Closing summary.
Time to wrap up… after a day in which the pound has sunk to fresh 29-month lows.
Sterling is on the brink of falling to just $1.15 against the resurgent dollar, as worries about a looming UK recession, and political uncertainty, hit the currency.
Gas prices have been volatile, with the day-ahead UK wholesale price falling sharply, down 16%, but other contracts recovering on concerns that Russia could turn off gas to Europe this winter.
Fitch say that a full shut-off of Russian pipeline gas to the EU increasingly “looks like a reasonable assumption”.
Recession fears have knocked oil further below the $100/barrel mark, while aluminium has hit a 16-month low as falling factory activity in China spooked the markets.
The UK’s cost of living crisis became more acute, with warnings that Britons face a 10% fall in real household incomes due to surging inflation, with an extra 3 million people at risk of falling into poverty.
Resolution Foundation warned that the outlook was ‘frankly terrifying’.
And markets are making a dire start to September, after a tough August, with stocks sliding on both sides of the Atlantic.
Here are today’s main stories:
Spain to cut VAT on gas to 5% from October
The Spanish government will cut value-added tax (VAT) on gas to 5% from 21% from October to reduce the impact of rising gas prices on household utility bills.
Prime Minister Pedro Sanchez told local radio station Cadena SER that the move is planned “so that our citizens’ heating bills are lower,”
The government seeks to “fairly share the costs and charges of the [Ukraine'] war”, he added.
The measure will mean a revenue loss worth about €190m per quarter, Budget Minister Maria Jesus Montero told reporters later Thursday.
