EU leaders meet for emergency energy talks amid division over price cap

  • In Business
  • 2022-09-09 08:46:19Z
  • By The Telegraph
  • EU countries to discuss menu of options to stave off energy crisis

  • Split over price cap after Putin threatens to halt supplies

  • Price freeze will save households £1,000 a year

  • The FTSE 100 closed the day up 0.33pc at 7,262.06.

  • Ben Marlow: The energy bailout has saved what's left of the high street - for now

  • Sign up here for our daily business briefing newsletter

EU ministers will meet for emergency energy talks in Brussels today as a proposal to cap prices on Russian gas stokes fears of the Kremlin halting supplies completely.

European Commission president Ursula von der Leyen has presented the bloc with a menu of options to stave off an energy crisis, including a price limit on Russian gas, help for cash-strapped companies and a windfall tax on power generators.

However, Russia responded to the proposals by threatening to stop sending energy to the bloc as it gradually chokes off supplies. The warning has prompted some countries, including Hungary, to oppose the plan.

09:46 AM

EU price cap faces more opposition

An agreement among EU countries to impose a price cap on Russian gas is looking very unlikely at this point.

A number of countries have signalled this morning that they do not support the proposal by European Commission president Ursula von der Leyen, including Germany and Austria.

The key concern is that the Kremlin will shut off the remaining gas, oil and coal it supplies the bloc. However, Belgium has called for a price cap on all gas bought in Europe, not just deliveries arriving from Russia.

09:28 AM

Shops close and data releases cancelled after Queen's death

While most businesses remain open today, a few have closed their doors as a mark of respect to the Queen.

Department store Selfridges and clothing retailer French Connection  have closed while all ONS and Bank of England data releases scheduled for today have been cancelled.

However, the ONS said that all releases deemed "market-sensitive" will proceed as normal next week with new GDP and inflation data due.

09:02 AM

Cineworld gets access to $785m


A US court has granted Cineworld immediate access to $785m after approving "first day relief" in relation to its bankruptcy filing.

The world's second-largest cinema chain filed for bankruptcy in the US to help it restructure $9bn of debt earlier this week.

The company - which owns brands such as Picturehouse - said the court decision to hand it access to the funding will allow it meet ongoing obligations and pay employee wages.

08:51 AM

Pound gets a backer after slump

The pound has had a tough few weeks on currency markets but the currency has one fan at least.

Legendary investor Bill Gross is betting on sterling after it slumped to a 37-year low against the strong dollar earlier this week.

According to Bloomberg, Mr Gross said:

Sterling has jumped 1.3pc against the dollar this morning to rise back above $1.16. It is part of a broad pullback in the dollar today, a move being pinned on a hawkish European Central Bank easing demand for the currency.

08:32 AM

Asos sales hit by cost of living crisis

Asos sales have been hurt by shoppers slashing spending to cope with the cost of living crisis, the company has admitted this morning.

The online shopping giant said that full-year profit will be at the bottom end of its guidance with sales growth of just 2pc.

It said it is "cautious about the outlook for consumer spending" with discount clothing retailer Primark also giving investors a gloomy update yesterday. Shares are choppy in early trading and are up 2.5pc.

08:19 AM

City pores over Truss energy package

Liz Truss's energy bills package may have been overshadowed by other events yesterday but the City is still poring over the implications of the huge intervention.

Deutsche Bank's economist Sanjay Raja warns that the extra fiscal firepower will force the Bank of England to raise interest rates to 4pc as it boosts growth and threatens to cause prolonged higher inflation.

While her plan will suppress the inflation rate in the short-term, higher-than-normal price rises could linger for longer as it supports demand.

Mr Raja said:

07:51 AM

London stock market to open after death of Queen

Markets in London will open shortly this morning despite the death of Queen Elizabeth II yesterday.

A spokesperson for the London Stock Exchange said it is likely to close on the day of her funeral as it is expected to be a public holiday.

It will remain open for trading as normal during the official period of mourning.

07:36 AM

Price cap on the table but EU countries criticise plan

EU energy ministers are heading for Brussels to thrash out a new plan but agreement is far from certain.

The most controversial aspect is a proposal by EU chief Ursula von der Leyen to implement a cap on the price European countries pay for Russian gas in a bid to cut the funding of Vladimir Putin's war machine. However, many members of the bloc remain unconvinced.

The Kremlin immediately responded to the plans by threatening to cut off the remaining energy supplies Russia sends to the EU, prompting heavily exposed Hungary to warn against the proposal.

07:23 AM

Agenda: EU leaders meet for emergency energy talks amid division over price cap

Good morning. EU countries will meet today to find new measures to shield households from soaring energy bills as the region heads for recession.

Energy ministers in the bloc will discuss a menu of options drawn up by European Commission president Ursula von der Leyen to stave off a crisis, including a price cap on Russian gas, efforts to cut demand and a windfall tax on power generators.

The price cap proposal has stoked divisions in the bloc as some members raise doubts over whether it can reduce prices after Russia cut supplies to the region.

Five things to start your day 

1) Truss rips up oil and gas red tape in drive to energy independence Fracking and North Sea drilling back on the agenda in push to make UK energy independent by 2040.

2) Public could be urged to turn down thermostats to avoid energy shortages Jacob Rees-Mogg understood to support campaign to tell households how to reduce their boiler's flow temperature.

3)  Kwasi Kwarteng sacks most senior civil servant in the Treasury Sir Tom Scholar, the Treasury permanent secretary, told by the new Chancellor that he was no longer wanted in the job.

4)  'Our energy bill has risen by over 300pc' Business owners say six-month energy bill freeze is not enough, calling for long-term support.

5) Kate Andrews: Ed Miliband's windfall tax would be a disaster to rival the price cap

What happened overnight 

Hong Kong stocks edged up in the first few minutes of business on Friday, following an advance on Wall Street as traders prepare for further central bank interest rate hikes.

The Hang Seng Index rose 0.21 per cent, or 39.03 points, to 18,893.65. The Shanghai Composite Index gained 0.17 per cent, or 5.59 points to 3,241.18, while the Shenzhen Composite Index on China's second exchange added 0.22 per cent, or 4.61 points to 2,109.00.

US shares ended with modest gains, recovering from early losses after the ECB's rate hike announcement and comments from US Fed chief Jerome Powell that the American central bank must continue to act "strongly" to cool demand and contain price pressures.

The dollar fetched 143.78 yen in early Asia trade, against 144.27 yen in New York late on Thursday. Among major shares, Toyota was up 0.41 per cent at 2,089 yen, Olympus was up 0.84 per cent at 3,122 yen, and Uniqlo operator Fast Retailing was up 1.09 per cent at 84,020 yen.

Coming up today

Corporate: Computacenter (interim results)

Economics: inflation (China), consumer inflation expectations (UK)


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