Norway has drawn up plans to ration electricity exports in a move that has heightened fears of energy shortages in the UK and Europe this winter.
The government in Oslo on Monday announced new rules limiting the sale of power to foreign countries as heatwaves threaten Norway’s hydroelectric power generation.
Experts said the restrictions threatened the UK’s plan to draw power from Norway this winter via the North Sea Link - leaving electricity supplies more stretched and risking even higher bills for consumers.
The National Grid has already revealed that the UK is set to be more dependent than ever on the Continent for power, with interconnectors expected to provide up to 5.7 gigawatts of electricity at peak times. About one quarter of that total – or 1.4 gigawatts – is set to come from Norway.
Kathryn Porter, an energy consultant at Watt-Logic, said the proposed restrictions “put at risk the ability of Britain to import from Norway this winter”.
“National Grid ESO needs to urgently update its winter outlook taking account of this threat to Britain's energy security,” she added.
“Longer term, we need to develop more domestic generation and rely less on imports.”
Consultants at Aurora Energy also warned that curbs on Norwegian power would push electricity prices higher because National Grid would be forced to call upon coal-fired plants as backup.
Asked about the Norwegian plans, a National Grid spokesman said the company would update its winter forecasts to ensure they are "as robust as possible" in the autumn.
Norway generates almost all of its electricity from hydroelectric power stations and has been called the “battery of Europe”.
Its hydroelectric plants usually provide an abundant source of cheap power but water levels in the reservoirs are currently a third below what is typical for this time of year and take months to be replenished by rain and melting snow.
Terje Aasland, the country’s energy minister, said Norway’s centre-left government would respond with new regulations that would force power companies to limit electricity exports when the levels dip too low and instead prioritise refilling reservoirs to protect energy security.
Mr Aasland said the changes were necessary after dry spells in the spring and summer left water levels at historic lows.
The announcement comes against a backdrop of growing anger in Norway about soaring domestic electricity prices, which opposition parties claim are being driven by demand for power from abroad.
The new plans cast major doubt over the ability of other European countries to rely on cheap Norwegian power this winter and comes as supplies across the Continent are already stretched thin.
Europe is bracing for a tough winter, with Russia choking off supplies of gas to the Continent and France’s nuclear power stations laid low by technical issues.
Paris on Monday extended a temporary waiver to environmental rules for nuclear plants to help keep reactors running as resources are stretched thin.
State-owned nuclear power giant EDF will be allowed to discharge hot water from five plants into rivers, even if the temperatures breach rules usually in place to protect waterways.
In a rare bright spot, Germany appears to be succeeding in efforts to fill up its gas storage facilities before temperatures drop.
Germany's gas storage is now at about 72pc of capacity, according to figures from Gas Infrastructure Europe, just short of a target of 75pc set for September 1.
Progress on storage comes after German households and businesses cut gas usage to help prepare for winter. At the current pace, the country is within reach of hitting its target of 95pc by November 1.
That would put it in a better position to weather the colder period but analysts warned the plan could still be derailed if Moscow decides to shut down the Nord Stream 1 pipeline.
Nord Stream 1 is already running at just 20pc of capacity after state-owned energy giant Gazprom reduced flows. It claims capacity cannot be increased until a turbine recently repaired in Canada is returned.
The company is currently arguing that it cannot take delivery of the component from Germany because of western sanctions.
Olaf Scholz, Germany’s chancellor, has dismissed this as a thinly-veiled attempt to pile further pressure on Europe. Any restriction of electricity exports from Norway this winter threatens to put more pressure on power supplies and drive prices even higher.
However, Oslo argues that failing to properly conserve the reservoir levels could result in power rationing in the spring - and possibly this winter in extremis.
The problem is particularly acute in southwestern Norway, where water levels were only at 49pc of full capacity at the end of last month, according to the latest available data. That compares to 65pc at the same time in 2021 and a 20-year average of 74pc.
