Huawei heiress to be freed after deal with US

Meng Wanzhou walks past the media upon arriving at BC Supreme Court for her hearing on May 27, 2020 in Vancouver – Rich Lam /Getty Images

Tensions between Beijing and Washington DC are expected to ease after the Huawei heiress Meng Wanzhou agreed a deal with US prosecutors that will end her three-year battle against fraud charges and allow her to return to China.

Ms Meng, chief financial officer of the controversial Chinese telecoms behemoth and the daughter of its founder Ren Zhengfei, appeared by video in a US court hearing on Friday. The US is to defer and then later drop charges of wire and bank fraud against her, while Ms Meng has admitted wrongdoing but will not face any punishment.

It ends a three-year diplomatic and legal battle which has been a major flashpoint in relations between East and West.

Ms Meng, known in China as the “princess of Huawei”, has been under curfew and fighting extradition to the US since 2018 when she was arrested at Vancouver Airport.

She was charged with fraud for allegedly misleading HSBC about dealings with Iran that it is claimed broke US sanctions.

The case made the 49-year-old a symbol of the escalating technology war between the US and China, and then-President Donald Trump’s campaign against Huawei.

The company, one of China’s most successful tech firms, has been accused of acting as an arm of Beijing’s international surveillance apparatus, and has endured a sales slump in the last year after being hit by US export controls. It has always denied spying claims, and said it follows the law wherever it operates.

Under pressure from the Trump administration, Britain banned Huawei from its 5G mobile networks last year. Operators are forbidden from installing its equipment and must remove existing Huawei products from networks by 2027.

The White House has also implemented bans on US companies doing business with it. The controls have cut it off from the world’s most advanced microchips, crippling its smartphone division.

MS Meng’s arrest sparked a diplomatic stand-off, with China detaining two Canadian nationals in what was seen as an attempt to exert pressure on Justin Trudeau’s government to release Ms Meng. Friday’s deal could provide a path for China to release the pair, Michael Spavor and Michael Kovrig.

Mr Spavor and Mr Kovrig, a businessman and diplomat, have been in Chinese prisons since shortly after Ms Meng’s arrest, and charged with spying. Chinese officials had said Ms Meng’s arrest was politically motivated and intended to harm the country’s technology industry.

The deal could be seen as an indicator of a more conciliatory attitude towards Huawei from Joe Biden’s administration than the aggressive position adopted by Mr Trump, and could open him up to criticism from hawkish US politicians. Mr Biden’s officials have so far maintained Trump-era sanctions against the Chinese company and said they are willing to go further.

Ms Meng was arrested in December 2018 when changing flights en route to Hong Kong from Mexico, and has been under nighttime house arrest in a Vancouver mansion since.

Charges against her related to a subsidiary called Skycom, allegedly used for Huawei to do business with Iran in 2013 without tripping sanctions controls.

Ms Meng had reportedly turned down a previous plea deal because she did not want to admit wrongdoing.

The plea deal applies solely to Ms Meng. The US has separately charged Huawei with stealing trade secrets.

Huawei did not comment.

05:25 PM

Wrapping up

That’s all from us today – here are some of our top stories:

Thanks for following along. Have a great weekend!

05:11 PM

British firms urge government to speed up green energy shift

UK net zero emissions

UK net zero emissions

A string of major British companies have urged the government to fast-track the UK’s shift away from fossil fuels amid a crisis over surging gas prices.

Fourteen firms, including BT, Co-op and energy supplier Octopus, wrote a joint letter to Business Secretary Kwasi Kwarteng calling for a rethink of the government’s strategy.

They wrote: “We are writing to urge the government to (commit) to the full decarbonisation of UK electricity generation by 2035.”

The new target would require annual investments of up to £14bn per year in renewable energy, they added.

The UK, which will host the COP26 climate summit in Glasgow in November, has set a target of reducing its carbon emissions to net zero by 2050.

“As COP26 approaches, we believe the time is right for the UK to signal an end to the use of unabated fossil fuels in the power sector, claiming another historic first,” the letter, which was organised by environmental think tank Green Alliance, added. “There is now a clear pathway to delivering emissions-free electricity.”

Unabated refers to fossil fuels whose emissions have not gone through any filtering process.

In response to the letter, the government insisted it had a successful track record on the matter.

04:44 PM

Explainer: How BP sparked a fuel crisis in drive to ease visa rules

The timing of a leak about the oil giant’s pleading has fuelled suspicions it is more about a lobbying campaign for looser EU immigration policies, report Russell Lynch and Oliver Gill.

They write:

Scenes of cars queuing on petrol forecourts this week have triggered uncomfortable memories of Britain’s fuel crisis more than 20 years ago.

Rather than blockaded refineries, the disruption has its immediate genesis in a fateful Cabinet Office meeting nine days ago with some of Britain’s biggest companies and industry associations.

When explosive warnings from oil giant BP that a shortage of HGV drivers would force it to ration petrol station deliveries hit the front pages, anxious drivers inevitably scurried to fill up despite ministerial pleas not to do so.

Motorists’ groups are baffled by the issue being thrust into the public consciousness after a summer of low-level disruption barely registered. The timing has fuelled suspicion that the leak is more to do with low politics and a lobbying campaign for looser visa restrictions, to bring in more drivers and bring down soaring costs.

Read more on this story here

04:30 PM

WPP agrees to pay $19m to settle bribery charges

WPP  - Handout via REUTERS

WPP – Handout via REUTERS

WPP has agreed to pay more than $19m to the US Securities and Exchange Commission (SEC) to settle charges that it broke anti-bribery laws.

According to an SEC statement, the advertising behemoth acquired majority interests in firms in high-risk markets without ensuring that these subsidiaries implemented the group’s internal compliance controls.

It accused WPP of failing to respond to repeated warning signs of corruption in some of these subsidiaries.

In one example cited by the SEC, a subsidiary in India continued to bribe Indian government officials in return for advertising contracts even though WPP had received seven anonymous complaints about the conduct.

