Inflation in the eurozone has soared to a new record high, piling more pressure on the European Central Bank as price rises show no signs of slowing.
Consumer prices rose 0.7pc in July, leaving them 8.9pc higher than a year before, according to Eurostat.
Energy costs are the biggest driver of inflation, up 39.7pc in a year, but food and services prices also continued to pick up.
Maartje Wijffelaars at Rabobank, said the figures “are likely to give consumers and the ECB even bigger headaches”.
“Going forward, the path for inflation is very dependent on what happens with Russian gas flows, and hence energy prices, but in any case it isn’t expected to come down fast,” she added.
Soaring prices and the energy crisis are having a disastrous effect on Europe’s biggest economy. Germany growth ground to a halt in the second quarter, new figures showed, with GDP flatlining between April and June.
The grim reading contrasted against strength elsewhere, with France, Spain and Italy all reporting solid growth that beat forecasts.
France’s economy grew 0.5pc in three months, while Italy expanded 1pc and Spain 1.1pc. France and Spain, which provided full breakdowns of their figures, were spurred by a rebound for tourism.
Overall, the eurozone registered 0.7pc quarterly growth, far stronger than the 0.2pc expected by economists.
Andrew Kenningham from Capital Economics said the “chunky increase” was driven by the re-opening of the services sector from lockdowns, which had “masked a deterioration in most other parts of the economy”.
“We expect a triple whammy of high inflation, tighter monetary conditions and an energy crisis to push the economy into recession later this year,” he added.
Last week, the ECB increased its base interest rate by 0.5 percentage points, the first increase in 11 years.
Nicola Nobile from Oxford Economics said the strong inflation figures would likely prompt the ECB to increase rates by another half a percentage point at its next meeting, in September, but that the pace was likely to slow thereafter.
That’s all from us this week, we shall see you on Monday! Before you go, check out the latest stories from our reporters:
The Royal Navy has taken delivery of a new experimental testbed ship that will let sailors experiment with cutting-edge technology such as robot submarines and remote controlled boats. Gareth Corfield writes:
Christened the XV Patrick Blackett, the Dutch-built vessel arrived in Portsmouth Naval Base this week for delivery to NavyX, the service’s research and development division.
Tom Ryall, the Royal Marine colonel in charge of NavyX, said the new ship “will give us greater flexibility to experiment with novel military capabilities, and accelerate new technology, kit and concepts to the front line.”
Read the full story here
London’s top indices finished in the green today, marking their strongest monthly performance of 2022, as a jump in commodities and a slew of upbeat earnings reports outweighed economic slowdown worries.
The FTSE 100 gained 1.1pc while the FTSE 250 climbed 1.6pc, both holding at seven-week highs.
Michael Hewson at CMC Markets UK said: "It’s been another positive week for markets in Europe, with investors taking comfort from earnings numbers that have by and large been better than expected, despite concerns about the growth outlook.
"The gains seen this month have offered a welcome respite, while the belief that central banks may have to pare back the number of rate hikes they can deliver is also helping, pushing yields sharply lower, and improving the attractiveness of stocks in general.
AstraZeneca’s Covid-19 antibody drug slashes the risk of new variants emerging, the company said, as Britain faces mounting pressure to follow other Western nations in ordering doses. Hannah Boland has the story:
AstraZeneca said recent studies had shown that offering its Evusheld Covid antibody treatment to immunocompromised patients for whom vaccines do not work meant the virus had less scope to mutate.
Pascal Soriot, chief executive of AstraZeneca, said: "If you actually look at where the new variants have come up around the world, most of the time they come out of a patient who has HIV who is immunocompromised or someone who has cancer who is immunocompromised. The virus stays in their body for days and weeks and gets a chance to develop mutations."
Read the full story here
Twitter’s bid to hold Elon Musk to his $44bn (£36bn) deal for the social media platform will head to a five-day trial beginning October 17.
Musk must reveal by the end of Friday any legal claims he has against the company, a Delaware judge ruled.