A UK Goverment spokesman said: “The UK’s secure and diverse energy supplies will ensure households, businesses and industry can be confident they can get the electricity they need. Thanks to a massive £90 billion investment in clean energy in the last decade, we have one of the most reliable and diverse energy systems in the world.
"We have secured the capacity we need this winter to ensure households, businesses and industry can be confident they can get the electricity they need, taking account a wide range of risks, such as changes to export rules overseas."
That's all from us today, thank you for following! Before you go, have a look at the latest stories from our business reporters:
FTSE 100 ends in the green
The FTSE 100 has closed at a two-month high, boosted by economically sensitive sectors such as oil & gas and banks as upbeat economic data from China and the US eased worries about an imminent recession.
The index gained 0.6pc to 7,482.
"We still remain bullish on oil, banks and mining sectors," said Alan Custis, head of UK equities at Lazard Asset Management, adding that their view was it was not going to be a long and deep recession.
"Most of these sectors have done well so far this year but one can make a strong argument to say that they're still looking pretty robust for the balance of the year."
Ryanair cancels flights in Spain as staff strike
Ryanair has cancelled 10 flights and delayed 111 more in Spain as cabin crew staff resumed strike action over pay and working conditions.
Barcelona, Spain's second-busiest airport, was the worst hit, with eight flights cancelled earlier this afternoon.
But the union complained that the strike was not having a greater impact, hitting out at the government for compelling the airline to operate around 80pc of its flights and forcing most crew to go to work, said Pau Ibarzabal, spokesman for the USO union.
"We believe it is abusive and almost violates our right to strike," he said.
BioNTech hope Omicron vaccine will boost demand as Covid jab glut hits sales
BioNTech is hoping a new Covid vaccine designed to offer better protection against Omicron will boost orders, after a glut of jabs in Europe and the US caused a slump in sales. Hannah Boland reports:
BioNTech, which is working with Pfizer on the Omicron-adapted vaccine, said it was expecting to start delivering the jab as soon as October, in time for booster roll-outs this autumn and winter.
Although existing Covid vaccines offer protection against the newer variants, companies are working to develop ones which work even better. BioNTech said the delivery of these newer vaccines would bring about "an uptake in demand in key markets" in the fourth quarter of the year.
Sales slumped 40pc to €3.2bn (£2.7bn) in the three months to the end of June compared to last year. BioNTech blamed "a re-phasing of orders" as the pandemic evolves but said it was still expecting to record Covid vaccine revenues of between €13bn and €17bn this year. Last year, BioNTech made €18.8bn from its vaccines.
M&C Saatchi pushes back negotiations with suitor Next Fifteen
M&C Saatchi and suitor Next Fifteen have postponed talks over the proposed £310m deal for the advertising company.
Shares in M&C Saatchi dipped as its possible acquisition by the media business hit another roadblock.
In May, the company agreed to a takeover deal by Next Fifteen, but a month later said it no longer considered the move to be "fair and reasonable" after the suitor's share price slid heavily, knocking the value of the deal.
The two parties agreed to conduct meetings on August 19, but this has been pushed back "until such time as the regulatory conditions to the acquisition have been satisfied", Next Fifteen said.
Newcastle Building Society in talks over merger with Manchester Building Society
Newcastle Building Society said it is in exclusive talks with Manchester Building Society over a potential merger.
The pair plan to "explore the possibility" of transferring Manchester's business to Newcastle, but discussions are at an early stage. The merger could be completed at the earliest in the middle of next year if it gets the go-ahead.
Newcastle has 336,000 members, 31 branches and £4.9bn in assets, making it the country's eighth largest building society. Manchester only has 11,000 members, no branches and around £200m in assets. It is the 41st largest.
That's all from me today – thanks for following! Handing over now to Giulia Bottaro.
