Russia’s ultra-wealthy oligarchs have lost $32bn (£23.5bn) so far this year, and looming sanctions mean even more of their wealth could be wiped out.
The country’s 23 billionaires currently have a net worth of $343bn, according to Bloomberg rankings. That’s down from $375bn at the end of the year.
Gennady Timchenko, an oligarch with family ties to Putin, has been the biggest loser from the crisis, with a third of his wealth wiped out this year.
He’s one of three individuals – alongside Boris and Igor Rotenberg – singled out for UK sanctions. The US is also targeting wealthy Russians, meaning their losses could mount.
Earlier today Foreign Secretary Liz Truss refused to rule out sanctions against Roman Abramovich, the billionaire owner of Chelsea Football Club.
12:21 PM
Wall Street set to rise as markets shrug off sanctions
US stocks are poised to open higher this afternoon as investors assess an initial raft of sanctions against Russia over Ukraine.
Futures tracking the S&P 500 and Dow Jones both rose 0.8pc, while the Nasdaq pushed 1pc higher.
US President Joe Biden said Russia had started to invade Ukraine and announced steps targeting Russia’s sale of sovereign debt abroad, its elites and a pair of banks.
It follows similar moves by the UK and other allies. They stopped short of sweeping measures, though Boris Johnson said sanctions could be scaled up.
12:12 PM
The £100m Gatsby mansion offering luxury in the Cotswolds
ICYMI – Plans have been unveiled for a £100m mansion in the rolling Cotswolds countryside that would be the largest home built in Britain for a century.
Helen Cahill has dug into the details of the eyebrow-raising estate, which promises a taste of the Gatsby lifestyle (for better of for worse) to Britain’s billionaire set.
The £100m Cotswolds mansion plans offering a ‘Gatsby’ lifestyle to the billionaire set
12:02 PM
Bailey: Russia sanctions pose no risk to UK finance sector
One more quick note on Andrew Bailey’s appearance this morning, which has left investors largely unmoved.
He reassured MPs that sanctions against Russia posed no threat the UK’s financial stability, as British banks had very limited exposure to Russia.
Mr Bailey also said wider concerns that tougher action on Russia might hurt London’s position as a global financial hub were also misplaced.
He said: “The situation is so serious… I don’t think that saying ‘well this could be a bit damaging to London as a financial centre’ is just really an argument that holds water.”
11:53 AM
Pound holds gains after Bank of England speeches
Sterling has held onto its gains against the dollar after Andrew Bailey and other Bank of England officials tried to cool down bets on aggressive interest rate rises.
Speaking about the decision earlier this month to raise interest rates, Bailey said he saw clear risk of inflation sticking at a high level. But he urged investors not to get carried away with bets on future interest rate hikes.
He told MPs: “If we get the second-round effects… of course we would need to react to that with higher interest rates.” However, he said this would hurt the economy and increase unemployment.
The pound barely moved after the comments. It stayed up 0.1pc against the dollar at $1.3601 and was flat against the euro at 83.35p.
11:42 AM
IMF urges Bank of England to sell £650bn of bonds
Earlier today Andrew Bailey said officials hadn’t decided exactly how much of Bank’s £895bn bond programme should be paid down. Well, the IMF has a suggestion.
In a report today, the group said the central bank should sell around £650bn of Government bonds to reduce its balance sheet by two-thirds in a return to normal policy after 13 years of quantitative easing.
However, the IMF took aim at the Bank’s lack of clarity over when it would kick off bond sales. It said changes to the size of the BoE’s balance sheet could cause “volatility in government bond and other asset markets”, urging it to “clarify communications”.
Still, it welcomed the decision to raise interest rates, echoing predictions that inflation will top 7pc.
11:32 AM
Barclays boss: Our exposure to Ukraine is ‘limited’
The chief executive of Barclays has insisted that rising tensions between Russia and Ukraine would have only a limited impact on the bank.
