FTSE 100 rises 0.7pc as commodity prices rebound
Matthew Lynn: Michael Gove is a one-man economic catastrophe
Donald Trump’s plans to take his social media app public are facing another setback after a federal grand jury issued subpoenas to the company trying to buy it.
The former president launched Truth Social in February, a year after he was banned from Twitter, Facebook and YouTube in the wake of the US Capitol riots.
Trump Media and Technology Group, which operates the app, was in the process of being bought by a special purpose acquisition company (Spac) called Digital World Acquisition Corp in a deal that would take it public.
But Digital World revealed that it and every member of its board has received subpoenas from a grand jury in New York.
It warned that the subpoenas, which are seeking a number of documents linked to the company, could delay the takeover.
It’s the latest blow to Trump’s media company, which is already facing investigations by the Securities and Exchange Commission and other regulators over potential wrongdoing ahead of the planned deal.
That's all from us, thank you for following! Before you go, have a look at the latest stories from our reporters:
Italian eyewear billionaire Leonardo Del Vecchio dies at 87
Italy's Leonardo Del Vecchio, who rose from childhood poverty to build the eyewear empire that owns brands such as Ray-Ban and Oakley, has died at the age of 87.
Del Vecchio added a dash of Italian style to spectacles and became one of Europe's wealthiest men, investing some of his riches to build stakes in Italian financial group Mediobanca and insurer Generali.
The billionaire founded the Luxottica business in 1961, initially to supply components for glasses, and remained the chairman and major shareholder in the world's biggest eyewear group after it combined forces with France's Essilor in 2018.
Partly raised in an orphanage, Del Vecchio's rags-to-riches story mirrored Italy's own recovery after World War Two.
"A leading figure in Italian business for more than 60 years, Del Vecchio created one of the country's largest companies from humble beginnings," said Prime Minister Mario Draghi, calling the entrepreneur "a great Italian".
Post Office workers plan strike for next month
Following strikes by rail workers and barristers, Post Office employees are next. Some 114 Crown Post Office locations will close on July 11 to protest against wages.
An offer of a 3pc raise and one-off payment of £500 for employees at the state-owned utility is “woefully inadequate” with inflation hitting 9.1pc in May and expected to rise further, the Communications Workers Union said.
The Post Office was separated from Royal Mail in 2012.
Andy Furey, the assistant secretary of the CWU, said: “This dispute is about dignity and respect for hard-working employees - essential public servants who, as key workers, provided unprecedented customer service during the pandemic."
FTSE 100 hits one-week high
The FTSE 100 has ended at a more than one-week high today, as an easing of Covid restrictions in China and the prospect of global infrastructure funding brought relief to commodity prices, lifting shares of major oil and mining companies.
The commodity-heavy FTSE 100 rose 0.7pc, hitting its highest closing level since June 16 at 7,258.
"The burst of global enthusiasm for equities has put a spring in the step of the FTSE 100 at the start of the week," Hargreaves Lansdown analyst Susannah Streeter said.
"It is hoped this scheme, seen as a counter to China's Belt and Road Initiative, will set off a spurt of spending and demand for commodities around the world."
Break-up of nuclear sub contractor to start within months of US takeover
The break-up of one of Britain's most sensitive defence companies will begin as soon as this year if a US takeover is signed off by the Government. Howard Mustoe has the exclusive:
Parts of Ultra Electronics will be offloaded within months by Boston-based Advent International if its £2.6bn sale is approved by the Business Secretary Kwasi Kwarteng, insiders said.
Advent intends to launch an immediate strategic review of Ultra — which provides secret kit to Britain's nuclear submarines — before pressing ahead with the sale of non-defence operations that it owns.
Telecom groups agree to Westminster's cost of living plans
Broadband companies and mobile operators have committed to allow struggling customers to move to cheaper packages without charge, the Government has announced, as part of its efforts to ease a growing cost of living crisis.
