Good night from a sweltering London

European governments proceed to seek for methods of weaning themselves off Russian energy earlier than large will increase in Vitality payments hit households over the subsequent few months.

The newest push got here with German chancellor Olaf Scholtz’s backing for a new gas pipeline linking Spain and Portugal to central Europe through France. The proposal, backed right this moment by Madrid and Lisbon, might be prepared inside 9 months, in response to Spanish vitality and setting minister Teresa Ribera.

Within the meantime, in response to Portuguese prime minister António Costa, the port of Sines on his nation’s south-west coast might be used as a hub to ship liquefied pure fuel into Europe. LNG is changing into more and more essential as Russian fuel dwindles, however Europe faces strong competition from Asia to lock in provides for the winter months.

The EU has recognized the dearth of different pipelines as a key impediment in beefing up the bloc’s vitality infrastructure. Berlin is already below critical strain after Russia lower flows by way of Nord Stream 1, the important thing connector with Europe, which is presently working at simply 20 per cent capability. German households are bracing for a surge in heating payments this winter because the shortfall pushes up costs and complicates the nation’s efforts to fill its fuel storage amenities.

A spread of presidency measures to sort out the surge in vitality costs are in operation throughout Europe, from worth caps to tax cuts, windfall taxes and subsidies.

Low rainfall can be complicating issues. Norway this week mentioned it might curb electrical energy exports to Europe if water ranges for its hydropower crops remained low, denting hopes it may come to its neighbours’ rescue. And in Germany, low levels on the Rhine are including to enterprise worries: inland waterways could solely account for about 6 per cent of German transport volumes however are used to ship 30 per cent of coal, crude oil and pure fuel.

Within the UK, forecasts for household energy bills proceed to escalate, fuelling a deepening cost of living crisis. The newest, from consultancy Auxilione, suggests the typical may prime £5,000 subsequent yr, following a steep rise in wholesale fuel costs.

Ministers are assembly power company chiefs to debate potential treatments, whereas additionally drawing up plans to fight the threat of outages this winter. On the optimistic facet, a standard entrance in opposition to Russia’s vitality squeeze has improved fractious relations between the UK and the EU.

The IMF final week prompt European international locations move on elevated vitality prices to customers to encourage vitality saving and the shift to greener energy, albeit with focused assist for poorer households which are disproportionately affected by the will increase.

In the meantime, the Worldwide Vitality Company mentioned western sanctions had solely had a “restricted influence” on Russian oil output. Though exports have fallen to Europe, the US, Japan and Korea, the routing of flows to international locations resembling India, China and Turkey has mitigated the nation’s losses.

The IEA additionally lifted forecasts for oil demand due to its elevated use for energy era in Europe and the Center East as fuel turns into too costly.

Amid the gloom there are some crumbs of consolation for customers. US petrol costs have dipped beneath $4 a gallon for the primary time since Russia’s invasion of Ukraine. The development can be being replicated in Europe, stories our Energy Source publication: EU drivers are paying 9 per cent lower than in June and British drivers 8 per cent.

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Must know: the economic system

New UK GDP figures this morning confirmed the economic system shrank 0.1 per cent within the second quarter, following progress of 0.7 per cent within the first three months of the yr, as households lower spending and falling Covid circumstances and testing depressed well being output. The nation additionally reported its worst commerce deficit since data started.

Newest for the UK and Europe

Drought was formally declared throughout elements of England, because the UK suffers its driest summer season for 50 years, with rainfall, river flows, soil moisture, groundwater and reservoir ranges all much lower than normal.

Industrial manufacturing within the eurozone elevated for the third month in a row, elevating hopes that supply chain problems could also be easing. The June rise of two.4 per cent on the earlier yr was nicely forward of the 0.8 per cent forecast by economists.

The German economic system, particularly its industrial sector, has been hit arduous by surging inflation, provide chain points and faltering world demand. Development in what was historically Europe’s powerhouse has stagnated, with the IMF slashing its 2023 forecasts. On prime of this, extreme drought alongside the Rhine poses an enormous threat to business.