CS Venkatakrishnan, known as Venkat, told reporters: “From a financial point of view, our exposures are limited. We have been out of Russia for many, many years and we have exercised a lot of care and diligence on on-boarding Russian entities and Russian clients.”
So far, the UK has rolled out sanctions on five Russian banks and three wealthy individuals. The US has also targeted a pair of state-owned Russian banks and three oligarchs.
Venkat said the bank has a “robust and straightforward process for changes in sanctions regime.” He added that the moment sanctions were announced “we took those names, we put them through our system and screened them”.
11:24 AM
TfL to scrap face mask rules
Transport for London (TfL) will no longer require face masks on public transport – but it’s still strongly recommending them.
The transport body said face coverings will no longer be mandatory on Tubes, trains and buses from tomorrow.
TfL said passenger numbers were continuing to recover, with weekday Tube use at around 60pc of pre-pandemic levels. This rose to 75pc last weekend.
11:19 AM
Peel Hunt slumps as delayed deals spark profit warning
Peel Hunt plunged this morning after it warned a slew of delayed deals will dent its investment banking revenue.
Shares in the broker dropped 15pc to a record low after it said concerns about inflation, interest rate hikes and geopolitical tensions had all taken their toll.
A recent slowdown in trading activity is adding to the pain, with the company now expecting full-year profits to be lower than current market expectations.
Still, Peel Hunt said its investment banking division is expected to post record revenue for the year to the end of March.
11:12 AM
Bailey: Wage restraint comments also apply to bank bonuses
Andrew Bailey has said his recent remarks about British workers not asking for a pay rise also apply to bonuses paid to bankers.
Speaking in front of MPs, he said: “We don’t set pay levels in banks. But the same point holds. Please reflect on the economic situation we’re in with this very big shock coming in from outside.”
The Bank Governor sparked a backlash earlier this month after saying employees should limit their pay bargaining to prevent the UK sliding into a wage-price spiral.
But he’s at risk of sparking outrage again. Asked how much he’s paid, Mr Bailey seemed to suggest he’s lost track.
He said: “It’s somewhere over £500,000. I can’t tell you exactly what it was. I don’t carry that around in my head.”
Labour MP Angela Eagle reminded him that his pay including pension is in fact £575,538. That’s around 18 times the average salary.
10:43 AM
Andrew Bailey: Asset sales could be paused during market turmoil
Andrew Bailey has said the Bank of England’s planned asset sales could be suspended if there’s too much volatility in markets.
The central bank is set to run down its £895bn bond purchase programme as part of a wider tightening of monetary policy.
Mr Bailey said it would consider kicking off this process when rates hit 1pc, but that this would only happen during “normal market conditions”.
10:31 AM
GSK seeks approval for Covid-19 vaccine
Better late than never seems to be the policy for GlaxoSmithKline, which is seeking regulatory approval for its Covid-19 vaccine two years into the pandemic.
GSK and French partner Sanofi said they plan to submit data from both their booster and Phase III efficacy trials in an effort to get the jab approved.
Thomas Triomphe, executive vice president for Sanofi Vaccine, said: “We’re very pleased with these data, which confirm our strong science and the benefits of our Covid-19 vaccine. The Sanofi-GSK vaccine demonstrates a universal ability to boost all platforms and across all ages.”
Unlike rivals including Pfizer, AstraZeneca and Moderna, GSK didn’t develop a vaccine for the first waves of the virus.
However, its antibody drug, which was found to cut the chances of hospitalisation and death, was approved in December.
10:23 AM
UK to guarantee up to $500m in loans for Ukraine support
The UK is ready to guarantee up to $500m (£368m) in loans to support Ukraine and help mitigate the economic effects of Russian aggression.
The Foreign Office said guarantees of Multilateral Development Bank lending will be offered for projects that will support economic stability and reforms such as tackling anti-corruption.
Foreign Secretary Liz Truss said:
We are putting our money where our mouth is and using Britain’s economic expertise and strength to support the people of Ukraine.
