Macron to nationalise EDF as France faces up to threat of blackouts

·28 min read
France EDF energy crisis nationalisation Russia Ukraine gas nuclear - REUTERS/Pascal Rossignol
France EDF energy crisis nationalisation Russia Ukraine gas nuclear - REUTERS/Pascal Rossignol

Emmanuel Macron is to fully nationalise France’s debt-laden nuclear power giant EDF as it scrambles to shore up energy supplies in the wake of Russia’s invasion of Ukraine.

The French state will take control of the 16pc of the company it does not already own, prime minister Elisabeth Borne announced on Wednesday, following months of speculation about its future.

She said France needed to “ensure our sovereignty faced with the consequences of the war and the colossal challenges ahead,” while “the climate emergency requires strong, radical decisions”.

Ms Borne said: “We need to have full control of the production and our energy Future.

“That is why I confirm today the intention of the state to hold 100pc of the capital of EDF.”

She was booed during her 90-minute speech on Wednesday as she set out the government’s priorities. She reiterated Mr Macron’s campaign pledge for France to be the “first great nation to exit from fossil energies”.

Ms Borne gave no further details about the timing of the state’s nationalisation plans or how it would be done. Shares in EDF rose 14.53pc in Paris following the announcement to close at €8.98, valuing the energy giant at €34.7bn (£29.6bn).

Analysts at Barclays said investors were pricing in an “increased likelihood of such a scenario”.

Founded in 1946, EDF is 84pc owned by the French state, with the remainder held by retail and institutional investors, including Blackrock and Vanguard, and 1.32pc by its employees.

It made sales last year of €84.5bn from nuclear, coal, hydropower, gas and wind power stations around the world, including France’s 56-strong nuclear fleet, which produces more than 70pc of its electricity.

Its assets include the UK’s nuclear fleet and it is also building Britain’s first new nuclear plant in a generation, Hinkley Point C, and is in talks to build a second, Sizewell C, in Suffolk.

However, debts have swelled over several years to stand at €43bn, amid outages at its French plants, historically low electricity prices, and rules forcing it to sell a chunk of its power at cut price to rivals.

Its outlook darkened this year, with half its nuclear fleet out of action for checks and maintenance owing to corrosion problems. Meanwhile, in April, the French government ordered it to sell more power at lower prices to rivals, to try and shield consumers from surging costs. EDF said the move would cost it about €8bn. The French state has pumped in about €2.1bn to help.

The Kremlin’s war on Ukraine has triggered an energy crisis across Europe amid fears that gas supplies from Russia will be cut off. The low output of France’s nuclear fleet has added to the problems, given France typically exports power to plug gaps in others’ supplies.

Power prices in Europe climbed to a record €345 per MWh on Wednesday, as fears grow over Russian supplies. However, oil prices fell below $100 a barrel for the first time since April, as traders priced in the likelihood of recessions which would cause demand to fall. Brent Crude dipped to $99.78 a barrel by mid-morning, before climbing back up to $100.61 by early evening.

EDF’s future has long been a thorny question in France. Mr Macron backed away from plans to spin-off the company’s renewable energy division last year following opposition from unions. Mr Macron lost his majority in the National Assembly in June, potentially complicating efforts at reform. However, analysts believe a buyout of minority shareholders would not require a parliamentary vote.

04:05 PM

Handing over

That's all from me for today – thanks for following! Rachel Millard is in charge for the rest of the day.

03:57 PM

Markets shrug off political drama but brace for more

UK markets have largely shrugged off the chaos in Westminster today, though investors are likely gearing up for more turmoil ahead.

Boris Johnson is clinging on to power despite a wave of Government resignations, but markets have largely priced in his exit after a series of scandals.

The pound dropped to more than two-year lows but the moves were largely driven by a rally in the dollar as investors rushed to safe-haven assets amid fears of a recession.

The FTSE 100 gained 1.3pc, clawing back some of yesterday's losses. Some analysts attributed this to hopes of more spending under new Chancellor Nadhim Zahawi, but the gains were in line with broader markets.