The billionaire’s lawyers have said he might file counterclaims – essentially his own lawsuit against Twitter – in which he could seek financial damages for the disputed deal.
The Tesla and SpaceX chief said he was walking away from the deal on July 8, blaming Twitter for breaching the merger agreement by misrepresenting the number of fake accounts on its platform.
Twitter sued days later, calling the fake account claims a distraction and saying Musk was bound by the merger contract to close the deal at $54.20 per share.
Kerry Group raked in €4.1bn (£3.4bn) in revenue in the first half of this year, driven by strong demand for its meat, bakery and drinks products.
The food company, which owns brands including Richmond, Cheesestrings and Fridge Raiders, reported a 13pc boost in sales across the group.
Prices went up by 8.3pc, and more than 10pc in the past three months, as the cost of raw materials continues to rise. The company said supply chain issues and inflationary pressures had not yet impacted sales and demand for new food and beverage experiences has grown.
One of the world’s biggest commodities groups is fetching three times as much for its coal as demand for the dirty fuel booms in the wake of Russia’s invasion of Ukraine. Rachel Millard reports:
FTSE 100 miner and trader Glencore said it had sold the fuel for an average of $236 (£195) per tonne during the first half of the year, which compares to the $72.25 per tonne it achieved during the same period in 2021.
Demand for coal prices have jumped as power generators look for alternatives to natural gas as Russia restricts supplies to Europe in retaliation over sanctions. The supply of coal from Russia has also been more difficult since the war.
Glencore produced 55m tonnes of coal during the six months to the end of June, which was 14pc higher than last year after it bought out former partners in Colombia’s Cerrejon mine, BHP and Anglo-American.
That’s all from me for this week – thanks for following! Giulia Bottaro will see you through to the weekend.
British wine drinkers may have noticed something different about their plonk recently – more plastic miniature bottles.
Lanchester Wines, an importer and wholesaler based in County Durham, last month swapped out single-serve glass bottles for plastic after the war more than a thousand miles away shut several melting facilities, leading to a shortage in production.
Mark Roberts, sales director for the company, said: “The loss of three major furnaces has severely reduced the availability of glass bottles across Europe.”
It’s just one example of the knock-on effects of the conflict on distribution networks throughout the region.
Ukraine’s exports of everything from grains to industrial goods have plummeted, contributing to shortages and soaring costs.
As energy bills soar and the mercury continues to rise, Spain’s prime minister has a solution: stop wearing ties.
Pedro Sanchez has asked his ministers, public officials and private sector employees to adopt a more casual dress code to reduce the need to energy-guzzling air conditioning.
He told reporters: "I’d like you all to note that I am not wearing a tie. This means we can all save from an energy point of view."
Striking a more serious note, Mr Sanchez said his Government would introduce emergency measures next week to improve efficiency and energy saving.
For now, he said: "I have asked ministers, all public officials, and I would like to ask the private sector too, if they haven’t already done so, not to wear a tie when it isn’t necessary because that way we will be confronting the energy saving that is so important in our country."
Shoppers face smaller and worse quality onions and carrots in supermarkets after the record-breaking heatwave and drought conditions ravaged the growing of Britain’s staple vegetables.
Tom Rees has more:
Farmers warned extremely dry and hot weather in the UK will add to rampant food price inflation as the growth of crops is stunted by heat and strained water supplies.
The industry warned that vegetables including onions, carrots, cabbages and potatoes will be affected after record temperatures and dry conditions. Dairy production also could be affected as farmers cannot grow as much grass to feed their livestock.
Ian Hall, a large-scale carrot farmer from Tompsett Burgess Growers and the British Carrot Growers Association, said: “Because the crop is responsive to water and also with the temperature [as] once they get to say 28 degrees the carrots stop growing, the results are that the carrot crop are just not growing fast enough.”
He said carrots in the shops will be smaller and farmers are facing lower yields from their crop.
Read Tom’s full story here
More than half of Britons received more in welfare than they paid in tax last year, according to new figures from the ONS.