Without admitting or denying the SEC’s findings, WPP agreed to pay $10.1m in disgorgement [the repayment of profits obtained illegally], $1.1m in prejudgment interest, and an $8m fine.

A WPP spokesman said: “WPP’s new leadership has put in place robust new compliance measures and controls, fundamentally changed its approach to acquisitions, cooperated fully with the Commission and terminated those involved in misconduct.”

04:19 PM

FTSE 100 closes lower

The FTSE 100 has closed lower as investor jitters took the shine off a strong week of gains.

The blue-chip index fell 0.4pc to 7,051 points, with continued uncertainty around economic recovery outweighing gains for healthcare stocks.

Retailers, industrial miners and life insurers were the biggest drag, while AstraZeneca limited further losses by rising 2pc after positive trial results for its new prostate cancer drug Lynparza.

Russ Mould, investment director at AJ Bell, said: “Miners were weak as investors started worrying about the potential fall-out should Evergrande go bust. Commodities demand could tumble if the Chinese property market experiences a crash.”

The FTSE 100 has gained almost 1.3pc this week, marking its strongest weekly performance since mid-August.

But a mounting energy sector crisis and growing worries about food costs and tax hikes dented consumer confidence this month as optimism over the economic outlook begins to fade.

The domestically-focused FTSE 250 fell 0.9pc, marking its third week of losses.

04:07 PM

Evergrande misses bond deadline

Some more details on the escalating Evergrande crisis today from my colleagues Louis Ashworth and Ben Gartside.

They write:

Beijing moved to protect Evergrande homebuyers over foreign investors after the teetering Chinese property giant missed a critical bond payment deadline.

The company is yet to make an announcement regarding the interest payment on offshore bonds that was due on Thursday. If it is not repaid within 30 days after the deadline, Evergrande will be considered to have defaulted.

Earlier this week it staved off a default by striking an agreement with domestic bondholders over interest payments worth $35.9m (£26m).

Chinese regulators have insisted that completing developments is Evergrande’s primary concern and acted to ensure funds paid by purchasers were not diverted.

Local governments have been told to place funds for Evergrande projects into escrow accounts outside the developer’s direct control.

Read more: Evergrande misses bond deadline as Beijing tries to protect property buyers

03:51 PM

Brent near three-year high

The Total Culzean platform in the North Sea, about 45 miles east of the Aberdeen - ANDY BUCHANAN /AFP

The Total Culzean platform in the North Sea, about 45 miles east of the Aberdeen – ANDY BUCHANAN /AFP

Brent oil prices moved towards three-year highs this afternoon, as oil prices received a boost from tight supplies particularly in the United States, analysts said.

In late afternoon deals, European benchmark Brent North Sea crude for delivery in November struck $77.87 per barrel – reaching a high last seen on October 29, 2018.

“The price rise is being facilitated by limited supply coupled with robust demand, causing the oil market to tighten noticeably,” Commerzbank analyst Carsten Fritsch told AFP.

Right now, Brent prices are standing at $77.74, up 0.6pc compared to yesterday.

03:36 PM

Pound drops against the dollar

The pound has dropped against the dollar today, losing some of its gains from the rally which followed the Bank of England’s hawkish tone on interest rates and its pandemic bond-buying yesterday.

Default concern swirling around giant Chinese developer Evergrande has sapped confidence across global markets throughout the day, boosting the safe-haven dollar and weighing on risk-oriented currencies including the pound.

Sterling, which had risen as high as $1.375 during the previous session, has now retreated 0.5pc to about $1.367.

“A first rate step in Q1 is now priced in by financial markets which is likely to provide support for sterling for now,” said Commerzbank analyst Esther Reichelt.

However she warned that Britain’s economic recovery faced challenges ahead.

“To be quite clear: we consider the current GBP strength to be justified, but continued challenges for economic growth such as the labour shortages that have been aggravated by Brexit are likely to prevent a rapid tightening of monetary policy”.

03:22 PM

In pictures: Queues grow at petrol stations

Adding to the crisis in the electricity market, the government is now also trying to stop drivers panic buying fuel as queues build up outside some service stations.

Queues started forming after BP and Exxon Mobil both said yesterday that a shortage of HGV drivers was hampering deliveries of fuels, with some of their forecourts forced to closed.

Pictures taken in the past 24 hours show long lines of cars outside petrol stations in Weymouth, Dorset; Tonbridge, Kent; Brighton, Sussex and Ellesmere Port, Cheshire.

Vehicles queue for fuel at a Sainsbury's petrol station on September 24, 2021 in Weymouth, England - Finnbarr Webster /Getty Images Europe

Vehicles queue for fuel at a Sainsbury’s petrol station on September 24, 2021 in Weymouth, England – Finnbarr Webster /Getty Images Europe

A store worker directs traffic as people queue for petrol at a Morrisons in Ellesmere Port, Cheshire  - Christopher Furlong /Getty Images Europe 

A store worker directs traffic as people queue for petrol at a Morrisons in Ellesmere Port, Cheshire – Christopher Furlong /Getty Images Europe

A man looks on as drivers queue to enter a supermarket petrol station as concern spreads over fuel supplies in Brighton, England - Leon Neal /Getty Images Europe 

A man looks on as drivers queue to enter a supermarket petrol station as concern spreads over fuel supplies in Brighton, England – Leon Neal /Getty Images Europe

Motorists queue for petrol at a Sainsbury's service station in Tonbridge, Kent - BEN STANSALL /AFP

Motorists queue for petrol at a Sainsbury’s service station in Tonbridge, Kent – BEN STANSALL /AFP

03:06 PM

Huawei agreement: Meng to appear in court today

Meng Wanzhou arrives at a court hearing in Vancouver - JENNIFER GAUTHIER /REUTERS 

Meng Wanzhou arrives at a court hearing in Vancouver – JENNIFER GAUTHIER /REUTERS

Huawei’s chief financial officer Meng Wanzhou is expected to appear virtually in hearing in Brooklyn federal court later today to agree to a deferred prosecution agreement that should enable her to leave Canada after three years in detention.

