Advertisement

Powell hints at further rate rises as US battles inflation

Jerome Powell, chair of the Federal Reserve, has signalled it may need to make more interest rate rises than expected - REUTERS/Jonathan Ernst
Jerome Powell, chair of the Federal Reserve, has signalled it may need to make more interest rate rises than expected - REUTERS/Jonathan Ernst

Jerome Powell, chair of the Federal Reserve, has signalled it may need to make more interest rate rises than expected in response to surprisingly high employment figures.

Speaking at The Economics Club of Washington DC, a non-profit forum for global business leaders, Mr Powell said: “The reality is that we are going to react to the data. If we continue to get higher jobs reports or higher inflation reports, it may be the case that we have to raise rates more.”

Mr Powell said inflation is unlikely to go away quickly. “The base case for me is that it will take some time. We will have to do more rate increases and then look around to see if we have done enough,” he said.

Last week, Mr Powell said that the disinflationary process had begun its early stages, as inflation began to cool in the goods sector. But the unanticipated strength of the labour market data has raised fears of further inflationary pressures.

American non-farm jobs rocketed by 517,000 in January – 332,000 more than the 185,000 expected and nearly double the number recorded in December.

“We didn’t expect it to be that strong. That shows you why we think this process will take a significant period of time,” Mr Powell said.

“If the data were to continue to come in stronger than expected and we conclude that we need to raise rates more than we previously thought, then we would certainly do that. We would certainly raise rates more,” he added.


07:16 PM

Goodnight

That's all from us tonight, see you in the morning!


07:15 PM

Microsoft unveils new AI-powered version of Bing

Microsoft has unveiled new versions of its Bing internet search-engine and Edge browser that will incorporate artificial intelligence technology from the maker of ChatGPT.

The new tech provided by startup OpenAI will be more sophisticated than the systems behind ChatGPT and will see Microsoft become the first to offer users a more conversational alternative to finding answers on the internet.

“This technology is going to reshape pretty much every software category,” said Satya Nadella, Microsoft's chief executive, today at an event at the group's Washington headquarters.

It follows Microsoft's recent multibillion dollar investment into OpenAI, as part of the tech giant's attempts to gain ground on Google's stronghold on the search engine market.


06:51 PM

Ukraine court freezes bank account of Ferrexpo subsidiary amid investigation

The bank accounts of a Ukrainian subsidiary of FTSE 250 mining company Ferrexpo have been frozen following claims it underpaid iron ore royalty payments.

A Ukrainian court has ordered for the bank accounts of Ferrexpo Poltava Mining, a subsidiary operating in the Swiss-based exporter’s largest mine, to be suspended amid an ongoing investigation into the allegations.

Ferrexpo is being investigated by the prosecutor general of Ukraine for the potential underpayment of iron ore royalty payments between 2018 and 2021.

In a London Stock Exchange statement issued today, Ferrexpo denied all accusations made as part of the probe. It also said it has fully cooperated with local authorities throughout the process and maintained it operated in accordance with the legal and fiscal frameworks of Ukraine.

Ferrexpo denied all accusations made as part of the ongoing probe
Ferrexpo denied all accusations made as part of the ongoing probe

06:21 PM

US Fed Reserve chief was surprised by strong labour market report

US Federal Reserve chair Jerome Powell has noted that the disinflationary process still has a "long way to go" following recent reports that American companies have been hiring much faster than analysts had predicted.

Last week's suprising findings signalling a robust US labour market fuelled concerns that the US Federal Reserve may need to ramp up interest rate hikes again to lower the risk of inflation.

In an interview with Carlyle Group chairman David Rubenstein, Mr Powell today noted that the US is in the "very early stages of disinflation".

Commenting on the reports of a strong labour market, Mr Powell said although "we didn't expect the data to be this strong" it shows why the process will take a long time.

"It's not going to be, we don't think, smooth. It's probably going to be bumpy," he continued.

Mr Powell added: "If the data were to continue to come in stronger than we expected and we were to conclude that we needed to raise rates more than is priced into the markets or than we wrote down at our last group of forecasts in December, then we would certainly do that, we would certainly raise rates more."


05:31 PM

US judge won't tighten FTX founder's bail conditions

A US judge has refused to tighten the bail conditions of FTX founder Sam Bankman-Fried designed to address potential witness tampering concerns.