Formula One stuck in the slow lane as electric rival races ahead
Some 40,000 motorsport fans crammed into London’s docklands to revel in a weekend of car racing. But it wasn't Formula One, the crown jewel, that drew spectators to the ExCel earlier this month, it was its electric rival: Formula E.
Spectators weren’t disappointed: British hopeful Jake Dennis whizzed to victory for Avalanche Andretti on the opening day of E-Prix’s eighth season. Yet over the same weekend, F1 heavyweights Max Verstappen and Lewis Hamilton battled it out at the Hungarian Grand Prix. Fans couldn’t watch both at the same time.
Patrick Mulholland delves into the future of motorsport. Read his full story here.
ScottishPower to build £150m green hydrogen plant at Felixstowe Port
ScottishPower is reportedly planning to build a £150m green hydrogen plant at the Port of Felixstowe to power trains, trucks and ships.
The energy giant has drawn up plans for a plant at the Suffolk port, the Guardian reports. It would produce the fuel using renewable electricity from 2026 in quantities equivalent to around 100 megawatts a year – enough to power 100,000 homes.
The company said the investment came amid surging demand for green fuel as petrol and diesel prices continue to soar.
It has submitted an application to the Government's Net Zero Hydrogen Fund, which provides state backing to develop hydrogen projects over the next three years.
ScottishPower has estimated the whole project could cost between £100m and £150m.
GB News beats TalkTV to Virgin Media channel slot
GB News has outmuscled Rupert Murdoch's TalkTV to secure a channel slot on Virgin Media that will bolster its fight for viewers, writes Ben Woods.
The fledgling news network will move this month from channel 626 to the more prominent 604 slot on the pay TV operator's channel guide, according to Virgin Media's website.
The move will strengthen its challenge to the BBC by moving GB News closer to the 24-hour news channels of BBC and Sky. The 604 channel sits between Sky News and BBC Parliament, while BBC News HD holds the 601 position.
Analysts have pointed to GB News and TalkTV's less competitive positions on TV channel menus as one of the reasons why they have not amassed bigger audiences.
Losing out to a rival comes as another blow for Mr Murdoch's opinionated news station, which has struggled to dislodge GB News and was forced to cut short its Tory leadership debate after presenter Kate McCann fainted live on air.
TalkTV was in a bidding war with GB News for the higher slot because it holds the 627 position on Virgin Media's channel menu, which places it below international news networks, such as Al Jazeera, CNBC and France 24.
Ocado halts sales of disposable BBQs amid heatwave
Ocado will stop selling disposable barbecues following warnings they could lead to fires.
The online grocer said it's halted sales with immediate effect after the London Fire Brigade urged people not to use barbecues in open spaces, grassland, or on balconies as temperatures soar again.
It comes after Marks & Spencer last week said it would stop selling portable BBQs.
Following the campaign by the London Fire Brigade, we’ve stopped selling disposable BBQs on Ocado with immediate effect. This is the right thing to do and we hope the remaining retailers will follow suit.
— ocado (@Ocado) August 8, 2022
House of Zana beats Zara in row over 'identical brand'
A small fashion company based in Darlington has won a tribunal against high-street giant Zara over claims it had an "identical brand".
The Spanish retailer had threatened legal action against House of Zana.
Owner Amber Kotrri launched the clothing brand online in 2018, and opened her first store in Darlington a year later.
When she attempted to trademark the name House of Zana, she received a notice of opposition, followed by a letter from lawyers representing Zara saying the brand was "conceptually identical" to theirs, and "confusingly similar" for customers.
Mrs Kottri said she was urged to rename her business and remove all existing branding, but she refused to sign the agreement, saying there was "no risk of confusing us with Zara" and the change would "cause irreparable damage" to the business.
Now a tribunal judge has sided with Mrs Kottri and ruled that House of Zana can keep its name.
Wall Street opens higher on upbeat jobs data
Wall Street's three main indices have opened higher after last week's upbeat jobs data soothed some concerns about a recession.