The Wall Street Journal is reporting that she will have to admit to some wrongdoing in exchange for prosecutors deferring and later dropping wire and bank fraud charges.

02:40 PM

Petrofac shares jump

Shares of oil service provider Petrofac have spiked 23pc today, after it was announced the company had entered into a deal with the UK Serious Fraud Office and intends to plead guilty to seven counts of failing to prevent bribery between 2011 and 2017.

Petrofac said the charges relate to former employees offering or making payments to agents in relation to projects awarded between 2012 and 2015 in Iraq, Kingdom of Saudi Arabia and the United Arab Emirates.

“All employees involved in the charges have left the business,” it added.

Petrofac will plead guilty at a hearing at Southwark Crown Court which has been scheduled for September 27, the SFO said. A financial penalty will be determined by the court.

Chairman René Medori said: “Petrofac has been living under the shadow of the past, but today it is a profoundly different business, in which stakeholders can be assured of our commitment to the highest standards of business ethics, wherever we operate.”

02:32 PM

Can cryptocurrencies bounce back?

Craig Erlam, senior market analyst of UK & EMEA at OANDA, comments:

China’s opposition to cryptocurrencies is nothing new but the latest clarification would suggest those involved are at risk of prosecution. China’s actions haven’t held back cryptos rise too much in the past so I wouldn’t be surprised to see it bounce back once more. Where’s every crypto enthusiasts friend, Elon Musk, when they need him?

Of course, this time it’s happening as bitcoin appears to have entered into a correction phase which may have contributed to its declines. A move below $40,000 could see it come under further pressure after such a long period of consolidation above here.

02:26 PM

Expert reaction: China crypto ban

Simon Peters, cryptoasset analyst at multi-asset investment app eToro, says:

The announcement of China’s ban on crypto transactions has caused a big sell-off in bitcoin and other altcoins today. The move could prove to be a brake on the global adoption of crypto.

At a stroke, effectively, one in seven of the world’s population is now officially frozen out of the cryptoasset market. Until now crypto was well-established in the region, making its total exclusion a significant event.

From a price point of view, we’ve seen FUD (fear, uncertainty, doubt) from China before – most recently with the crackdown on bitcoin mining. BTC dropped to just $30,000 back in May as a result, but prices did recover afterwards.

This latest price fall could be seen as an opportunity for unfazed long-term holders to ‘buy the dip’ and further build up portfolios at lower prices. It will be interesting to see if the $40,000 level holds its support, as a break could send prices really tumbling in the short term.

02:17 PM

Queues spread to airports as e-gates fail

Electronic passport gates failed at UK airports today, creating queues as passengers were forced to wait for border officials to check their travel documents.

London Heathrow, Manchester and Edinburgh airports all reported disruptions at their e-gates – which allow passengers with biometric passports to quickly pass through border controls – blaming technology failures.

“We’re aware of a systems failure impacting the e-gates, which are staffed and operated by Border Force,” Heathrow said in a statement.

“Our teams are working with Border Force to find a solution as quickly as possible.”

02:12 PM

City keeps European financial crown despite Brexit

The City of London has maintained its crown as Europe’s dominant financial hub as firms in the Square Mile adapt to Brexit, reports Simon Foy.

He writes:

London came second only to New York in the latest global financial centres index, which is published by Z/Yen Group, a financial think tank.

The City comfortably beat rival European centres, including Paris, Frankfurt and Amsterdam, which came 10th, 14th and 17th, respectively.

The report said London’s strong performance “reflects confidence in the longer-term prospects for the centre”.

Read the full story here.

01:59 PM

FTSE update

Time for an afternoon check in on the FTSE 100.

The index has slipped 0.2pc, with business services group Rentokil the biggest drag (down 3.2pc).

Rolls Royce is the top riser (up 4.7pc), after surging more than 20pc this week.

The FTSE 250 is also down 0.9pc.

Easyjet has made the most gains (up 4.3pc) after the government announced a relaxation in international travel restrictions last week.

At the other end of the index, cybersecurity company Darktrace dropped 7.9pc, erasing the gains it made earlier in the week.

01:46 PM

US stocks fall as Evergrande uncertainty lingers

Evergrande Group's under-construction Riverside Palace development in Taicang, Jiangsu province, China - Qilai Shen /Bloomberg 

Evergrande Group’s under-construction Riverside Palace development in Taicang, Jiangsu province, China – Qilai Shen /Bloomberg

Stock indexes have edged lower in the US this morning, as worries persist about global spillover from debt-laden China Evergrande.

Property developer Evergrande owes $305bn and investors are worried a collapse could reverberate through China and possibly the global financial system.

A Thursday deadline for paying $83.5m in interest of a dollar bond passed without comment from Evergrande. Bondholders have not been paid nor heard from the company, according to Reuters.

The Dow Jones Industrial Average inched just 0.01pc lower at the open, to 34,762.31.

Meanwhile The S&P 500 opened 0.25pc lower at 4,438.04, while the Nasdaq Composite dropped 0.60pc to 14,961.62 at the opening bell.

Nike tumbled more than 6pc after the company said sales this quarter may fall as factory closures linked to coronavirus lockdowns in Vietnam prevent it from keeping up with consumer demand.

That means full-year growth will be in the mid-single-digits rather than a low double-digit percentage rate Nike targeted earlier.

Shares of crytpocurrency exchange Coinbase fell more than 2pc following China’s crypto crackdown.

01:31 PM

Peel Hunt raises £112m ahead of AIM listing

Investment bank Peel Hunt has raised £112m ahead of a stock market listing next Wednesday, which will value the firm at around £280m.

The company, which specialises in mid and small-cap stocks, is due to list on the London Stock Exchange’s junior Alternative Investment Market (AIM).

It said around £40m has been taken in new capital while existing shareholders have sold stock worth around £72m.

The firm added that the proceeds raised will be used to further establish its European presence, as it capitalises on the recent post-pandemic surge in deal-making across the continent.