A VAT cut, higher spending on welfare and health and a steep reduction in household consumption meant that 54.2pc of individuals took more support from the state than they contributed in the first year of the pandemic to March 2021.
The ONS said it was "both the greatest proportion and the largest annual increase" since records began in 1977. In 2020, 47.5pc were net recipients.
Incomes support programmes such as the furlough scheme weren’t counted as a benefit.
The last time the proportion was above 50pc was in 2012-13 as the economy was recovering from the financial crisis. Before 2008, the share of net welfare beneficiaries had always been under half the population.
Wall Street has opened largely higher this morning following upbeat results from Amazon and Apple, while hopes of less aggressive interest rate rises also boosted sentiment.
The S&P 500 opened 0.4pc higher, while the tech-heavy Nasdaq rose 0.6pc. The Dow Jones slipped 0.04c.
Ben & Jerry’s is heading for a courtroom showdown with owner Unilever over the sale of its Isreali business after talks aimed at soothing tensions came to nothing.
Hannah Boland has the story.
The ice cream maker and its parent company failed to reach an agreement over the dispute by a July 28 deadline, according to Reuters. The issue is now set to be referred back to a federal judge, although Unilever could still settle out of court, Reuters said.
The case centres on Unilever’s sale of Ben & Jerry’s Israeli operations, against the will of the ice cream brand’s independent board.
A source said the dessert maker, known for flavours such as Chunky Monkey, was unwilling to “cave” on its stance on Palestinian human rights in talks aimed at averting a public legal battle.
Ben & Jerry’s is suing Unilever over the sale of its Israeli operations, which it argues harms the "social integrity" of its brand. Under the terms of its sale to Unilever in 2000, the Ben & Jerry’s business is allowed its own independent board with decision-making power over what it sells and where. The division has become well known for its outspoken stance on a range of political issues, including the war in Ukraine.
The sale of its Isreali operation came after Ben & Jerry’s tried to mount a boycott of occupied Palestinian territories. That drew criticism, and eventually action, from Unilever, which said it "rejects completely and repudiates unequivocally any form of discrimination or intolerance". Ben & Jerry’s is now attempting to reverse the sale.
Unilever argued it still has “primary responsibility for financial and operational decisions” at Ben & Jerry’s despite the independent board.
Venezuela’s opposition leader Juan Guaido is one step closer to getting his hands on more than $1bn of gold stashed in the Bank of England after a London judge decided not to recognise a Venezuelan court decision that President Nicolas Maduro should have it.
Maduro has sued the Bank for access to the stash, claiming it was needed for a Covid relief fund. However, Guiado has also staked a claim to take the gold.
The long-running case has been heard by several UK courts since.
In a judgement today, Judge Cockerill said: "I conclude that there is no basis for the recognition of the judgements upon which the Maduro Board relies. The Guaido Board therefore succeeds."
The ruling bolsters Britain’s decision to effectively recognise Guaido as Venezuela’s leader.
ICYMI – Amazon is putting the brakes on its global recruitment spree after reporting its second loss in a row.
Here’s more from Gareth Corfield:
However, investors seized on rising sales to send shares sharply higher, adding $14bn to the fortune of founder Jeff Bezos.
The company will continue to hire software engineers, particularly for its Amazon Web Services and advertising businesses, but will be cautious about hiring for other departments, chief financial officer Brian Olsavsky said.
He added: “We will continue to add headcount, but are also mindful of the economic condition.”
Investors overlooked the tech behemoth’s $2bn (£1.6bn) fall into the red to focus instead on unexpected growth in sales driven by US consumers and demand for the company’s cloud computing services.
Amazon posted gross quarterly revenues of $121.23bn after the bell on Thursday, outperforming market analysts’ predictions of $119.09bn by 1.8pc.
However, the net loss in the three months to 30 June – its second in a row – was a sharp reversal of the previous year’s $8.1bn profit.
Read Gareth’s full story here
Liz Truss has doubled down on a pledge to review the Bank of England’s mandate as she set out an economic growth target of 2.5pc a year.