The proposed conditions would have stopped Bankman-Fried from communicating with most employees of the failed cryptocurrency exchange or his hedge fund, Alameda Research, without lawyers present or through encrypted messaging apps, such as Signal.

US district judge Lewis Kaplan today did not provide reasons for his decision, despite Bankman-Fried and the prosecutors reaching an agreement earlier this week to allow communication with certain employees pending the court’s approval.

Bankman-Fried was bailed late last year on a $250m bond and has since pled not guilty to criminal charges that he cheated investors and looted billions of dollars from the now bankrupt exchange. 


04:37 PM

FTSE closes

The FTSE 100 has closed 0.4pc higher at 7,864.71 points. Today the blue-chip index reached as high as 7,888.29 points, nearing last week's record breaking close of 7,901.8 points.

However, the midcap FTSE 250 index dropped by 1.1pc to 20,189.00 points.


04:24 PM

Hertz misses target to order 100,000 Tesla vehicles by end of 2022

Last year Hertz missed its targets for the number of Tesla vehicles within its US rental fleet, annual regulatory filings show.

The rental company, headquartered in Florida, previously committed to ordering 100,000 Teslas by the end of 2022. This announcement, made in October 2021, saw Tesla's market valuation surge past one trillion dollars for the first time and helped generate investor interest ahead of Hertz's relisting on the Nasdaq the following month.

However, Hertz today said that Tesla vehicles represented 11pc or less than 50,000 of its 428,700 fleet across America. That's less than half of its 100,000 target.

The rental company noted that its eletric vehicle strategy is impacted by its ability to secure adequate vehicle supplies within a reasonable timeframe.

Last month, Tesla announced plans to slash the prices of its electric vehicles, sparking an industry price war.


03:32 PM

Handing over

Right, that's all from me today. My colleague Adam Mawardi will take things from here.


03:30 PM

Sanderson hit by Russia withdrawal

Luxury wallpaper and textiles business Sanderson Design Group saw shares drop after its European business was impacted by its exit from Russia.

The group, which has showrooms in London, New York, Chicago, Amsterdam and Dubai, said overall sales were flat at £112m over the year to January 31.

Sanderson said it was buoyed by "strong" sales of Morris & Co branded products, including William Morris patterns.

It also hailed 18pc growth in North America.

However, these gains were offset by a slump in northern Europe after ending trade in Russia, where it had previously recorded £1.8m in sales. Shares were down 7.6pc at 121.5p this afternoon.


03:18 PM

Digital pound 'would sit alongside and not replace cash', says minister

A digital pound would be a "digital counterpart to familiar trusted banknotes and coins and subject to rigorous standards of privacy and data protection", Treasury minister Andrew Griffith has said.

The Treasury and the Bank of England are designing a "digital pound" which could be launched by the end of the decade, with a consultation the future currency "open for four months", according to Mr Griffith.

It could start to replace banknotes and coins amid a continued decline in the use of cash.

Efforts by the Government and Bank of England to consider the launch of the digital pound come amid fears over big tech competition in currency.

Making a Commons statement on a potential digital pound, Mr Griffith told MPs the experience of using a digital pound "would be very similar to using other forms of digital money". He said:

I want to be clear that the Government is legislating to protect access to cash and ensuring that the UK's cash infrastructure remains sustainable long term.

So as part of a wider landscape of money and payments it would sit alongside and not replace cash.

A digital counterpart to familiar trusted banknotes and coins and subject to rigorous standards of privacy and data protection.


02:41 PM

Bed Bath & Beyond plummet by record 48pc

Bed Bath & Beyond shares plunged a record 48pc at the opening bell in the US after the ailing home goods store said it was planning to raise some $1bn (£830m) through an offering of preferred stock and warrants in a last-ditch effort to stave off bankruptcy.

The home goods retailer said in securities filings that if it cannot complete the complex transaction, it would "likely file for bankruptcy protection".

The US chain has said in recent weeks that it had defaulted on a loan and may not be able to remain in business, raising concerns about its future.

Bed Bath & Beyond held talks in recent days with an investment firm to underwrite a significant portion of the proposed offering, two people familiar with the matter said.