03:24 PM

Oil prices drop below $100 for first time since April

Oil prices have dropped below $100 a barrel for the first time since April amid fears a looming recession will hurt demand.

Benchmark Brent crude dipped below the milestone to its lowest since April 25. That came after it dropped $10 on Tuesday in its third-largest fall ever in dollar terms.

West Texas Intermediate was trading at around $98 a barrel after shedding 2pc.

Renewed recession fears have sparked a sell-off in commodities, with oil facing additional pressure from worries that high prices will hit demand.

However, analysts at Goldman Sachs argued the fears were overblown.

They wrote: “While the odds of a recession are indeed rising, it is premature for the oil market to be succumbing to such concerns.

“The global economy is still growing, with the rise in oil demand this year set to significantly outperform GDP growth.”

02:57 PM

Struggling homeowners ‘too embarrassed’ to accept support

Struggling borrowers are ignoring offers of support because they are ashamed and embarrassed about their financial difficulties, the City watchdog has warned.

Simon Foy has more:

Research by the Financial Conduct Authority (FCA) found that more than two-fifths of Britons suffering financial hardship during the cost of living crisis did not respond when their lender tried to contact them about their difficulties.

The regulator said that many people were not speaking to their banks or families due to the shame, guilt and embarrassment they felt at being in financial difficulty.

It came as the FCA urged borrowers to contact their lender if they are struggling to make payments.

Last month, the watchdog told banks to provide customers with help and support that takes into account their individual circumstances if they are struggling with payments, including agreeing a reduction or a freeze for a period if necessary.

02:41 PM

Wall Street opens flat ahead of Fed minutes

Wall Street's main indices have had a subdued start to the day as investors await minutes from the Federal Reserve's meeting last month.

The S&P 500 and Dow Jones were little changed at the opening bell, while the tech-heavy Nasdaq ticked up 0.1pc.

02:21 PM

EU hints at trade retaliation over Brexit plan

The EU's chief Brexit negotiator has hinted that the bloc could roll out retaliatory trade measures against the UK over its plans to override parts of the withdrawal agreement.

Maros Sefcovic said the proposal "seriously harmed" the bloc's interest, adding it would be forced to act if the Government adopted the bill.

The so-called Trade and Cooperation Agreement allows for the partial or full suspension of benefits in case of a breach of the Withdrawal Agreement, including the Northern Ireland protocol. In that case, the EU could slap tariffs on UK exports to its territory.

Mr Sefcovic said no alternative solution to the protocol, which keeps Northern Ireland in the single market while creating a customs border with the rest of the UK, had been found.

02:04 PM

Canada to throw away millions of unwanted AstraZeneca doses

AstraZeneca Covid vaccine Canada - AP Photo/Manu Fernandez, File
AstraZeneca Covid vaccine Canada - AP Photo/Manu Fernandez, File

Canada is to throw out almost 14m doses of AstraZeneca's Covid vaccine after it struggled to find a country that would accept them, writes Hannah Boland.

Canada last year unveiled plans to donate around 17.7m doses of the AstraZeneca Covid jab to other countries, after concerns over the safety of the vaccine prompted it to prioritise those made by BioNTech and Moderna.

It had initially ordered 20m AstraZeneca doses, although largely stopped using them amid questions over its potential link to very rare blood clots.

However, Canadian health officials have now said 13.6m of the doses it was planning to donate – or 77pc – had now expired and would need to be thrown away.

A spokesman for Health Canada said: “Due to limited demand for the vaccine and recipient country challenges with distribution and absorption, they were not accepted.”

Canada sent around 4.8m AstraZeneca doses to other countries, including islands in the Caribbean and countries in South America.

It has also donated another 4.1m of the doses using the Covax scheme, by which countries provide funds to give vaccines to lower income countries.

​Read Hannah's full story here

01:47 PM

Gas rally runs out of steam as Norway scraps strikes

Natural gas prices halted their surge after Norway's Government intervened to end a major strike.

The Norwegian Government proposed a compulsory wage board to resolve a dispute that could have shut down more than half the country's gas exports.

