Gas supplies are facing even more pressure after a fire ripped through a major plant in Russia.
Gazprom’s Amur gas processing plant in the country’s Far East has halted operations after a fire early on Friday, a spokesperson confirmed.
The plant plays a key role in Russian gas exports to China, which has been hit by electricity shortages that have led to power rationing across the country.
But the shutdown will spark further concerns about gas supply to Europe at a time when shortages have sent prices to unprecedented highs.
01:01 PM
Expert reaction: Inflation is the key metric for investors
There are some words of reassurance for investors from Richard Flynn at Charles Schwab UK, who says inflation is a more important metric of recovery than jobs growth.
Investors will be disappointed by today’s data, particularly as there has been much more positive economic data issued recently: from key September manufacturing reports showing stronger-than-expected growth to, personal income and spending rising in August, and September consumer sentiment unexpectedly being revised higher.
However, as the implication of economies reopening are felt across the world, inflation is a key metric that investors are tracking. According to Bloomberg analytics, inflation has been a hot topic in world-wide earnings conference calls over the past year. In monitoring transcripts of over 1,500 global stocks’ earnings calls, the word “inflation” has popped up more than 3,600 times, the highest level in over 20 years.
Jerome Powell did say recently however that the current inflation spike is really a consequence of supply constraints meeting very strong demand, and that is all associated with the reopening of the economy – which is a process that will have a beginning, a middle and an end. Investors can gain some assurance from this.”
12:56 PM
US jobs: Summer momentum fades
The latest jobs numbers are well below forecasts and mark a sharp drop since the recent peak in July.
The US labor market ended the summer with much less momentum then when it entered with only a 194k advance in September.
▶️Only 1/4 of 3-month trailing average of 806k
▶️Well short of consensus 500k call
▶️Even short of under-consensus 384k call pic.twitter.com/A4HtsdSVHd— Gregory Daco (@GregDaco) October 8, 2021
12:52 PM
Expert reaction: Fed decision ‘in disarray’
Seema Shah at Principal Global Investors, says the US jobs data presents the Federal Reserve with a “real conundrum” over winding down stimulus measures.
After looking like almost a done deal, today’s jobs number has thrown expectations for tapering into disarray. The Fed doesn’t seem to need much to convince it that tapering should begin imminently, but at just 194,000, jobs numbers are suggesting that the labour market is further from hitting the substantial progress goal than they expected.
Additional disappointment came from the participation rate. At this point in the year, with benefits expiring and a return to in-person schooling, the Fed has been hoping that labour supply would increase. That dynamic simply isn’t materialising and, if anything, people are leaving the labour market.
But perhaps the most worrying part of the jobs report comes from the higher-than-expected hourly earnings growth. Markets have already been concerned that higher prices are starting to eat into demand – are higher wages starting to eat into employment? The Fed is facing a real conundrum.
12:40 PM
Big miss on US jobs growth
The US added fewer jobs than forecast for the second month in a row in September, casting doubts over the labour market’s recovery.
Nonfarm payrolls increased 194,000 last month after an upwardly revised 366,000 gain in August, a Labor Department report showed. This was well below the 500,000 rise forecast by a Bloomberg survey of economists.
The unemployment rate fell to 4.8pc, while average hourly earnings jumped.
The disappointing figures will cast a shadow over recovery hopes and complicate a decision by the Federal Reserve on scaling back stimulus measures before the end of the year.
The Fed is looking for “substantial further progress” in the labour market, which the latest figures may not satisfy.
12:35 PM
Russia accuses US of ‘political blackmail’
Tensions between Russia and the West are starting to mount, as the two sides accuse each other of playing political games amid an escalating energy crisis.
The White House last night warned Russia against using the crisis as a tool to pile pressure on Europe, prompting Kremlin spokesman Dmitry Peskov to dismiss this as an “erroneous assessment”.
Mr Peskov has gone further, though, suggesting it’s actually the US, not Russia, that’s used the crisis for “political blackmail” such as obstructing Russian energy projects including Nord Stream 2.
Sergey Lavrov, the Russian foreign minister, on Friday went as far as to suggest that Washington is trying to sow divisions between Russia and Europe.
He said: “The US wants to get Russia to quarrel with Europe over the gas issue and hurt our mutual ties.”
