Live news updates from September 20: Lagarde says rates need to rise fast, ‘Spac king’ to return $1.5bn

Beyond Meat, the maker of plant-based food products, announced the suspension of its chief operating officer following reports the executive had been arrested and charged after a road rage incident in which he was accused of biting a man’s nose.

Doug Ramsey, 53, was arrested on Saturday night and charged with third-degree battery and making a terroristic threat, according to records from Washington county, Arkansas. The records show he was released on Sunday morning on a $11,085 bond.

Citing a police report from Saturday, local media reported Ramsey was arrested following a fight in a parking garage outside a University of Arkansas football game in Fayetteville, Arkansas, on Saturday.

According to the police report cited by media, Ramsey was angered when another driver’s vehicle made contact with his own. The report says Ramsey exited his car and punched through the back windshield of the other vehicle. The other driver exited his car, at which point Ramsey is alleged to have started punching him, bitten his nose and threatened to kill him.

Beyond Meat, which has its headquarters in California, said in a statement on Tuesday afternoon that Ramsey had been suspended effective immediately. Operations activities would now be overseen on an interim basis by Jonathan Nelson, the company’s senior vice-president for manufacturing operations.

Ramsey joined Beyond Meat in December 2021, following an almost three-decade career at Arkansas-based Tyson Foods, one of the biggest producers of traditional meat in the US.

The suspension of its COO comes at a difficult time for Beyond Meat, which in recent months has announced job cuts and downgraded its sales outlook due owing to continued inflationary pressures and the need to discount its products in an effort to attract shoppers.

Beyond Meat shares have shed more than three-quarters of their value in 2022 and closed at a record low of $16.03 on Tuesday. Shares briefly changed hands for more than $230 about two months following the company’s initial public offering in May 2019, when it floated at a price of $25 a share.

European Central Bank president Christine Lagarde said interest rates need to rise fast and possibly to a restrictive level to avoid the risk of inflation becoming more entrenched in the economy.

A fast pace of interest rate increases was important to bring inflation down to the ECB’s 2 per cent target, Lagarde said on Tuesday.

“Adjusting the pace of rate hikes is a key tool to signal our determination to fulfil our mandate and keep inflation expectations contained,” she said in a speech. “Moving faster at the start of the hiking cycle clearly conveys our commitment to bring down inflation to our medium-term target,” she added.

Most economists expect the policy rate to rise until they reach the “neutral rate”, a level that does not stimulate or limit economic growth, although they could increase beyond that point.

Faster rate increases can influence inflation expectations, reducing the risk of a wage-price spiral and of inflation becoming persistent even after the shocks in the energy market disappear.

The ECB has adjusted its pace from the traditional 25 basis-point increase to the 75 basis point rise at the last meeting in early September.

Eurozone inflation reached 9.1 per cent in August, the tenth consecutive month of record-high inflation rates as a result of multiple shocks such as the rise in energy price increase following Russia’s invasion of Ukraine, supply chain disruptions and the release of pent-up demand.

“We may see this streak [of high inflation] continue in the near term,” Lagarde said.

Gap plans to cut 500 corporate jobs, as the apparel company continues to battle declining sales and profit trends that have been exacerbated by consumers’ changing habits in response to the pandemic and inflation.

The retailer will cut jobs at its headquarters in San Francisco as well as at its main offices in New York and Asia, the Wall Street Journal reported earlier today. Gap confirmed in an email to the Financial Times that the details of the article was accurate but refused to comment on the matter.

Shares were down 4 per cent in afternoon trade, compared to a 1.5 per cent drop in the S&P 500.

The retailer, which also owns Old Navy, Banana Republic and athleisure brand Athleta, struggled in its second quarter and reported excess inventory and pressure on its profit margin.

Gap reported a wider-than-expected net loss of $49mn in the second quarter that ended in July, wider than analysts’ forecasts for a net loss of $17mn. The company also announced in July that its chief executive Sonia Syngal would step down.