Other commitments taken by companies such as BT, Virgin Media O2, Vodafone and Sky included agreeing manageable payment plans, and options to improve existing low-cost offers and increase promotion of existing deals.
"This latest intervention means anyone struggling to pay their broadband or mobile bill as a result of global price rises can expect support from their provider if they ask for it," said the department for Digital, Culture, Media and Sport.
It’s a difficult time for lots of people up and down the country and we must find as many ways as possible to support families across the UK. We can’t do it without industry and I want everyone to play their part.
— Nadine Dorries (@NadineDorries) June 27, 2022
France urges TotalEnergies to do more to ease fuel price pain
French finance minister Bruno Le Maire has called on TotalEnergies to do even more to help customers cope with high fuel prices by extending and increasing rebates.
As fuel prices hit record highs this year, the French energy company yielded to government pressure by offering a 0.10€ (£0.08) rebate on prices at the pump until the end of August, in addition to an 0.18€ rebate from the state.
"I would like Total to keep up its efforts and why not increase it?" Le Maire said on BFM TV shortly before a meeting with the company's chief executive, Patrick Pouyanne.
After the meeting, a finance ministry source told Reuters that TotalEnergies shared the opinion that companies have a part to play in fighting inflation.
"They have some work to do to make the best possible offer in the coming days," the source said.
That's all from me for today – thanks for following! Handing over to Giulia Bottaro now.
Cake Box sets sights on 200 stores
Cream cake retailer Cake Box has outlined plans to open more stores as it reported a pre-tax profit of £7.7m for the latest financial year.
This marked an 83.3pc jump from the previous years as it continued its post-pandemic recovery. Revenue rose by 50.7pc from £21.9m to £33m.
Neil Sachdev, non-executive chairman of Cake Box, said the business aims to open 24 new stores in the coming year, which should bring the total to 200 by autumn.
He added that the business will rely on e-commerce more heavily as this financial year saw the cake company record a 41pc growth in online sales.
Mr Sachdev said:
E-commerce is a key sales channel, and we continue to increase our capability and expand our customer reach through a dedicated delivery service. This will form an integral part of our growth over the next two to three years with the potential for Cake Box to be a 50/50 online and bricks-and-mortar business.
Coinbase slumps as Goldman Sachs cuts to sell
Shares in Coinbase have tumbled after Goldman Sachs downgraded the company to a sell rating amid a deep sell-off across the crypto market.
The cryptocurrency exchange fell more than 8pc in early trading, putting it on track to extend a 75pc decline this year.
Bitcoin has loss more than half its value in the last six months, with fears mounting that the notoriously volatile sector is heading for a "crypto winter".
Coinbase has already announced plans to lay off 18pc of its workforce as it battles to keep a lid on ballooning costs.
Goldman analyst William Nance cited the "continued downdraft in crypto prices" as well as a broader drop in activity levels across the industry.
He wrote: "We believe Coinbase will need to make substantial reductions in its cost base in order to stem the resulting cash burn as retail trading activity dries up."
UK to consult with WTO on steel tariffs
The Government has said it will consult with other countries at the World Trade Organization on its plan to extend steel tariffs after Boris Johnson said it was “reasonable” to use them to protect Britain’s domestic industry.
A No 10 spokesman said that “no decision has yet been taken” ahead of a June 30 deadline when some of the tariffs will expire. He added that the decision “will balance our international obligations and the national interest.”
The UK has proposed to extend safeguard tariffs and quotas on certain steel products for a further two years, after International Trade Secretary Anne-Marie Trevelyan said that ending them may cause “serious injury” to British producers.
On Sunday, Mr Johnson said UK steel ought to enjoy the “same protections” as in other European economies.
The Telegraph reported over the weekend that the Prime Minister is preparing measures designed to protect UK manufacturers from a “flood of cheap steel” from overseas in a move that could appeal to voters in traditionally Labour-voting steel-producing areas.
Wall Street rises as rebound continues
Wall Street's three main indices have pushed higher at the opening bell as the rebound in stocks continued.