These guarantees can help inject vital capital into Ukraine and help its economy weather the storm of Russian aggression.
10:11 AM
BoE’s Haskel: Ukraine crisis could drive up inflation
Bank of England policymaker Jonathan Haskel has warned the escalating conflict in Ukraine could add to inflation risks.
Consumer price growth already stands at a 30-year high, but Mr Haskel warned this could surge even higher as looming conflict drives up energy prices.
He told MPs in written testimony: “If certain geopolitical events specifically affect the commodity supply chain, it could create substantial price volatility.
“At the time of writing, there seems a material risk of further increases in global gas prices which would only add to the already considerable rises in CPI inflation we have seen so far.”
10:07 AM
Darktrace rises after first acquisition
Darktrace pushed higher this morning after unveiling a deal to buy Dutch rival Cyberprint for €47.5m (£40m) – its first ever acquisition.
Analysts said the takeover, which will be paid 75pc in cash and 25pc in equity, is “highly complementary” to the firm’s existing business.
Shares in the FTSE 250 company rose 3.5pc.
09:56 AM
Energy bills will rise again next winter, warns Octopus
Households should brace for higher energy bills next winter as the energy price cap is likely to rise again, the boss of Octopus Energy has warned.
Ofgem has already said the price cap will jump 54pc in April, and the next review is due in October.
Speaking to Bloomberg, Greg Jackson said: “Even aside form the Ukraine crisis, gas prices were at record levels driven by the pandemic, supply chain issues and long cold winters and lack of storage, so it’s a perfect storm in the global gas market.”
He added: “It’s likely that winter is going to be more expensive in the UK because of the way the Government price cap formula works. Next winter is when it’s really going to bite unless more measures come in or prices fall rapidly.”
09:49 AM
Pound ticks up with Bank of England officials in focus
Sterling edged up this morning alongside the FTSE, with traders turning their attention to a string of senior Bank of England officials being grilled by MPs.
All eyes are on Governor Andrew Bailey, Deputy Governor Ben Broadbent and other two BoE members for any indications of how the central bank will act at its meeting next month.
Yesterday Deputy Governor Sir Dave Ramsden signalled more monetary tightening, but said he now sees a “modest” interest rate hike over the coming months.
Sterling is also getting a boost from a more aggressive easing of Covid restrictions. Boris Johnson has announced all remaining rules will be scrapped this week, including mandatory isolation after testing positive.
The pound edged 0.1pc higher against the dollar to $1.3607. Against the euro it was flat at 83.41p.
09:36 AM
Ted Baker shares surge as it shrugs off omicron hit
Shares in Ted Baker leapt in early trading as it reported a sharp rise in quarterly sales despite the impact of the omicron variant.
The fashion brand said sales increased 35pc year on year in the 12 weeks to 29 January, up from growth of 18pc in the previous three months. Compared to pre-Covid levels, sales were down 10pc before omicron hit, tumbling to 42pc when the new variant set in.
But Ted Baker issued a bullish outlook for the year ahead, saying it had navigated supply chain issues and confirming its targets. The company has signed a new franchise agreement in the UK, with plans for at least three new stores per year over the next three years.
Analysts at Liberum said the sales growth reflected a revamp in Ted Baker’s brand. Shares surged 12pc.
09:28 AM
Covid fraud could cost £16bn, MPs warn
Fraud and errors relating to the Government’s Covid support schemes could cost British taxpayers as much as £15.7bn.
That’s according to MPs on the Public Accounts Committee, who estimated £5.3bn of the lost cash related to Rishi Sunak’s flagship furlough scheme. That’s 8.7pc of payments made under the programme.
Other loans and grants programmes added to what the committee branded “unacceptable” losses.
The MPs said the Government has spent £261bn on 374 different measures tackling Covid so far. That’s expected to reach £370bn over the lifetime of the measures, with some loan repayments not due for two decades.