01:24 PM

Up to 100 petrol stations affected by shortage, says BP

Vehicles queue up to enter the BP petrol station, in Harpenden, Britain - PETER CZIBORRA /REUTERS 

Vehicles queue up to enter the BP petrol station, in Harpenden, Britain – PETER CZIBORRA /REUTERS

Oil major BP has said today that between 50 and 100 of the company’s petrol stations have been affected by the loss of at least one grade of fuel.

A spokesperson added that around 20 of its 1,200 sites have had to close completely as a result of a loss of delivery supply.

01:08 PM

Don’t blame Brexit for driver shortages

The European-wide shortage of lorry drivers, along with failure to train staff and online shopping boom are all contributing to the problem, write my colleagues Tom Rees and Tim Wallace.

They write:

Analysts at Transport Intelligence found Europe is short of 400,000 drivers, indicating the international scale of the problem. The long-term failure to attract, train and retain drivers has combined with a boom in demand.

The pandemic forced up sales of goods, often online, as locked-down consumers had little else to spend their money on. But more goods ordered online needs more lorries are required to deliver them.

Read more on this story here.

12:59 PM

New crisis for chip makers as staff shortages bite

Gadget makers have warned that they will have to cut production or raise prices in the coming months as a staff shortage exacerbates the microchip crisis that has hit global supply chains, reports James Titcomb.

IPC, a trade body for electronics companies, said that four in five manufacturers were finding it difficult to hire qualified staff. More than a third – 37pc – said there was a “severe lack of qualified candidates” while 43pc said it was “somewhat difficult” to hire.

The shortages threaten to compound rising component costs and lack of supplies, the result of a worldwide squeeze on semiconductor production.

The chip shortage has most visibly hit car production in recent months but has begun to affect electronics producers in the run-up to Christmas, leading some to raise prices.

Electronics manufacturing often requires specialised training so that staff can handle sensitive or dangerous materials used in production. IPC said almost half of its members were retraining current workers, while 44pc were raising wages in an attempt to attract employees.

12:57 PM

Climate protesters blocking Port of Dover now removed

Protesters from Insulate Britain block the A20 in Kent, which provides access to the Port of Dover in Kent - Gareth Fuller /PA

Protesters from Insulate Britain block the A20 in Kent, which provides access to the Port of Dover in Kent – Gareth Fuller /PA

Climate protesters who were blocking the entrance to Britain’s busiest ferry port today have now been removed, according to the Port of Dover Police

Earlier today, more than 40 protesters from the climate group Insulate Britain blocked the main road into the port, which handles 17pc of the UK’s trade in goods.

The group said they were trying to highlight the climate crisis and fuel poverty in Britain.

The group, an offshoot of Extinction Rebellion, has called for better insulation of UK homes in order to cut emissions and energy costs.

Insulate Britain blocked London’s orbital M25 highway for five days this month but the government now has a court injunction, meaning the group’s members could be jailed if they block the motorway again.

Police officers lift a protester from the top of a tanker, as Insulate Britain block the A20 in Kent - Gareth Fuller /PA

Police officers lift a protester from the top of a tanker, as Insulate Britain block the A20 in Kent – Gareth Fuller /PA

Police officers carry away a protester from Insulate Britain - Gareth Fuller /PA

Police officers carry away a protester from Insulate Britain – Gareth Fuller /PA

12:41 PM

PM gives go-ahead to relax visa rules for HGV drivers

Prime Minister Boris Johnson has told ministers to go ahead and relax immigration rules to allow more HGV drivers from abroad into the country to ease shortages at petrol stations, the Financial Times is reporting.

One person speaking to the FT said Johnson was “completely fed up with bad headlines on this and wants it sorted and doesn’t care about visa limits any more.”

12:30 PM

Queues build at petrol stations

Social media is showing queues building at petrol stations around the country, after BP and Exxon Mobil said a shortage of truck drivers was hampering deliveries of fuel to some locations.

The companies’ announcements was followed by a sharp increase in vehicles waiting to buy fuel at some petrol stations.

Transport Secretary Grant Shapps told BBC Breakfast said there were “systemic” problems within the haulage sector that needed addressing and that there was a need to make it a “more attractive industry”.

“Traditionally, this has been – and these are extraordinary figures – a 99% white male profession, average age 55, conditions not great, truck stops not great,” he said.

“And the salaries have been suppressed over many years by people coming in and driving and being prepared to do that at lower wages.”

12:23 PM

Dante Labs investigated for no-show PCR tests

The competition watchdog has launched a probe into PCR tester Dante Labs, which has completed four million tests since Covid began, over worries it might not be delivering tests on time or at all.

The PA news agency has the details:

The Competition and Markets Authority (CMA) said Dante could be breaking the law and treating customers unfairly.

It said the company might not be delivering PCR tests or results on time or at all, and failing to respond to complaints or provide proper customer service.

The company might also be refusing or delaying requested refunds and using terms and conditions which unfairly limit consumers’ rights.

Dante, which said it is “disappointed” by the probe, is on a Government list for providers of tests to enter England after travelling abroad.

Dante said: “While the overwhelming majority of our customers have received a timely and cost-effective service, we recognise the challenges faced by a small proportion of those who have purchased our tests. We have invested significantly in our customer service operation to improve our overall delivery in the face of huge demand.”

12:15 PM

UK has 10 days to save Christmas, says retail industry

Petrol tankers fill up with petrol and diesel at the Essar Oil Refinery at Stanlow - Christopher Furlong /Getty Images Europe 

Petrol tankers fill up with petrol and diesel at the Essar Oil Refinery at Stanlow – Christopher Furlong /Getty Images Europe

Britain has just 10 days to alleviate an acute shortage of lorry drivers before it is inevitable the current crisis will disrupt Christmas, a lobby group representing the retail industry said on Friday.

“HGV drivers are the glue which hold our supply chains together. Without them, we are unable to move goods from farms to warehouses to shops,” said Andrew Opie, director of food & sustainability at the British Retail Consortium.

“Unless new drivers are found in the next ten days, it is inevitable that we will see significant disruption in the run up to Christmas.”

