Live news updates from June 14: UK employment rate hits record high, European gas prices surge

Apple and Major League Soccer have agreed to a broadcasting rights package worth $2.5bn over 10 years, according to people familiar with the matter, a big investment in live sports by the tech group that will put the North American football league’s matches on its streaming service.

Beginning next year, all live fixtures will air on a dedicated MLS streaming service available on the Apple TV app. The price of the subscription for consumers was not immediately available.

MLS commissioner Don Garber declined to comment on the dollar value of the agreement. He said it was structured as a “minimum guarantee” with Apple to form a streaming service, with the potential for additional revenue sharing and sale of some traditional television rights.

Moving the league’s live broadcasts to streaming will allow MLS to expand its appeal overseas as opposed to “being the North American version of the global game,” Garber said.

The deal between Apple and MLS is the second live sports rights deal for the tech group and its first comprehensive rights package with a league. Earlier this year, it struck an agreement with Major League Baseball to broadcast Friday night games.

“Sports clearly represents the next battleground for ownership of the living room among the big tech companies,” said Paolo Pescatore, tech and media analyst for PP Foresight. “This is a statement of intent by Apple. While it’s late to the party, it must now be considered a serious player for sports rights in key markets for its products.”

Canadian travellers will no longer need to be vaccinated to travel by plane within the country or on outbound flights, according to new policy announced on Tuesday by the federal government.

“Suspending this requirement is possible thanks to the tens of millions of Canadians who did the right thing,” transportation minister Omar Alghabara said on Tuesday, referring to the 86 per cent of Canadians above the age of five who have at least two doses of a COVID-19 vaccine.

“This action will support Canada’s transportation system as we recover from the pandemic.”

The new policy — which maintains a mask-wearing requirement — comes into effect June 20 and also applies to train travel. It also removes the vaccination requirement for employees at federally regulated transportation companies.

The announcement comes days after Ottawa suspended ramdomized COVID-19 testing at Canadian airports. Travellers in Canada and abroad have experienced long delays at airports in recent weeks, caused in part by staff shortages.

A vaccine mandate will remain in place for cruise ship passengers and crew members.

Europe’s gas supplies suffered a double blow on Tuesday after a major US liquefied natural gas export terminal said it would be offline for at least three months and Russia said it would cut flows through a key route to Germany.

Freeport LNG, which accounts for about a fifth of US LNG exports and about 10 per cent of Europe’s imports this year, said on Tuesday that repairs following an explosion at its plant last week could take until the end of the year, with only partial activity set to resume after 90 days. Last week Freeport had indicated the terminal would resume operations in early July.

At the same time Russia said it would reduce capacity on the Nord Stream 1 pipeline to Germany by about 40 per cent, blaming the reduction on the delayed return of a key piece of technical equipment that Siemens Energy said has been blocked by Canadian sanctions against Moscow.

The twin threat to European gas imports illustrates the ongoing vulnerability of the continent to supply disruptions as it tries to reduce its reliance on Russian gas following Moscow’s invasion of Ukraine in February.

Gas prices in Europe have soared in the last year after Russia squeezed supplies ahead of the invasion and as fears of supply disruptions grew, stoking inflation and a cost of living crisis for many countries.

The EU has tried to avoid directly targeting Russian gas flows with sanctions — which prior to the invasion made up as much as 40 per cent of all of its supplies — even as it has moved to cut its dependence.

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US government debt was under pressure on Tuesday as markets bet that the Federal Reserve would raise interest rates by 0.75 percentage points at the conclusion of its two-day policy-setting meeting on Wednesday.

The yield on the two-year Treasury note, which moves with interest rate expectations, rose as much as 0.1 percentage points to a 15-year high of 3.45 per cent, reflecting a fall in the debt instrument’s price.

The benchmark 10-year Treasury yield, which moves with growth and inflation expectations, rose by as much as 0.14 percentage points to an 11-year high of 3.5 per cent.

The $23tn US Treasury market is the world’s largest financial market and the bedrock of investment and loan pricing decisions.

Until Friday, futures markets were betting that the Fed would raise interest rates by 0.5 percentage points in June and July — as indicated by chair Jay Powell at the US central bank’s most recent meeting — to combat inflation that has been running at 40-year highs.

But analysts began ratcheting up their rate rise forecasts after data last Friday showed the annual pace of US consumer price inflation for May had exceeded expectations to hit 8.6 per cent, as Russia’s invasion of Ukraine pushed up food and fuel costs.

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Caterpillar will relocate its corporate headquarters from the outskirts of Chicago to the Dallas area, marking the latest move by a Fortune 500 company to the Lone Star state.

The US construction equipment group — regarded as a bellwether for the industrial sector — said on Tuesday that it would trade Deerfield, Illinois for Irving, Texas, where it already has an office.

“We believe it’s in the best strategic interest of the company to make this move, which supports Caterpillar’s strategy for profitable growth as we help our customers build a better, more sustainable world,” chief executive Jim Umpleby said in a statement.

The announcement came six weeks after fellow manufacturing giant Boeing said it would shift its corporate base from Chicago to the outskirts of Washington, DC.

It will be Caterpillar’s second headquarters move in five years. The manufacturer relocated from Peoria, in central Illinois, to its Deerfield home in 2017 to “improve access to global customers, dealers” and “worldwide operations, while also enhancing executive recruitment”, it said at the time.