They also pointed to other losses, including £21bn of loans that aren’t expected to ever be repaid.
Meg Hillier, chair of the committee, said:
Lack of preparedness and planning, combined with weaknesses in existing systems across government, have led to an unacceptable level of mistakes, waste, loss and openings for fraudsters which will all end up robbing current and future taxpayers of billions of pounds.
09:20 AM
Aston Martin eyes higher shipments on DBX demand
Aston Martin expects deliveries to rise by 8pc this year as booming demand for the DBX SUV helps to offset delays in its Valkyrie supercar.
The luxury car maker reported earnings before interest, tax, depreciation and amortisation of £65.6m in the fourth quarter – falling short of analyst estimates of £81m.
For the year as a whole, pre-tax losses narrowed to £213.8m from £466m in 2020, with revenues jumping 79pc to £1.1bn.
Aston’s profits have been dented by delayed deliveries of the £2.4m Valkyrie, but bosses said they hope to ship between 75 and 90 Valkyries to wealthy customers in 2022.
The company also sold more than 3,000 DBXs last year, giving it a 20pc share of the luxury SUV market.
09:13 AM
Unite Group jumps as student demand bounces back
Unite Group is the biggest riser on the FTSE 250 this morning after it reported a continued recovery in demand after the pandemic.
The student accommodation specialist posted 2.3pc rental growth last year, while occupancy rose to 94pc. It added that demand was growing as university applications for the next academic year are 7pc higher than pre-Covid levels.
Shares jumped as much as 9.3pc – the biggest rise since November 2020 – before easing to gains of 7.5pc.
09:01 AM
Heathrow records lowest passenger numbers for 50 years
Heathrow Airport’s losses from two years of Covid disruption have swelled to £3.8bn after it attracted the lowest number of passengers for 50 years.
The London travel hub posted a loss of £1.8bn last year as passenger numbers slumped to 19.4m – the lowest since 1972.
While there was some easing in travel last year, Heathrow’s reliance on long-haul travel meant it suffered a further reduction in traffic.
Demand is on the up, but the omicron variant dented the recovery at the start of the year, leaving passenger numbers 23pc behind its forecasts.
Heathrow said a strong summer season should push full-year passenger numbers to its target of 45.4m, but it’s also relying on approval from the Civil Aviation Authority to raise the fees it charges to airlines.
08:58 AM
Expert reaction: Barclays shows potential after profit beat
Will Howlett, an analyst at Quilter Cheviot, says Barclays’ latest figures show it’s an attractive proposition for shareholders.
Barclays delivered a broad based profit beat for the final quarter of 2021, which we would expect to support earnings upgrades.
The bank is announcing a further £1bn share buyback, which should been seen as particularly which we see as particularly attractive with the shares trading at a significant discount to tangible book value.
Barclays has reiterated its target of delivering a return on tangible equity of greater than 10pc, and after delivering 13.4pc in the financial year 2021, albeit flattered by net provision writebacks, the shares offer significant potential for re-rating, in our view.
08:55 AM
FTSE risers and fallers
The FTSE 100 has started on the front foot today as strong corporate earnings and positive sentiment among miners lifted sentiment.
The blue-chip index rose 0.6pc, building on yesterday’s gains as markets shrugged off sanctions against Russia.
Barclays rose 3.2pc after posting a record annual profit thanks to a boom in pandemic dealmaking.
Rio Tinto was also up 1.2pc after paying out a record dividend on the back of strong results. This helped boost other miners including Antofagasta and Glencore as commodities prices rose amid Russia tensions.
The FTSE 250 rose 0.7pc, snapping a five-day losing streak. Unite Group jumped 7.7pc after strong earnings.
08:29 AM
How the crisis could impact energy bills
ICYMI – here’s what the Russia-Ukraine crisis could mean for your energy bills:
Households are threatened with even higher energy bills including petrol at £1.70 a litre, after the invasion of Ukraine intensified the inflationary forces advancing on global markets.