Investors are examining the latest data to see whether inflation could have peaked, allowing the Federal Reserve to pull back on aggressive interest rate rises.
Figures released this afternoon showed an unexpected rise in US durable goods orders – a sign business investment is holding up.
The S&P 500 rose 0.4pc, marking the third straight day of gains for the benchmark index. The Dow Jones was up 0.2pc, while the tech-heavy Nasdaq jumped 0.6pc.
What Russia’s debt default means for the world
Russia has defaulted on its foreign-currency sovereign debt after failing to make payments to creditors for the first time in a century.
But what does that mean? Here's a round-up of the implications for Russia and the world, courtesy of my colleague Louis Ashworth.
Credit Suisse found guilty in money laundering case
Credit Suisse and a former employee have been found guilty of failing to prevent money laundering in Switzerland's first criminal trial of one of its major banks.
The trial, which included testimony on murders and cash stuffed into suitcases, is seen as a test case for prosecutors taking a potentially tougher line against the country's banks.
The judges looked at whether Credit Suisse and the former employee did enough to prevent an alleged Bulgarian cocaine trafficking gang from laundering profits through the bank from 2004 to 2008.
Both Credit Suisse and the former employee – who cannot be named under Swiss privacy laws – had denied wrongdoing.
The Federal Criminal Court said it found deficiencies within Credit Suisse both with regard to the management of client relations with the criminal organisation and with regard to the monitoring of the implementation anti-money laundering rules.
"These deficiencies enabled the withdrawal of the criminal organisation's assets, which was the basis for the conviction of the bank's former employee for qualified money laundering," the court said.
Credit Suisse faces a fine of 2m Swiss francs (£1.7m).
US durable goods orders climb
Orders placed with US factories for durable goods rose more than expected in May, suggesting business investment remains firm even in the face of inflation and a possible recession.
Bookings for durable goods – defined as items meant to last at least three years – increased 0.7pc in May after a revised 0.4pc rise the previous month, according to the Commerce Department.
The value of core capital goods orders, a proxy for investment in equipment that excludes aircraft and military hardware, rose 0.5pc after a 0.3pc gain a month earlier.
Gold rises after Russia import ban
Gold rose after G7 nations said they would ban imports of the precious metal from Russia – even as analysts described the move as "largely symbolic".
The US, UK, Japan and Canada plan to announce the ban during the G-7 summit that started yesteday in Germany.
While the Government said over the weekend that the measure “will have global reach,” analysts played down the potential impacts as the London Bullion Market Association removed Russian gold refiners from its accredited list in March.
Still, gold climbed as much as 0.8pc to $1,841 an ounce. Bullion had shed 0.7pc last week after Fed chairman Jay Powell said his commitment to curbing inflation was unconditional.
Ukraine's richest man sues Russia
Ukraine's richest man has filed a lawsuit against Russia at Europe’s top human rights court, seeking compensation for billions of dollars in business losses since Russia's invasion.
Rinat Akhmetov, owner of the Azovstal steelworks in the city of Mariupol, sued Russia for "grievous violations of his property rights" at the European Court of Human Rights.
His holding company System Capital Management said Mr Akhmetov was also seeking a court order "preventing Russia from engaging in further blockading, looting, diversion and destruction of grain and steel" produced by his companies.
The billionaire said: "Evil cannot go unpunished. Russia's crimes against Ukraine and our people are egregious, and those guilty of them must be held liable.
"The looting of Ukraine’s export commodities, including grain and steel, has already resulted in higher prices and people dying of hunger worldwide. These barbaric actions must be stopped, and Russia must pay in full."
Kremlin spokesman Dmitry Peskov said Russia was no longer under the jurisdiction of the European Court of Human Rights.
Wimbledon fans face ‘severe disruption’ as tram drivers strike
Tennis fans travelling to Wimbledon this week will fall victim to the latest strike by transport workers, as drivers on the London Tramlink walk out in a row over pay.
