FT News Briefing Russia’s double energy whammy
Sep 6, 2022
Britain faces an energy crisis as a new prime minister takes charge, tackling rising household costs and inflation. Meanwhile, Russia has halted gas supplies to Europe in retaliation for sanctions, complicating the energy landscape. OPEC+ is also cutting oil production to support prices amid escalating challenges for European industries. In a surprising twist, affluent individuals from China are flocking to Singapore, seeking safety from strict pandemic measures and geopolitical tensions.
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UK's Economic Crisis
- Liz Truss faces a major economic crisis and plans a substantial intervention to freeze energy bills.
- This intervention could cost tens of billions of pounds, possibly reaching 100 billion.
Truss and the Bank of England
- Truss's relationship with the Bank of England is uncertain after she criticized its inflation handling during her campaign.
- Despite suggesting a review of the bank's mandate and potential regulatory mergers, she now stresses respecting its independence.
EU Gas Price Caps
- The European Commission recommends capping Russian gas import prices to soften the energy crisis blow.
- They also propose a country-specific cap system based on individual energy mixes, with details to be discussed at an upcoming meeting.