In an interview with Conservative Home, she recommitted to plans to "revisit the mandate" but stressed she would preserve the Bank’s independence. Any review will include an examination of quantitative easing, she said.
The Tory leadership frontrunner has made no secret of her plan to look again at the BoE, but markets fear a mandate review would only add to uncertainty as inflation spirals.
Ms Truss said the mandate "was set in 1997 in completely different times, and one of the issues round controlling inflation is around monetary policy, and that’s not just about interest rates, it’s also about quantitative easing".
The Bank, which has raised rates five times since December, has stressed that around 80pc of inflation is out of its hands as Russia’s war in Ukraine drives up energy prices.
The owner of British Gas will stop selling power and natural gas to its biggest business customers as surging wholesale energy costs eat away at its profit margins.
Centrica will only supply clients consuming up to 10 gigawatt-hours of electricity and 1m therms of gas, Bloomberg reports. That means gradually getting rid of about 200 customers.
Wholesale gas costs have doubled this year and trading on behalf of big customers is more risky because more collateral is required to guarantee trades – tying up cash – while the change of a default increases.
Centrica isn’t the only one to cut off big customers. In March Scottish Power said it would gradually stop selling energy to businesses because of the market’s "unprecedented challenges".
US stocks are on track for their biggest monthly gain since November 2020 thanks to a string of positive results and expectations of slower Federal Reserve interest rate rises.
Futures tracking the Nasdaq rose 1pc after the tech-heavy index hit a seven-month high yesterday. Amazon and Apple both rose in pre-market trading after beating revenue estimates.
Futures on the S&P 500 rose 0.7pc, while the Dow Jones up 0.3pc.
European stocks were also on track for their best month in almost two years, with the banking sector outperforming after a slate of strong results.
Exxon Mobil has posted its best ever profit as it cashed in on surging energy prices.
The US energy giant posted net profit of $17.9bn (£14.7bn) in the second quarter, nearly quadrupling from last year and usurping the previous record set in 2008. Adjusted earning of $4.14 per share also beat forecasts.
It comes after rival energy giants including Shell and TotalEnergies posted unprecedented results.
Natural gas is headed for its biggest weekly gain in more than a month as lower supplies from Russia fuelled fears of winter shortages.
Putin’s cuts are already taking their toll, driving up household bills and sending inflation even higher. It could get worse as countries struggle to refill storage sites ahead of winter.
European inventories are now about 68pc full, but the ability to get enough gas into storage will depend on future Russian supply and the ability to secure supplies from elsewhere.
Prices jumped against this week after the key Nord Stream pipeline linking Russia and Germany reopened at just 20pc of capacity.
Benchmark European prices slipped 0.1pc this morning, but are still up about 10pc for the week. Prices are about 10 times higher than the normal levels for this time of year.
Barclays has been hit by three discrimination claims in London from black bankers who accused the lender and colleagues of treating them unfairly because of their race.
The cases are being heard together at an employment tribunal. All three men are from Cameroonian backgrounds.
Christian Abanda Bella, who works in the investment bank’s analytic team, said he blew the whistle on "an attempt by some executives to sabotage" regulatory process on price model systems, according to court documents seen by Bloomberg.
He said he was then labelled as "aggressive" in performance reviews, which he said was linked to his race.
Colleague Louis Philippe Samnick alleges he faced similar treatment when he outline concerns on a team project. He said he was portrayed as a "troublemaker" and was overlooked for a promotion due to his skin colour.
Henry-Serge Moune Nkeng, who works in Barclays’ risk team, sued the bank for discrimination. His claims related to race and disability discrimination following a leg injury and having to take time off.
Barclays denies all of the allegations.
Virgin Media O2 has created a joint venture with French infrastructure investor InfraVia Capital Partners to build between 5m and 7m new fibre connections across Britain.
The venture will invest £4.5bn in the network. It will be 50pc owned by Liberty Global and Telefonica and 50pc by InfraVia and the deal is expected to close by the end of the year.
The investment will include £3.3bn in debt and £1.4bn in equity, while the connections will be built over the next four years.