Oliver Gill has more:
Strike action will take place on Tuesday and Wednesday this week after drivers rejected a 3pc pay rise.
The London Tramlink runs along 17 miles of track across south London, serving Bromley, Croydon, Sutton and Wimbledon.
Trams run every five minutes during weekdays between Croydon and Wimbledon, carrying tennis fans to the All-England Club.
Transport for London said “severe disruption is expected on both days” and urged people to use alternative public transport.
Sadiq Khan, the London mayor, was urged to intervene in the row to force the operator to pay a “fair pay settlement”, union leaders said.
Fuel prices extend record highs
Fuel prices are still hitting new record highs across the UK even as wholesale prices behind to fall.
The average price of petrol at the pumps rose to 191.05p yesterday, according to the RAC. Diesel hit a record high on Saturday at 199,09p before edging lower a day later.
The numbers suggest retailers aren't yet passing on savings from lower wholesale prices to drivers on the forecourt – something motoring bodies have criticised heavily.
Simon Williams, fuel spokesman at the RAC, said:
We are struggling to see how retailers can justify continuing to put up their unleaded prices as the wholesale cost of petrol as reduced significantly.
Tech rally to drive Wall Street higher
Wall Street looks set to follow the FTSE 100 higher this afternoon thanks to a rally in tech stocks.
US stocks look set to build on Friday's 3pc rally that cemented the best week for global stocks in a month.
Investors are reassessing the outlook as inflation continues to surge and the threat of recession hangs over global economies.
Futures tracking the S&P 500 rose 0.3pc, while the Dow Jones gained 0.2pc. The tech-heavy Nasdaq rose 0.4pc.
Kremlin denies Russian default
Russia has denied it's defaulted on its foreign debts for the first time in a century after a grace period on $100m of missed interest payments ran out.
Kremlin spokesperson Dmitry Peskov said Russia made bond payments due in May but the fact they had been blocked by because of western sanctions was "not our problem".
Moscow has struggled to make payments after the White House moved to block channels to creditors in the West, meaning Russia could not settle its debts despite the means and willingness to do so.
Mr Peskov added: "Our position is well known. Our reserves are blocked unlawfully and all attempts to use these reserves will also be unlawful and would amount to outright theft."
The default marks the first time Russia has failed to make payments to international bondholders since the Bolshevik revolution in 1918.
Oil prices fluctuate as traders keep an eye on G7
Oil prices are wavering this morning as traders monitor the G7 for any signs of a price cap on Russian crude.
Benchmark Brent crude dipped slightly to just below $113 a barrel. West Texas Intermediate hovered at around $107 after posting its first back-to-back weekly loss since April.
World leaders are drawing up plans on a potential price cap on Russia oil imports that could help to ease the surge in prices while also punishing the Kremlin.
Meanwhile, mounting fears of a recession and a drop-off in demand are pushing oil prices towards their first monthly decline since November.
Ukraine grain exports crash 44pc
Ukraine's grain exports have tumbled by around 44pc so far this month as Russia's warmongering cuts off key supplies and drives up food prices around the globe.
Exports stood at 1.1m tonnes in the first 22 days of June, according to the country's agriculture ministry. This included 978,000 tonnes of corn, 104,000 tonnes of wheat and 24,000 tonnes of barley.
Prior to Putin's invasion, Ukraine shipped as much as 6m tonnes of grain per month.
Britain has committed £10m in aid to help rebuild Ukraine's railways as a blockade of Black Sea ports leaves millions of tonnes of grain stranded.
Putin is using hunger as a weapon of war and we cannot allow his blockade of Ukrainian grain to continue.
Today the UK is pledging up to £10m in aid to help Ukraine repair its rail infrastructure so Ukrainians can resume their crucial exports. 🇬🇧🇺🇦https://t.co/KIopdEzGzJ
— Liz Truss (@trussliz) June 27, 2022
G7 leaders plot $600bn rival to China's Belt and Road
G7 leaders have outlined plans for a $600bn (£489bn) trade and infrastructure initiative that would rival China's flagship Belt and Road project.