Bed Bath & Beyond shares plunged a record 48pc at the opening bell - REUTERS/Emily Elconin
Bed Bath & Beyond shares plunged a record 48pc at the opening bell - REUTERS/Emily Elconin

02:34 PM

US markets inch lower at opening bell

US markets have tumbled at the open ahead of comments from US Federal Reserve chairman that could give clues about the direction of interest rates.

The Dow Jones Industrial Average fell 0.4pc at the bell to 33,759.63 while the broad-based S&P 500 dropped 0.2pc to 4,102.23.

The tech-heavy Nasdaq Composite was flat at 11,885.88.


02:09 PM

ATG shares rise 10pc after £33.4m takeover

Auction Technology Group (ATG) has snapped up US second-hand selling platform estatesales.net in a deal worth $40m (£33.4m).

Estatesales.net is used by corporate estate sale companies and private customers to advertise online the sale of second-hand items from things like private home estate sales and business liquidations.

Shares in ATG rose as much as 10pc after analysts at Numis and Peel Hunt reiterated their recommendation to buy following the deal, which opens up the US market to the London-listed company.


01:53 PM

US markets expected to rise at opening bell

Wall Street markets are expected to edge higher ahead of a speech by Federal Reserve chairman Jerome Powell later in the day that will be parsed for further clues on how long the central bank will keep interest rates higher.

Mr Powell's speech at the Economic Club of Washington, at 5.40pm UK time, will be closely monitored after a strong jobs report last week stymied rising hopes of less aggressive monetary policy.

Russ Mould, investment director at AJ Bell said: "A strengthening labour market theoretically makes it less likely that the Federal Reserve will halt interest rate rises anytime soon.

"The Fed needs to see both the jobs market and inflation start to cool before it can justify changing its stance on rates."

Nasdaq 100 futures rose the most among futures tracking Wall Street's three main indexes, but were only up 0.3pc.

Heavyweight Microsoft Corp rose 0.9pc in premarket trading. It is expected to reveal its investment in chatbot sensation ChatGPT later in the day.

Boeing climbed 1.1pc after the US planemaker confirmed that it expects to cut about 2,000 white-collar jobs through attrition and layoffs.


01:21 PM

Crypto miners merge after industry slump

Bitcoin miners Hut 8 Mining and US Bitcoin Corp are merging in an all-stock deal after a prolonged slump in cryptocurrency prices heaped pressure on the industry.

The combined company will have a market capitalization of about $990m (£826m), the companies said.

It will have "access to" roughly 825 megawatts of "gross energy" across six sites. US Data Mining Group is the legal name of US Bitcoin Corp.

Bill Tai will remain chairman of the board, while Jaime Leverton will continue as chief executive of the new company, which will be named Hut 8 Corp and based in the US.

Shares of Hut 8 rose 4.6pc to $2.49 in early trading. They have rise about 180pc so far this year, after plunging 89pc in 2022.


01:00 PM

Higher windfall taxes will 'stop investment' insists Hunt

Jeremy Hunt said higher windfall taxes will "stop investment" in the British energy sector as BP announced record profits in the wake of the Ukraine war.

The Chancellor said that the total tax take from that sector is £80bn over five years "which is more than the entire cost of funding the police force".

Responding to a question in the Commons from shadow chancellor Rachel Reeves on whether the Government would have a "proper windfall" tax, he said the Conservative plans raise more money than what Labour was advocating in the autumn.

He said: "They are also balanced and fair because anything higher will stop investment, increase dependence on Putin and increase energy prices.

"I'm afraid there is more clean energy with the Conservatives and more expensive bills with Labour."

He added: "She can play politics but we will be responsible because we want lower bills, more investment in transition and more money for public services like the police."

Meanwhile, SNP MP Carol Monaghan asked whether there would be more unfunded tax cuts in the March Budget after the Resolution Foundation claimed Liz Truss's unfunded tax cuts cost the economy £30bn.

The Chancellor said: "There will be no tax cuts funded by borrowing."

Chancellor Jeremy Hunt - Jordan Pettitt/PA Wire
Chancellor Jeremy Hunt - Jordan Pettitt/PA Wire

12:28 PM

Oil moves higher as Saudi Arabia increases prices

Oil has rallied as Saudi Arabia signalled confidence in the demand outlook with a surprise boost in crude prices.

Saudi Aramco increased most of its prices for crude that will be shipped to its main market of Asia in March, amid growing optimism over a robust demand recovery in China following the end of zero Covid policies.