The move will take Virgin Media O2’s footprint to 80pc of the UK – up from 50pc today. It marks efforts by the newly-formed group to take on telecoms behemoth BT.
Shares in BT dropped 4pc following the announcement.
Hermes reached record profitability in the first half of the year as the maker of the $10,000-plus Birkin bag became the luxury industry’s standout performer.
The French company’s shares soared as much as 9.6pc – the biggest rise in more than two years – after it said its recurring operating margin reached a record high of 42pc, up from 41pc a year earlier.
Hermes follows LVMH and Kering in posting strong results, showing the luxury consumer is resilient so far to high inflation and worries over a potential economic downturn.
Sales have been hit by Covid lockdowns in China, but that’s less of an issue for Hermes, given the months-long waiting lists for its bags.
Axel Dumas, executive chairman of Hermes, told analysts the company isn’t seeing any signs of demand slowdown amid worries over the global economy, adding that the French brand would probably be one of the last luxury labels to be affected.
Jack Ma will give up control of Ant Group in a move that could further delay the tech giant’s plans for a stock market float.
The move comes two years after Beijing halted Ant Group’s $34bn IPO at the last minute and forced it to restructure its business.
That came after Ma spoke out against the Chinese state and promptly disappeared for three months.
The tycoon has been considering giving up control of his company for several years, the Financial Times reports.
But his exit will fuel speculation that he’s been pushed out by Beijing. It is also likely to delay Ant’s IPO by at least another year.
Hussain Mehdiat HSBC Asset Management says the eurozone is facing significant risks.
Another upside inflation surprise will make uncomfortable reading in Frankfurt and exacerbates the household income squeeze.
Underlying price pressures are emanating from a strong labour market, while further gas supply disruptions pose significant upside risks going forward.
Recent declines in the euro exchange rate mean imported inflation is also a problem. This will keep the ECB on a hawkish trajectory this year even in the face of likely recession.
We see good reason to remain cautious on eurozone equities, despite relatively attractive valuations.
UK mortgage approvals fell by more than expected in June and consumers dramatically ramped up borrowing in the latest signs the cost-of-living crisis is hitting economy.
Lenders authorised 63,726 mortgages, down 3pc from May and the lowest level in two years, according to Bank of England data.
Consumers took out an extra £1.8bn in unsecured debt – well above the £1.2bn averaged over the last six months.
The fall in mortgage lending points to a slowdown in the housing market following a pandemic boom as the Bank of England raises interest rates to tackle soaring inflation.
The rise in consumer credit may also suggest that struggling families are borrowing to make ends meet.
A Chinese group is using “dark” tankers to take on Russia oil in the middle of the Atlantic, in a hazardous effort to ship more of the tainted crude east.
Louis Ashworth has more:
An anonymous entity based in the Chinese port city of Dalian has bought up a string of super-sized VLCC carriers to create a “transfer hub” in international waters around 860 nautical miles off Portugal’s coast, analysts say.
According to a report by Lloyd’s List, the maritime intelligence company, at least five “elderly” tankers had been bought by the Dalian firm in the past three months, and are now being used to transport oil.
They are allegedly being used to consolidate shipments of Russian oil loaded at Baltic and Black Sea ports, which are then being taken on destinations including China.
China has become a major importer of Russian oil since the West imposed sanctions in response to the war in Ukraine. Russia has replaced Saudi Arabia as China’s biggest oil trading partner. Russia’s urals blend oil is trading at a steep discount to benchmark Brent crude as many companies shun the country.
Read Louis’ full story here
Sterling has rallied to a one-month high against the dollar as risk appetite returns to markets.
The pound rose 0.5pc against the dollar to hit $1.2220. Against the euro it dipped 0.2pc to 83.75p.
The currency is on track to gain 0.3pc against the dollar in July, reversing big losses from the previous month. Investors are now looking ahead to next week’s Bank of England interest rate decision.
Aston Martin is hoping for higher luxury car sales in the second half of the year after hundreds of its SUV models were held up by parts shortages.