12:16 PM
Denmark’s richest man hands staff £34m bonus
Denmark’s richest man, Anders Holch Povlsen, is a generous soul it seems. He’s decided to give his 17,000 staff a bonus of one month’s wages after profits at his clothing company Bestseller hit a record high.
They will share in a pot worth £34m after profits hit 3.6bn kroner for the 12 months to July – almost nine times the previous year.
Bestseller owns brands incuding Jack & Jones and Vero Moda and Povlsen, who is worth about £8bn, also has a sizeable stake in Asos.
11:43 AM
Tata wins Air India auction with £1.8bn bid
Tata has emerged victorious in a bidding war for Air India, bringing to an end decades of attempts to privatise the country’s debt-laden flag carrier.
Tata Sons, the holding company behind Tata Group, was the highest bidder in the government auction, tabling an offer of 180 billion rupees (£1.8bn).
Tata originally launched Air India in 1932. Since then it’s struggled and has stayed alive only through a series of taxpayer-funded bailouts.
The deal adds a third airline to Tata’s empire and gives it access to more than a hundred planes, thousands of trained pilots and crew, and lucrative landing and parking slots all around the world.
11:35 AM
Russia repeats offer to ease gas crisis
Russia has reiterated that it’s ready to step in to ease Europe’s gas crisis – but repeated its insistence that any additional supplies be tied to long-term contracts.
It’s the third day in a row that the Kremlin has offered to stabilise the continent’s chaotic energy markets, but it’s yet to provide any specific details.
President Vladimir Putin first stepped in on Wednesday with a pledge to ramp up supplies – a move that helped calm the surge in natural gas prices.
A Kremlin spokesman said Russia was fulfilling its existing gas supply obligations at the maximum level and was keen and ready to quickly discuss the signing of new long-term contracts, according to a Bloomberg report.
He added that this was the only way to calm the turbulent market.
But EU officials have raised concerns that Russia had been deliberately limiting supplies, while the US has warned the country not to exploit the crisis for political gain.
The Kremlin spokesman rejected the accusations, saying: “Russia has never used energy resources as a tool for any pressure, political or otherwise.
“Even in the most challenging times, Russia has never stopped supplies, this has never happened and never will.”
11:26 AM
UK tax policy under fire amid energy crisis
The escalating energy crisis has not only sparked a row about the price cap – it’s also got political commentators questioning the UK’s tax policy.
Analyst Joe Armitage points out that while other European nations have slashed taxes on energy bills to provide some respite for households, Britain is preparing to slap a green energy surcharge on bills.
The proposals are controversial to say the least, given the gas shortages that are driving prices up to record highs.
Italy has reduced VAT on energy bills to 5%, saving £500m and provided over £2bn of extra support. Spain has reduced tax on electricity and natural gas and reduced bills by over £3bn. France similar. Meanwhile, the UK is set to announce a new green tax for gas!
— Joe Armitage (@joe_armitage) October 8, 2021
Read more on this story: Gas bills set to rise further under green energy surcharge plan
11:06 AM
Panic buying left petrol stations 85pc empty
A surge of panic buying pushed fuel sales to more than double their normal level and left petrol stations across the country 85pc empty, new figures have revealed.
Fuel sales soared to almost 36,000 litres per filling station on Sept 24, compared with a pre-Covid average of almost 18,000 litres, according to the Business Department.
Worries over a lack of lorry drivers sparked fears of shortages and led to long queues at forecourts as motorists desperately tried to fill up.
The panic buying drained stocks at petrol stations to as little as 15pc nationwide, the figures showed.
The Army has now been deployed to help with deliveries, but supply shortages have persisted – especially in London and the south east.
The data showed that while the situation has improved, inventories remained well below normal on Oct 3.
10:57 AM
US futures hold steady ahead of jobs data
US futures are largely flat ahead of jobs data for September that’s likely to impact the Federal Reserve’s decision about easing stimulus measures.
Futures tracking the S&P 500 were up 0.07pc, while the Dow Jones rose 0.13pc. The tech-heavy Nasdaq dipped 0.02pc.
Wall Street pushed higher on Thursday, with tech giants leading gains after the US Senate reached a temporary agreement on the debt ceiling to avoid an historic debt default.