Caterpillar said it will not receive any local or state financial incentives for moving to Texas. The company will be the 54th Fortune 500 company to be based in the state.

Caterpillar said it would start the headquarters transition later this year. The group has 107,000 global employees, with the highest concentration in Illinois, where it has maintained a presence since 1925. A majority of the roughly 230 roles in Deerfield are expected to transition to the new base over time, the company said.

The US Open tennis tournament said it would permit Russian and Belarusian athletes to compete in the final Slam event of the year, in contrast with an earlier decision by Wimbledon to restrict their ability to play due to the invasion of Ukraine.

The US Tennis Association, which owns and operates the New York-based tournament, said athletes from those nations would have to compete under a neutral flag, similar to sanctions taken previously by other sporting authorities including the International Olympic Committee.

“We recognise that each organisation has had to deal with unique circumstances that affect their decisions,” the USTA said in a statement on Tuesday. “The USTA will allow all eligible players, regardless of nationality, to compete at the 2022 US Open.”

The decision paves the way for men’s top-ranked player Daniil Medvedev to defend his 2021 US Open title.

In April, the All England Lawn Tennis Club said Russian and Belarusian athletes would not be eligible to compete at the grass court championships, prompting the ATP and WTA professional tours to strip Wimbledon of its ranking points.

US government debt was under pressure on Tuesday as markets prepared for the Federal Reserve to aggressively raise interest rates to fight inflation.

The yield on the policy-sensitive two-year Treasury note rose 0.05 percentage points to nearly a 15-year high of 3.42 per cent, reflecting a fall in the debt instrument’s price as markets positioned for the Fed to raise rates by the largest amount in almost 30 years.

The benchmark 10-year Treasury yield rose 0.07 percentage points to 3.44 per cent, around its highest point since 2011. Bond yields rise as their prices fall.

The latest shakeout in the $23tn Treasury market, the world’s largest financial market and the bedrock of investment and loan pricing decisions by the world’s biggest banks and pension funds, came as traders positioned for the conclusion of the Fed’s latest monetary policy meeting on Wednesday.

Markets have now almost fully priced in a 0.75 percentage point rate rise by the Fed at the conclusion of its June policy meeting on Wednesday. Economists at JPMorgan, Goldman Sachs and Barclays all anticipate a 0.75 percentage point rise — which would be the first since 1994.

Analysts began ratcheting up their rate rise forecasts after data last Friday showed the annual pace of US consumer price inflation for May had exceeded expectations to hit 8.6 per cent, as Russia’s invasion of Ukraine pushed up food and fuel costs.

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The US Treasury department has extended a waiver allowing US banks to keep processing energy-related transactions without violating Russia sanctions, in the latest sign of the Biden administration’s concerns about further disruptions to energy markets from the war in Ukraine.

As part of the original sanctions package against Russia introduced after the February invasion, the US had issued a waiver for American banks to keep processing energy-related transactions involving third countries until June 24.

On Tuesday, the US Treasury department extended that until December 5.

“Today, Treasury renewed its authorisation of energy transactions to align our regulations with the implementation timing of the EU’s ban on crude oil. This licence will provide for an orderly transition to help our broad coalition of partners reduce their dependence on Russian energy as we work to restrict the Kremlin’s revenue sources,” the Treasury said.

The move comes as the US administration has grown increasingly concerned about high energy prices and their impact on the US economy, and is seeking ways to curb further rises. However, it could spark a backlash from some on Capitol Hill who have been arguing for the waiver to end.

Andy Barr, a Kentucky Republican who serves on the House financial services committee, had been urging Janet Yellen, Treasury secretary, to end the waiver, saying Russia’s energy sector was still experiencing a “boom”.

“Russia’s energy sector is bankrolling Putin’s war machine in Ukraine, financing the killing of innocent civilians to include women and children in Ukraine,” Barr said in a statement on Tuesday.

“It is inexplicable for Treasury to continue this waiver any longer,” he added.

The outlook of chief executive officers on the US economy sharply declined in the second quarter according to a survey released on Tuesday, reflecting inflationary struggles and growing fears of a recession in the near future.

The Business Roundtable’s CEO economic outlook index fell 19 points to 96, as sentiment related to plans for hiring, capital investment and sales expectations worsened. The survey, conducted by Business Roundtable, a Washington-based lobby group whose members include the leaders of some of America’s largest companies, polled 177 chief executives about their outlook for the next six months.

Though the index remains above the long-run average of 84, the drop from last quarter’s survey was the sixth-largest in the history of the index, which began in 2002.

“The softening of quarterly CEO sentiment reflects uncertainty driven by the unprecedented times we face as a nation and global community,” said General Motors CEO Mary Barra, who chairs the BRT. Respondents specifically noted challenges associated with insufficient semiconductor supply.

The worsening outlook parallels a broader decline in sentiment about the US economy. Economists polled by the Financial Times predict a recession in the US next year, and consumer sentiment has continued to sag, reaching record lows in June.

Small business owners also foresee headwinds in the future as they face record high inflation and a tight labour market. Owners’ expectations for improving business in the next six months fell in May to the lowest levels seen in the 48-year history of a survey conducted by the National Federation of Independent Business.

Meta has largely failed in a bid to overturn a ruling that forced it to sell online image platform Giphy, in a ruling on Tuesday, but could succeed in forcing the UK competition regulator to look again at its decision last year.