Brent crude, the international benchmark, has risen 1.2pc today and is close to $82 a barrel.

West Texas Intermediate futures climbed 1.5pc above $75 a barrel, extending a rebound from the lowest since mid-December.

The dollar eased on Tuesday, making commodities priced in the currency more attractive to investors.

It comes ahead of  comments on monetary policy from Federal Reserve Chair Jerome Powell, which may give clues on the  next steps for interest rates in the world's largest economy.


12:07 PM

Soaring inflation driving drinkers away, warns Carlsberg

Beer may have a reputation for being "recession-proof", but soaring inflation risks driving drinkers away, Carlsberg has warned.

Senior business reporter Daniel Woolfson has the latest:

"While beer historically has been a resilient consumer category, the higher prices in combination with generally high inflation may have a negative impact on beer consumption in some of our markets, particularly in Europe," Carlsberg said today.

It added 2023 would be "another challenging year", with commodity and energy price increases expected to have a "significant impact" on the cost of doing business.

Operating profits at the brewer grew 12.2pc in 2022, boosted by the recovery of pubs and bars in Western Europe and a strong showing in Asia.

Carlsberg's UK business, Carlsberg Marstons Brewing Company (CMBC), was formed in 2020 in a £780m merger with Marstons.

 Carlsberg - REUTERS/Andrew Kelly
Carlsberg - REUTERS/Andrew Kelly

11:50 AM

Ultra-low rates to become thing of the past, says ECB chief

The European Central Bank will not need to return to ultra-low interest rates as inflation will settle in a new regime close to its 2pc medium-term target, according to a Governing Council member.

Francois Villeroy de Galhau said at an online press conference:

I personally believe that once we will have fought inflation and come back to 2pc we will be in a new inflation regime, probably closer to our target.

Then we will have probably in the medium term a level of interest rate that will be more normal than in the recent past.

Mr Villeroy said that in the shorter term the ECB will focus on tackling underlying inflation, which is "much to high".

Euro area annual inflation is expected to have been 8.5pc in January, down from 9.2pc in December.


11:17 AM

Sunak reshapes the way Government does business

The Government has divided the business department into two ministries as Rishi Sunak carries out a mini-reshuffle.

Grant Shapps will become Energy Security and Net Zero Secretary in a department under the same name, while Michelle Donelan becomes the Science, Innovation and Tech Secretary at a new department.

Kemi Badenoch has become the new Business and Trade Secretary.

The Prime minister has also made Greg Hands the new Conservative party chairman after sacking Nadhim Zahawi over his tax affairs.

Our politics live blog has the latest reaction and explains what it means.

Grant Shapps has become Energy Security Secretary - Jordan Pettitt/PA Wire
Grant Shapps has become Energy Security Secretary - Jordan Pettitt/PA Wire

11:09 AM

Arm boosts revenues as it prepares to float stock

Arm, the chip design firm owned by SoftBank, reported a 28pc increase in revenue for the latest quarter as it prepares for a highly anticipated float on the stock market.

Revenue at the Cambridge-based semiconductor designer rose to $746m (£621.6m) from $581m (£484.1m) a year earlier, driven by an increase in internet-of-things gadget adoption and highly royalty rates in smartphones.

SoftBank founder Masayoshi Son has pinned high hopes on the prospects for Arm, saying at one point that he expects the firm to pull off the biggest float - known as an initial public offering or IPO - for a chipmaker ever.

Markets have moved against him however, with technology valuations sliding and the chip industry running into soft demand in key product segments.

It is not clear whether it will opt for the London Stock Exchange against New York's two major exchanges.

Arm's technology and designs are already pervasive throughout the electronics industry, dominating segments like mobile phones, and its customers include the likes of Apple.

Arm makes semiconductors for mobile phone makers like Apple - Chris Ratcliffe/Bloomberg
Arm makes semiconductors for mobile phone makers like Apple - Chris Ratcliffe/Bloomberg

10:55 AM

Boeing plans to cut about 2,000 finance and HR jobs

Boeing is to cut 2,000 office jobs in the US as the struggling planemaker battles to improve its stalling production line.

Chief business correspondent Oliver Gill has the details:

Roughly a third of the 2,000 roles being cut are to be outsourced to India, according to The Seattle Times, with the remaining positions disappearing completely.