The Build Back Better World initiative, named after US President Joe Biden’s domestic spending and climate agenda, struggled to get off the ground because not enough G7 partners contributed financially when it was unveiled a year ago.
The project has now been dusted off and re-branded as the Partnership for Global Infrastructure and Investment (PGII).
The US is calling on leaders to agree to fund the launch of projects in middle- and low income countries to the tune of $600bn over the next five years.
The US has promised to raise $200bn of the total through grants, federal funds and private investment, while the EU has announced a further €300bn.
British microchip factory faces shutdown if China deal approved, ministers warned
ICYMI – Britain’s biggest microchip factory is likely to be closed and production shifted to Shanghai if ministers allow a Chinese takeover of the business to go ahead, a report has warned.
Matt Oliver has the story:
Researchers at the Policy Exchange think tank claimed there was a “strong possibility” that Newport Wafer Fab’s new owner, Nexperia, will in future seek to move the company’s facilities out of South Wales.
This risks strengthening China’s stranglehold on the global semiconductor market, the think tank said, which has suffered huge disruption because of the country’s strict zero-Covid policy and subsequent lockdowns.
Semiconductors are a crucial component in electrical goods such as smartphones and televisions, and are essential in car manufacturing.
The Policy Exchange said Kwasi Kwarteng, the Business Secretary, should consider these implications when he is deciding whether to undo the deal, they said, alongside American concerns and the military applications of the company’s technology.
Pound rises as markets regain composure
Sterling has strengthened against the dollar as markets regained some composure after days of losses fuelled by recession fears.
The pound pushed higher alongside the FTSE 100, which gained as an easing of Covid restrictions in China boosted commodity prices.
The pound rose 0.3pc against the dollar to $1.2319, after briefly touching a 10-day high. Against the euro it was steady at 85.95p.
Simon Harvey at Monex Europe said: "The pound is being buoyed by the more supportive risk backdrop this morning, as evidenced by equities, but moves are very limited and the pound continues to trade in recent ranges.
"With limited economic events pencilled in for today... equity performance is likely to continue driving broader FX price action."
France's public finances 'at alert level'
France's public finances have reached an "alert level" amid rising interest rates, surging inflation and slowing growth, the country's finance minister has said.
The warning comes as President Emmanuel Macron's government looks to negotiate a revised 2022 budget with opposition parties after he lost his majority in the National Assembly in elections earlier this month.
Bruno le Maire told local media: "Not everything is possible, quite simply because we have reached an alert level for public finances.
"We used to be able to borrow at 0pc or at negative rates, but today we are borrowing at more than 2pc."
The finance minister also said debt charges on inflation-linked bonds will rise by "several billion euros" as prices continue to surge.
G7 prepares Russian oil price cap
The G7 is drawing up plans to punish Vladimir Putin with a cap on the price of Russian oil that could also calm inflation.
Louis Ashworth has the details:
Wealthy nations would effectively create a buyer’s cartel to drive down the value of the Kremlin’s most lucrative export.
Leaders and officials are mulling a mechanism that would only allow Russian crude and petroleum products to be sold and stored at below a certain price.
Talks will aim to maintain Chinese and Indian access to cheaper crude from Russia, rather than attempting to bring about a full boycott that could send prices surging.
Countries are grappling with how to keep pressure on Mr Putin through sanction without exacerbating the inflationary crises many are facing at home.
Finding ways to lower the oil price could starve Russia of vital funding while also easing costs for businesses and households.
Officials in the US and German governments have said plans are being hashed together at the G7 summit in Bavaria, with hopes that a fully-fledged plan can be announced tomorrow.
Rouble weakens as Russia crashes into default
The rouble weakened in volatile trade in Moscow after Russia defaulted on its foreign debts for the first time in a century.