On Tuesday, the Competition Appeals Tribunal unanimously dismissed all of Meta’s grounds of appeal apart from one. It concluded that the Competition and Markets Authority had acted rationally last year when it decided Meta should sell Giphy and come to an “unassailable” conclusion when reviewing Giphy’s role as a competitor.

However, the tribunal said the CMA might have to revisit its decision as a result of Meta’s one successful appeal. The CAT found the regulator failed to properly consult during its probe and wrongly redacted material from its final decision.

In its ruling, the tribunal said “Meta’s success in relation to ground 4 prima facie undermines the entirety of the decision”, meaning it would need to hear again from both parties about what should happen as a result and whether “that failure obliges us to remit the decision to the CMA for fresh consideration”.

Facebook’s parent Meta has been locked in dispute with the UK competition regulator since it was told to unwind the $315mn acquisition last year — marking the first time the regulator had moved to dismantle a big tech deal.

Russia has imposed sanctions on 49 UK citizens, including journalists, defence officials and arms industry executives in response to western measures against Moscow over president Vladimir Putin’s invasion of Ukraine.

The sanctions bar those listed from visiting the country but will probably have a smaller effect than western sanctions against members of the Russian elite, who have significantly more assets and interests in the UK and Europe than their counterparts do in Russia.

Russia’s foreign ministry said on Tuesday that the 29 sanctioned journalists were “deliberately disseminating false and one-sided information about Russia and the events in Ukraine and the Donbas”, the eastern border region home to the worst fighting of the war.

It added that the journalists — who included BBC director-general Tim Davie, the editors of the Times, Telegraph and Guardian, as well as the FT’s chief foreign affairs commentator Gideon Rachman — were “inciting Russophobia in British society with their biased assessments”.

The list also included 20 people associated with the UK defence industry, including minister for defence procurement Jeremy Quin, the heads of the Royal Air Force and Royal Navy, and several executives from BAE Systems and Thales UK.

Russia said those people “participate in decision-making about supplying weapons to Ukraine that are used by local death squads and Nazi groups to kill civilians and destroy civilian infrastructure”.

To justify Russia’s invasion, Moscow has repeatedly made baseless claims that Ukraine is controlled by Nazis and is terrorising its own civilians.

The World Health Organization said on Tuesday that it will convene an emergency committee following the global outbreak of monkeypox.

“So far this year, more than 1,600 confirmed cases and almost 1,500 suspected cases of monkeypox have been reported to WHO from 39 countries,” WHO director-general Tedros Adhanom Ghebreyesus said.

Tedros called the outbreak “unusual and concerning,” adding that the WHO will convene the emergency committee on June 23 “to assess whether this outbreak represents a public emergency of international concern”.

The director-general said the cases came from seven countries “where monkeypox has been detected for years, and 32 newly affected countries”. 

“So far this year 72 deaths have been reported from previously affected countries; no deaths have been reported so far from the newly affected countries, although WHO is seeking to verify news reports from Brazil of a monkeypox-related death,” he said.

Shares in FedEx jumped on Tuesday after it shrugged off higher fuel costs and labour shortages to raise its quarterly dividend by more than 50 per cent.

In a statement on Tuesday, the US delivery company said it had added two new directors, Amy Lane and Jim Vena, to its board as part of an agreement with activist investor and hedge fund DE Shaw.

A third director that will be mutually agreed on between the hedge fund and FedEx will be added later, the delivery group said.

Lane is a director of NextEra Energy and retailer TJX Companies, while Vena recently served as chief operating officer of railroad company Union Pacific Corporation.

The delivery company raised its quarterly dividend 53 per cent year-on-year to $1.15 per share, and its shares rose 12 per cent in early trading on Tuesday.

The company also said it would add a performance metric to its executive payment programme that it said would better link management pay to shareholder returns.

“We believe that today’s board enhancements and changes to the executive compensation programme position the company well to deliver on its plan to drive significant value for all stockholders,” Michael O’Mary, DE Shaw managing director, said in a statement.

The US liquefied natural gas plant responsible for 10 per cent of Europe’s imports of the seaborne fuel will not resume full operations until late 2022, dealing a fresh blow to US efforts to boost energy supplies to Europe as the continent tries to cut imports from Russia.

Freeport LNG, which accounts for about a fifth of US exports of the superchilled fuel, said on Tuesday that repairs following an explosion at its plant in Texas last week could take until the end of the year.

US natural gas prices fell by more than 15 per cent on the news, as traders digested a longer-than-expected outage from a major source of demand for the fuel, with the front month contract for Henry Hub selling for about $7.20 per million British thermal units.

European wholesale gas prices were up by 17 per cent on the day, to almost €100 per megawatt-hour, as the Freeport announcement followed news that Russia’s state-controlled export monopoly Gazprom had reduced supplies through a pipeline to Germany.

Freeport said in a statement that “completion of all necessary repairs and a return to full plant operations is not expected until late 2022”, although a “resumption of partial operations is targeted to be achieved in approximately 90 days”.

Freeport previously said that its plant would be closed for three weeks following the fire.

US LNG export plants have been working flat out to increase supplies amid a surge in global gas prices in recent months and after the White House pledged to send American fuel to help replace Russian supplies.