The British car brand forecast positive free cash flow for the rest of the year as it works out troubles in its supply chain.
At the end of June it had more than 350 of its DBX707 SUV awaiting parts. But it expects deliveries of the model to help it meet annual targets.
Aston saw its losses widen to £89.9m in the first half even as revenues increased almost 9pc to £541.7m.
The update comes after Saudi Arabia’s sovereign wealth fund took a 20pc stake in Aston Martin as part of a £653m investment round.
Germany’s economy ground to a halt in the second quarter – a further sign the country could be heading for recession as Putin slashes gas supplies.
GDP in Europe’s largest economy was unchanged, defying expectations of 0.1pc growth. While private and public spending supported the economy in the second quarter, trade was a drag, according to the statistics office.
The figures contrasted with growth of more than 1pc for both Spain and Italy, while France returned to growth after a contraction in the first quarter.
Still, the continent is grappling with sky-high inflation and the threat of a further cut to gas supplies is weighing on the outlook.
Trick or treaters could be in for a nasty suprise after US chocolate maker Hershey warned of a shortage of sweets over Halloween.
The food giant, which makes Twizzlers, Reese’s Peanut Butter Cups and is the US licensee for KitKat, said it might not be able to meet demand over the holiday due to raw material shortages and capacity problems.
It’s the latest blow for chocoholics after Swiss food group Nestle put up its prices again due to "unprecedented increases in costs".
Nestle, which makes Kitkats, Cheerios and Smarties, said it had increased prices by 6.5pc in the first half of the year.
Standard Chartered was handed a boost thanks to a strong quarter for its traders, despite fears that a slowing global economy could squeeze its lending business.
The London-based bank reported pre-tax profit of $1.3bn (£1bn) in the second quarter – up 7pc – as traders benefitted from volatility in global markets along with many of its Wall Street peers.
The lender announced a $500m share buyback and plans to return more than $5bn to shareholders over the next three years.
Bill Winters, chief executive of StanChart, said:
We remain disciplined on expenses, with significant savings delivered and maintained a strong capital position. We remain confident in the delivery of the financial targets we set out in February.
The FTSE 100 looks set to end the week on a positive note after a string of upbeat company results.
The blue-chip index rose 0.3pc in early trading, led higher by financial stocks.
NatWest topped the index with gains of 8pc after it announced a £1.8bn dividend for shareholders as its profits rose.
Standard Chartered was up 3.6pc after it was boosted by a record trading results. HSBC, Barclays and Lloyds were all also in the green.
Testing firm Intertek was the morning’s biggest laggard, shedding 6.5pc after it warned on lower profit margins.
The domestically-focused FTSE 250 jumped 0.8pc, with Morgan Advanced Materials leading the gains.
The competition watchdog has opened an investigation into environmental claims made by fashion brands Asos, Boohoo and George at Asda amid concerns over so-called greenwashing.
The Competition and Markets Authority said it opened an investigation into the three fashion brands “to scrutinise their ‘green’ claims,” saying it’s concerned that clothes, footwear and accessories are being marketed as eco-friendly with language that seems too vague and misleading.
The regulator is investigating claims across the British fashion sector and will target other areas including travel and consumer goods.
Asos said it’s "committed to playing its part in making fashion more sustainable, including providing clear and accurate information about its products".
France has swerved a recession after it returned to growth in the second quarter, though surging inflation and the threat of cuts to Russian gas supply still linger.
GDP rose by 0.5pc in the three months to the end of June after a 0.2pc contraction at the start of the year, beating expectations.
But most of the surprise came from trade, with consumer spending falling for a second straight quarter. Meanwhile, inflation hit a new record high of 6.8pc.
Spanish GDP jumped 1.1pc – almost three times the forecast level – but inflation hit a record 10.8pc.
It’s part of a flurry of economic data from the EU, which culminates in figures for the eurozone as a whole.
NatWest will hand shareholders a £1.8bn special dividend as it posted a rise in profits, but acknowledged its customers were being hit by the cost-of-living crisis.