Now attention has turned to the Labor Department’s closely-watched nonfarm payrolls report, due this afternoon.
It’s set to show that hiring surged by 500,000 jobs in September as the summer wave of Covid infections began to subside, paving the way for the Fed to start scaling back its monthly bond buying.
Jeffrey Halley at OANDA said: “All roads lead to non-farm payrolls data which will decide, in the market’s minds, whether the start of the Fed taper is a done deal for December.
“I do not believe that markets have priced in the Fed taper and its implications to any large degree yet. Even a weak number probably only delays the inevitable for another month.”
10:46 AM
Carlisle Capital among suitors for Derby County
US investment firm Carlisle Capital is reportedly one of the suitors circling Derby County after the football club collapsed into administration last month.
Carlisle, which was set up by members of the Binnie family, is in talks with Derby County’s administrators, Sky News reports.
It’s said to be one of around five parties interested in buying out the Championship side who are deemed by advisers to be credible suitors.
But there are still major question marks over Derby County’s debts. The club, which is managed by Wayne Rooney, owes roughly £15m to MSD Capital, the firm set up by the computing billionaire Michael Dell.
It also owes tens of millions of pounds to other creditors including HM Revenue & Customs.
10:33 AM
Deloitte facing probe over audit of Essar Oil
Deloitte is reportedly under investigation over its auditing of Stanlow refinery owner Essar Oil UK.
The Institute of Chartered Accountants in England and Wales (ICAEW) has started looking into whether Deloitte should have raised concerns about Essar’s governance earlier, the Financial Times reports.
The industry body is also looking at whether Deloitte breached a statutory deadline for publicly filing reasons for its resignation at Companies House.
Deloitte resigned as auditor in October 2020, citing governance concerns affecting the company’s audit strategy.
Essar was forced to refinance last year amid a slump in demand for fuel. It came close to collapse last month before agreement a new schedule with HMRC to repay its pandemic debts.
10:18 AM
Russian gas plant halts operations
Some more details are coming through about the major gas plant fire in Russia this morning.
Bloomberg reports that gas processing has been stopped at the whole of the Amur plant in east Siberia, even though only one of two processing trains was damaged in the fire.
The blaze began early in the morning and was extinguished at 1pm local time (5am London time), a spokesman said.
Amur’s operations are not essential for Gazprom’s gas supplies to China to continue. Exports through the conduit, called the Power of Siberia, started in late 2019, some 18 months before the Amur plant was launched.
The facility processes natural gas from Gazprom’s Chayanda field, extracting valuable fractions that can be used as feedstock for petrochemical production.
10:12 AM
Weir Group slides after ransomware attack
Weir Group is the biggest laggard on the FTSE 250 today after the engineering firm revealed it had been hit by a ransomware attack.
The company said it was the victim of an attempted ransomware attack in the second half of September, which hit its third-quarter profits. Shares are down 3pc.
Ransomware attacks, in which hackers freeze the victim’s computer systems, steal data and threaten to destroy or publicise it if they aren’t paid, have been on the rise in recent years.
10:03 AM
BoE: Small businesses facing debt time-bomb
There’s also some words of warning from the Bank of England over the levels of pandemic debt held by small businesses.
Louis has more details:
The Bank warned of a debt time-bomb threatening Britain’s small businesses, with the growth indebtedness across SMEs “substantially outpaced that of larger businesses”.
Huge numbers of small companies took on extra debt to weather the pandemic, much of it through Government-backed schemes. SME debt levels have jumped by a quarter during the pandemic, versus a rise of just 2pc for large firms, the Bank said.
“Significantly more SMEs now have debt to service, and while the majority of new debt was relatively cheap due to government loan schemes, this will add to pressure on weaker SMEs,” the FPC warned.
09:59 AM
Bank of England: Markets could correct ‘sharply’
The Bank of England has warned markets could “correct sharply” if investors grow fearful of stagflation or interest rate hikes, reports my colleague Louis Ashworth.
He writes:
A report by the Financial Policy Committee warned risk-taking “remains elevated in a number of markets relative to historic levels”.
The US stock market sagged during September, stumbling from record highs amid worries high inflation will prove stronger and long-lasting than had been expected.