Prices paid to US producers rose in May in the latest sign of inflationary pressure ahead of the Federal Reserve’s meeting on Wednesday.

The producer price index, which tracks the prices that businesses receive for their goods and services, advanced 0.8 per cent in May, an acceleration of 0.3 percentage points from the month prior.

On an annual basis, prices rose 10.8 per cent in May compared with a year earlier. This was lower than the 11 per cent gain from the previous month and slightly below economists’ expectations of 10.9 per cent.

US consumer prices also surged last month, even though some economists expected growth to peak in April.

Inflation reached 8.6 per cent in May, marking the highest level since December 1981, highlighting the challenge facing the economy.

The Federal Reserve will meet on Wednesday to consider raising interest rates. The US central bank increased its benchmark interest rate by 0.5 percentage points last month for the first time in more than two decades.

However, some economists think worsening inflation may cause the Fed to raise rates by 0.75 percentage points at the meeting.

Crypto exchange Coinbase is to cut its workforce by 18 per cent, according to a statement from chief executive Brian Armstrong on Tuesday.

“Today I am making the difficult decision to reduce the size of our team by about 18 per cent, to ensure we stay healthy during this economic downturn,” Armstrong said.

He added that he took full accountability for the decision: “I am the CEO, and the buck stops with me,” he said.

Crypto markets have fallen sharply in recent days. Bitcoin, the industry’s flagship cryptocurrency, has fallen about 60 per cent since its all-time high last November to a current price of just over $22,000.

The announcement comes after a series of hiring updates from Nasdaq-listed Coinbase, which employs around 6,000 people.

In February, the crypto exchange intended to hire 2,000 people for its product, engineering and design divisions. However, last month it announced a slow down in hiring in the wake of the broader crypto market downturn. Coinbase generated net losses of $430mn in the first quarter of the year.

In Tuesday’s announcement, Armstrong admitted that Coinbase “grew too quickly”.

Global fund managers believe the profit outlook for companies is the worst since the financial crisis, according to a survey by Bank of America.

The review found that a net 72 per cent of those surveyed expect profits to deteriorate, the weakest reading since September 2008 when Lehman Brothers collapsed.

BofA pointed out that other historic “big lows” in profit expectations have all occurred at crisis moments on Wall Street, including the dotcom bubble and Covid-19.

The latest fund manager survey for June comes as the US stock market officially enters a bear market, with mounting inflation worrying investors.

BofA said global growth optimism was at an “all time low” while concerns over stagflation were the highest since June 2008.

Energy billionaire Harold Hamm has launched a takeover bid for Continental Resources, in a move that would bring the US oil producer under the full ownership of its founder.

Hamm, one of the main figures in the US shale revolution of the past two decades, on Tuesday launched an all-cash offer of $70 per share for the 17 per cent of Continental that his family does not already own.

The bid values Continental at $25.4bn and represents a 9 per cent premium over the energy group’s closing share price on Monday.

Continental is the largest oil producer in the Bakken Shale fields in the US states of North Dakota and Montana, and in the Anadarko Basin field in the company’s home state of Oklahoma. It also has operations in Wyoming and the Permian Basin in Texas.

In a statement, Continental on Tuesday said that its board “intends to establish a special committee consisting of independent directors of the board to consider the proposal”, and that the offer was not binding.

Russia said UK authorities would have to deal directly with Moscow-backed separatists in eastern Ukraine in efforts to secure the release of two Britons sentenced to death last week for fighting for Kyiv.

Dmitry Peskov, president Vladimir Putin’s spokesman, said Russia was prepared to listen to appeals over the fate of the two men, Aiden Aslin and Shaun Pinner, but said none had been forthcoming from London, state-run newswire TASS reported.

The demand that the UK hold talks with the Donetsk People’s Republic, a breakaway statelet in eastern Ukraine’s industrial Donbas border region, would probably complicate efforts to secure their release.

A court in the DPR sentenced Aslin, Pinner and Moroccan national Brahim Saadoun to death for “mercenary” activity. Their families have said the men were under contract with the Ukrainian army and were not mercenaries.

UK foreign secretary Liz Truss said on BBC Radio on Tuesday that she would do “whatever is necessary to secure their release”, adding that “the best route is through the Ukrainians”.

Kyiv has floated the idea of including the men as part of a larger exchange of Ukrainian and Russian captives.

But the Kremlin’s insistence the UK hold talks with the DPR effectively amounts to a demand it recognise the separatist group.

The DPR declared independence from Ukraine after Putin annexed Crimea in 2014 and claims large areas of the Donetsk region still under Kyiv’s control — though Moscow is the only country to have backed the separatists.

Putin recognised its independence in February alongside the neighbouring Luhansk People’s Republic a few days before ordering the invasion of Ukraine.

Separatist leaders appointed several Russian officials to senior positions last week and have frequently spoken of their desire to become part of Russia.

European stocks slipped lower in choppy trading on Tuesday, following a global equity rout in the previous session as expectations of extra-sharp rate rises by the US Federal Reserve plunged Wall Street into a bear market.

The Stoxx Europe 600 share index was down 1.1 per cent by the late morning in London, having climbed almost 1 per cent in early dealings. The decline put the regional gauge on track for its sixth straight day of losses. London’s FTSE 100 lost 0.9 per cent.