The S&P 500 gained 0.3pc at the open, while the Dow Jones was up 0.2pc. The tech-heavy Nasdaq rose 0.4pc.
CBI tells Boris Johnson to act now over cost-of-living crisis
Britain's biggest business lobby group has called on Boris Johnson to act now to tackle the cost-of-living crisis as it hit out at a "summer of drift".
The CBI warned that a power vacuum at the top of government risked leaving households uncertain how they'd pay their bills when the new energy price cap is announced.
Tony Danker, CBI director-general, said:
The economic situation people and businesses are facing requires all hands to the pump this summer. We simply cannot afford a summer of Government inactivity while the leadership contest plays out followed by a slow start from a new Prime Minister and Cabinet.
The Prime Minister and Chancellor should be taking the next few weeks to grip the emerging crisis and the planning required to tackle it. This will also give their successor – whomever that may be – the very best chance of getting quickly out of the blocks.
That means whirring the Whitehall machine into action to prepare for day one of a new premiership, allowing the candidates to interact now with officials on what can be done to help the most vulnerable people and businesses as inflation continues to rise.
Crucially, there is going to be a great deal of worry for many over how they will pay their energy bills after the next price cap. It makes no sense to wait an agonising 10 days or so from the price cap announcement to ‘day one’ of a new leader. That means the Prime Minister and the candidates should come together to agree a common pledge to support people and help quell fears.”
Avanti West Coast slashes train timetable due to 'unofficial strike'
Avanti West Coast has slashed its timetables and suspended ticket sales due to "unofficial strike action" by drivers.
The train operator said it will run as few as four services per hour from Sunday in an attempt to halt the short-notice cancellations that have plagued its operations in recent weeks.
It normally operates up to seven per hour on the West Coast Main Line.
Services between London Euston and Manchester appear to be the worst affected by the cut, with train frequencies reduced from three per hour to just one.
Avanti said the limited timetable will be in place "until further notice".
The company has also suspended ticket sales for travel from Sunday until September 11 while the new schedule is finalised to minimise the number of people disrupted.
It expects tickets for the first week of that period to be back on sale by the end of this week.
UK lithium investor plans Australian plant to ease China's grip on electric car making
The owner of a planned lithium processor in the north-east of England is to set up a refining plant in Australia as part of efforts to counter China’s dominance of the industry.
Howard Mustoe has more:
Alkemy Capital will build a plant in Port Hedland, Western Australia, to start the refining process before the material containing lithium is shipped to Alkemy’s planned $350m Tees Valley Lithium processing site.
The plant will make shipments to Europe far more efficient, as about 95pc of the raw material weight moved is waste. Initial refining in Australia can increase the lithium richness to as much as 40pc.
The project will give Australian miners of spodumene, the mineral containing lithium, “direct access to the European market”, said Alkemy director Sam Quinn. It will also reduce emissions from shipping, as the refined materials will be lighter than heavy ore.
Australia is the biggest producer of lithium, mining almost half the world’s supply in 2020 according to the US Geological Survey.
However, China dominates the refining and processing segment of the industry, owning most of the factories that turn the metal into suitable grade for batteries. China controls about nine tenths of the world’s lithium hydroxide supply.
Palantir shares slump as forecasts fall short
Shares in Palantir have fallen sharply after the data software company's forecasts for the year fell short of analysts' expectations.
Palantir said adjusted profit will be about $342m (£283m) on revenue of about $1.9bn in 2022, excluding any major future contracts with the US government. Analysts had been expecting profits of $527.9m and revenue of $1.98bn.
Shares dropped as much as 14pc.
Since getting its start in 2004 selling data analysis tools to the CIA, Palantir has won dozens of contracts with other government agencies in the US and around the globe.
But the company, co-founded billionaire Peter Thiel, has attracted controversy among privacy activists over contracts including its work with the NHS.