A growing number of retailers are struggling with high levels of inventory, reflecting an effort to pre-empt a potential repeat of pandemic-era shortages and supply chain disruptions, as well as inflation prompting consumers to prioritise spending on food and petrol rather than general merchandise.

Walmart and homeware retailer Bed Bath & Beyond are among consumer-facing companies to have also cut jobs recently. Both companies have reported inventory challenges related to weakening consumer demand.

Mykhailo Podolyak, an adviser in Ukrainian president Volodymyr Zelenskyy’s administration, said the “world’s community has to react immediately to the attempt to annex the territory of Ukraine by increasing arms aid and introducing new economic sectoral sanctions against Russia”.

His comments came after leaders imposed by Russia in occupied regions of Ukraine’s far east and southern coastal areas announced plans to hold referendums on joining the Russian Federation.

“[The] Kremlin opposes the supply of modern tanks and ATACMS [missiles] to Ukraine? It is time to give it,” Podolyak said on Twitter.

Ukraine has repeatedly pleaded in past months for ATACMS, 300km range rockets for multiple launch rocket systems that the US and other western countries have already provided. The system launchers that Ukraine has so far received came with shorter-range rockets capable of striking targets up to 80km.

Ukraine has used them over past weeks to destroy Russian weapons depots, logistics and command posts deep inside occupied eastern and southern regions of the country. This, in turn, softened the ground ahead of Ukraine’s lightening counteroffensive this month which reclaimed thousands of square kilometres in far eastern regions and a smaller amount in southern area near the Russian occupied city of Kherson.

Russia’s invading forces attempted to blow up a reservoir dam to slow a surprise counteroffensive by Ukraine’s army, Kyiv has claimed.

The alleged attack follows an uptick in Russian strikes on critical infrastructure after Ukrainian forces caught them off guard with a surprise northeastern counteroffensive.

“In the settlement of Pechenihy, the occupiers tried to destroy the dam of the Pechenizske Water Reservoir, but were unsuccessful,” the general staff of Ukraine’s armed forces said in a statement.

The Pechenizske reservoir dam lies east of the provincial capital Kharkiv and flows into the Siversky Donets river. The river flows south to the eastern Donetsk region, where it has formed a natural barrier between Ukrainian forces in defensive positions and Russian troops approaching from the north and east.

Since liberating Izyum and other towns in the northeastern Kharkiv region, Ukrainian forces have advanced across the river upon Russia’s forces in towns near sister cities Severodonetsk and Lysychansk that were occupied by Russian forces early this summer.

The uptick in Russian strikes targeted electricity generators and grids, triggering blackouts across eastern Ukraine, and a dam in the central city of Kryviy Rih. The dam’s destruction threatens to flood a river that runs south towards front lines in northern parts of the Kherson region in the country’s south, where Ukrainian troops are regaining territory in past weeks at a slower pace.

Ukrainian officials have condemned the critical infrastructure attacks as “terrorist” acts and claim they are intended to also slow down their army’s counteroffensive.

The German government is poised to nationalise struggling utility Uniper, which has been brought to the brink of insolvency by the fallout from Russia’s invasion of Ukraine.

Once Europe’s biggest importer of Russian gas, Uniper has suffered as Moscow cut supplies of natural gas to Europe, forcing it to buy more expensive gas on the spot market in order to meet its supply contracts.

Uniper said on Tuesday it was in final discussions with Berlin about a new rescue package, in which the German government would provide a further €8bn of capital and acquire the 56 per cent of its shares currently held by the Finnish energy company Fortum.

“As a result, it is envisaged that the federal government will obtain a significant majority stake in Uniper,” the company said.

Germany already owns a 30 per cent stake, which it acquired in July as part of an initial €15bn rescue package. Chancellor Olaf Scholz said at the time that Uniper was of “paramount importance” to the country’s economy and for safeguarding energy supplies to companies and consumers. The utility requested more support in August, raising the bill for its bailout to €19bn.