Meanwhile, US stock futures hinted that Wall Street stocks might stabilise after the day of sharp selling. Contracts tracking the S&P 500 edged 0.2 per cent higher. The blue-chip equity gauge on Monday tumbled almost 4 per cent to close at its lowest level since the start of 2021 — down more than a fifth from its all-time high in January — as analysts ratcheted up their forecasts on how aggressively the Fed would tighten monetary policy.

Data last Friday showed that US consumer price inflation hit an unexpectedly high annual pace of 8.6 per cent in May, with Russia’s invasion of Ukraine stoking higher food and fuel costs.

Markets have now almost fully priced in a 0.75 percentage point rate rise by the Fed at the conclusion of its June policy meeting on Wednesday. Economists at JPMorgan, Goldman Sachs and Barclays all anticipate a 0.75 percentage point rise — which would be the first since 1994.

On Tuesday, money markets were pricing expectations for the benchmark US federal funds rate to climb to 3.6 per cent by the end of this year, compared with the current range of between 0.75 and 1 per cent.

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Nicola Sturgeon sought to reinvigorate the campaign for Scottish independence after launching the first of a series of papers that she said would make the case that separation from the UK would leave Scotland wealthier and fairer.

In a briefing at her official residence in Edinburgh, Scotland’s first minister on Tuesday said the case for breaking away from the 315-year old union was “more compelling” than in 2014, when Scots voted 55 per cent to 45 per cent to remain in the union.

The latest push comes in the face of multiple obstacles, not least opposition from a UK government that claims sole right to approve a plebiscite — something that prime minister Boris Johnson has ruled out — and polls that show support for independence has ebbed.

Sturgeon acknowledged that the Scottish parliament’s right to call a vote was contested and said that she would soon give “a significant update to parliament”. She added she was ready to negotiate with Johnson and agree to the process of facilitating a referendum.

The papers to come will discuss a range of issues likely to influence votes, such as currency, fiscal policy, pensions and welfare, the relationship with the EU and defence.

Federal Reserve: The US Federal Open Market Committee’s two-day monetary policy meeting gets under way today. Mounting inflation fears and expectations that the central bank may impose a 0.75 percentage point interest rate rise this week sent US stocks into a bear market on Monday and triggered a bond sell-off. The Fed raised the main interest rate by 0.5 percentage points in May, the first half-point increase since 2000.

US producer prices: The producer price index, which tracks the prices businesses receive for their goods and services, is expected to have climbed 0.8 per cent in May, following a 0.5 per cent rise the previous month. That would leave the year-on-year rise at 10.9 per cent.
Core PPI — an underlying gauge of inflation that strips out volatile items such as food and energy — is expected to have accelerated to 0.6 per cent in May.

Chief executive outlook: Business Roundtable, Washington’s leading business lobby group, is expected to release the results of its second-quarter economic outlook survey, which is meant to provide insight into the US economy by polling chief executives about hiring plans, capital expenditures, and sales expectations.

US primaries: Voters in Maine, Nevada, North Dakota and South Carolina will cast ballots in primaries as part of the 2022 midterm election cycle. Texas’s 34th District holds a special election to fill the House seat vacated by Democratic Representative Filemon Vela Jr.

The Financial Conduct Authority has criticised banks for not thoroughly examining how branch closures affect their customers and told them to consult more widely before shuttering outposts. 

In a statement, the FCA said some banks and building societies “are not currently doing enough to properly understand the impact of these changes and to keep their customers informed”.

The UK financial watchdog said it wanted lenders to communicate more widely on possible cutbacks, including engaging with “other groups such as local charities and councils to understand the wider impact from changes to services”. 

Other cutbacks include shortening branch opening times and removing cash machines.  

The FCA issued its updated guidance as part of a consultation on whether moving away from branches and in-person banking was harming customers. Final guidance will be announced by the end of the year. 

“We expect firms to continue to offer easy and accessible banking services to their customers, and this is even more important as the country faces a cost-of-living crisis,” said Sheldon Mills, executive director of consumers and competition at the FCA. 

The UK lost 34 per cent of its bank and building society branches between 2012 and 2021, research for parliament showed.

The regulator has long been concerned about the issue. Previous actions have included pressing banks and building societies to reconsider branch closures during Covid-19. 

Northern Ireland’s Democratic Unionist party should “get on with it” and return to the region’s political institutions following the publication of a bill to rewrite post-Brexit trade arrangements, UK foreign secretary Liz Truss said.

“I would like the DUP to get on with it as soon as possible,” Truss told BBC Radio Ulster a day after the government introduced a bill allowing it to unilaterally rip up swaths of the Northern Ireland Protocol agreed with the EU after London left the bloc.

But the DUP said it needed to be sure the bill — which is expected to face heavy opposition in the House of Lords — was progressing before it returned to the regional government in Stormont.

A stand-off over the post-Brexit trade agreement prompted the DUP, Northern Ireland’s biggest unionist party, to pull out of the region’s executive.

Truss defended the government’s “reasonable” decision to seek to scrap parts of the protocol it says are not working, rather than triggering a clause that would suspend them pending negotiations.

“Triggering Article 16 wouldn’t have resolved the issues,” Truss said. “It would simply have kicked the can down the road and caused more frustration.

“It’s not true that we are ripping up the protocol. We are changing elements of the protocol that don’t work,” she said. “This is the only option that creates the long-term durable solution the people of Northern Ireland deserve.”

