Afternoon summary
Time to recap....
Risks of a UK recession have risen as the cost of living crisis, the Ukraine war and the Covid-19 pandemic hit the economy. Deutsche Bank have warned that the economy is slowing, amid renewed supply chain bottlenecks, higher inflationary pressures, heightened domestic and global uncertainty, and staff absences with Covid.
The Russia-Ukraine was has also hit global trade, which shank by an estimated 2.8% in March.
Russia has moved closer to a possible debt default, after paying some holders of dollar-denominated debt in roubles this week due to a US freeze on its overseas reserves.
Growth worries have hit markets in Europe, where the Stoxx 600 dropped 1.5% today. Wall Street is also under pressure, with the Nasdaq is down over 2%.
The UK cost of living crisis has intensified, as millions of workers and businesses were hit with higher national insurance rates today.
Health secretary Sajid Javid defended the 1.25 percentage point increase, saying it was needed to pay for health and social care as a result of the Covid pandemic.
Chancellor Rishi Sunak’s popularity has tumbled since last month’s spring statement.
British building firms have seen cost pressures intensify, as supply chain disruption pushes up the cost of materials such as cement, timber, metals and plastic.
MPs warned that a chronic shortage of food workers could push up prices even higher in the shops.
Western allies have imposed fresh sanctions on Russia. The UK will impose a full asset freeze on Russia’s largest bank, end all imports of oil and coal by the end of the year, and also sanctioned eight more oligarchs.
Former Russian president Dmitry Medvedev has said Moscow will fight attempts to seize Russian property abroad in courts around the world.
The lavish wealth of Roman Abramovich’s business partners has been revealed today, including offshore investments in a Caribbean island resort, plans to redevelop a Marylebone church and a vast array of property in the UK and beyond.
In the travel world, holidaymakers and travellers faced fresh disruption after more easyJet and British Airways flights were cancelled due to staffing shortages caused by a soaring number of coronavirus cases.
Trade unions have condemned the owner of struggling Manchester airport for inflating bosses’ pay by almost a quarter in the first year of the pandemic even as the wages for staff were cut and hundreds of workers were let go.
A former P&O Ferries chef is suing the company for £76m over its decision to sack almost 800 staff without notice last month.
The job of keeping the UK’s electricity and gas flowing will be returned to public control by 2024, under government plans for the effective nationalisation of a division of National Grid.
Goodnight. GW
European stock markets have posted losses today, as economic worries hit shares.
France’s CAC index tumbled 2.2% (with concerns that Marine Le Pen could win this month’s presidential election also knocking shares).
Germany’s DAX lost 1.9%, on concerns about possible recession risks in the eurozone as the Ukraine war hurts growth.
Warnings that the UK could slip into recession, and that America’s economy could contract next year, also wieghed on investors.
But the FTSE 100 index held up better in London, ending just 26 points lower at 7588 (down 0.35%).
Live Market Update from the CMC dealing desk - European Closing Prices:#FTSE 7587.7 -0.34%#DAX 14151.69 -1.89%#CAC 6494.25 -2.28%#MIB 24447.36 -2.06%#IBEX 8482.1 -1.64%
— CMC Markets (@CMCMarkets) April 6, 2022
Prices are indicative only. $FTSE $DAX $CAC $IBEX
Michael Hewson, chief market analyst at CMC Markets, says the tone for markets has soured significantly, with Europe possibly moving towards embargoes on Russian oil and gas.
European stocks sank sharply as the mood music over more onerous sanctions on Russia ratchets up further in anticipation of that we could well see evidence of further Russian atrocities in the coming days.