After narrowly swerving non-payment several times since launching an invasion of Ukraine in late February, Moscow failed to pay $100m of coupons on bonds due last month, for which a 30-day grace period ended on Sunday.
The rouble fell 0.5pc against the dollar to 53.68, at one point shedding around 2pc and touching its weakest since June 21. Against the euro it was down 0.6pc.
Soap maker PZ Cussons to cash in on higher prices
Consumer goods group PZ Cussons has said it's on track to boost revenue from raising prices even as shoppers swap in value ranges.
The maker of Carex and Imperial Leather said it expects full-year sales to rise 3pc, with full-year revenue set to hit £590m.
PZ Cussons said it had been boosted by higher prices, but warned that trading conditions remained challenging as soaring inflation piles pressure on household budgets.
Jonathan Myers, chief executive of PZ Cussons, said:
We have plans in place to mitigate the impact of this, as we continue to deliver great value for consumers, whilst also investing behind more premium innovations.
UK takes stake in sex party planner Killing Kittens
The Treasury has taken a stake in a sex party planner founded by a schoolmate of the Duchess of Cambridge.
Killing Kittens, which was founded in 2005 by Emma Sayle, is known for its exclusive, hedonistic events in cities around the world, but was forced to cancel its in-person parties during the pandemic.
The taxpayer has now taken a stake through Rishi Sunak's Future Fund programme, which was set up during Covid to help innovative firms, the Financial Times reports.
Loans granted through the Future Fund convert to equity at the company's next fundraising. It's offered support to hundreds of businesses, including Bolton Wanderers football club and the Black Sheep Coffee chain.
FTSE risers and fallers
The FTSE 100 has pushed higher in early trading as an easing of Covid restrictions in China brought relief to commodity prices.
The blue-chip index rose 0.6pc, driven by gains for major mining stocks.
Rio Tinto rose 2.6pc after a US appeals court ruled that the Government may give the copper miner a right to lands in Arizona.
Anglo American, Glencore and Antofagasta all pushed higher thanks to a rebound in copper and iron ore prices as rules were eased in Shanghai and several other major Chinese cities.
BAE Systems also edged higher after the defence giant secured a $12bn contract from the US Department of Defence.
The domestically-focused FTSE 250 also gained 0.6pc, with cruise operator Carnival rising more than 5pc.
Gas prices jump as Europe struggles to refill storage
Natural gas prices rose again this morning as Russia's supply cuts threaten to spark shortages this winter.
European countries have found it difficult to replace Russian gas after the Kremlin cut flows through a major pipeline to around 40pc of normal levels.
This has slowed the pace of refilling storage sites, which are crucial to get the continent through winter.
Benchmark European prices rose more than 5pc in early trading after jumping 9pc last week.
Humiliation for Putin as Russia defaults on foreign debts
Russia has defaulted on its foreign debts for the first time in a century, in a humiliating blow to Vladimir Putin that further freezes his country out of the Western financial system.
Louis Ashworth has more:
After narrowly swerving non-payment several times since launching an invasion of Ukraine in late February, Moscow failed to pay $100m of coupons on bonds due last month, for which a 30-day grace period ended on Sunday.
Payment had been rendered practically impossible after the White House moved to block channels to creditors in the West, meaning Russia could not settle its debts despite the means and willingness to do so.
The default – the first time Russia has failed to make payments to international bondholders since the Bolshevik revolution in 1918 – is mainly a symbolic event for now: Russia is already a pariah within the Western financial system and is unlikely to tap international markets for money in the near future.
But it will further tie Mr Putin’s hands as the country suffers its biggest economic shock in years, and could starve Russian companies of future funding options if the contagion spreads to corporate bonds.
FTSE 100 edges higher
The FTSE 100 has started the week on the front foot despite continued worries about a possible recession.
The blue-chip index rose 0.2pc to 7,221 points.