German power sets new record amid fresh heatwave
German power prices have hit yet another record high as a fresh heat wave sweeping the continent drove up demand.
Benchmark prices for next year have reached a fourth record in five trading days, showing the ever growing cost of keeping the lights on in Europe's biggest market.
While demand and prices usually drop in summer months, Putin's gas cuts and reduced output in France have underpinned a huge rally his year.
Germany power for 2023 rose as much as 1.8pc to €414 a megawatt-hour. That's more than quadruple the average seasonal prices over the past five years.
New car insurance policies £129 more expensive than renewals
The average cost of motor insurance for new customers is now £129 more expensive than a renewal, showing how pricing reforms have made it less attractive to shop around.
Average premiums for new policies rose by 3pc to £500, while renewed policies were virtually unchanged at £371, according to data from the Association of British Insurers.
The ABI said it was still too early to assess the impact of the FCA's rule changes, which banned the practice of signing up customers at discount prices before rapidly increasing their premium.
But the data showed a growing gap between prices paid for new and renewed policies.
Car insurance providers have also been grappling with the impact of semiconductor shortages that are hammering new car production, as well as rising prices for used cars.
NEWS | New Motor Premium Tracker data out today
Figures reflect rising costs for insurers and have increased by £5, but still £11 cheaper than the same quarter in 2021.
Find out more: - https://t.co/tZWDoKp9gJ
— ABI (@BritishInsurers) August 8, 2022
US futures rise as traders assess rate rises
US futures pushed higher this morning as traders assessed the prospect of further aggressive interest rate rises by the Federal Reserve.
Better-than-expected US jobs data has added to the case for more Fed monetary tightening, and traders are looking to inflation numbers due this week for clues on the policy path.
Futures tracking the S&P 500 rose 0.5pc, while the Dow Jones was up 0.4pc. The tech-heavy Nasdaq gained 0.6pc.
Hungary fines Ryanair £640,000 in consumer protection probe
Hungary has fined Ryanair 300m forints (£640,000) after a consumer protection investigation into the airline's decision to pass the cost of a special tax onto consumers.
In May Prime Minister Viktor Orban's government announced a tax worth 800bn forints on "extra profits" earned by major companies – a move intended to plug holes in the budget after a spending spree ahead of his re-election.
Ryanair had called on Orban's government to scrap what it called a "misguided" new tax, which is levied at a rate per departing passenger. It added that the tax would damage Hungarian tourism and the economy.
Judit Varga, Hungarian Justice Minister, said: "The consumer protection authority has found a breach of the law today, because the airline has misled customers with its unfair business practice."
North Sea oil needs more investment to stem decline, says Shell
Britain needs to keep developing new oil and gas fields in the North Sea even as it rolls out major offshore wind and storage projects across the country, Shell has said.
Simon Roddy, Shell's UK head of upstream, told Bloomberg: "The UK will still need its home-produced oil and gas, which would otherwise only be replaced by likely higher-emissions imports.
"There was only one major development consent for the whole of the North Sea last year. I don't fundamentally think that's a sustainable position."
Shell is planning to invest as much as £25bn in the UK's energy system over the next decade, three-quarters of which will be spend on renewables.
But it will also continue to develop North Sea oil and gas, albeit at a slower pace than in the past.
"We are certainly looking at other opportunities, particularly gas and around our infrastructure."
Oliver Dowden calls for 'considerable intervention' over energy bills
Tory Party co-chair Oliver Dowden has called for "intervention on a considerable scale" over surging energy bills.
He told Sky News: "Well these things don't necessarily have to be done through an emergency budget. So if you look at the £1,200 that was announced earlier this year, that wasn't through an emergency budget, but I think there is no doubt that we do need an intervention of a considerable scale to deal with this, because we have to be honest with people about the scale of the challenge that they are facing."