In a worst case scenarios, all of Norway's exports to the UK could have been halted.

Energy giant Equinor said three oilfields had restarted production and the remained would be back in full operation within a few days.

Meanwhile, Germany rushed through new laws allowing it to rescue struggling energy companies, further helping to calm market nerves.

Benchmark European prices dipped today after five sessions of gains that saw prices jump 28pc.

01:16 PM

US crypto lender files for bankruptcy

A US cryptocurrency lender has filed for bankruptcy protection after failed attempts to call in a loan worth hundreds of millions, as meltdowns sweep through the industry.

Gareth Corfield has more:

Voyager Digital, which accepts deposits in real-world currency and lets users trade digital tokens through its app, filed for Chapter 11 bankruptcy protection on Wednesday.

It comes after the company had attempted to call in a $670m (£561m) loan made to Three Arrows Capital, a crypto-focused hedge fund. It culminated in a court-ordered liquidation of Singapore-based Three Arrows last week.

Stephen Ehrlich, Voyager’s chief executive, said: "Today we began a voluntary financial restructuring process to protect assets on the platform, maximise value for all stakeholders, especially customers, and emerge as a stronger company.”

Three Arrows had borrowed about 15,250 Bitcoins and the equivalent of $350m in US Dollar Coin (USDC) from Voyager. USDC is a cryptocurrency whose value is pegged to real-world currency.

A British Virgin Islands court was told Three Arrows had failed to meet several margin calls as the ongoing rout in cryptocurrencies shrank its value, resulting in Voyager issuing a notice of default.

12:34 PM

Shell to build Europe's largest green hydrogen plant

Shell has decided to push ahead with plans to build Europe’s largest plant producing hydrogen from renewable power as oil majors bet the fuel could be key to cutting carbon emissions.

Holland Hydrogen I will include 200 megawatts of electrolyzers, powered by a wind farm off the coast of the Netherlands.

That’s 10 times the size of the largest existing green hydrogen facility in Europe. Shell didn’t disclose the value of the investment.

Green hydrogen is a key part of Europe’s plans to cut emissions and reliance on imported natural gas from Russia. The clean-burning gas can be used to replace fossil fuels in industrial processes such as chemicals production, heavy transportation and power generation.

Anna Mascolo at Shell said: "Renewable hydrogen will play a pivotal role in the energy system of the future and this project is an important step in helping hydrogen fulfill that potential."

12:29 PM

Microsoft's $69bn Activision takeover faces watchdog probe

Activision Microsoft CMA Call of Duty - AP Photo/Activision
Activision Microsoft CMA Call of Duty - AP Photo/Activision

It's a busy day for the competition watchdog.

After announcing an investigation into Amazon, the Competition and Markets Authority has said it's also reviewing Microsoft's $69bn (£58bn) takeover of video game giant Activision.

The CMA said it was considering whether the deal would result in a substantial lessening of competition within any market or markets in the UK. It's inviting comments by July 20.

The deal for the Call of Duty owner is Microsoft's largest ever. The all-cash takeover will hand almost $400m to Activision chief executive Bobby Kotick, who's been accused of presiding over a culture of sexual harassment and misconduct claims and once threatened to have an assistant killed.

Read more on this story: Activision Blizzard boss scores $400m payday after Microsoft pounces on Call of Duty maker

12:04 PM

US futures swing as recession fears linger

US futures have swung between gains and losses this morning amid lingering concerns about an economic downturn.

Markets were plunged deep into the red yesterday as renewed fears of a recession prompted selling by investors around the globe.

The FTSE 100 posted strong gains this morning, while the pan-European Stoxx 600 index also climbed as markets regained some ground.

But Wall Street looks set for a more cautious index, with futures tracking the S&P 500, Dow Jones and tech-heavy Nasdaq were all unchanged.

11:39 AM

Bank of England admits misleading the markets

The Bank of England misled markets over the pace of interest rate rises, its chief economist has admitted.

Louis Ashworth has the details:

Huw Pill said the Monetary Policy Committee’s repeated commitments to “further tightening” indicated it would steadily increase the cost of borrowing in small, steady increments.