The incursion by Vladimir Putin’s forces prompted a senior Bank of England official to warn on Tuesday that “moderate” interest rate rises may be required soon – heralding higher mortgage costs – to bring prices under control.
UK and European gas prices climbed 9pc and 10pc respectively after Germany halted the approval process for the Nord Stream 2 gas pipeline, which is being built to deliver supplies from fields controlled by the Kremlin.
Britain is much less directly reliant on Russian gas than continental Europe but is affected by higher prices in the global wholesale market.
Its latest upswing left prices at roughly four times the long-term average and increased expectations of a further increase in the cap on household energy bills at the next review in October.
Read more: Ukraine invasion threatens to push energy bills even higher
08:17 AM
Metro Bank crashes to £245m loss amid regulator fines
While most British banks have emerged from the pandemic with huge profits, the picture isn’t so rosy for Metro Bank.
The high street lender crashed to a £245.1m loss last year as it put aside cash to cover fines from regulators.
An investigation remains ongoing by the Financial Conduct Authority, alongside costs as part of a restructuring and a £5.4m fine by the Bank of England related to its reporting and governance failures.
The figures were an improvement on the £311.4m loss, however. Bosses said they have put in place cost-cutting measures and remain on track to reach a breakeven position. Shares rose 0.8pc.
Daniel Frumkin, chief executive of Metro Bank, said:
Two years into the turnaround, our strategy is delivering meaningful results as we move towards profitability.
In a changing macro-economic environment, we have accelerated the shift of our balance sheet, with improved yields and lower cost of deposits.
There is still more to do but our focus on delivering higher margins through unsecured and specialist mortgage lending, as well as tight cost control, is enabling transformational change.
08:05 AM
Truss: Ofcom should investigate ‘propaganda’ channel Russia Today
A bit more from Liz Truss now.
The Foreign Secretary has said she thinks media regulator Ofcom should investigate Russia’s state-backed news channel Russia Today, which is broadcast in Britain.
She told Times Radio: “On the subject of Russia Today I am of the view that it broadcasts propaganda and fake news on a regular basis and is effectively an arm of the Russian state, and I’m sure Ofcom is looking at that.”
08:02 AM
FTSE 100 inches higher
The FTSE 100 has inched higher at the open as investors weigh up the latest development in escalating tensions between Russia and the West.
The blue-chip index edged up marginally to 7,496 points.
It follows a tumultuous day on Tuesday, when markets initially crashed on Putin’s move into Ukraine before recovering later in the day.
07:59 AM
UK to block Russian sovereign debt from London markets
Britain will stop Russia selling sovereign debt in London after President Vladimir Putin pushed troops into Ukraine.
Foreign Secretary Liz Truss confirmed that the Russian state will not be able to tap UK markets to help raise cash.
She told Sky: “We’ve been very clear that we’re going to limit Russian access to British markets. We’re going to stop the Russian government with raising sovereign debt in the United Kingdom.
“There will be even more tough sanctions on key oligarchs, on key organisations in Russia, limiting Russia’s access to the financial markets, if there is a full scale invasion of Ukraine.”
Boris Johnson yesterday outlined the first tranche of sanctions against Russia, targeting five banks and three high-wealth individuals, but the Prime Minister is facing criticism that the measures don’t go far enough.
07:52 AM
Rio Tinto dishes out record dividend as profits soar
Barclays isn’t the only blue-chip firm posting record results this morning.
Miner Rio Tinto has revealed it pulled in record profits of $21.4bn (£15.7bn) in 2021 thanks to surging iron ore prices and strong demand from China.
Profits were up 72pc on 2020, reaching the highest levels in the firm’s 149-year history, as iron ore earnings roughly doubled.
Jakob Stausholm, chief executive of Rio Tinto, cited “significant price strength for our major commodities,” as he announced a record final dividend of $7.7bn.
It comes as the miner tries to overhaul its culture after a damning report revealed shocking levels of racism, harassment and sexual assault claims at the company.