Managers have also been told to identify underperforming staff, raising the threat of future rounds of redundancies, as Boeing moves to cut bureaucracy and improve performance.

A spokesman for Boeing told The Seattle Times, which first reported the job cuts: “Over time, some of our corporate functions have grown quite large.

"And with that growth tends to come bureaucracy or disparate systems that are inefficient… So we're streamlining."

Alongside the redundancies came an edict for managers to identify 10pc of staff as "failing to meet all expectations" in their performance reviews - raising fears that Boeing was identifying more employees who could be cut in the future.

A Boeing 737 Max jet - AP Photo/Elaine Thompson
A Boeing 737 Max jet - AP Photo/Elaine Thompson

10:31 AM

Adani stocks rally after $113bn wipeout

Shares in India's Adani Group have rallied a day after it prepaid some loans, bringing relief to investors that have seen $113.6bn (£94.6bn) wiped off the conglomerate's market value.

The group, led by billionaire Gautam Adani, has been roiled by days of market turmoil after US short-seller Hindenburg Research alleged two weeks ago that it had engaged in stock manipulation and used tax havens. It also said the group had unsustainable debt.

Adani Group has denied the allegations, saying it complies with all laws and has made necessary disclosures over time. Nonetheless, investors dumped its shares as concerns of financial contagion grew.

On Monday though, Adani Group said it will pre-pay $1.11bn (£920m) of loans on shares.

Separately, JPMorgan said the group companies were still eligible for inclusion in the bank's bond indexes.

The group's flagship company Adani Enterprises was trading 14.7pc higher today, but still around half the level seen before the Hindenburg report was released.

Indian billionaire Gautam Adani - REUTERS/Amir Cohen
Indian billionaire Gautam Adani - REUTERS/Amir Cohen

10:19 AM

Pound falls toward $1.20

The pound is heading back towards $1.20, having recovered from earlier dipping below the mark to its lowest level in a month.

The movement comes amid uncertainty in the bond market. The UK's 10-year gilts briefly fell towards 3.22pc but now stands up one basis point on the day to 3.25pc.

Sterling has fallen 0.2pc today.


09:47 AM

Bank of England wants more women in leadership roles

The Bank of England wants to hire more women into management roles and move its leadership away from its present all-male team.

Deputy Governor Dave Ramsden said 35pc of senior managers are female, up from 20pc in 2014, but the bank is targeting up to 44pc by 2028.

The Bank of England is led by Governor Andrew Bailey and four deputy governors along with a chief economist, all of whom are men.

Three of the nine people on the Monetary Policy Committee are women, while Sarah Breeden was promoted to the head of financial stability in 2021. Speaking at an event on women in economics, Mr Ramsden said:

I'm very conscious that as one of an all-male team of governors here at the bank, the focus of today's event hits
uncomfortably close to home.

Like many organisations, the Bank of England has made real strides forward. We need to keep building on that.

Bank of England deputy governor Dave Ramsden - Chris Ratcliffe/Bloomberg
Bank of England deputy governor Dave Ramsden - Chris Ratcliffe/Bloomberg

09:35 AM

Russia-linked LockBit hackers threaten to publish Royal Mail data

A Russia-linked hacking gang has claimed credit for the cyber attack that has crippled Royal Mail, threatening to publish stolen data from the company online.

Senior technology reporter Matthew Field has the details:

The LockBit ransomware gang published an update on its official forum, warning it would publish "all available data" on Feb 9.

The Telegraph revealed in January that the LockBit gang, which is believed to have close links to Russia, was behind the attack.

The cyber attack shut down the postal service's international export services, causing significant delays to overseas mail and leaving millions of parcels stuck in limbo.

Read how the hack is still impacting Royal Mail.


09:22 AM

Gas prices recover but cold snap nearing end

European natural has recovered slightly even with the end of a short-lived cold spell in sight while healthy stockpiles are helping tackle any boost in demand.

Benchmark futures fell as much as 2.3pc, after two days of modest gains, but have since clawed back losses after BP revealed record profits and raised its dividend, indicating confidence in its business going forward.

The ongoing chilly weather in parts of western and central Europe, coupled with low wind output, is raising gas consumption.

But temperatures are expected to rebound soon and could remain above seasonal norms for the next two weeks, according to forecaster Maxar Technologies.