World on 'tipping point' of permanently high prices
KPMG is not the only organisation warning over inflation this morning, as my colleague Tim Wallace reports:
The world is on the “tipping point” of falling into a period of runaway inflation in which soaring prices become embedded and difficult to control, the Bank for International Settlements (BIS) has warned.
In its annual economic report, the BIS said leading economies faced entering a world in which soaring prices become embedded and difficult to control.
It called on central banks to step up efforts to tackle soaring prices while limiting the impact to growth.
Agustín Carstens, general manager of the BIS, said: “The key for central banks is to act quickly and decisively before inflation becomes entrenched.
“If it does, the costs of bringing it back under control will be higher. The longer-term benefits of preserving stability for households and businesses outweigh any short-term costs.”
Central banks around the world, including in the UK and US, hoped last year that rising inflation would be “transitory”.
City watchdog investigates Wise boss after tax breach
The Financial Conduct Authority has opened an investigation into the chief executive of Wise almost a year after he was fined by HMRC for deliberately defaulting on his taxes.
The Telegraph last year revealed that Kristo Kaarmann had been fined £365,651 for a deliberate default during the 2017/18 tax year on a £720,495 tax bill.
The City regulator has now said it's examining the “regulatory obligations and standards to which Kaarmann is subject”.
David Wells, chairman of Wise, said the company will “cooperate fully with the FCA as and when they require, while continuing to support Kristo in his role as CEO”.
The London-listed payments firm an investigation with an external legal counsel after Mr Kaarmann’s name was included on HMRC’s list of individuals and businesses receiving penalties for a deliberate default regarding their tax affairs.
It said the board shared details of the findings, assessment and actions with the FCA.
KPMG: BoE must weigh recession risks
Yael Selfin, chief UK economist at KPMG, says the Bank of England will have to balance interest rate rises with the risk of recession.
We expect supply issues to gradually ease during the course of this year, although headwinds in the form of a potential deterioration in Russian energy supply or further lockdowns in China as a result of its zero Covid policy could worsen the outlook.
Combined with the pressures on household budgets, the Monetary Policy Committee will have to weigh the risk of high inflation spilling into pay growth against the risk of a recession.
Britain at risk of 'mild' recession
The UK could be pushed into a recession as runaway inflation threatens to all but wipe out economic growth.
KPMG has become the latest organisation to sound the alarm, saying there was roughly a 50pc chance of Britain being tipped into a "mild recession".
It warned the UK was particularly vulnerable to a downturn if a cut-off of Russian gas supplies caused a contraction in the eurozone economy, or if aggressive interest rate rises in the US sparked a recession there.
KPMG forecast that the UK economy will slow to 3.2pc this year from 7.1pc in 2021, before almost grinding to a halt at 0.7pc next year.
5 things to start your day
1) World is on ‘tipping point’ of permanently high prices Inflation risks becoming embedded in leading economies and difficult to control, Bank for International Settlements warns
2) French energy giants tell households to ration supplies ahead of looming winter shortage Households asked to ‘immediately’ limit energy consumption to preserve gas reserves
3) Jaguar Land Rover's battle to stop dealers selling in China The car maker has strict rules for its dealers wanting a piece of the highly lucrative market
4) Train operators hit back at RMT assault on “fat cat rail bosses” Rail chiefs say annual profits average a third of what Mick Lynch claimed
5) Thousands of PwC staff to get inflation-matching pay rise PwC boosts pay to help attract staff amid warnings of wage increases fuelling inflation
What happened overnight
Asian markets rallied again this morning, building on last week's advances and following a strong performance on Wall Street as speculation that inflation may have peaked tempered expectations about central bank interest rate hikes.
Hong Kong climbed more than 2pc thanks to a strong performance in Chinese tech firms. Indications that China's crackdown on the sector could be coming to an end added to the upbeat mood in the city.
Tokyo, Shanghai, Seoul, Singapore, Sydney, Manila and Wellington were also well up.
Coming up today
Corporate: No scheduled updates
Economics: Durable goods orders, non-defence capital goods orders, pending home sales (US)