“Asset valuations could correct sharply if, for example, market participants re‐evaluate the prospects for growth, inflation or interest rates,” the FPC said.
There are signs investment banks are loosening underwriting standards and beginning to take on more debt, the report added, but it determined the UK banking system is sufficiently resilient to potential shocks.
09:44 AM
Major fire knocks out Russian gas plant
There’s some dramatic footage coming from the Amur gas plant fire in Russia this morning.
It’s unclear what implications the incident will have, but the plant is a key link in the country’s gas exports to China.
GAS MARKET: Still unclear what’s the damage, but for a market on the edge, this is another source of worries. A fire has hit the Amur processing plant on the “Power of Siberia” gas pipeline linking Russia and China pic.twitter.com/4Bi7hDkLUS
— Javier Blas (@JavierBlas) October 8, 2021
09:32 AM
Tesco to hire 15,000 more temporary workers for Christmas
Tesco is hiring another 15,000 temporary workers to help cope with increased demand over the Christmas period.
The supermarket giant said it’s looking to recruit 30,000 employees in total, with half of those roles now filled by temporary staff who joined during the pandemic and have had their contracts extended.
The festive recruitment drive follows similar moves by Sainsbury’s, Morrison and Aldi.
09:23 AM
Regulator rejects Shell’s plan for North Sea gasfield
Shell’s plans to develop a gasfield in the North Sea have reportedly been blocked by a regulator following scrutiny of the company’s environmental approach.
Reuters reports that the Offshore Petroleum Regulator for Environment and Decommissioning (OPRED) refused to approve the environmental statement for the Jackdaw project’s development, though it’s not clear on what grounds the decision was made.
A Shell spokesman said: “We’re disappointed by the decision and are considering the implications.”
It comes amid soaring natural gas and oil prices as the UK and Europe face a supply crunch ahead of the cold winter months.
09:16 AM
Sterling back on track for weekly gains
Sterling is set for its biggest weekly gain against the euro in two month as expectations grow that the Bank of England will lift interest rates.
The pound hit a two-month low versus the euro and erased all of its strong gains versus the dollar for 2021 as supply chains were strained to breaking point by shortages of workers.
But rising expectations the Bank of England may act sooner to tackle inflation have supported sterling this week.
Versus the euro, it edged 0.1pc lower to 84.9p, but was on track for its strongest week versus the single currency since early August.
It was 0.1pc lower versus a strengthening dollar to $1.3599. However, it was set for weekly gains versus the greenback after four consecutive weeks of losses.
09:06 AM
Jacamo owner N Brown hails big progress in turnaround plan
Jacamo owner N Brown has hailed positive momentum heading towards the busy Christmas period following the company’s turnaround plan.
The online fashion retailer, which also owns JD Williams and Simply Be, said it’s seen early improvements on the back of “restructuring work” after pushing forward with a new strategy last summer in a bid to return to growth.
The retailer posted a 7.1pc rise in pre-tax profit to £24.2m in the first half, compared with the same period last year. However, it said total group revenues were 0.1pc lower at £346.8m
N Brow is now ramping up its marketing activity with partnerships alongside the likes of Amanda Holden and Davina McCall as part of its “refreshed” strategy.
Shares are up 4.1pc.
09:00 AM
Fuel and food shortages hit Britons
There’s some more data out from the ONS today highlighting the impact of shortages up and down the country.
Around one in six adults – or 17pc – said they were unable to buy food over the last two weeks as supply chain troubles led to empty shelves. Meanwhile 15pc said they had trouble getting fuel amid panic buying at forecourts.
The figures show the impact of labour and material shortages, as well as Brexit border frictions, on household purchases.
When food shopping, around more than 60pc of adults reported experiencing some differences compared with usual, with less variety cited as the most common issue.
Around a quarter said they had not been able to buy other non-essential food items, while57pc reported that everything they needed had been available to buy.
85% reported their food shopping habits hadn’t changed in the past week, with 57% saying everything they needed was available.
However, 61% reported differences such as
? less variety (43%)
? items unavailable (20%)
? had to visit more shops (14%)— Office for National Statistics (ONS) (@ONS) October 8, 2021
08:48 AM
London lags behind regions in post-pandemic recovery
Five regions are outpacing the wider rate of economic growth in the UK, new figures have shown, while London lags behind.