The language – which Mr Pill described as “a trap” – was used following meetings at the end of the last year and early this year.

“Not only did this give a false – and thus misleading – impression that Bank Rate was set to move mechanically and unconditionally upward over the coming months, but it also discouraged markets from pricing the macroeconomic risks to the interest rate outlook,” he said.

“That mispricing is ultimately costly for the efficiency of capital allocation.”

​Read Louis' full story here

11:16 AM

National Grid ramps up pressure on industry to cut gas use

National Grid is set to turn the screw on big energy users to curb their gas use this winter amid fears Putin's supply cuts could lead to shortages.

Britain's grid operator is meeting regional gas network companies tomorrow to discuss how to get more factories and businesses to cut their consumption.

With many companies reluctant to step up voluntarily, the grid managers will examine new incentives to encourage reduced gas use.

Getting large industrial users to agree to cut gas use could be key in avoiding shortages this winter. Plans have already been rolled out to keep coal plants online if gas flows are cut further.

There are also similar plans being prepared to reduce electricity use if needed.

10:49 AM

Regulator to investigate Amazon over anti-competitive practices

Amazon CMA competition - REUTERS/Carl Recine
Amazon CMA competition - REUTERS/Carl Recine

Amazon has been hit with an investigation by UK regulators over concerns about anti-competitive practices on its ecommerce site.

The Competition and Markets Authority said it will consider whether Amazon has a dominant position in the market and whether it is abusing this position by giving an unfair advantage to its own retail business or sellers that use its services over third-party sellers.

The probe will look at the company's data collection practices, as well as how it allocates preferential placement to some sellers and eligibility for Prime delivery.

Sarah Cardell, general counsel at the CMA, said:

Thousands of UK businesses use Amazon to sell their products and it is important they are able to operate in a competitive market.

Any loss of competition is a loss to consumers and could lead to them paying more for products, being offered lower quality items or having less choice.

10:34 AM

Pound steadies near two-year low as Boris Johnson clings to power

Beaten-down sterling steadied this morning but didn't stray far from its two-year lows against the dollar as Boris Johnson clung to power despite a wave of resignations.

The Prime Minister has been hit by a string of ministerial resignations this morning after the dramatic departure of both Rishi Sunak and Sajid Javid last night.

Adam Cole, head of currency strategy at RBC Capital Markets, said: "Markets have now all but written off Boris Johnson as PM.

"There is no real clear frontrunner to replace him and the potential PMs run to a dozen different people, without a view on that it’s difficult to say what Boris' replacement would mean for policy."

The pound edged up 0.1pc against the dollar to $1.1975, but remained near its lowest level since March 2020. Against the euro it rose 0.3pc to 85.63p.

10:24 AM

Airbnb prices in London soar as UK weighs restrictions

Airbnb London prices - REUTERS/Gabrielle Lurie/File Photo
Airbnb London prices - REUTERS/Gabrielle Lurie/File Photo

The cost of renting a flat in London on Airbnb has jumped amid a surge in demand from tourists.

The rebound from the pandemic means the median rate per night for an entire property is about 25pc higher than it was in 2019, according to data from Inside Airbnb.

Westminster and Kensington & Chelsea were unsurprisingly the most expensive boroughs. A place in Westminster would have set you back around £256 per night in May.

The Government is considering restrictions on short-term rentals as part of a review into the impact of sites like Airbnb. New rules could include property inspections to enforce regulations around noise, safety and anti-social behaviour.

10:04 AM

Oil helps Putin dodge worst of economic pain

Russia appears to be on track for a much less severe recession this year than previously expected, as continued oil sales helped to offset the impact of sweeping sanctions.

Economists from JP Morgan, Citigroup and other major banks are slashing their forecasts for the drop in output this year to as little as 3.5pc.

That appears to dismiss expectations that Putin's invasion of Ukraine could spark the deepest economic slump in a generation.

Officials in Moscow, some of whom predicted a contraction of as much as 12pc, are now preparing to improve forecasts to less than half that.

