US president Joe Biden has announced he is shutting off US airspace to Russia and labelled president…

By Suzanne Evans, Director, Political Insight

US president Joe Biden has announced he is shutting off US airspace to Russia and labelled president Vladimir Putin a "dictator" in his first State of the Union address. He also warned Putin would "pay a continuing high price" for the invasion of Ukraine.
 
Oil prices surged past $110 (£83) a barrel yesterday, the highest level since early July 2014. Brent crude climbed above $113 (£84), an increase of more than $12 since Russia first invaded Ukraine, while West Texas Intermediatealso surpassed $111, its highest level since August 2013. However, the Organisation of the Petroleum Exporting Countries (OPEC) chose not to release any more oil onto the market, sticking to plans for a modest rise in output in April.  OPEC has been hiking output by 400,000 barrels per day each month since August. The next meeting is scheduled for 31 March. The International Energy Agency (IEA) meanwhile, is to release 60 million barrels from oil reserves. The intergovernmental organisation of 30 OECD countries including the UK warned that the situation in energy markets was "very serious" and that global energy security was under threat. IEA member countries are required to maintain total oil stock levels equivalent to at least 90 days of the previous year's net imports.
 
Simon Williams, RAC fuel spokesman, said: “The sudden $10 jump in the oil price on Tuesday to $113 a barrel is likely to take the average price of petrol towards 155p a litre and diesel to 160p, particularly as it’s looking like this price isn’t just a market blip caused by the US and allies deciding to dip into the strategic oil reserve.
 
Natural gas prices have jumped for the third consecutive day. UK wholesale gas prices are now back up 37% to 397.48p per therm, close to their peak last Autumn, while benchmark European prices rose as much as 15% to €140 (£116) a megawatt-hour after jumping 23% on Tuesday. Dutch gas futures contract jumped 39% to €169.5 (£141) per megawatt hour. The rise comes amid concerns that Russia will stop gas supplies to Europe in a retaliatory measure, as well as worries about pipelines being damaged in the conflict. The higher costs are likely to be passed on to consumers, piling even more pressure on household bills at a time of record levels of inflation.
 
Germany’s economy minister says the country is prepared in the event Russia should stop exporting gas to the country. Robert Habek told Deutschlandfunk radio that in the case that Russia cuts off its gas supply, Germany was ready to boost strategic reserves. Germany relies on Russia for more than half its natural gas, and a decision to phase out nuclear power has left Europe’s largest economy vulnerable to disruption.
 
US Federal Reserve chair Jerome Powell has announced the central bank will go ahead with an interest rate rise in March, despite the Ukraine crisis. Powell said: "With inflation well above 2% and a strong labor (sic) market, we expect it will be appropriate to raise the target range for the federal funds rate at our meeting later this month. "
 
New figures released yesterday showed eurozone inflation climbed to a fresh high in February as energy prices soared, intensifying an interest rate policy dilemma for the European Central Bank (ECB). Russia accounts for about 40% of the bloc's imports of natural gas.
 
Economic secretary John Glen told the Treasury select committeeyesterday that legislation to crack down on laundered dirty money in the UK and corrupt elites faces "serious drafting and consultation issues" that could hamper its implementation. "We are trying to do these sanctions measures broadly in alignment with our allies in the US and the EU but in terms of the legislative interventions there are serious drafting issues and consultation issues," he said. The Economic Crime (Transparency and Enforcement Bill), which has been fast-tracked in face of the conflict in the Ukraine, will introduce a register of overseas entities highlighting the ultimate owners of overseas companies that control property and land in the UK, Yahoo Finance UK reports. The new processes to verify the identities of the company owners — to be carried out by Companies House — were not expected to be introduced to parliament until the autumn. The new register will require anonymous foreign owners of UK property to reveal their identities to ensure that criminals cannot hide behind secretive chains of shell companies. Glen told MPs that the pressure to move with sanctions and clampdown on dirty money was "significative" but warned of the challenge ahead. "The wider reform will be the most significant change to Companies House legislation in over a century," Glen said, because changes had to ensure the ease of setting up a business remained, but "not with some of the shortcomings that have been highlighted". Opposition leader Keir Starmer has warned that a register of the real foreign owners of property will not come into force until autumn 2023 at the earliest – “far too long for the Ukrainian people”.
 