Asked about the rising energy price cap, he added: "Let's see when we know the exact level of the price cap, but if it looks like it's going to be at that kind of scale then of course we'll need further intervention."
Spending on fine wine and whisky on the rise, says merchant
More wealthy collectors are buying top wines and whiskies, driving a 37pc revenue jump at merchant Bordeaux Index.
The company said investors were flocking to wine and whisky as "hard assets", amid a wariness for "recently popular but now more challenging segments such as Tech and Crypto".
Fine wine market prices were up 10pc in the first half of the year, which Bordeaux Index said was driven by super-rare Burgundy wines.
It also saw an increasing number of new wealthy collectors in the market.
More people turn to cash to help budget better
The cost-of-living crisis has sparked a surge in households using cash over cards as they look to manage their budgets better.
The Post Office said personal cash withdrawals were up almost 8pc in July compared to June, noting that "more and more people [are] increasingly reliant on cash as the tried and tested way to manage a budget". It comes as inflation hit a 40-year-high.
Up until now, use of cash has been on the decline, as people buy more online and use their cards in stores.
PageGroup sees signs of a summer slowdown in hiring
London-listed recruitment company PageGroup saw a "slight slowing in time to hire" in July, as employers start to worry about the risk of recession.
Shares in PageGroup slipped 10pc after it suggested a slowdown in some markets, although the company said it was not changing its profit forecasts.
It comes after a survey last week found that UK employers were taking on new workers at their slowest pace in 17 months amid concerns over the economic outlook.
Recruiters have over the past year been buoyed by the tight labour market, which has pushed wages higher and meant larger fees for companies such as PageGroup.
Jack Dorsey tweets 'End the CCP' after China Covid report
Twitter founder Jack Dorsey has stirred up controversy by tweeting the worlds "end the CCP" in response to a report about China's strict Covid measures.
Dorsey, who was chief executive of Twitter until November, made the comments – ostensibly about China's Communist Party – while quoting a CNN report about the rigorous testing and contact tracing rolled out by Beijing.
It comes the same week that US House Speaker Nancy Pelosi visited Taiwan, inflaming relations between the US and China.
Sanctions busters in the spotlight as shadowy deals help Russia keep trading
It’s a well-known playbook. Identity theft on the high seas, a mysterious tanker docking at the wrong port, a network of brass plates in a foreign land. All are designed to evade international sanctions and keep money and goods flowing beyond borders.
But even the world’s most sanctioned countries have found holes in the methods – and the country at the top of that list is no exception, reports Szu Ping Chan.
Pound rises with GDP in focus
Sterling has climbed against the dollar after falling sharply on Friday as traders turn their attention to fresh economic data.
The pound tumbled 0.8pc at the end of last week after strong US jobs data bolstered the case for more interest rate rises and boosted the pound.
But focus is now on GDP figures due later this week, which are expected to show the UK economy shrank in the second quarter.
The pound rose 0.4pc against the dollar to $1.2117. Against the euro it was up 0.1pc at 84.25p.
UK inflation fears at record high
Inflation fears among businesses have risen to the highest on record as corporate Britain braces for a further surge in energy prices, writes Louis Ashworth.
Price rises show no signs of slowing as a weakening pound, supply chain disruptions and labour shortages force up costs, the auditor BDO said.
Its monthly index of business surveys found the labour market remained buoyant in July as companies scrambled for staff.
However, BDO warned a slowdown looks likely as the UK heads for a recession. Employment activity was the highest in two and a half years, as companies fought harder for a pool of workers restricted by post-Brexit immigration restrictions and a wave of departures during Covid.
Kaley Crossthwaite, a BDO partner, said: ““Reports of a less optimistic outlook are by no means surprising as the economy now faces the prospect of a recession towards the end of the year.
“Although it’s encouraging to see recruitment intentions remain strong, we know that talent shortages are an issue, with many businesses reporting they are struggling to find people with the right skills.”