Fortum confirmed that negotiations over a sale of its shares to the German government were in “the final stages” and included the return to Fortum of the financing it had already provided to Uniper, previously estimated at about €8bn.

Ford shares were on track for their biggest one-day drop in more than two years after the automaker said it would take a $1bn hit from inflation-related supply costs that would push third-quarter earnings below Wall Street expectations.

The Dearborn, Michigan-based company announced after the closing bell on Monday that adjusted earnings before interest and taxes would fall between $1.4bn and $1.7bn, well below analysts’ consensus of nearly $3bn.

The company said it took on the additional $1bn in costs this quarter as inflation prompted suppliers to charge more. The automaker also built between 40,000 and 45,000 high-margin trucks that it cannot immediately sell because they lack components due to supply chain shortages.

Ford shares were down 9.8 per cent at midday on Tuesday, putting Ford on track for its biggest one-day drop since June 2020. They had been down as much as 11.1 per cent in morning trading on Tuesday. The fallout from the announcement weighed on rival automakers, with GM down 4 per cent in New York trading and Stellantis, the owner of the Fiat and Chrysler brands, closing 2.2 per cent lower in Amsterdam.

Deutsche Bank analyst Emmanuel Rosner wrote in a note he was
“surprised” by Ford’s results, “since the company appeared to have
weathered [semiconductor] shortages better than GM”.

“It appears that across the industry, chip and components shortages may be improving at a slower pace than anticipated,” he added.

Ford left its full-year guidance unchanged, forecasting adjusted
EBIT ranging between $11.5bn and $12.5bn. In July the automaker said it anticipated inflation-related costs for 2022 to be $3bn, up from $1bn predicted in the first quarter of this year.

UK railway workers at Network Rail and 14 train operating companies will take strike action on October 1 in a row over job security, pay and working conditions.

The 24-hour action, which will bring the railway to an effective standstill, comes after the RMT union received no further offers from the rail industry to help come to a negotiated settlement.

In separate disputes, workers at Arriva Rail London, Hull Trains and First Group Southwest will also strike on October 1.

RMT general secretary Mick Lynch said: “Transport workers are joining a wave of strike action on October 1, sending a clear message to the government and employers that working people will not accept continued attacks on pay and working conditions at a time when big business profits are at an all-time high.”

He added: “We want a settlement to these disputes where our members and their families can get a square deal. And we will not rest until we get a satisfactory outcome.”

Members of Aslef, the rail drivers’ union, are due to strike on October 1 and October 5.

The rate of US new home construction increased in August to the fastest pace since April, but rising mortgage rates and persistent inflation have slowed demand for new homes, data released on Tuesday showed.

US housing starts increased 12.2 per cent month on month to an annualised pace of 1.57mn, the commerce department said. That beat forecasts of 1.4mn in a Reuters poll of economists.

“We look for housing starts to soften from the August pace,” said Nancy Vanden Houten, US lead economist at Oxford Economics. “While a shortage of homes continues to persist, more cautious homebuilders are expected to slow the pace of construction in response to higher interest rates and a slowing economy.”

Permits to build homes, which are seen as a leading indicator of the housing market, fell 10 per cent from the previous month to an annualised pace of 1.5mn, missing economists’ estimates of 1.6mn.

The housing market has slowed down as mortgage rates have picked up. Last week, the 30-year mortgage rate hit 6 per cent, the highest level since 2008.

King Willem-Alexander of the Netherlands said the Dutch government will announce a 10 per cent increase in the minimum wage, as Europe grapples with the soaring cost of living.

The measure is part of an €18bn aid package to help households cope with rising inflation and soaring energy prices, which will be unveiled later on Tuesday.

Several European countries, including France, Germany, Italy and Spain have announced minimum wage increases, but the Dutch measure is the highest jump. Social benefits, including child allowances, will also increase.

The Dutch government will announce an energy price cap “so that people can continue to pay their bills,” King Willem-Alexander said, adding that the measures will be partly funded by “a temporary additional contribution from gas and oil companies”.

