higher wholesale gas prices will push up bills.

The pound fell to $1.1406, lower than in the aftermath of the 2016 Brexit vote and above the depth of March 2020 in the midst of the Covid-19 crisis. The pound has fallen 15% against the dollar this year.

Thank you for reading FirstFT Europe/Africa.Here’s the rest of the news for today

5 more stories in the news

1. Poland opposes windfall tax on power producers Ahead of Friday’s emergency EU meeting, Poland’s prime minister pushes back against a proposed windfall tax on electricity producers, saying it should not be a priority, and backs a halt to the bloc’s emissions trading scheme.Brussels energy crisis plan.

2. Europe surpasses US on China’s list for the first time Chinese companies have raised more than five times more money than the U.S. through equity sales in Europe this year, and the amount raised on exchanges in London and Zurich has risen amid fraying geopolitical ties between the superpowers. surpassed New York for the first time.

3. A sharp division in cancer care in Europe The European Cancer Agency calculates that across Europe, about 100 million cancer screening tests were missed and 1 million cancers went undiagnosed in the first year of the coronavirus pandemic. However, some countries maintain higher standards of care than others.

4. Melrose spins off auto business in GKN split Melrose Industries will spin off GKN’s automotive division as a UK listed company, one of the UK’s oldest engineering businesses. The FTSE 100 Turn Round Specialist, in 2018 he acquired an auto parts and aerospace parts maker in an agonizing £8 billion acquisition.

Five. India and China ease the pain of Russian oil sanctions According to a Financial Times analysis, in the second quarter of 2022, India and China will import 11 million tonnes more oil from Russia than in the first quarter, mostly offsetting the decline in shipments to Europe. , raising questions about the impact of sanctions on Moscow. to rising energy prices for European consumers.

the next day

ECB rate decision Expectations are high that the European Central Bank will announce an interest rate hike of 0.75% today. In July, the central bank raised its borrowing costs for the first time in more than a decade, bringing him half a percentage point higher than expected to zero.

economic data France releases its trade data for July, and the US releases its monthly car sales figures. In the UK, the Royal Institute of Chartered Surveyors publishes a monthly housing market survey. The OECD publishes its employment outlook, plus the Recruitment & Employment Confederation and KPMG publish monthly employment reports in the UK.

Corporate earnings British-American cyber defense specialist Darktrace, commercial lender Funding Circle, manufacturer Melrose, and F&B chain The Restaurant Group report earnings.

Correction: Earlier this week, I incorrectly listed the date of the Lebanese presidential election. We apologize for the error.

what else are you reading

How Small particles that can penetrate concrete could save lives Engineers use x-rays, ultrasound, and radar to look for signs of concrete corrosion and potential failures. But everything has its limits. Scientists are now using particles from space to develop techniques to safely and inexpensively view nearly every structure on Earth. Believers say the muon revolution is only a few years away.

The threat of a hard landing in the shipping industry In just three years, the container shipping industry will be as profitable as it has been in the last 60 years, fueled by surging demand during the pandemic. But analysts believe the cycle may have peaked and there is real risk of a crash after the “once in a lifetime” profit surge.

“They don’t treat us like humans.” China’s frontline Covid workers, dubbed ‘Big White’ after PPE, have been hailed as national heroes for their pivotal role in quelling the outbreak. But as the pandemic enters his third year, many are complaining of brutal conditions, pay cuts and long hours.

Monsoon disaster piles up misery in Pakistan The country’s climate change minister called it the “greatest climate catastrophe of the decade” and “the all-conquering cataclysm.” Rising temperatures following monsoons and floods have made Pakistan a case study of climate-vulnerable countries, where humanitarian, economic and political crises are interconnected.

What John Lewis understands about UK shoppers John Lewis called the end of the “experience economy”. Instead, there is now an ‘instant economy’, according to preferred retailers in central England. Kat Rutter-Puley writes that in this apparent marketing blunder may be the heart of a smart strategy.

books

The 2022 Booker Prize shortlist, released this week, features novels based on real events, from Robert Mugabe’s dictatorship to Magdalen’s abuse of laundry.