The bank posted a pre-tax operating profit of £2.6bn in the last six-month period, up 13pc and ahead of what analysts had predicted. Income was £6.2bn during the same period.
The company said it has released £46m from the impairment charges that it had previously set aside for a rainy day.
It declared an interim dividend of 3.5p per share and a special dividend of 16.8p per share – or £1.8bn.
Chief executive Alison Rose said:
NatWest Group delivered a strong performance in the first half of 2022, building on two years of progress against our strategic priorities.
We are growing our lending to customers and continuing our £3bn investment programme to create a simpler and better banking experience whilst delivering sustainable dividends and returns for our shareholders.
The FTSE 100 has pushed higher at the open after a late rally on Wall Street last night.
The blue-chip index rose 0.2pc to 7,357 points.
AstraZeneca has raised its revenue outlook after sales in the second quarter were driven by growth in all areas including Covid treatments.
The British pharmaceutical giant now expects revenues to grow by more than 20pc as increasing use of its Covid treatments offsets a decline in its vaccine.
Revenue rose to $10.8bn (£8.8bn) in the three months to the end of June, beating analyst expectations. Earnings per share rose to $1.72.
AstraZeneca hailed growth in "every geography and every market", adding that its $39bn acquisition of Alexion Pharmaceuticals also boosted performance.
Here’s what Luis Gallego, chief executive of IAG, had to say about the results:
In the second quarter we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines. This result supports our outlook for a full year operating profit.
Our performance reflected a significant increase in capacity, load factor and yield compared to the first quarter.
Premium leisure remains strong while business travel continues a steady recovery in all airlines.
Forward bookings show sustained strength and North Atlantic demand continues to grow following the lifting of the US Covid testing requirements in June.
Although bookings into the fourth quarter are seasonally low at this time of year, we are seeing no signs of any weakness in demand.
Our industry continues to face historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute. Our airline teams remain focused on enhancing operational resilience and improving customer experience.
I would like to thank those customers affected for their loyalty and patience and our colleagues for their hard work and commitment. We will continue working with the industry to address these issues as aviation emerges from its biggest crisis ever.
The owner of British Airways has swung back to a profit even as delays and cancellations sparked misery for British holidaymakers.
IAG posted an operating profit of €293m (£245m) in the three months to the end of June, up from a loss of almost €1bn in the same period last year and ahead of expectations.
The group has benefited from a rebound in demand after the pandemic, as well as higher ticket prices. But it’s also scrapped flights for thousands of passengers, who’ve often faced lengthy delays at airports due to understaffing.
IAG said a cap on passenger numbers at Heathrow would limit capacity to 80pc of pre-Covid levels over the summer and 85pc in the fourth quarter – a reduction of 5pc compared to previous guidance.
1) Defence companies re-energised by war in Ukraine BAE Systems is expecting a flood of new orders from countries preparing for the return of industrial war
2) Chinese fleet of ‘dark’ oil tankers takes on Russian crude at sea Ships are reportedly turning off their tracking signals to transfer Russian oil in the mid-Atlantic
3) Amazon warns of hiring slowdown after second consecutive loss Jeff Bezos’s fortune rises by $14bn as shares jump
4) No new homes in West London as electricity grid runs out of capacity Housebuilders have been told it could take until 2035 to get new developments hooked up to the electricity network
5) Lord Cruddas’ wealth drops by £100m as CMC crashes 20pc The company says a weak pound and unfavourable exchange rates are to blame
Asian stocks took their cue from a late rally on Wall Street, as markets focused on a possible slowdown in the pace of rate hikes rather than a US recession after data showed its economy shrinking for a second straight quarter.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.4pc. Japan’s Nikkei share average opened up 0.4pc, while the Seoul index and Australia’s index opened up 0.75pc and 0.76pc respectively.
China did not mention its full-year GDP growth target after a high-level Communist Party meeting and said instead it will try hard to achieve the best possible results for the economy this year.
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Inflation in the eurozone has soared to a new record high, piling more pressure on the European Central Bank as price rises show no signs of slowing.