EU governments in recent weeks have been locked in negotiations on how to structure a windfall tax on energy companies that could contribute to national relief measures.

Consumer prices in Canada recorded their biggest monthly drop since the start of the pandemic, potentially easing pressure for further big interest rate increases from the country’s central bank.

The consumer price index fell 0.3 per cent in August, Statistics Canada said on Tuesday, following July’s 0.1 per cent increase. This marked the biggest monthly decline since April 2020, and compared with economists’ expectations for a 0.1 per cent decrease.

That helped bring the annual increase in CPI to 7 per cent in August, down from 7.6 per cent in July, marking a further slowing from the 40-year high of 8.1 per cent in June. Economists expected an annual pace of 7.3 per cent.

A moderation in price growth for petrol, transportation and housing drove helped slow inflation in August. Petrol prices fell 9.6 per cent on a monthly basis, the largest monthly decline since April 2020, but were still up 22.1 per cent from a year ago.

Food prices were still higher than a year ago, due to factors including extreme weather and supply chain disruptions. Statistics Canada singled out a 10.8 per cent increase in grocery prices, the fastest pace in the country since 1981.

Stripping out volatile food and energy prices, the so-called core CPI registered no monthly increase in July, helping lower the annual pace of core inflation to a four-month low of 5.8 per cent.

Canada’s central bank has raised its policy interest rate by 3 percentage points since the start of this year to combat soaring inflation. The current policy rate of 3.25 per cent is now in so-called restrictive territory, wherein the central bank is explicitly targeting a slowing of the economy.

The leaders of three Russian-controlled regions of Ukraine have announced that they would be holding referendums this week about joining the Russian Federation.

The referendums, which Ukrainian officials immediately dismissed as a sham, will take place from September 23 to 27 and will aim to consolidate Russian rule in the regions.

The votes have been scheduled in the Donetsk and Luhansk People’s Republics of eastern Ukraine, which broke away from Kyiv in 2014 in a Russian-backed revolt and are not internationally recognised, as well as in the Kherson region of south-eastern Ukraine, which Russia seized earlier this year.

A Russia-installed leader in the Zaporizhzhia region of southern Ukraine, which is partially occupied by Russian forces, said everything was in place for a referendum there too, and said a vote could be held in the coming days.

Dmytro Kuleba, Ukraine’s foreign minister, said: “Sham ‘referendums’ will not change anything.” 

“Russia has been and remains an aggressor illegally occupying parts of Ukrainian land. Ukraine has every right to liberate its territories and will keep liberating them whatever Russia has to say,” he added in a tweet.

Ukrainian officials compared the planned votes to the referendum — which was not internationally recognised — held in Crimea in 2014, as part of Russia’s annexation of the peninsula from Ukraine.

“The Donbas is coming home,” Denis Pushilin, head of the Donetsk People’s Republic, said at an emergency meeting of the regional council before it voted to support the referendum.

Russian lawmakers have passed a bill that will criminalise desertion and other acts “during a period of martial law, armed conflict, or mobilisation”, a move that has raised concerns Moscow could soon declare outright war against Ukraine.

So far, Russia has termed its seven-month long invasion of Ukraine a “special military operation” rather than a war. It has conducted its assault using contract soldiers and mercenaries, without officially deploying the conscript army or mobilising the wider population for war.

The bill, which passed its third reading in the Duma lower house of parliament on Tuesday, introduces changes to the criminal code that make it possible for authorities to punish acts such as desertion if conducted during an ambiguous “wartime” or “mobilisation” period, rather than following a clear declaration of war.

Evading conscription and desertion during such a time will now carry a jail sentence of between five and 10 years. Similar sentences are introduced for failing to comply with a commander’s orders, marauding, and intentionally destroying military equipment.

Some Russian politicians said these changes to the criminal code do not equate to mobilisation itself.

“Mobilisation has not been announced,” the state Interfax news agency cited one of the authors of the bill as saying.