Prices have declined about 25pc this year, and are hovering near levels last seen before the Russian invasion of Ukraine.

However, the Resolution Foundation think tank said: "The huge volatility in gas prices over the past year means we can't assume energy prices will continue to fall, and they could well rise from their current levels with the outlook still dependent on temperatures in Europe and the unpredictable situation in Ukraine."

Dutch front-month gas, Europe's benchmark, was up 1.7pc at €57.87 a megawatt-hour.


09:11 AM

Nintendo's profit slips amid chips crunch

Japanese video game maker Nintendo recorded a slight drop in in profit in April to December as it maintained strong sales of its Switch console games.

Nintendo's net profit in the first nine months of the fiscal year through March was 346bn yen (£2.2bn), down 5.8pc from 367bn yen in the same period of the previous year.

Nintendo, the Kyoto-based maker of Pokemon and Super Mario video games, did not provide a breakdown of quarterly numbers.

Among the games selling well were "Splatoon 3," a paint-shooting game, "Pokemon Scarlet and Violet" and "Nintendo Switch Sports."

Nintendo sold fewer machines compared to a year earlier, partly because a shortage in computer chips, a critical part for the console, due to disruptions from the pandemic crimped production, the company said.

Nintendo lowered its full fiscal year profit forecast to 370bn yen (£2.3bn), from the 400bn yen (£2.5bn) it had projected in November. Previous fiscal year profit was 477.7 billion yen.

Nintendo profits fell as it sold fewer machines, partly because a shortage in computer chips - CHRIS DELMAS/AFP via Getty Images
Nintendo profits fell as it sold fewer machines, partly because a shortage in computer chips - CHRIS DELMAS/AFP via Getty Images

08:56 AM

'The reality is today's energy system is oil and gas', says BP chief

BP chief executive Bernard Looney has defended the company's energy investment plans after announcing record profits. He told Bloomberg TV:

What we're doing today is we're announcing that we're leaning into our strategy.

Our strategy is designed to help the world solve what is known as the 'energy trilemma'.

The 'energy trilemma' is we must have cleaner energy, for sure, and at the same time we must make sure that energy is secure, reliable and we must make sure that energy is affordable.

The way that we do that is that we have to invest in today's energy system. The reality is that today's energy system is predominantly an oil and gas system.

That needs investment if we are to make sure that we can keep security and affordability front and foremost and the war has shown us just how crucial that is.

So we're investing more into that and - not or - and at the same time we're investing into the energy transition. We're announcing more money into the transition.

BP chief executive Bernard Looney - REUTERS/Toby Melville
BP chief executive Bernard Looney - REUTERS/Toby Melville

08:38 AM

BP boosts the FTSE 100

The FTSE 100 rose as bumper results from oil giant BP and a rally in energy stocks helped buck the gloom in global markets as investors worried about the prospect for higher interest rates.

The blue-chip index rose 0.5pc to 7,871.85, while the broader European index was flat.

BP rose as much as 3.8pc after it reported a record profit and increased its dividend by 10pc in a sign of confidence in the market's continued strength.

The wider oil & gas index jumped 2.1pc as crude prices rallied nearly 2pc on optimism about recovering demand in China and concerns over supply shortages following the shutdown of a major export terminal after an earthquake in Turkey.

The midcap FTSE 250 index fell as much as 0.3pc, with Morgan Advanced Materials slumping 8.1pc after the industrial firm said a cyber security incident reported in January could cost the company about £8m to £12m.


08:29 AM

Government needs 'proper' windfall tax, says Miliband

Shadow climate secretary Ed Miliband called on the Government to bring forward a "proper" windfall tax on energy companies, after BP reported that underlying profit more than doubled to $27.7bn (£23bn) last year.

The Labour MP said:

It's yet another day of enormous profits at an energy giant, the windfalls of war, coming out of the pockets of the British people.

What is outrageous is that as energy giants rake in these sums, Rishi Sunak still refuses to bring in a proper windfall tax.

This is why people are sick and tired of the way the country is run under the Tories.

In just eight weeks time, the Government plans to allow the energy price cap to rise to £3,000. Labour would use a proper windfall tax to stop prices going up in April.


08:25 AM

BP under pressure to make wind and solar more profitable

BP is the latest oil and gas company to report record annual profits for 2022, with Shell last week reporting annual profits of $39.9bn.