07:42 AM
New boss hails ‘resilient’ performance
The positive numbers will come as a relief to chief executive CS Venkatakrishnan – known as Venkat – who was thrown into the top job in November following the shock resignation of Jes Staley.
He said:
2021 is the year in which Barclays demonstrated the results of the strategy we set out in 2016.
I am proud that we have delivered this resilient performance while continuing to support our clients and customers through another year of Covid-19 related challenges.
We recognise that the economic environment is more than usually uncertain, with rising inflation rates and tighter monetary policy, while many parts of society continue to recover from the severe social and economic effects of the Covid-19 pandemic.
07:39 AM
Barclays taps first female finance chief
The bank also announced its first female finance chief, appointing deputy group finance director Anna Cross to the role from April 23.
She will succeed Tushar Morzaria, who is retiring after more than eight years in the post, and becomes the first woman to hold one of the top three boardroom jobs at the bank.
07:37 AM
Barclays pulls in record profit amid dealmaking boom
Barclays will be hoping the scandal surrounding Jes Staley doesn’t overshadow a stellar set of results…
A busy final quarter of dealmaking helped offset a decline in trading activity, propelling the British lender to its highest ever annual profit.
Income from capital markets and merger advisory work rose by more than a quarter in the final three months of the year, taking these banking fees to £3.7bn for the year as a whole – the highest since at least 2014.
Profit before tax for the quarter jumped to £1.47bn, more than double last year, as the bank recovered charges from potential bad loans earlier in the pandemic. Annual pre-tax profit hit a record £8.4bn.
Barclays also announced a £1bn share buyback programme and a dividend of 6p per share for 2021 as it shared the spoils with investors. It issues a positive outlook for the coming quarters, with impairments expected to remain below pre-Covid levels.
07:27 AM
Barclays freezes Jes Staley payout
Good morning.
Barclays has revealed it’s suspending the payment of share awards to its former boss Jes Staley amid ongoing investigations into his relationship with the late sex offender Jeffery Epstein.
Mr Staley, who stepped down from the FTSE 100 bank in November, was being treated as a “good leaver”.
At the time, it was announced that he would pocket an annual payout of £2.4m in cash and shares plus a £120,000 pension allowance and other benefits.
He owns 5.7m shares worth around £10m and was also entitled to as many as 11.4m shares valued at £22.5m if the bank hits targets in coming years. The frozen awards are thought to include a 2019 bonus subject to performance between 2019 and 2021. It was worth up to £3.3m.
Barclays said almost 70pc of Mr Staley’s variable remuneration remains unvested, adding it hadn’t made any further decisions regarding the former boss’ pay.
5 things to start your day
1) Britain has logged out of the EU – now it needs a Brexit tech revolution As the UK strikes out from the EU, MPs say new ideas on data should form the backbone of deregulation
2) Inheritance tax revenues hit record high as Treasury gets extra £700m Rocketing house prices and frozen thresholds have seen more cash handed over in so-called ‘death duties’
3) Information Commissioner calls time on the ‘drag’ of Brussels’ data rules A new era of data regulation could mean an end to ‘cookie’ pop-ups
4) HSBC faces US probe into bankers’ use of WhatsApp for work WhatsApp is not approved for ‘business-sensitive messages’
5) Hargreaves Lansdown shares plunge as pandemic trading boom ends The investment platform’s profits fell as workers returning to the office have less time to trade and invest
What happened overnight
Equities mostly rose on Wednesday and oil prices stabilised as investors tracked developments in Ukraine. In early trade, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Jakarta were all in positive territory. Singapore and Manila slipped and Tokyo was closed for a holiday.
Coming up today
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Corporate: Aston Martin Lagonda, Barclays, Capital & Counties Properties, Hochschild Mining, Rio Tinto, Unite Group (full-year results); Ted Baker (trading update)
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Economics: Bank of England monetary policy report hearings (UK)