However, other politicians said the concept of a “mobilisation period” had now been introduced into the legal system, and could be viewed as a signal that a full-blown declaration of war and mass mobilisation could be on the horizon.

“The Duma has just considered and adopted in their final form several changes to the criminal code, at breakneck speed,” wrote high-profile lawyer Ivan Pavlov, who has previously defended opposition leader Alexei Navalny.

“Most likely, there will soon be a big announcement . . . [and] we will be able to call the war a war,” he continued.

Chamath Palihapitiya, a serial backer of special purpose acquisition companies who came to be known as the “Spac king”, said he was winding down two of his vehicles and returning more than $1.5bn to investors after he failed to find targets.

The former Facebook executive, who once labelled himself the Warren Buffett of his era, said Social Capital Hedosophia Holdings VI and IV would liquidate, blaming valuations and volatility for his inability to find deals.

“Over the past two years, we evaluated more than 100 targets and while we came close to doing a deal several times, we ultimately walked away each time for a couple of reasons,” he wrote.

Palihapitiya became the face of the boom in blank-cheque companies, partnering with British venture capitalist Ian Osborne to launch several Spacs as the market took off. He used Twitter as a platform to promote his deals and rally retail investors who had come to view the nascent market as a cheap way to get access to public companies that often had no revenue or even a product.

The UK’s gambling regulator said on Tuesday that the handover of the National Lottery to new operator Allwyn was officially under way, after existing operator Camelot dropped its appeal against the decision to award the licence to its rival.

Allwyn, a Czech company and Europe’s largest lottery operator, was awarded the 10-year National Lottery licence in March but a court battle held up the process.

However, earlier this month Camelot and its technology supplier IGT announced they had given up their attempt to hold up the licensing process and said instead they would only seek financial damages.

“We are pleased to have officially awarded the fourth licence to Allwyn following a highly successful competition and the court’s decision to lift the suspension on the award process,” said Andrew Rhodes, Gambling Commission chief executive.

As part of its winning bid, Allwyn pledged to halve ticket prices to £1, double the amount of money generated for good causes and invest heavily in new digital products. Under the new licence, Allwyn’s profits will be more closely tied to the money raised for good causes.

Allwyn will take over the National Lottery licence in February 2024. The contract is projected to be worth about £10bn a year in sales.

European shares and US stock futures turned lower on Tuesday, while government bonds came under pressure, as investors awaited a closely watched interest rate decision by the US Federal Reserve.

The regional Stoxx Europe 600 share gauge lost 0.8 per cent, reversing earlier gains, while London’s FTSE 100 slipped 0.3 per cent as traders returned to their desks following a UK public holiday to mark the state funeral of Queen Elizabeth. Futures markets anticipated a weak start for Wall Street, pointing to a fall of 0.5 per cent for the S&P 500 at the open.

The main US equity benchmark had gained 0.7 per cent by the close on Monday after a late rally that provided a positive impetus for equity markets in Asia.

Hong Kong’s Hang Seng index traded up 1.2 per cent, China’s mainland CSI 300 gauge added 0.2 per cent and Japan’s Nikkei inched 0.4 per cent higher.

Read more about today’s market moves here.

UN General Assembly: The general debate at the UNGA kicks off today and runs until next Monday. World leaders are convening in person for the annual event for the first time since the start of the Covid-19 pandemic. The UNGA comes as the war in Ukraine, tense US-China relations, soaring inflation, natural disasters, and a looming recession pose some of the most immediate challenges for countries across the world.

US housing: There will be more data this morning on the health of the US housing market. Potential home buyers are being discouraged by the combination of high house prices and rising mortgage rates, which last week topped 6 per cent for the first time since 2008. New monthly residential construction is expected to have held steady in August at an annualised pace of roughly 1.45mn homes, according to economists polled by Refinitiv. Building permits are expected to have decreased by 75,000, or 4.5 per cent, to 1.61mn.