09:56 AM

Decision on Newport Wafer Fab delayed again

The Government has delayed its decision on whether to allow a Chinese company to buy Britain's largest semiconductor factory for another two months.

Business Secretary Kwasi Kwarteng was due to issue his final verdict last night on the takeover of Newport Wafer Fab by Nexperia, a Dutch division of China's Wingtech.

However, he has now sought a further 45 working days to analyse the controversial takeover amid strained tensions with Beijing, the Financial Times reports.

It comes despite the head of Nexperia telling MPs on Tuesday that a quick decision was needed to end uncertainty.

09:46 AM

Reaction: Construction sector now feeling full impact of war

Joe Sullivan, partner at accountancy group MHA, says the full inflationary effects of Russia's war are now feeding through to the construction sector.

In recent months we had seen material prices start to level off, but we’re now seeing the full effects of the war in Ukraine work their way through the system, driving up prices and ensuring we continue at these price levels for some time.

Although the war began on 24 February, it takes time for the range of effects to work their way through. Together with these input cost increases, further shortages of raw materials like timber and manufactured goods such as generator components are behind the growing number of insolvencies in the construction sector.

The remarkable success of the residential property market continues but the rate of price increases is now slowing. However, the restriction in the supply of new plots is the key factor which will guard against the house ‘price bubble’ bursting significantly.

09:41 AM

UK housebuilding slows despite record prices

The UK's construction industry suffered its weakest growth since September last month as it braces for a slump in demand due to soaring inflation and an economic slowdown.

S&P Global's construction PMI fell to 52.6 in June from 56.4 the month before. That was below the reading of 55 forecast by economists.

Work on residential projects fell for the first time since 2020, despite house prices reaching a record. That suggests caution is increasing among housebuilders amid expectations of a slowdown in the market.

Worries about the outlook for the economy also dragged down companies' expectations for the future to the weakest since July 2020.

Tim Moore, economics director at S&P Global, said:

The gloomy UK business outlook and worsening consumer demand due to the cost-of-living crisis combined to put the brakes on construction growth.

House building has expanded more quickly than the rest of the construction sector over the course of the pandemic, but now finds itself as the worst-performing broad category.

Construction PMI - S&P Global/CIPS
Construction PMI - S&P Global/CIPS

09:27 AM

HMRC is ‘hiding the true cost of National Insurance raid’ – here’s what you’ll really pay

The taxman has been accused of using "sleight of hand" to disguise the true cost of Boris Johnson's National Insurance raid in an online calculator.

Harry Brennan has more:

A HMRC tax tool launched to help workers understand the impact of their changing National Insurance contributions falsely makes it look as if the Government is reducing their bills rather than increasing them, campaigners have said.

From today, the threshold at which most people start to pay National Insurance on their earnings is rising from £9,880 to £12,570 a year – a change hailed as the biggest tax cut of the decade by the Prime Minister, despite the fact that he increased the rate of the tax earlier in 2022, meaning the vast majority of workers are still paying extra.

Read Harry's full story here

09:23 AM

Trainline shares steam ahead on solid rail recovery

Trainline shares surged in early trading after the online ticket seller shrugged off the threat of more strikes to boost its sales outlook for the year.

Shares jumped as much as 24pc after the group said net ticket sales rose 16pc in the four months to June 30 compared to pre-Covid levels.

It now expects full-year net ticket sales to rise by between 18pc and 27pc against two years ago.

Trainline said the rebound was being driven by a faster-than-expected rebound in rail travel across Europe and a boost from tourism, in particular from America.

Chief executive Jody Ford said:

Not only is domestic rail travel rebounding at an impressive rate across Europe, but tourists are also returning strongly, with Americans leading the way.

More and more people are recognising that travelling by train is better for the environment and the best way to travel cross-country and cross-border at speed.

With an increasing number of train carriers offering high-speed services across the Continent, the appetite for train travel is set to increase.

09:12 AM

Petrol prices surge by monthly record in June

UK petrol prices rose by the most ever for the month of June amid soaring inflation and a cost-of-living crisis that’s gripping the country.

The average cost of petrol at the pump increased 16.59p per litre last month, surpassing the record of 11p set only this past March, according to the RAC.