BP and Tesco have closed some petrol stations because they cannot get petrol or diesel supplies to all their forecourts due to a lack of HGV drivers.

Recent estimates put the shortfall at around 100,000 drivers – a significant number when bearing in mind the total number of drivers before the pandemic was close to 600,000.

12:05 PM

Energy crisis: Symbio stops accepting new customers

Symbio has become the latest energy supplier to stop accepting new customers as power prices surge, hammering the sector.

Symbio said “technical issues” have forced it to stop taking new customers for the time being.

Igloo, Ampower, Utilita and Neo Energy have also all decided to stop taking customers recently, while a series of other suppliers have gone out of business.

“With unprecedented wholesale prices, we have taken this decision to allow our teams to focus on those customers we already supply,” said Igloo’s chief executive Matt Clemow.

11:58 AM

Money round-up

Here’s the daily round-up from The Telegraph’s Money team:

11:43 AM

Energy crisis: Gas prices hit European miners

Mining is the latest sector to warn it is being hit hard by the spike in power prices.

Producers of metals including copper and zinc electrify mines and smelters to make operations less polluting, meaning power costs are important to their bottom lines.

“[Long-term power] contracts will have to be renewed sooner or later. However they are written, you will eventually get hurt because of the situation in the market,” Mats Gustavsson, vice president for energy at Swedish metals producer Boliden, told Bloomberg.

“If you are exposed to the market, the operational expenses have of course increased.”

Boliden hasn’t yet been forced to curtail operations or output because of soaring energy prices, but costs are rising, Gustavsson said, declining to be more specific.

“The volatility is here to stay,” Gustavsson said. “What’s dangerous is that the lowest price is increasing all the time. So if you want to hedge yourself you will pay a much higher price.”

11:35 AM

US stock futures edge lower

US stock futures are pointing lower this morning in New York, pulled down by banking and tech shares.

Big banks including JPMorgan, Citigroup, Morgan Stanley and Bank of America dipped around 0.5pc, while big tech names Alphabet, Microsoft, Amazon, Facebook and Apple also fell between 0.5pc and 0.6pc.

Investors are still digesting a US Federal Reserve announcement on Wednesday, where the bank signalled it would reduce its monthly bond purchases as soon as November and that interest rates could rise quicker than expected. The default of China’s Evergrande is also preoccupying the market.

Futures tied to the Dow fell 0.19pc, S&P 500 futures fell 0.3pc and Nasdaq 100 futures tumbled 0.4pc.

Shares of cryptocurrency-related companies Coinbase, MicroStrategy, Riot Blockchain and Marathon Patent all suffered sharp losses – between 3pc and 6.1pc – after China’s central bank said it would crack down on cryptocurrency trading.

11:22 AM

Asos makes deal to dress up gamers

The gaming and fashion worlds collide as Asos inks deal to create physical and digital clothing for gamers - REUTERS/Dado Ruvic

The gaming and fashion worlds collide as Asos inks deal to create physical and digital clothing for gamers – REUTERS/Dado Ruvic

Online retailer Asos looks likely to step further into the digital world with a deal to create virtual clothing.

My colleague Laura Onita writes:

Asos has inked a deal with an esports company to eventually create and sell virtual clothes for gamers.

The online fast-fashion firm has teamed up with London-based company Fnatic to work on physical and digital ranges as the gaming and fashion worlds converge.

A raft of established retailers, especially luxury players, have been creating digital clothes that only exist online.

The tie-up between the two firms will first lead to Asos creating physical Fnatic team jerseys, including the upcoming League of Legends World Championship jersey. But the plan is to also work together on “digital kits and produce branded in-game experiences and digital products” during their three-year “multi-million pound” partnership.

Fnatic boss Sam Mathews said the deal will empower gamers to find their voice and style inside and outside of the game. “We couldn’t be more excited to be driving this change forward together with Asos,” he added.

Robert Birge, chief growth officer at ASOS, said that the retailer was keen to capture more Gen-Z shoppers as gaming and fashion continue to boom.

L’Atelier BNP Paribas estimated that in-game spending on items such as virtual clothes and accessories and character upgrades will this year grow to $129bn (£94bn) from $109bn in 2019.

In 2019, LVMH designed a capsule collection for Riot Games’ League of Legends.

Burberry teamed up with technology giant Tencent last year to add its hallmark tartan design to characters in the popular Honour of Kings video game, although the deal fell through amid the Xinjiang cotton controversy.

11:01 AM

Beijing ban on crypto goes further than ever before

Read my colleague James Titcomb‘s take on China’s latest crypto crackdown below:

China has declared all cryptocurrency transactions illegal in its strictest crackdown to date, sending the price of Bitcoin sliding.

The People’s Bank of China, the country’s central bank, said all payments involving cryptocurrency were illicit, in a widespread order that includes institutions based outside the country.

Bitcoin fell by more than 6pc after the announcement, from just over $45,000 to $42,132.

Beijing has previously sought to snuff out cryptocurrency “mining”, the energy-intensive process of minting new Bitcoins, which had been popular in Western China due to low power costs.

But Friday’s move went further by saying that purchases or transfers involving cryptocurrency were illegal.

The central bank, along with financial and internet regulators, said cryptocurrency had become associated with gambling, pyramid schemes and money laundering, and did not have the same legal status as currency.

It said that using people using virtual currencies, websites allowing transactions, or banks facilitating fund transfers, were illegal. The regulators also said they would strengthen enforcement against mining. The move would strengthen national security and social stability, the notice said.

Countries from India to Egypt have proposed or floated bans on using Bitcoin, while regulators in the UK are developing stricter oversight of the online exchanges where it is traded, but Beijing’s strongly-worded statement is among the most aggressive crackdowns.

It comes as Chinese authorities have tightened their grip on some of the country’s biggest companies in an attempt to exercise more control over its economy. Authorities have introduced strict controls over online gaming, ordered reforms at major technology companies and cracked down on online education services.

The prices of other cryptocurrencies such as Ether also slumped after the statement.

Despite Friday’s fall, Bitcoin has still risen roughly fourfold in the last year, after a surge at the start of 2021. Its price peaked at more than $60,000 in April.