Energy correspondent Rachel Millard has the latest:

The sums have triggered calls for tougher windfall taxes to help consumers battling high energy bills. The IPRR think-tank said the profits were "scandalous".

Mr Looney took over in 2020, and quickly announced plans to reduce BP's focus on oil and gas and shift towards greener energies, amid huge pressure to cut carbon emissions.

However, he has also been under pressure from shareholders to show he can get similar returns from wind and solar power, which can be lower but more stable.

The company said today it expected to achieve returns of more than 15pc from bioenergy, "double-digit" returns from hydrogen, and 6-8pc from renewables.


08:08 AM

BP increases dividends after record profit

BP has increased its dividend and extended share buybacks after posting a record profit for 2022.

The oil and gas giant is delivering significant rewards to investors — a 10pc increase in the dividend and an extra $2.75bn of buybacks — while also highlighting a contradiction at the heart of Europe's oil industry.

As major producers talk increasingly about the need to cut emissions and switch to cleaner energy, their polluting fossil fuel business is becoming ever more lucrative as a result of Russia's invasion of Ukraine.

The company has also rowed back on the level of carbon emissions it aims to cut from oil and gas production.

The company said it would evenly split new investment between low-carbon energy and oil and gas, spending up to $8bn on each by 2030.


08:04 AM

Markets rise after record BP profits

Markets have opened higher following the record-breaking profits announced by BP and its plans to row back on emissions targets.

The FTSE 100 was up 0.4pc to 7,841.43 after the open while the midcap FTSE 250 rose 0.1pc to 20,423.62.


07:56 AM

Start of 2023 'has brought some stability' to house prices

Let's quickly go back to house prices, which remained flat in January according to Halifax,

The pace of annual growth has continued to slow, to 1.9pc from 2.1pc in December, which is the lowest level recorded over the last three years.

The average house price is now around £12,500 (4.2pc) below its peak in August last year, though it still remains some £5,000 higher than in January 2022 (£276,483).

Halifax director Kim Kinniaird said:

The start of 2023 has brought some stability to UK house prices, with the average house price remaining largely unchanged in January at £281,684, a very small decrease on December.

We expected that the squeeze on household incomes from the rising cost of living and higher interest rates would lead to a slower housing market, particularly compared to the rapid growth of recent years.

As we move through 2023, that trend is likely to continue as higher borrowing costs lead to reduced demand.

For those looking to get on or up the housing ladder, confidence may improve beyond the near-term.

Lower house prices and the potential for interest rates to peak below the level being anticipated last year should lead to an improvement in home buying affordability over time.


07:46 AM

BP 'laughing all the way to the bank' says TUC

TUC general secretary Paul Nowak, reporting on the record BP profit figures, said:

As millions struggle to heat their homes and put food on the table, BP are laughing all the way to the bank.

Hard-pressed families will rightly feel furious - they are being treated like cash machines.

This boils down to political choices.

Ministers are letting big oil and gas companies pocket billions in excess profits. But they are refusing to give nurses, teachers and other key workers a decent pay rise.

We need a government on the side of working people, not fat cat energy producers.

That means imposing a higher windfall tax on the likes of BP and Shell. It means giving public servants fair pay. And it means giving households extra financial support as bills rise this April.


07:43 AM

BP 'mining gold out of vast suffering'

Greenpeace UK's head of climate justice, Kate Blagojevic, said:

BP is yet another fossil fuel giant mining gold out of the vast suffering caused by the climate and energy crisis.

What's worse, their green plans seem to have been strongly undermined by pressure from investors and governments to make even more dirty money out of oil and gas.

This is precisely why we need governments to intervene to change the rules.

She added: "It's time to stop drilling and start making polluters, not communities, who did least to cause the problem, pay the price for the climate damage they are causing all around the world."


07:37 AM

BP cuts climate change pledge

Oil giant BP has made a big cut to the ambition of its climate change pledge.

The business said it expects the carbon emissions form its oil and gas production will fall by between 20-30pc by 2030, when compared to 2019. Its previous target had been a 35-40pc drop in emissions.

It comes as the business said that its oil and gas production will be around two million barrels of oil equivalent a day in 2030.

This is 25pc lower than in in 2019, but its previous plan had been to cut production by 40pc.