The price rose every day in June, reaching a record 191.43p on June 30.

Prices for diesel also rose to just under £2, RAC data showed. The increases have come despite wholesale fuel prices dropping for the past five weeks.

Simon Williams, fuel spokesman at the RAC, said:

The rate at which pump prices have been rising over the last four weeks is hard to comprehend.

There’s no doubt that drivers are getting an incredibly raw deal at the pumps at a time when the cost-of-living crisis is being felt ever more acutely.

09:04 AM

Amazon strikes deal to take 15pc stake in Grubhub

Grubhub Just Eat Takeaway Amazon - Andrew Harrer/Bloomberg
Grubhub Just Eat Takeaway Amazon - Andrew Harrer/Bloomberg

Amazon has inked a deal to take a stake in Just Eat Takeaway's Grubhub and will offer its US Prime users a one-year membership to the service.

The ecommerce giant will receive options for a 2pc stake in Grubhub and will have the opportunity to increase the holding to 15pc.

Shares in Just Eat jumped more than 16pc in Amsterdam – its biggest one-day gain since 2018.

Just Eat said the membership agreement will renew every year unless either side terminates it.

The Dutch company announced plans to find an investor or buyer for the US business back in April, less than a year after buying it for $7.3bn.

Chief executive Jitse Groen is under pressure from investors to reignite growth amid fierce pressure in the food delivery market.

08:55 AM

Lloyds boss warns on surge in customer debt

Lloyds debt cost-of-living crisis - Chris Ratcliffe/Bloomberg
Lloyds debt cost-of-living crisis - Chris Ratcliffe/Bloomberg

The boss of Lloyds said the bank has seen the number of customers with persistent debt problems jump by almost a third as the cost-of-living continues to bite.

Charlie Nunn, who took over at the high street lender last year, said customers are "concerned" about the economy but said he believes many are talking "too negatively" about the financial outlook.

That's despite forecasts that inflation will surge to 11pc later this year amid jumps in the cost of energy, food and raw materials.

Mr Nunn told BBC Radio 4 that Lloyds research shows three-quarters of its customers are worried about recent price hikes and the impact this is having on savings.

He said:

Customers are concerned, and they should be. We have seen some areas where there's real points of challenge.

Around 80pc of individuals and UK customers and families have less than £500 worth of savings in their current account and their savings account. They might have money elsewhere, but what we can see is less than £500.

Lloyds said the proportion of people with persistent debt has increased by 30pc since the end of 2021 as the financial backdrop continues to worsen.

08:39 AM

FTSE risers and fallers

The FTSE 100 has surged in early trading, recovering much of yesterday's losses even as investors brace for more political uncertainty.

The blue-chip index jumped 2.3pc after tumbling almost 3pc as recession fears sparked its worst day of losses in three weeks.

Boris Johnson has appointed Nadhim Zahawi as Chancellor after Rishi Sunak's dramatic resignation, but he's still facing major doubts over his future.

The FTSE 100 was driven higher by gains for major stocks including AstraZenecaShell and BP.

Abrdn was the biggest riser, gaining 7.5pc after announcing plans to return £300m to shareholders via a share buyback. Fresnillo was the biggest exception, shedding 2pc after Credit Suisse slapped it with an underperform rating.

The domestically-focused FTSE 250 rose 1.8pc. Trainline surged more than 20pc after raising its guidance for the year on a better-than-expected recovery in passengers.

08:27 AM

2m households missed bill every month this year

More than 2m households have missed a bill payment every month this year as Britons struggle to make ends meet amid the cost-of-living crisis.

An estimated 2.1m households missed or defaulted on at least one mortgage, rent, loan, credit card or bill in June, according to consumer group Which?

An estimated 2m or more households have missed a payment every month so far this year.

Although those on lower incomes are most severely affected by the rising cost of living, the research suggests that consumers across all ages, regions and income bands are struggling.

Rocio Concha, Which? director of policy and advocacy, said:

Our research shows that a relentless cost-of-living crisis is continuing to put huge pressure on household finances – with consumer confidence in the economy plummeting to its lowest point since the pandemic.