On Thursday, Twitter became one of the biggest companies to embrace the technology, allowing users to send Bitcoin back and forth or to “tip” accounts that they follow. The feature is due to be added to the social network’s smartphone app in the coming weeks.

10:42 AM

Petrol station panic is pushing up prices, AA warns

Queues at a Sainsbury's Petrol Station in Colton, Leeds - Danny Lawson/PA Wire

Queues at a Sainsbury’s Petrol Station in Colton, Leeds – Danny Lawson/PA Wire

Back to the fuel crisis, with the AA’s president warning that pump prices have jumped half a penny in the past two days over the panic engulfing motorists after BP shut a handful of forecourts yesterday.

What led BP to close the stations wasn’t a lack of fuel, but rather a shortage of drivers to transport petrol and diesel to the pumps.

Edmund King said: “It is now clear that there have been occasional delays over recent weeks that have been managed with hardly anyone noticing. This was a manageable problem.”

Instead he warned that on-edge motorists have pushed the average petrol pump price up by 0.5p in the past two days, when it should be 2.5p lower thanks to a cheaper form of standard petrol introduced earlier this month as well as road fuel demand being down 8pc compared to pre-Covid levels.

Attempting to reassure drivers, Mr King said that there is no shortage of fuel as queues form outside forecourts.

“There is no shortage of fuel and thousands of forecourts are operating normally with just a few suffering temporary supply chain problems,” he said.

“Fridays and the weekend always tend to be busier on forecourts as drivers either combine filling up with shopping runs, prepare for weekend trips or refuel for the start of the new working week.

“Drivers should not fill up outside their normal routines because, even if the occasional petrol station is temporarily closed, others just down the road will be open.”

10:32 AM

Chart: Ether down over 6pc

Ethereum is one of the biggest fallers so far, as the chart below shows:

10:26 AM

More crypto stocks sink

More cryptocurrency stocks are dropping as the waves of China’s crackdown spread around the world.

Argo Blockchain slumped 10pc in London, while Bitcoin miner Northern Data AG lost 2pc in Frankfurt.

MicroStrategy, the enterprise software company that has more than $5 billion of crypto assets, lost 3.5pc in US pre-market trading. Riot Blockchain and Bit Digital each fell about 5pc.

It is the latest example of China’s scrutiny of its private sectors, tightening its grip on private education and digital gaming even at a time when its economic recovery from the pandemic appears to be slowing and the impending collapse of the aforementioned Evergrande puts traders on edge.

“China authorities are forcing the available liquidity into the real economy,” said Xiadong Bao, an emerging-markets fund manager at Edmond de Rothschild Asset Management.

While the move may not be direct fallout from Evergrande, the overall goal of China’s regulatory efforts is “less speculation, for example in property and crypto, and more sustainable development,” Bao said.

10:17 AM

Evergrande shares fall over interest payment doubts

Evergrande has debts in excess of $300bn - HECTOR RETAMAL/AFP via Getty Images

Evergrande has debts in excess of $300bn – HECTOR RETAMAL/AFP via Getty Images

Shares in Evergrande have fallen about 12pc in Hong Kong after the embattled Chinese property developer gave no indication about making an $83m interest payment on its dollar-denominated bonds, my colleague Chris Johnston writes.

European banks are trying to reassure investors that their exposure is limited, while staff at its electric vehicle business have not been paid.

Evergrande’s unusual silence about the interest payment due on Thursday has put a focus on what might happen during a 30-day grace period. The hugely indebted company has given no signs of having met the payment, which has the grace period before any default could be declared.

Some Chinese companies have used such grace periods in the past to make interest payments. Several years ago, Glorious Property Holdings made multiple payments during grace periods, including at least one on the final day.

10:13 AM

Crypto stocks slide

Ether, EOS and Litecoin are still suffering the steepest plunges of over 7pc but Bitcoin was down around 4pc as of 11.10am.

Crypto-related stocks also slid, with Marathon Digital Holdings tumbling 6pc in US pre-market trading, while Coinbase fell 3.2pc.

This is far from China’s first foray into clamping down on cryptocurrency trading, of course.

The country banned mining last June after outlawing crypto exchanges half a decade ago.

But this is its most aggressive action in a long time against the cryptocurrency industry, which once saw China as its most promising growth areas. The country’s targeting of enforcement efforts at crypto comes as it attempts to hit carbon reduction goals, with mining using up a massive amount of energy.

09:48 AM

Chart: Fuel prices accelerate

Here’s a chart showing just how high fuel prices have risen so far this year – at a massively accelerated pace due to the strength of the reopening following the pandemic:

09:37 AM

Fresh China clampdown hits Bitcoin

Bitcoin has dropped below $44,000 after China’s central bank deemed that all crypto transactions are illegal, sending shockwaves through the world of digital currencies.

Bitcoin dropped 3.3pc to $43,219 while Ether sank over 6pc. Litecoin, Dash, Bitcoin Cash and EOS were all over 5pc lower after the People’s Bank of China’s decision was published.

The central bank said it would ban overseas exchanges from providing services to mainland investors.

09:04 AM

Sunak orders review of bank rules after Greensill saga

Greensill Capital  - Anthony Devlin/Bloomberg

Greensill Capital – Anthony Devlin/Bloomberg

The Government is looking at strengthening some of the UK’s financial regulations after they were criticised in a report into the collapse of Greensill Capital.

Chancellor Rishi Sunak said in a letter to the Treasury Committee that his department had started to review the appointed representatives regime. An appointed representative is a firm or person that conducts regulated business on behalf of a directly FCA-authorised firm.

Sunak wrote that the Treasury “will consider legislative reforms that may be necessary to strengthen the oversight of appointed representatives and to prevent opportunities for abuse of the system”.

The committee published a report in July saying the current rules were being used “well beyond” their original purpose.

A Greensill subsidiary piggybacked on the regulatory license of an unrelated firm through the appointed representatives regime, which was originally designed for sole traders. This meant that a private firm was responsible for ensuring that Greensill adhered to UK regulations, rather than the FCA.