The Works slashes outlook over Christmas cost-of-living fears
Hobby retailer The Works has slashed its outlook for the year amid fears the cost-of-living crisis will dent demand this Christmas.
Bosses said they can't be certain how customers will behave, with inflation expected to peak in the months leading up to the festive period.
Adding to waning consumer demand, the company warned high freight costs were showing no signs of easing in the short term.
It said: "It is not clear how long these market conditions will persist, which creates a heightened degree of uncertainty about how consumers will behave, particularly in the forthcoming Christmas shopping season, The Works' most important trading period."
The Works reported 1.4pc increase in like-for-like sales over its latest quarter even as sales on its website tumbled.
Online like-for-like sales dropped nearly 29pc in the first quarter of the financial year. However, they are still 40pc above pre-Covid levels.
Veolia to sell Suez UK waste division for €2.4bn
Veolia has agreed to sell Suez's waste activities in Britain to Macquarie Group for €2.4bn (£2bn) to satisfy concerns raised by the competition watchdog.
The sale will mark the final step in Veolia's acquisition of a large part of its smaller French rival amid growing demand for water and recycling services.
It comes after the Competition and Markets Authority said Veolia's takeover of Suez's UK business may hurt competition in the country and drive up prices at a time when consumers are already being squeezed.
While Veolia said it disagreed with the CMA's analysis, it agreed to sell the assets.
Joules shares surge on Next stake sale talks
Joules is the biggest market mover this morning after it confirmed it's in talks over the sale of a minority stake to Next.
The struggling fashion brand jumped as much as 21pc to 40p after it revealed the discussions, which could raise around £15m.
Joules said the investment would be made at no less than Friday's closing price of 33p.
FTSE risers and fallers
The FTSE 100 has pushed higher in early trading as positive economic data from the US and China helped to ease some recession fears.
The blue-chip index gained as much as0.6pc before easing back to a rise of 0.3pc, with banking and commodity stocks providing momentum.
Oil giants BP and Shell gained more than 1pc as oil prices jumped following strong US jobs data and Chinese exports numbers that picked up unexpectedly in July.
Miners Glencore and Anglo American were also up 1pc, tracking stronger metal and iron ore prices, while rate-sensitive banks also climbed.
Hargreaves Lansdown was the biggest riser, gaining more than 6pc.
The domestically-focused FTSE 250 rose 0.2pc. Recruiter PageGroup was the biggest laggard, down 6.3pc even after it reported a 74pc jump in half-year operating profit.
PwC fined £1.8m over botched BT audit
PwC has been fined £1.8m over its audit work for BT carried out in the wake of fraud in the telecoms giant's Italian operations in 2016.
The Financial Reporting Council (FRC) said it also fined audit partner Richard Hughes £42,000.
The FRC said both PwC and Mr Hughes admitted breaches of the rules in relation to the audit of adjustments disclosed by BT in its accounts for the year to the end of March 2017, which were made after the Italian fraud was uncovered.
As well as the fines, PwC and Mr Hughes were issued with severe reprimands by the FRC.
It added that the penalties were reduced from £2.5m for PwC and £60,000 for Mr Hughes thanks to early admissions of rule breaches.
SoftBank crashes to record loss as tech rout hits Vision Fund
SoftBank has crashed to a record loss of 3.16 trillion yen (£19bn) as a sell-off in global tech stocks continued to hammer its Vision Fund.
The Vision Fund posted a loss of 2.33 trillion yen in the three months to the end of June – eclipsing the record loss set in the previous quarter. It’s a sharp reversal from the 235.6bn yen profit posted in the same quarter a year ago.
SoftBank has been dealt a blow by the slide in global markets, which has hit its investments in companies such as Uber. The tech-heavy Nasdaq slumped 22pc over the quarter, capping its worst performance since the financial crisis in 2008.
Jaguar Land Rover owner buys Ford factory in India
The Indian car maker behind Jaguar Land Rover has inked a deal to buy a Ford manufacturing plant in Gujarat for 7.26bn rupees (£75m).