The UK’s foreign secretary has said the government intends to “establish the principle” of sending asylum seekers to Rwanda despite legal challenges over the controversial policy.

“We are expecting to send a flight later today,” Liz Truss told Sky News on Tuesday. “I can’t say exactly how many people will be on the flight, but the really important thing is that we establish the principle.”

Truss said the government wanted to “break the business model of these appalling people traffickers who are trading in misery”.

“That’s why it’s important that we get the flight out today,” she added.

Under a new immigration policy, Rwanda will receive some of the asylum seekers arriving in Britain in exchange for development aid.

UK courts refused to grant an urgent injunction to block the first flight to Rwanda on Monday. Three judges dismissed an appeal, which was jointly brought by one asylum seeker along with two NGOs and the Public and Commercial Services Union.

However, Care4Calais, an NGO that participated in the legal action, said the number of asylum seekers due to be deported fell from 11 to eight after some individuals mounted challenges over the weekend.

Stalling economic growth has not yet taken the heat out of the UK labour market, according to data that on Tuesday showed the number of full-time employees at a record high, redundancies at record lows, and the number of unfilled jobs at an all-time high of 1.3mn.

The figures, released by the Office for National Statistics, also showed that big bonus payments helped average UK earnings keep pace with inflation in the three months to April, although total and regular pay fell sharply in real terms in the final month as energy bills jumped.

The employment rate rose to 75.6 per cent in the quarter, up 0.2 percentage points from the previous three-month period. It is 0.9 percentage points below pre-pandemic levels because the number of part-time employees and self-employed workers has not recovered.

The overall unemployment rate was 3.8 per cent, slightly above the 50-year low reached the previous month, but still lower than when the pandemic struck.

The ONS data showed average regular earnings fell 2.2 per cent in real terms as inflation eroded the value of pay settlements. However, strong bonus payments – concentrated in the financial sector – kept total pay growth slightly ahead of inflation.

The data will strengthen the case for the monetary policy committee to raise rates again when it meets this week.

The BoE made it clear in its May forecasts that it believed unemployment would need to rise and household income fall in real terms for inflation to return to its 2 per cent target in the medium term.

Demand for new houses continues to outstrip supply despite mounting fears about the UK economy, raising the likelihood that the housing market will cool rather than crash.

Crest Nicholson and Bellway, two of the country’s biggest housebuilders, were upbeat on their prospects on Tuesday, with the former upgrading its revenue forecasts for the full year and the latter announcing it was selling homes at a faster pace than in the previous year.

That comes despite rising interest rates, inflation and an unexpected contraction in the economy, which have stoked expectations of a slowdown in the housing market and possibly a sharp drop in sales.

“The message to date is that trading has not really abated,” said Chris Millington, an analyst at Numis. “The sales rates are really strong compared to pre-Covid; order books are where we’ve never seen them before.”

He said a chronic undersupply of new homes in the country was the main factor ensuring demand remained resilient.

“Inevitably [the market] is going to moderate; you can’t see that not happening with rates going up and economic uncertainty. But this makes it look like a moderation not a crash,” he said.

Japan’s finance minister on Tuesday said he was “concerned” about the rapid pace of the weakening yen, saying the government would take appropriate measures if needed, as the currency fell to a 24-year low against the dollar.

Shunichi Suzuki told reporters that excess volatility could hurt economic and financial stability, as the yen plunged past ¥135 against the dollar on Monday, the lowest level since October 1998 when the Asian financial crisis swept the regional economy.

“A rapid yen weakening has been seen in the exchange market recently and I’m concerned,” Suzuki said, adding that he would closely co-operate with the Bank of Japan and pay closer attention to developments in the foreign exchange market and their impact on the economy and prices.

Japan will also maintain close communication with currency authorities from G7 nations, Suzuki added.

Last Friday, following a week of new 20-year lows, the BoJ, Ministry of Finance and Financial Services Agency issued a rare joint statement expressing concern about the yen’s steep slide. The currency has fallen more than 20 per cent against the dollar over the past 12 months.

UK: The first flight to Rwanda carrying migrants who crossed the English Channel is set to leave after the controversial policy survived a legal challenge in the UK’s Court of Appeal. Tuesday is also the fifth anniversary of the fire that engulfed the west London high-rise block Grenfell Tower, leaving 72 people dead and 203 households homeless. The UK releases its latest unemployment figures.

Economic news: Germany publishes its final inflation figures for May and Zew releases its latest economic sentiment survey. Eurozone inflation rose to 7.5 per cent in April. Early figures showed that inflation in Germany stood at 7.9 per cent in May.

Ashtead Group: Equipment rental group Ashtead publishes its fourth-quarter results. Ashtead, which hires out excavators, scaffolding and generators, added more than 80 per cent to its share price last year as builders, farmers and tradesmen pivoted to rentals because of the limited availability of new goods.

Corporate earnings: Paragon Banking Group, Bellway and Ferguson also release results.

Markets: European futures ticked positive after Asia-Pacific equities sustained losses as investors worried over Chinese lockdowns and fears of inflation and the prospect of a recession in the US. Contracts for the Euro Stoxx 50 and the FTSE 100 were each up 0.6 per cent, suggesting the global sell-off was abating.