Chief executive Bernard Looney said:

We need continuing near-term investment into today's energy system, which depends on oil and gas, to meet today's demands and to make sure the transition is an orderly one.

We have high-quality options throughout our portfolio, allowing us to choose only the best.

We will prioritise projects where we can deliver quickly, at low cost, using our existing infrastructure, allowing us to minimise additional emissions and maximise both value and our contribution to energy security and affordability.


07:24 AM

BP scales back oil and gas cuts as boss warns of 'energy trilemma'

BP is scaling back plans to reduce its oil and gas production as it posted record profits amid soaring oil and gas prices.

The FTSE 100 company says it now expects its fossil fuel production to fall by 25pc by 2030, compared to a previous expectation of 40pc.

It marks a stark readjustment of chief executive Bernard Looney's strategy to shift the company towards greener energy as part of the push to tackle global warming - as the business faces what he called an "energy trilemma".

The move comes amid heightened concern over energy security following disruption to oil and gas markets caused by Russia’s war on Ukraine.

However, BP is also increasing its investment in greener energy, planning to invest up to $65bn between 2023 and 2030 into products such as bioenergy, electric car charging, wind and solar power and hydrogen.

Mr Looney told Bloomberg TV: "The energy trilemma is we must have cleaner energy, for sure, and at the same time we must make sure that energy is secure, reliable and we must make sure that energy is affordable.

"The way that we do that is that we have to invest in today's energy system. The reality is that today's energy system is predominantly an oil and gas system.

"That needs investment if we are to make sure that we can keep security and affordability front and foremost and the war has shown us just how crucial that is."

The adjustment to its strategy was announced as BP posted record profits of $28bn [£23bn], following a year of high oil and gas prices amid shortages and market disruption following Russia's invasion of Ukraine.

BP profits have more than doubled - Nicholas.T.Ansell/PA Wire
BP profits have more than doubled - Nicholas.T.Ansell/PA Wire

07:20 AM

House price declines slow in January

House prices were flat last month, according to an influential index, halting their biggest decline since the global financial crisis in 2008.

The average sale price stood at £281,684 in January, down barely from £281,713 in December, according to lender Halifax.

The annual rate of house price growth has slowed to 1.9pc, down from 2.1pc in December.

The figures are slightly more positive than data published by Nationwide earlier this month, which said the average sale price fell to £258,297 in January, down from £262,068 in December, a fall of 0.6pc.

It comes after the Bank of England raised interest rates by half a percentage point to 4pc on Thursday, heaping more pressure onto mortgage payers.


07:11 AM

Good morning

Losses in house prices slowed down in January after four months of declines according to the Halifax.

The lender said that the average sale price stood at £281,684 in January, down barely from £281,713 in December.

5 things to start your day

1)  Energy bailout to cost half as much as feared | MPs and economists call for tax cuts as predicted size of subsidies slashed to £69bn

2) Hoarding ‘Britcoin’ to be banned over bank run fears under Sunak’s digital currency proposals | Frictionless digital transfers may increase the risk of commercial banking collapses, officials say

3) Only economic ‘war footing’ can beat Biden’s subsidy blitz | Business leaders urge Rishi Sunak to unveil radical reforms as US races to attract foreign investment

4) Google's Bard to challenge ChatGPT for AI chatbot crown | The technology behind the chatbot will be integrated into Google's search engine

5) Royal Mail strike called off after union slip-up | CWU leaders cancel walkouts after a legal challenge over their validity

What happened overnight

Asian share markets mostly stabilised after steep losses in the past 24 hours, while the US dollar remained elevated as investors considered the prospects for interest rates to remain higher for longer in many developed economies.

MSCI's broadest index of Asia-Pacific shares outside Japan was up 0.4pc, after US stocks ended the previous session with mild losses.

Australia's S&P/ASX200 was trading higher ahead of the Reserve Bank's decision but slid into negative territory after the official cash rate was raised by 25 basis points. The benchmark index closed down nearly 0.5pc.

Tokyo shares ended flat as investors sat on their hands ahead of Federal Reserve chair Jerome Powell's remarks later in the day.

The benchmark Nikkei index edged down less than 0.1pc to 27,685.47, while the broader Topix index added 0.2pc to 1,983.40.

Hong Kong's Hang Seng Index was trading 0.7pc higher and China's bluechip CSI300 Index was up 0.1pc.

Advertisement