The agreement between Tata's electric vehicle division and the US company's Indian division covers land, machinery and all "eligible employees".
Ford stopped production in India last year after struggling for more than two decades to generate profits there.
The move comes as Tata tries to boost car production to meet rising demand. It said annual production at the Sanand plant will initially give it new capacity of 300,000 vehicles a year, which could be increased to 420,000.
FTSE 100 opens higher
The FTSE 100 has started the week on the front foot even as investors assess the latest prospects for monetary tightening and a looming economic slowdown.
The blue-chip index gained 0.6pc to 7,484 points.
UK's Covid venture capital fund 'mainly backed zombie businesses'
The UK's Covid venture capital fund largely invested in so-called zombie businesses, leaving it with a "significant tail of dormant companies".
The Future Fund, a £1.1bn portfolio set by by then-Chancellor Rishi Sunak and managed by British Business Bank, invested in almost 1,200 mainly early-stage companies at the height of the pandemic.
But minutes of a BBB audit committee meeting last summer, seen by the Financial Times, reveal comments from non-executive director Dharmash Mistry that “most of the companies in the portfolio had . . . limited chance of growth to a sufficient scale for success” and would therefore become “zombie businesses”.
Minutes from another meeting this year included a warning from Mr Mistry that the portfolio was “likely” to have “a significant tail of dormant companies and it would be helpful if this could be signalled in advance to manage expectations”.
Joules in talks over Next stake sale
Struggling high street retailer Joules has confirmed it's in talks to sell a stake to Next in a move that could raise about £15m.
Joules said it was also in discussions over joining Next's online platform to support its "long-term growth plans".
It follows reports that the upmarket brand was in talks to sell a 25pc stake to its larger rival. Joules didn't confirm the size of the potential stake, but said Next would become a "strategic minority shareholder".
Joules has had a miserable year so far as a series of profit warnings sparked an 80pc slump in its share price.
The company last month said it had called in advisers at KPMG to look at bolstering its finances as soaring costs and waning consumer confidence hit the group's bottom line.
Qantas bosses asked to haul luggage
The scale of the aviation sector's staff shortages has been laid bare after one airline asked its executives to haul luggage.
Qantas has written to bosses at head offices looking for 100 volunteers to leave their office jobs for three months and handle bags instead.
They're being asked to load and unload luggage, as well as to drive vehicles that carry bags between planes and terminals. Applicants must be able to move suitcases weighing as much as 32kg.
Meanwhile, the boss of JetBlue has said the US budget airline is having to over-hire staff due to the pace at which people are leaving the industry.
It comes as the sector grapples with widespread staff shortages as companies struggle to cope with a sharp rebound in demand after the pandemic.
5 things to start your day
1) Britain really isn’t working – and the collapsing NHS is to blame - Economic inactivity has risen in the UK despite falling in most of the developed world
2) Generation rent 'failed by the Government on housing' - Redrow boss issues warning after Truss and Sunak vow to ditch housing targets
3) Vegetable shortage looms as Europe battles heatwave - Lack of water and shipping chaos mean shoppers will have less choice
4) Why Europe is suffering a worse inflation crisis than Britain - The UK is suffering less inflation than the average EU nation
5) Amazon workers plot wave of strikes as pay row escalates - Company struck by spontaneous walkouts last week
What happened overnight
Stocks dropped in Hong Kong this morning, with the Hang Seng Index dipping 0.7pc.
The Shanghai Composite Index fell 0.4pc and the Shenzhen Composite Index on China's second exchange also eased 0.4pc.
Tokyo stocks traded within a narrow range. The benchmark Nikkei 225 index opened low, but then trended up 0.2pc. The broader Topix index trimmed losses and was off 0.06pc.
Coming up today
Corporate: Clarkson, PageGroup (interim results)