Hong Kong’s fund management association has called for incoming city leader John Lee to reopen international borders or risk the Chinese territory being “marginalised”, adding to pressure from local and international chambers to open up the city.

“International travel [should be allowed] to assume normalcy in the earliest instance so as to ensure that Hong Kong would not lag behind other key international financial centres,” said Sally Wong, chief executive of the Hong Kong Investment Funds Association.

Wong said the association, which represents global and local firms that have more than $52tn in assets under management, has seen more relocations this year away from Hong Kong as other countries allow quarantine-free travel.

“[We] will increasingly be marginalised and be put in an uncompetitive position in terms of talent recruitment and retention,” she added.

But the territory’s incumbent leader Carrie Lam said on Tuesday that she “will not budge” to pressure from business chambers and the financial sector.

The city has been put on alert following a jump of daily Covid-19 cases over the past week and ahead of a potential visit by Chinese president Xi Jinping for the 25th anniversary of Hong Kong’s handover from China to Britain.

“I understand that there is still a lot of pressure, especially from the financial services sector, that they urge the [Hong Kong] government to take more decisive acts to relax the quarantine rules,” said Lam. “But we have to appreciate and assess the effectiveness or the consequences of that decision.”

Lam will leave office by the end of June with Lee taking up the position of chief executive on July 1. The Financial Times has contacted Lee’s office for comment.

Iron ore contracts traded in Asia declined on Tuesday as lockdowns in China damped demand for construction materials.

Iron ore contracts for July in Singapore declined as much as 1.8 per cent, while the most actively traded contracts in Dalian slipped 2.3 per cent. It was the fourth consecutive decline for the Singapore contracts and the third in Dalian.

Construction materials have struggled in recent days as cities across China reimpose restrictions to combat the spread of the coronavirus, which investors fear will halt construction projects in the world’s second largest economy.

Prices of two steel products, rebar and hot-rolled coil, also declined in Shanghai on Tuesday. Shares in Australian natural resource groups also fell on fears of weaker demand from China with Fortescue Metals losing as much as 10 per cent.

China reported 230 new cases of Covid-19 on Tuesday, up from 220 the day before, and both Beijing and Shanghai have extended some curbs, despite exiting lockdowns that lasted weeks earlier this month.

Bitcoin’s downward spiral deepened on Tuesday as fears of soaring US inflation hammered rate-sensitive digital assets.

Bitcoin plunged 10.3 per cent in early trading to $20,823.56, according to Bloomberg data, hitting a new 18-month low a day after dropping more than 20 per cent as two big cryptocurrency platforms halted operations.

Cryptocurrencies and equities have suffered this week, after US inflation data showed prices were rising faster than expected, renewing expectations of sharp interest rate increases from the Federal Reserve, and the European Central Bank left the door open to aggressive rises in the coming months, pushing Wall Street stocks to their worst week since January.

The world’s biggest crypto exchange Binance and cryptocurrency lending group Celsius suspended withdrawals on Monday amid the sell-off. Binance later resumed full operations, blaming the suspension on a “stuck transaction”.

In equity markets, Australian shares declined as much as 5.3 per cent, with the country’s stocks catching up to a global sell-off after taking a break on Monday for the Queen’s birthday.

Equities elsewhere in Asia-Pacific continued their downward spiral, with Hong Kong’s Hang Seng index and Japan’s Topix shedding as much as 1.7 per cent, China’s CSI 300 declining 1.2 per cent and South Korea’s Kospi losing 1.9 per cent.

Oil prices stabilised, however, with concerns over supply shortages outweighing fears over lockdowns in China and a recession in the US. Brent crude, the international benchmark, and US marker West Texas Intermediate were both flat at $122.23 and $120.97 a barrel, respectively.

The US defence department has signed a $120mn deal with Australia’s Lynas Rare Earths to build the country’s first onshore commercial-scale rare earths separation facility, as part of a US government push to end China’s dominance of critical mineral supply chains.

Rare earth elements are vital in low carbon technologies such as electric vehicles and wind turbines, as well as military equipment and consumer electronics. China is responsible for almost 90 per cent of global refining of rare earths, according to the International Energy Agency.

Under the deal with Lynas, China would be bypassed entirely. Lynas, the world’s largest rare earths producer outside China, will export rare earth carbonate refined in Australia to the US, where it would be further processed for commercial use.

The facility, which expands a pilot scheme started in 2020, will be the first commercial scale rare earths plant inside US borders. It will meet some of the goals set out in a strategic review on building supply chains and local manufacturing industries in semiconductors, batteries, critical minerals and pharmaceuticals published last June by President Joe Biden’s administration.

The defence department, which led the work on critical minerals for the review, warned that China’s dominance of the industry carried geopolitical, supply chain and environmental, social and governance risks.

“The concentration of global supply chains for strategic and critical materials in China creates risk of disruption and of politicised trade practices, including the use of forced labour,” the department said at the time.

The $120mn will cover the full cost of the construction of the plant, which is likely to be built in Texas and be operational by 2025, Lynas said. It added that the use of ore mined and refined in Australia would answer some of the department’s environmental, social and governance concerns.

China: The world’s second-largest economy releases figures for its May retail sales and industrial production. Both measures declined by their most since the early days of the pandemic in April. China also releases unemployment data.

South Korea: The country issues May jobs data. Unemployment has stayed steady at 2.7 per cent for the past three months.