Canadian inflation: Canadian consumer prices are expected to have ticked down by 0.1 per cent on a monthly basis in August, according to economists polled by Refinitv. Headline annual inflation is predicted to have moderated to 7.3 per cent year over year, down from 7.6 per cent in July, and a 40-year high of 8.1 per cent in June. Canada’s central bank has raised its interest rate by 3 percentage points since the start of this year to 3.25 per cent, in an effort to combat inflation.

Fed policy meeting: The US Federal Reserve’s Federal Open Market Committee will begin a two-day meeting today, during which it will debate another aggressive rate rise as the central bank moves to tame inflation. The Fed will make its decision public on Wednesday.

The ranks of the super-rich swelled in 2021, with the number of people worth over $100mn increasing by 21 per cent to 84,500, according to the latest Credit Suisse Global wealth report.

The US gained 30,000 ultra-high-net-worth individuals followed by China with an additional 5,200 members.

UHNW numbers increased by more than a thousand in Germany, Canada and Australia.

The report, which was published on Tuesday, said that reductions in ultra-high net worth individuals were rare, with the UK posting the largest fall of 1,130 members.

Anthony Shorrocks, economist and report author said that the few losses of wealth were “almost always associated with currency depreciation against the US dollar.”

He added that analysis of median wealth within countries and across the world shows that global wealth inequality has fallen this century due to faster growth achieved in emerging markets.

However, global wealth inequality rose during the pandemic.

Aggregate global wealth totalled $463.6tn at the end of last year, a rise of $41.5tn or 9.8 per cent.

Accounting for inflation, total wealth rose by 8.2 per cent, according to the report as a result of “the widespread and sizeable gains in share prices.”

Credit Suisse warned that worldwide inflation and the Russia-Ukraine war will likely hamper real wealth creation over the next few years.

Nannette Hechler-Fayd’herbe, global head of economics and research at Credit Suisse, said: “Some reversal of the exceptional wealth gains of 2021 is likely . . . as several countries face slower growth or even recession.”

Ukraine has exported more than 14m tonnes of grain through so-called “solidarity lanes” into EU countries via land and river routes since the start of the war, officials said, as Brussels looks to expand the channels despite the reopening of the Black Sea to shipping.

In August Ukraine exported 2.6m tonnes of grain via the EU, more than double the amount in April. That accounted for 61 per cent of total Ukrainian grain exports, against 39 per cent via Black Sea shipping, according to senior EU commission officials.

Most Ukrainian grain handled by the EU is re-exported through ports in Romania or Poland. Brussels is investigating ways to expand the initiative, and has run pilot programs to test new channels through the Baltic and Nordic countries, and through the Mediterranean.

Russia’s full-scale invasion of Ukraine — the world’s second largest grain exporter — closed the country’s Black Sea ports, leaving huge amounts of food stranded and provoking fears of a global hunger crisis.

In response, the EU opened up trade lanes via rail, road and rivers into the bloc to handle grain, mainly for re-export from EU ports. In July the UN brokered a deal between Kyiv and Moscow to restart shipments of grain through the Black Sea.

European and Asian stock markets turned higher on Tuesday as investors awaited a closely watched interest rate decision by the US Federal Reserve.

The regional Stoxx Europe 600 share gauge added 0.8 per cent in early dealings. London’s FTSE 100 rose 0.9 per cent as traders returned to their desks following a UK public holiday to mark the state funeral of Queen Elizabeth.

Those moves followed a late rally on Wall Street, which pushed the S&P 500 up 0.7 per cent by the close on Monday.

The positive finish on Wall Street helped Asian markets to make modest gains, with Hong Kong’s Hang Seng index trading up 1.1 per cent, China’s mainland CSI 300 gauge adding 0.1 per cent and Japan’s Nikkei inching 0.4 per cent higher.

Read more about today’s market moves here.

The UK’s culture secretary has said the government will re-examine the business case for the sale of Channel 4, following opposition from advertisers and production companies.