08:51 AM

Mitie cleans up as Covid contracts boost profit guidance

Outsourcer Mitie has bumped up its full-year operating profit guidance to between £145m and £155m as it continued to benefit from a boom in Covid-related contracts.

The cleaner experienced a surge in such contracts in the first quarter and said the boost had continued into the second quarter as workers returned to offices.

It told investors:

Although the contribution from these contracts is expected to decline in the second half of the year, given the strong start that we have made, we are increasing our operating profit before other items guidance for FY22 to £145m – £155m.

Elsewhere the mid-cap company’s business performed in line with expectations.

Shares in Mitie rose 2.6pc on the update.

08:27 AM

AstraZeneca shares jump on positive drug trial

While the FTSE 100 is lagging this morning, AstraZeneca is bucking the trend.

The pharmaceutical giant rose as much as 3pc in early trading after it successful results in trials of its new prostate cancer drug Lynparza.

08:17 AM

German business confidence falls to five-month low

Germany manufacturing confidence - Swen Pfoertner/Pool via REUTERS/File Photo

Germany manufacturing confidence – Swen Pfoertner/Pool via REUTERS/File Photo

German business confidence fell to a five-month low in September amid a “bottleneck” recession just before voters go to the polls to elect Chancellor Angela Merkel’s successor.

The Ifo Institute’s index fell to 98.8 from 99.6 in August, deeper than economists’ expectations in a Bloomberg survey. An index measuring expectations for the next months also fell, as did one assessing current conditions.

The data highlights the challenges faced by German business as they battle supply chain disruptions that have hit the country’s sizeable manufacturing industry. Continued Covid infections also threaten the economy’s recovery.

Ifo President Clemens Fuest said: “Problems in the procurement of raw materials and intermediate products are putting the brakes on the German economy. Manufacturing is experiencing a bottleneck recession.”

While manufacturing has been hardest hit, a separate survey release on Thursday showed momentum in Germany service sector also slowed.

08:04 AM

Shapps: ‘Systemic’ problems in haulage industry

Grant Shapps has admitted that there are “systemic” problems in the UK’s haulage sector and that more had to be done to make it a “more attractive industry”.

The Transport Secretary told BBC Breakfast: “Traditionally, this has been – and these are extraordinary figures – a 99pc white male profession, average age 55, conditions not great, truck stops not great.

“And the salaries have been suppressed over many years by people coming in and driving and being prepared to do that at lower wages.

“So we need to resolve the systemic problems as well and that’s why, as I say, we are doing everything we possible can to open up the capacity and bring more people in.”

He told Sky News: “We need to make this a more attractive industry to go into and the solution to that is to have those slightly higher wages and better conditions at truck stops and the like as well.”

Mr Shapps told the broadcaster the wage base for hauliers had been held down by “importing cheap European, often eastern European, labour, undercutting the domestic market and creating more long-term problems”.

07:38 AM

FTSE 100 opens in the red

Meanwhile the FTSE 100 has sunk 0.24pc at the open to 7,050.7 points as growth worries persisted after yesterday’s warning from the Bank of England that inflation is likely to climb above its previous forecast of 4pc.

AstraZeneca jumped 2.7pc to the top of the main London index after trials of its prostate cancer drug Lynparza showed positive results.

However, retail stocks such as JD Sports (down 2.6pc), industrial miners and life insurers were the top losing sectors.

It comes amid growing worries over energy bills, food costs and tax hikes, which conspired to push consumer confidence in the economy to its steepest fall since October 2020.

Mid-cap index the FTSE 250 fell 0.36pc.

07:26 AM

Shapps: ‘I will move heaven and Earth to solve petrol crisis’

Grant Shapps has said he will move “heaven and Earth” so that petrol and other goods can continue moving around the country easily.

The Transport Secretary earlier blamed the pandemic for the shortage of lorry drivers that prompted BP to shut fuel forecourts that it simply could not reach to stock up.

Now he has told the BBC Today programme:

I’ll move heaven and Earth to do anything that’s required to make sure that lorries carry on moving our good and services and petrol around the country.

I’ll do anything which actually helps. The big query actually is where is the blockage? What we do know is that there are a lot of people who have their HGV licences but many of which will have lapsed to come out of the market, often because there has been cheaper European labour.

We want to get those people back in.

Here’s a chart showing how UK and EU driver shortages have hit Britain’s logistics sector:

07:20 AM

‘Tax hikes, energy bills and a lack of goods to blame’

Linda Ellett, KPMG UK’s head of consumer markets, said the Chancellor’s big tax hike, inflation, rising energy bills and a lack of goods on shop shelves have all conspired to deal the blow to households’ outlook.

She added:

It’s impossible for consumers to ignore the challenges all around us.

Now is also the time that many retailers are ramping up for the festive season. It remains to be seen quite how many challenges they face and how this will be received by consumers, who are preparing to spend big after last year’s cancellations, but who may be left frustrated by a lack of choice and availability.

The grocery industry has been preparing some time for the months ahead, and retailers are having to make bold and often difficult decisions to ensure that the best possible products and shopping experiences will still be available at Christmas – even if that means cutting product lines temporarily for now.|

We will need to wait and see whether confidence takes a further knock due to this lack of choice. After last year’s muted festivities, families may decide to go all-out with the quality of their gifts and Christmas dinner, rather than quantity, and the Christmas spirit may override frustration caused by limited choices.

07:06 AM

Cost of living crisis blow to consumer confidence

Consumer confidence has plunged amid increasing anxiety about the rising cost of living, a long-running survey suggests.

PA has the details:

GfK’s Consumer Confidence Barometer fell by five points to minus 13 in September, a drop not seen since October last year.

All measures of the survey, including confidence in the general economic situation and personal finances, were down in comparison to last month.

The index also recorded a three-point drop to minus six in the major purchase index, an indicator of consumer confidence in buying big ticket items, in worrying news for hard-pressed retailers looking to build sales as they go into the key holiday period.