Markets: US stocks closed in a bear market on Monday after a dramatic late-session sell-off, while government bond yields soared, with investors unnerved over stubbornly high inflation and the prospect of aggressive monetary tightening by central banks. The S&P 500 slid 3.9 per cent. The yield on the benchmark 10-year Treasury note, which underpins global borrowing costs, rose 0.21 percentage points to 3.36 per cent, its highest level since 2011. Bitcoin prices dropped to an 18-month low.

United Airlines has reported a surge in international travel searches following a change in US policy that lifted the requirement for international air travellers to submit proof of a negative Covid-19 test to enter the country.

Since the change was announced on Friday, United has logged “more than 2.4mn searches for international travel, a 7 per cent increase from the week prior”, the Chicago-based carrier said.

Roughly 1.5mn of the queries were for international travel from the US, up 7.6 per cent, with the remainder for travel to the US.

Most searches were from US travellers seeking near-term summer bookings to Europe, Mexico and the Caribbean.

Politicians and business leaders, including the chief executives of the largest US airlines, had been imploring the Biden administration to lift the testing requirement, arguing that international travellers are necessary for a complete recovery from the pandemic.

The Biden administration has warned that the requirement could be reimposed should the US see a significant rise in cases or a new fast-spreading variant.

The rule change will have the greatest impact on the US’s three largest carriers, American Airlines, United, and Delta Air Lines, which have the greatest amount of international exposure.

United earned 37 per cent of its revenue from international travel in 2019, the most of any US airline, according to analysts at Raymond James.

Overseas visitation numbers have remained below 2021 levels, said Morning Consult analyst Lindsey Roeschke. “Testing requirements have factored into these numbers: 39 per cent of Americans say testing requirements make them less willing to travel internationally.”

The rocket that Elon Musk hopes will one day help humans populate Mars has passed its biggest regulatory hurdle, although it still needs to clear a thicket of other red tape before its first launch.

The US Federal Aviation Administration on Monday approved the launch on environmental grounds, ending months of delays as other regulatory agencies became involved in the process.

The first launch would have been set back years if the FAA had not gone along with a request from Musk’s company SpaceX for an accelerated approval process.

However, the FAA listed a series of other environmental clearances that SpaceX will need from other agencies before it can go ahead with the first launch.

These range from passing state-level air emissions tests to addressing the rocket’s impact on endangered species, although the federal agency pointed to actions the company had already taken to mitigate these.

The finished environmental process does not guarantee that the FAA will issue a launch licence, the agency said. The FAA said it would make a licence determination only after SpaceX provides all outstanding information and the agency can fully analyse it.

The so-called Super Heavy rocket, dubbed Starship, could turn into the most disruptive launch system since SpaceX’s own Falcon rockets, which have become the main workhorse for lifting payloads into orbit and taking US astronauts to the International Space Station.

According to SpaceX, Starship will be capable of lifting more than 100 tons into orbit and drastically undercut the cost of other launch systems.

Read more about the FAA’s SpaceX decision here.

US national security adviser Jake Sullivan met China’s top diplomat Yang Jiechi in Luxembourg on Monday in a meeting officials described as aimed at managing competition between the world powers.

The meeting is the second between the two officials since March and following a telephone call in May, and comes amid a tense few months and a low point in relations between Washington and Beijing over Taiwan, the Indo-Pacific region and Russia’s war in Ukraine.

The meeting lasted four and a half hours. A senior administration official said the talks were “candid, in depth, substantive and productive”.

Sullivan raised US concerns about Beijing’s recent decision to veto a UN Security Council resolution on North Korea amid indications that Kim Jong Un is preparing for a possible weapons test, as well as Washington’s determination to see a “democratic, independent, sovereign and prosperous Ukraine with the means to deter and defend itself against further aggression”.

On a recent visit to Asia, President Joe Biden’s first, he said the US would intervene with force to defend Taiwan if it came under attack by China. US officials have repeatedly said his comment did not change US policy, and US defence secretary Lloyd Austin repeated that during a speech in Singapore over the weekend.

Austin and his Chinese counterpart held the first senior level contacts between the US and Chinese militaries on Friday.

While in Asia, Biden launched a trade initiative with 12 Indo-Pacific countries in a bid to boost economic engagement in the region as the US seeks to counter a more assertive China.

US stocks closed in a bear market on Monday after a dramatic late-session sell-off, while government bond yields soared, with investors unnerved over stubbornly high inflation and the prospect of aggressive monetary tightening by central banks.

Wall Street’s equities benchmark S&P 500 slid 3.9 per cent in New York to close at its lowest level since January 2021. The move left the index more than 20 per cent below its January 2022 all-time high, a decline commonly identified as a bear market.

The heavy selling was triggered by unexpectedly high inflation figures released this past Friday, which showed US consumer prices rose 8.6 per cent year on year in May as Russia’s invasion of Ukraine raised fuel and food costs.

Analysts have upgraded their forecasts of how far the Federal Reserve will raise interest rates at its monetary policy meeting which concludes on Wednesday, with increasing speculation that the central bank might implement an extra large 0.75 percentage point increase.

Futures markets now show investors expect the federal funds rate to hit 3.6 per cent by the end of the year, compared with the current range of 0.75 to 1 per cent. A week ago, investors had only expected the rate to reach 2.9 per cent this year.

Read more about the day’s more markets moves here.