The East Midlands, East of England, South East, South West and West Midlands had growth greater than the UK-wide figure in the second quarter, according to the Office for National Statistics (ONS).
The highest of these was the East of England, which expanded by 5.3pc. This was above the wider UK gross value added figure of 4.8pc.
But figures show that London, North East, Yorkshire and The Humber and Wales are still lagging behind in the post-pandemic recovery. The lowest are of growth was the North East at 4.0pc.
08:40 AM
Brighton Pier owner settles £5m insurance claim
The owner of Brighton Pier has settled a £5m business interruption claim with its insurers after being forced to close during the pandemic.
Brighton Pier Group, which also owns Lightwater Valley theme park in North Yorkshire, said it has already been paid £4.1m for the insurance claims and received documentation for a final £900,000 on Thursday.
The group, chaired by entrepreneur Luke Johnson, said the claims related to losses the business faced to the end of June after pandemic restrictions forced it shut to its doors.
It came as Brighton Pier Group said it performed “strongly” over the past quarter, with summer weather, school holidays and a strong bank holiday weekend in August boosting its performance.
Shares surged 21.5pc following the announcement.
08:28 AM
Salaries grow at fastest rate in 24 years
Wage growth rose at its fastest pace in 24 years last month as a shortage of workers pushed up pay.
A survey by the Recruitment & Employment Confederation (REC) and KPMG showed starting salaries for permanent workers soared in September. At the same time, the pool of available workers fell at near the sharpest rate on record.
The survey will add to concerns about inflation – an issue that’s already ringing alarm bells at the Bank of England. They also indicates difficulty moving people off of furlough and into work following the pandemic, an issue the REC said the Government should address with more training programs.
Claire Warnes at KPMG said: “While higher salaries are good for job seekers, wage growth alone is unlikely to help sustain the economic recovery.
“Many do not have the right skills to transfer to the sectors with most demand.”
08:21 AM
Global tax talks to resume after Ireland falls into line
Global talks to overhaul corporate taxation are set to resume with urgency today after Ireland caved in to international pressure and dropped its low-tax business model.
Ireland has agreed to a minimum 15pc tax rate that has been championed by the US. It means it will abandon the 12.5pc rate that’s been a cornerstone of the country’s economy and helped attract tech giants such as Facebook and Google.
The Irish shift is one of several needed from among the 140 countries negotiating a wide-ranging deal in talks hosted by the Organization for Economic Cooperation and Development (OECD).
Some nations are seeking so called carve-outs to partially exempt certain activities from a minimum tax rate of 15pc, while others are haggling over a separate part of the accord concerning where profits of big firms are levied.
Read more on this story: Ireland abandons low-tax model as it caves in to Biden
08:15 AM
Travel stocks fly high
It’s been a fairly sluggish start for markets this morning, but travel stocks are providing some momentum as investors cheer an easing of travel restrictions.
Airlines are leading the way, with British Airways owner IAG topping the risers on the FTSE 100 – up around 3pc. Among the mid-caps, easyJet has pushed 1.8pc higher.
Travel operators Tui and On the Beach are also doing well, gaining 2.7pc and 2.5pc respectively, while travel retailers and concession operators such as Upper Crust owner SSP and WH Smith are also in positive territory.
The sentiment has spread to Europe too – Lufthansa is up 0.5pc, while hotel groups Accor and Melia have also made gains.
08:08 AM
Odeon sells 1m Bond tickets
Odeon has sold just over 1m tickets for the new James Bond film, the company has said, marking the latest sign that the blockbuster is stirring up business for the pandemic-hit cinema sector.
No Time to Die is the highest-attended film since Star Wars: Rise of Skywalker in 2019 with roughly half of punters going to the cinema for the first time since the pandemic, the chain said.
The film, which marks actor Daniel Craig’s fifth and final outing as the suave spy, was delayed three times from its planned April 2020 release date as lockdown measures shut venues around the world.
Earlier this week Universal Pictures said the film took a huge $121m (£89m) at the international box office over its opening weekend.