International newest

Fed official Mary Daly advised the FT it was too quickly to “declare victory” against inflation regardless of Wednesday’s encouraging CPI report. She did nevertheless sign help for the Fed to sluggish the tempo of its rate of interest will increase.

Columbia’s first leftist authorities in trendy instances is focusing on the rich and the nation’s commodities exports in a major tax reform. The measures purpose to lift an extra $5.8bn subsequent yr or 1.7 per cent of GDP.

Argentina raised rates of interest to 69.5 per cent as inflation leapt 7.4 per cent in July from the earlier month, marking an annual improve of 71 per cent.

Must know: enterprise

The pinnacle of SMIC, China’s prime chipmaker, mentioned geopolitical tensions have been creating panic in an trade already beset by excessive inflation and a gradual downturn in demand.

US west coast editor Richard Waters says using knowledge is transferring to the forefront of regulators’ antitrust concerns. Lina Khan, chair of the US Federal Commerce Fee, has emphasised the necessity to act extra aggressively in opposition to vertical integration — offers that mix firms in numerous elements of a worth chain, resembling Amazon’s buy of iRobot.

Pandemic-related migration to Florida has led Miami to develop into the brand new growth city for corporate lawyers.

Beijing’s zero-Covid coverage and weak client confidence has battered China’s second-hand marketplace for luxurious items resembling high-end watches and handbags.

One high-end trade positively not on the rocks — except you prefer it served that means — is Scotch whisky. The spirit has proved surprisingly resilient contemplating the headwinds of Brexit modifications in commerce guidelines, provide chain issues and surging inflation. The variety of Scottish distilleries is at its highest because the second world war.

Regular progress is being made on driverless automobiles, writes innovation editor John Thornhill, however the lack of public acceptability and authorized certainty may but show the trade’s biggest roadblock.

Carmakers are additionally going through challenges of their drive in the direction of an electrical future. China has monopolised supplies of supplies for electrical batteries whereas the price of people who stay in the marketplace is hovering. Chinese language firm CATL right this moment introduced a €7.3bn battery plant in Hungary, confirming its standing because the world’s largest automobile battery producer.

Science spherical up

North Korea declared “victory” over Covid-19, simply three months after first admitting to an outbreak of the virus, with a complete dying toll of simply 74. Specialists are sceptical, given the dearth of mass testing, whereas some recommend it could have extra to do with desirous to revive commerce with China.

The Omicron variant continues to trigger havoc in elements of the world. Tibetan cities have been locked down after experiencing their first Covid outbreak in two years. Lockdowns have additionally affected widespread Chinese language vacationer locations resembling Hainan.

There was nevertheless optimism in Hong Kong, which this week shortened its lodge quarantine for worldwide arrivals to three days.

The EU medicine regulator mentioned it might await trial data earlier than approving vaccines designed to sort out the unique coronavirus and the Omicron variant. The choice contrasts with the US, which is planning to approve the jabs earlier than knowledge on their efficacy are launched.

BioNTech and Pfizer are beginning scientific trials for vaccines focusing on the BA.4 and BA.5 variants of Omicron. BioNTech reported decrease gross sales and earnings than anticipated within the second quarter after the EU renegotiated its Covid vaccine contract amid a glut of photographs. Pfizer can be testing a vaccine for Lyme disease.

Novavax additionally pointed to decrease demand for jabs because it slashed its 2022 revenue forecast. Folks in wealthy international locations have develop into extra reluctant to take repeated booster photographs, whereas vaccine hesitancy continues to be a consider poorer nations.

Well being authorities are more and more targeted on the risk from monkeypox. Vaccines are in brief provide throughout Europe, and within the UK may run out this month.

One other potential hazard is poliovirus, which has been detected in London sewage, prompting the rollout of a vaccine booster to youngsters within the metropolis aged one to 9.

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Some excellent news…

Columnist Sarah O’Connor picks out a cheering nugget from some new official statistics. In contrast with pre-pandemic instances, Britons are spending extra time socialising, enjoyable and retaining match and fewer time commuting. Lengthy could it proceed.