“We’re looking at the business case for the sale of Channel 4 and making sure that we still agree with that decision,” Michelle Donelan told BBC Radio 4’s Today programme on Tuesday. “As the prime minister [Liz Truss] said, we do need to re-examine the business case.”

In April, then culture secretary Nadine Dorries rolled out a plan to privatise Channel 4 despite lacklustre support.

Big advertisers, independent production companies and some potential buyers have strongly opposed moves to privatise the publicly owned, commercially funded broadcaster, or voiced concern over the risks of a mishandled sale.

Earlier, Donelan told Sky News that about 250,000 members of the public attended the late Queen Elizabeth’s lying-in-state.

“Over 250,000 went through parliament, we’re just crunching the final numbers so that’s an approximate figure,” she added.

The queue to see the Queen’s coffin in Westminster Hall between September 14 and 19 reached up to 8km. On Saturday, mourners faced a waiting time of 17 hours.

Sweden’s central bank kicked off a week of expected bumper interest rate increases by unveiling its biggest rise this decade.

The Riksbank on Tuesday raised interest rates by 1 percentage point to 1.75 per cent as it sounded the alarm over sky-high inflation.

The US Federal Reserve, Swiss National Bank, Bank of England and Norges Bank are all expected to follow suit in the coming two days with rate increases of 0.5 to 0.75 percentage points as central banks fight to bring inflation under control.

Sweden’s central bank was one of the last to raise rates this year, opting only to increase them from zero in April after years of inflation being lower than its 2 per cent target. In August, the inflation rate was 9 per cent in Sweden, the highest since 1991.

Its 1 percentage point rise is the biggest since its current inflation-targeting regime was introduced in the 1990s, and is the joint highest this year by a major western central bank after the Bank of Canada made a similar increase in July.

“Inflation is too high. It is undermining households’ purchasing power and making it more difficult for both companies and households to plan their finances. Monetary policy now needs to be tightened further to bring inflation back to the target,” the Riksbank said in a statement.

The Swedish central bank indicated it would increase interest rates by a further 0.5 percentage points in November, and 0.25 points in February.

German producer prices rose to their highest level on record, as soaring energy prices continue to pile pressure on the industrial sector.

Industrial products cost 45.8 per cent more in August than in the same month last year, the Federal Statistical Office announced on Tuesday, the sharpest rate of inflation since records began.

Energy prices were up 139 per cent compared with last August and by 20.4 per cent month on month, the agency reported.

Prices of intermediate goods were unchanged from July, raising hopes that the year-on-year inflation rate for consumer goods prices will soon peak. While prices of basic chemicals, fertilisers and nitrogen compound continued to increase sharply, wood prices fell 12 per cent.

The German government this month pledged €67bn to support struggling energy companies as concerns rise that soaring prices will trigger a wave of insolvencies across the European energy sector.

Germany’s economy is expected to contract next year as rising energy costs reduce disposable income and consumers rein in their spending, according to the Ifo think-tank in Munich.

The pandemic-driven boom in UK home improvement has started to subside, with the owner of DIY stores B&Q and Screwfix saying that its revenues were falling and first-half profits had dropped by nearly a third.

Kingfisher on Tuesday said sales were still “significantly” ahead of pre-pandemic levels, adding that it was investing for “further growth” in ecommerce and expanding in Poland.

Sales dropped 4.1 per cent to £6.8bn in the six months to July, the company said, adding that revenues were 16.6 per cent ahead of their level three years ago. Pre-tax profits fell by 30 per cent to £474mn, which Kingfisher said was “largely reflecting very strong prior year comparatives in the UK and Ireland”.

“Kingfisher has delivered a very resilient first half of sales. While facing very strong comparatives from the prior year as well as a more challenging environment,” said chief executive Thierry Garnier.

“Looking to the months ahead, although trading in the year to date has been in line with our expectations, we remain vigilant against the more uncertain economic outlook for the second half. We are therefore focused on delivering value to our customers at a time when they need it most,” he added.

Mike Ashley is to step down as a director of Frasers Group at the company’s annual meeting next month, but has agreed to lend the UK retailer £100mn.