08:02 AM
US warns Russia not to exploit gas crisis
The US has waded into the debate over soaring gas prices, warning Russia not to exploit the crisis for its own gain.
Jake Sullivan, US national security adviser, said any attempt to do so would backfire.
He told reporters: “Russia has a history of using energy as a tool of coercion, as a political weapon. Whether that’s what’s happening here now is something I will leave to others.”
It comes after President Vladimir Putin said Russia would step in to stabilise energy markets by pumping more gas to Europe, even hinting that supplies could hit record levels.
But there are concerns the Russian leader could use the crisis to force through approval of the Nord Stream 2 pipeline, while the International Energy Agency has suggested that the country may have held back significant volumes of gas even as prices surged.
07:46 AM
Gruhub founder quits four months after Just Eat deal
The founder of US delivery company Grubhub has quit just four months after it was taken over by British rival Just Eat Takeaway.
Matt Maloney joined the Just Eat Takeaway board in June but has since stepped down to “pursue other opportunities”, the company said.
Just Eat boss Jitse Groen said: “Great entrepreneurs like Matt start businesses that touch the lives of millions of people.
“He has built a magnificent company and helped create hundreds of thousands of jobs across the US. We are sorry to see him leave the company and wish him the best in his future endeavours.”
Grubhub was bought by Just Eat in a £5.8bn deal that formed the biggest food delivery company outside China. It had previously been courted by Uber, but that deal failed to pass competition scrutiny.
07:35 AM
FTSE risers and fallers
After a strong open, the FTSE 100 is now up a modest 0.1pc at 7,085 points.
Leading the gains are heavyweight oil stocks, with Royal Dutch Shell and BP up 1.6pc and 1.4pc respectively, while miners also provided a boost.
Travel stocks are also faring well this morning, with British Airways owner IAG posting the largest rise of 2.2pc. It comes after Transport Secretary Grant Shapps confirmed that 47 countries will be cut from the UK’s travel red list.
The domestically-focused FTSE 250 is up 0.2pc, with travel stocks such as Tui leading the gains.
07:27 AM
Kwasi Kwarteng to meet industry amid price cap row
Business Secretary Kwasi Kwarteng will meet with energy intensive companies today as the energy crisis rumbles on.
Mr Kwarteng will hold talks with representatives from sectors such as steel and chemicals amid concerns surging prices could force them to shutter factories.
The crisis has sparked a row over a potential relaxation of energy price cap rules. Businesses have urged the government to lift the cap to prevent further supplier collapses, but the move would drive up prices for households at a time when living costs are already rising.
In a tweet last night Mr Kwarteng said the price cap will remain in place over winter, adding: “Protecting consumers from rising global gas prices is my top priority.”
Ofgem chief executive Jonathan Brearley also said there were no plans to raise the price cap before April. However, he told BBC Radio 4 he expected a “significant” rise in the spring.
ENERGY UPDATE
Protecting consumers from rising global gas prices is my top priority
The Energy Price Cap is holding back a wave of instant bill increases. It will remain in place, and at the same level, this winter
To date, @Ofgem has moved 1.7m customers to new suppliers
1/5
— Kwasi Kwarteng (@KwasiKwarteng) October 7, 2021
07:18 AM
Royal Mail expands in Canada with £210m takeover
There’s some big corporate news this morning for Royal Mail, which is beefing up its presence in North America with a £210.5m deal for Canadian logistics business Rosenau Transport.
Royal Mail said the takeover, secured through its international subsidiary General Logistics Systems (GLS), would allow it to expand in the country and capitalise on “significant growth opportunities”.
The postal group has been in Canada since 2018 and operates two hubs with 27 depots.
The deal will see it expand and create a new link with GLS’s current operations on the west coast of the US. It will be funded with existing cash and borrowing and see GLS take on 24 facilities in four provinces, once completed by the end of the year.
GLS chief executive Martin Seidenberg said:
The addition of Rosenau Transport to GLS complements and enhances our accelerate strategy.
With its strong presence in western Canada, high quality, entrepreneurial culture, as well as freight capabilities and parcel potential, Rosenau Transport’s model is similar to our existing Canadian business and provides an excellent fit.
07:08 AM
FTSE 100 opens higher
The FTSE 100 has opened in positive territory this morning, building on yesterday’s gains.
