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Good morning. Liz Truss will enter Downing Street today after a bruising battle to become the UK’s prime minister and will finalise a two-year package of energy relief for households and business that could cost up to £100bn.
The foreign secretary beat rival and former chancellor Rishi Sunak in a ballot of Conservative party members by 81,326 votes to 60,399 — a 57-43 margin — after a seven-week contest to succeed Boris Johnson.
Truss will meet the Queen today at Balmoral, the monarch’s estate in Scotland, and will immediately return to London to announce her cabinet and address the economic crisis facing the country.
Truss is seeking to cap energy prices in a costly market intervention to avoid household misery and business collapse. Average household bills will rise from almost £2,000 to more than £3,500 in October.
Her team has said the total package, to be announced within days, will not exceed £100bn but could come close given the scale of the support needed for households and companies. Among the options being considered are capping wholesale gas prices and freezing household energy bills.
Do you think Truss will be successful in her pledge to help households with soaring energy bills? Tell me what you think at [email protected], and your response may be shared in a future edition of the newsletter. Thank you for reading FirstFT Europe/Africa — Gary
Five more stories in the news
1. Brussels seeks EU-wide gas price caps The European Commission’s energy agency has called for member states to adopt an “emergency wholesale price cap” on gas to tackle a widening energy crisis, according to a document seen by the Financial Times, as Russia said flows through the Nord Stream 1 pipeline would not resume until the west lifted sanctions.
2. Billions lost on UK Covid business loans More than £1bn of taxpayer-funded loans made under the UK government’s Covid “bounce back” scheme have been identified as potentially fraudulent, while banks have claimed or received £3.8bn to cover defaults under the scheme.
3. Citi nears €100mn deal for new EU headquarters Citigroup is close to signing a €100mn deal to develop a site in the heart of Dublin, boosting the scale of its European headquarters as banks beef up their presence after Brexit. The US bank has said it will hire 300 additional staff in Ireland.
4. Industrial metal prices fall on recession fears The S&P GSCI index, which tracks the spot price of metals including copper, nickel and aluminium, has dropped more than 9 per cent since mid-August, leaving it back near July lows, as Europe’s worsening energy crisis and signs of a manufacturing slowdown in China spook traders.
5. Centrica seeks billions in additional financing British Gas owner Centrica — the UK’s largest supplier of gas and electricity to households — is in talks with banks to secure billions of pounds in extra credit to meet ballooning collateral demands amid extreme volatility in energy markets.
The day ahead
Economic data S&P Global releases construction purchasing managers’ indices for France, Germany, the UK and the US. The UK also has second-quarter M&A activity data.
Corporate earnings Industrial equipment rental company Ashtead Group, property developer Berkeley Group, oil and gas group Cairn Energy and fashion house Salvatore Ferragamo report earnings.
Bruegel The Bruegel think tank’s Annual Meetings event begins in Brussels. Speakers include IMF managing director Kristalina Georgieva.
Booker Prize The Booker Prize shortlist will be announced. You can find the longlist here. (Booker Prizes)
What else we’re reading
The ‘unavoidable evil’ of wartime fossil fuels With severe cuts to Russian gas supplies and record prices, EU commissioners have done an about-turn on green policies. Governments are set to spend at least €50bn this winter on new and expanded fossil fuel infrastructure and supplies, putting emissions targets at risk.
‘The bad news for the pound is not all in the price’ The pound has fallen sharply over the past 12 months, and it has not been weaker since the mid-1980s. Contrarian traders are taking this as a signal to start building long positions, but occasionally such bets fail, warns Chris Watling, founder and chief executive of Longview Economics.
From Rome’s rough streets to the cusp of power Buoyed by disenchanted voters willing to bet on a firebrand, Giorgia Meloni has her sights set on becoming Italy’s first female prime minister. When Italians vote on September 25, her Brothers of Italy is expected to emerge as the largest party in parliament, propelling its rightwing coalition to a majority.
Taiwan’s military mired in the past Inertia that has hindered efforts to strengthen Taiwan’s defences is rooted in the army’s historical links to the Kuomintang, the Chinese Nationalist party that ruled the country under martial law for decades, experts say. The reform drive has taken on urgency as Beijing ratchets up military pressure.
The battle for control of India’s media Critics of Prime Minister Narendra Modi and the co-founders of media group New Delhi Television, Prannoy and Radhika Roy are struggling to fend off a corporate raid by Gautam Adani, the world’s third-wealthiest man. Defeat would see India’s biggest television news channels controlled by billionaires, with profound implications for media plurality.
Award-winning interior designer Joyce Wang offers FT Globetrotter her very own Hong Kong highlights: traditional shops, rooftop picnics and boat trips to beautiful beaches.
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