Ashley set up Sports Direct in 1982, changing the name to Frasers after he bought the department store chain in 2018.

Michael Murray became chief executive of the company in May.

“Since Michael Murray took over the leadership of Frasers Group earlier this year, the business has gone from strength to strength,” said Ashley on Tuesday. “It is clear that the Group has the right leadership and strategy in place and I feel very confident passing the baton to Michael and his team.”

He added that he remained “100 per cent committed” to supporting the company’s plans, and that he would lend Frasers £100mn on the same commercial terms as the group’s existing borrowing facilities.

Dozens of Hong Kong citizens who gathered outside the city’s British consulate to watch the Queen’s funeral on Monday evening used the event to display rare public defiance against local authorities.

More than 100 people were outside the building to watch the event on a live stream, despite the British consulate not holding any public events for the funeral.

At one point, a number of attendees sang the de facto anthem of the 2019 pro-democracy protests, “Glory to Hong Kong”, some phrases of which are now deemed in possible violation of the territory’s sweeping national security law imposed by Beijing.

They also chanted “Hong Kongers, add oil”, which was one of the popular protest slogans during the 2019 demonstrations. Police took away a man who played a harmonica version of “Glory to Hong Kong” but there was no confirmation that he had been arrested.

Such public displays of protest songs and slogans are rarely seen in the city after many were arrested for offences under the security law, introduced in the wake of the protests.

Also on Monday, police brought charges of obstructing a police officer against the head of the Hong Kong Journalists Association, just days before his planned trip to the UK for a journalism fellowship.

Ronson Chan, a deputy assignment editor at online media outlet Channel C HK, was arrested nearly two weeks ago while covering a news event. The journalists’ association has been labelled as “anti-China” by pro-Beijing figures.

Liz Truss has admitted that a UK-US trade deal, long seen as one of the biggest prizes of Brexit, is not on the horizon, as she arrived in New York on her first overseas trip as prime minister.

Brexit supporters insisted that the 2016 Leave vote would open the way for a free trade agreement with the US, which would dwarf trade deals with countries such as Australia or New Zealand.

But President Joe Biden has made it clear that such a deal was not a priority and on the flight from London to New York, Truss admitted it was not on the agenda.

“There aren’t currently any negotiations taking place with the US and I don’t have an expectation that those are going to start in the short to medium term,” Truss told reporters en route to the UN General Assembly.

Her frank assessment ahead of a meeting with Biden in New York leaves a hole in the government’s post-Brexit trade strategy, a core part of Truss’s ambition to boost the UK’s growth rate.

Read more on the UK-US trade relationship here.

Electric vehicle maker Zhejiang Leapmotor Technology is seeking to raise as much as $1bn in what would be Hong Kong’s largest initial public offering this year, in the latest test of investor appetite for China’s fast-growing EV market.

Leapmotor plans to raise as much as HK$8.1bn (US$1bn) from the sale of about 131mn shares in Hong Kong in a range of HK$48-HK$62 each.

The IPO would be the biggest this year in Hong Kong, where only two listings have brought in more than $1bn. However, both were secondary share sales by companies already trading on mainland Chinese exchanges, with battery component supplier Tianqi Lithium raising $1.7bn in July and duty-free retailer China Tourism Duty Free raising $2.1bn last month.

Local brokers said investors remained broadly unenthusiastic about the city’s IPO market, which has remained sluggish over the past year as Beijing has cracked down on fast-growing Chinese internet and technology groups, which were once responsible for most of Hong Kong’s biggest listings.

“The IPO market at the moment in Hong Kong is lukewarm,” said Dickie Wong, head of research at Kingston Securities. Wong said most local investors “are not participating in any IPO subscriptions any more because they can’t make any profits”.

Leapmotor’s push to list this month followed on the heels of an announcement on Monday by Onewo, a subsidiary of property developer China Vanke, which plans to raise as much as $784mn from its own initial public offering. That listing is set to price on Thursday.

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