The blue-chip index is up 0.3pc at 7,100 points.
07:07 AM
Tesla leads West Coast exodus
There’s no doubting the significance of this move. Tesla, which is the world’s biggest car maker, is by far the largest company to ditch California in favour of Texas – but it’s by no means the first.
Computer giant Hewlett-Packard has shifted its headquarters to Houston, while financial services group Charles Schwab moved from San Francisco to Dallas.
While California has traditionally been America’s tech hub, companies are being drawn to Texas’ lower taxes, lower cost of living and more lax business regulations.
That said, there’s been growing discomfort among some companies over the state’s policies, such as a recent abortion law – which has been temporarily blocked – and efforts to restrict voter rights.
06:57 AM
Elon Musk’s California clash
Tesla may have been born and raised in California, but Elon Musk’s relationship with the Golden State soured during the first wave of Covid last spring.
When Alameda County ordered production stopped at Tesla’s plant in Fremont, Mr Musk openly defied public health officials by closing late and reopening early, blasting the rules as “fascist”.
He briefly sued the county, but Tesla has continued to expand its footprint in California.
A new Megafactory that will make Mega packs – the energy-storage product Tesla sells to utilities – is under construction in the Central Valley city of Lathrop. Meanwhile, the electric car maker will continue to expand manufacturing in the state and aims to boost production at its vehicle factory in Fremont – and at its Nevada battery plant – by 50pc.
Announcing the move last night, Mr Musk said: “We will continue to expand our activities in California. This is not a matter of Tesla leaving California.”
Tesla is filing a lawsuit against Alameda County immediately. The unelected & ignorant “Interim Health Officer” of Alameda is acting contrary to the Governor, the President, our Constitutional freedoms & just plain common sense!
— Elon Musk (@elonmusk) May 9, 2020
06:48 AM
Tesla to move headquarters to Texas
Good morning.
Tesla will move its headquarters from California to Texas after boss Elon Musk hit out at a number of the state’s policies.
Mr Musk, who announced the move at a shareholder meeting in Austin, Texas, had fallen out with politicians in California over the state’s response to the pandemic.
He also cited the high cost of living for Tesla’s employees.
5 things to start your day
1) Ireland abandons low-tax model as it caves in to Biden
Dublin ends weeks of wrangling over the wording of US president’s global corporation tax plan by raising rate to 15pc, hitting 1,500 firms.
2) Government’s switch to greener fuel was ‘major factor’ behind petrol crisis
Petrol retailers were ‘emptying their tanks’ for the switchover to E10 fuel when garages were swiftly drained by panic buying.
3) Interest rate rise fears mount as employers offer record pay rises
Pushing up pay without raising productivity could lead to an inflationary spiral, warn experts.
4) Soaring energy costs force Gupta to delay Liberty Steel restart
Rocketing power costs means debt-ridden British manufacturer’s steel prices would have to rise by up to £500 a ton.
5) Many used cars set to cost more than new models
Boss of Pendragon says problem is ‘simply supply and demand – there used to be 10 cars per buyer, now its 10 buyers per car”.
What happened overnight
– The US Senate voted on Thursday night to stave off a credit default that would have sparked a recession and worried world markets as Democrats and Republicans agreed to a stop-gap fix to raise the nation’s debt limit. The breakthrough – which defers the crisis until December 3 by adding another $480 billion to the allowable national debt – came with an estimated 11 days to go until the country would no longer have been able to borrow money or pay off loans for the first time in its history.
– Asian shares rose on Friday as Chinese shares returned from a one-week holiday upbeat, tracking a global rally, while investors also eyed key US jobs data for any fresh insight into the timing of Federal Reserve tapering.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5pc, after rallying 2.1pc the day before, its biggest daily gain since August. Japan’s Nikkei index advanced 1.8pc.
Chinese blue chips gained 0.56pc as they resumed trading after being closed for the National Day holiday, while Hong Kong, which has been open all week, gained 1pc.
Elsewhere, Australian shares rose 0.84pc, helped by mining stocks amid surging commodities prices.
Coming up today
Trading update
Electrocomponents
Economics
Bank of England FPC meeting minutes (UK); non-farm payrolls (US), labour force participation rate (US)