Confidence in personal finances over the last 12 months dropped four points to minus four, while the forecast for the next 12 months fell six points to five – although it remains four points higher than this time last year.

Expectations for the general economic situation over the coming 12 months fell 10 points to minus 16, but is still 22 points higher than September last year.

GfK client strategy director Joe Staton said: “On the back of concerns about rising prices for fuel and food, the growth in headline inflation, tax hikes, empty shelves and the end of the furlough scheme, September sees consumers slamming on the brakes as those already in economic hardship anticipate a potential cost of living crisis.

“All measures have declined this month and consumers are clearly worrying about their personal financial situation and the wider economic prospects for the year ahead.”

“When consumer confidence drops, shoppers tend to spend less, and this dampens the overall economic prospects for the UK. This really is an unwelcome picture going into 2022 and beyond.”

06:50 AM

Shapps tells motorists to ‘carry on as normal’

Mr Shapps blamed the pandemic for the shortage of drivers and said Brexit was not part of the problem - BEN STANSALL/AFP via Getty Images

Mr Shapps blamed the pandemic for the shortage of drivers and said Brexit was not part of the problem – BEN STANSALL/AFP via Getty Images

Transport Secretary Grant Shapps has told motorists to “carry on as normal” after BP was forced to close petrol stations yesterday owing to a lack of lorry drivers to deliver fuel.

Mr Shapps told Sky News: “The advice would be to carry on as normal, and that is what BP is saying as well.

“They describe it on the average day that they have a handful of petrol stations that they had to close out of 1,200.

“The problem is not new. There has been a lack of drivers for many months through this pandemic because during the lockdown drivers couldn’t be passed through their lorry HGV tests, and that is what has led to this problem.

“But many more tests are being made available now, so we should see it smooth out fairly quickly.”

The minister denied that Brexit was part of the problem for recruiting HGV drivers in the UK, instead arguing that being divorced from the EU had helped enable some of the solutions.

“I’ve seen people point to Brexit as if it is the culprit here. In fact, they are wrong,” Mr Shapps said.

“Not only are there very large and even larger shortages in other EU countries like Poland and Germany, which clearly can’t be to do with Brexit, but actually because of Brexit I’ve been able to change the law and alter the way our driving tests operate in a way I could not have done if we were still part of the EU.

“So, Brexit actually has provided part of the solution of giving more slots available for HGV tests and there are a lot more – twice as many – tests available now than before the pandemic, a large proportion of those we’ve only been able to do because we are no longer in the EU.”

Instead he blamed the pandemic, calling the driver shortage a “global” issue, adding: “Europe is hit particularly bad.”

“We’ve got, for example, in Germany a 60,000 shortage and Poland a 123,000 shortage of lorry drivers, so as I say it is the principal cause of the problem and we are working very hard to change it, including changing the law in order to provide more tests for HGV drivers and encouraging people back into the market.

“There are longer-term problems, which is that it is difficult – it is a long day’s work, it is hard work, it is a skilled job and, actually, it has been underpaid up until now, so we very much welcome the salary going up, the wages going up, and that’s attracting more people back to the sector.”

06:23 AM

FTSE 100 to inch higher

Good morning.

The FTSE 100 is expected to inch higher this morning after yesterday’s climb was cut short by the Bank of England’s warning that inflation will be even higher than its 4pc forecast amid the ongoing supply chain crisis.

That sent the pound soaring 0.6pc against the dollar yesterday as London’s main index ran out of steam, falling to 7,078.35 points by the close of trading.

Today it is set to open 0.16pc higher to hit 7,088 points after Germany and France bourses posted close to 1pc gains.

Michael Hewson, chief market analyst at CMC Markets, said: “Yesterday saw another positive day for European markets, rising for the third day in a row, shrugging off early week concerns about the Chinese property market, and despite evidence that the wider economy is slowing, due to increasing supply chain constraints.

“The FTSE100 did its best to reprise its role as the perennial party pooper, sliding back from its intraday highs, to finish in negative territory, which in some part may have been down to the sharp rise in the pound, and gilt yields.

“Nonetheless markets in Europe, as well as the US are now back in positive territory for the week, a scenario that didn’t look very likely back on Monday, when fears of an Evergrande bankruptcy had investors circling the wagons.”

5 things to start your day

1) Interest rates set to rise as soon as February amid inflation surge: The Bank of England has been forced to revise up its inflation forecasts as surging energy costs, labour shortages and chaos in the supply chain hold back Britain’s recovery from Covid.

2) Alarm as petrol stations begin rationing fuel: Motorists were warned on Thursday night of shortages at fuel forecourts as BP announced it was closing pumps and rationing petrol and diesel because of a lack of lorry drivers.

3) George Osborne brings in Russian oligarch to his new investment bank: George Osborne has won his new investment bank employer a role advising EN+, the Russian metals giant founded by Oleg Deripaska, according to reports.

4) British Airways abandons plans for new budget airline at Gatwick: British Airways is poised to scrap almost all short-haul flights from Gatwick after pilots rejected the carrier’s plan to set up a new budget airline and hand them sweeping pay cuts.

5) Ford considers Halewood plant over Germany for EV systems: Ford is weighing up whether to build transmission systems for electric cars at its Halewood plant on Merseyside rather than at a site in Germany.

What happened overnight

Asian shares were on edge on Friday, hurt by persistent uncertainty around the fate of debt-ridden China Evergrande, even as more risk appetite drove gains for Wall Street and US benchmark Treasury yields.

MSCI’s broadest index of Asia-Pacific shares outside Japan lost 0.1pc and was set for a weekly loss of 0.68pc. Australian shares fell 0.41pc, while the Hong Kong benchmark was mostly flat.

Japan’s Nikkei rose 1.93pc, however, catching up on global gains after a public holiday. Chinese blue chips reversed early losses to gain 0.6pc after a cash injection from the central bank.

Investors continue to worry about the fate of property developer China Evergrande, which faces an interest payment deadline due Thursday. Its shares fell 5.2pc on Friday after bouncing 17.6pc a day earlier.

Coming up today