The government and businesses must ensure that targeted support reaches the ever-growing number of consumers struggling to make ends meet.

08:22 AM

Cunliffe vows to do 'whatever it takes' on inflation

Deputy Governor Jon Cunliffe has doubled down on the Bank of England's promise to tackle inflation, saying it will do "whatever is necessary".

He told BBC Radio 4: "We will act and we will act forcefully. We will use those tools to ensure that the economic conditions are not ones in which inflation becomes embedded."

The language echoes that used by the MPC in its June decision, which was seen as a hint that officials would consider accelerating a series of rate increases that started in December.

That’s raised the possibility of a 50 basis point hike next month, which would be the largest since the Bank gained independence in 1997.

08:03 AM

FTSE 100 jumps at the open

The FTSE 100 has pushed sharply higher at the open after recession fears sparked a global market sell-off on Tuesday.

The blue-chip index rose 1.5pc to 7,130 points.

08:00 AM

Zahawi denies resignation threats

The new Chancellor has denied reports that he threatened to resign if he wasn't given the top job at No 11.

He said: "No, I didn't threaten to resign at all... That is not true. By the way, this is a team game."

However, asked whether he thought about resigning, Mr Zahawi didn't offer a direct denial. He also sidestepped a question about whether he'll run for leader when there's a vacancy.

And when grilled about why he took the job amid accusation about Boris Johnson's integrity, he said:

You don't go into this job to have an easy life.

You make some tough decisions every day. Sometimes it's easy to walk away, but it's much tougher to deliver for the country.

07:53 AM

Zahawi stands firm on public sector pay

Mr Zahawi appears to be taking a tough line on public sector pay, even as discontent grows amid surging inflation.

Britain is bracing for widespread strikes – particularly on the railways – as unions hit back over below-inflation pay rises.

But the newly-appointed Chancellor said the Government needed to be careful about not driving prices even higher.

He told Sky News: "The important thing is to get inflation under control, be fiscally responsible.

"The first thing we've got to do is make sure that we are really careful about, whether it's public sector pay, that inflation doesn't continue to be fuelled."

07:48 AM

Zahawi vows 'nothing off the table' on tax cuts

Good morning. 

It's a baptism of fire for new Chancellor Nadhim Zahawi, who's been grilled on his plans for the UK economy on his first day in the job.

Mr Zahawi, who was appointed following Rishi Sunak's dramatic resignation last night, said: "I will look at everything. There’s nothing off the table."

He hinted at cuts to corporation tax, saying: “I want to make sure we’re as competitive as we can be while maintaining fiscal discipline.”

But the new Chancellor said his main priority was to “rebuild and grow the economy” as surging inflation and the threat of a recession puts increasing strain on British households.

5 things to start your day

1) Scooter couriers face their last delivery amid green push Safety and environmental concerns call into question whether the delivery scooters will survive in a post-pandemic world.

2) Strike threat to UK gas supplies averted after Norway intervention The Government moved last night to prevent strikes that would have put Britain's gas supplies at risk.

3) Jeremy Warner: We must not follow China into a never-ending lockdown nightmare

4) German drugmaker accused of stealing Covid vaccine technology CureVac claims BioNTech has taken the mRNA technology behind Britain's Covid booster jab.

5) Heathrow faces more summer travel chaos as staff back July strike Union has warned of 'considerable delays' as refuelling staff back three-day walkout.

What happened overnight

Hong Kong stocks dropped at the start of trade today, with the Shanghai Composite Index losing 0.4pc.

The Shenzhen Composite Index on China's second exchange eased 0.3pc and the Hang Seng Index slipped 0.4pc.

Tokyo stocks opened lower, with the benchmark Nikkei 225 index losing 0.8pc.

Coming up today

Corporate: Redde Northgate (full-year results); Bellevue Healthcare Trust (interims); Ten Entertainment, Robert Walters (trading update)

Economics: Composite PMI, services PMI (US); retail sales, economic growth forecasts (EU); construction PMI (UK)

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