Athletes from Russia and Belarus will no longer be allowed to compete at the 2022 Winter Paralympics in Beijing, which opens tomorrow. The International Paralympic Committee (IPC) was heavily criticised after initially allowing the athletes to compete as neutrals. However, a statement issued this morning quoted IPC president Andrew Parsons as saying: "Ensuring the safety and security of athletes is of paramount importance to us and the situation in the athlete villages is escalating and has now become untenable." He described the athletes affected as "victims of your governments' actions". There were to have been 71 competitors from Russia and 12 from Belarus competing.
 
Russian oligarch Roman Abramovich is to sell Chelsea Football Club. He released a statement saying that in the current situation, he believes “this is in the best interest of the Club, the fans, the employees, as well as the Club’s sponsors and partners”. He added he will not ask for any loans to be repaid, and that he has instructed his team to set up a charitable foundation through which all net proceeds from the sale will be donated to all victims of the war in Ukraine. Abramovich said his decision was “incredibly difficult,” decision to make. “I hope that I will be able to visit Stamford Bridge one last time to say goodbye to all of you in person,” he said. “It has been a privilege of a lifetime to be part of Chelsea FC”.
 
Wizz Air suspended all flights to and from Russia and Ukraine yesterday. The Hungarian airline, which is the only European Union carrier to have bases in Ukraine, also said it was supporting employees who remained in the country who wanted to leave, and that it has an evacuation plan ready to bring out its assets "when it was safe to do so". Wizz has three aircraft in Kyiv and one in Lviv.
 
Latest Corporate Sanctions: Airbus has stopped support and supply of spare parts for Russia's aviation industry. Swedish fashion giant H&M is the latest retailer to withdraw from Russia, saying it will suspend sales temporarily both instore and online via its Russian website. The world's second-largest clothing retailer, H&M has already temporarily closed all stores in Ukraine "due to the safety of customers and colleagues". ASOS and Boohoo have also suspended trading in Russia.  Nike and Burberry – which has a flagship store in Moscow’s Red Square - have not pledged to boycott Russia but say they can't currently guarantee delivery of goods to customers in Russia. Nike has suspended online orders in the country [see note 1].  Finnish network equipment maker Nokia said it will stop deliveries to Russia to comply with sanctions imposed following the invasion of Ukraine. The world’s largest shipping firms, Danish Maersk and Geneva-based MSC, have suspended container shipping to and from Russia. Motorbike firm Harley-Davidson also suspended business and shipments of its bikes to Russia. Carmakers Jaguar Land Rover, General Motors, Aston Martin, Mercedes-Benz, Ford, BMW and Rolls-Royce have halted deliveries of vehicles to Russia due to the conflict, and construction equipment manufacturer JCB has paused all operations. [See note 2]
 
Russian cat breeders have also been targeted for sanctions: Federation Internationale Feline (FIFe), an international cat fancier society, will refuse to allow any cat born in Russia to be imported and registered in any FIFe pedigree book outside Russia, and has banned any cat bred by or belonging to anyone living in Russia from all FIFe shows outside Russia. FIFe said they would review these restrictions on 31^st May.
 
As many as six in 10 workers in Britain have admitted they still go into work despite being in poor health or injured, due to financial concerns, Yahoo Finance UK reports. According to a new poll from Nationwide Building Society, almost one in three (32%) ignore medical advice even when concerned about serious illness, while 43% would put off going to the doctors due their personal finance worries. The data also showed that three in 10 have no financial protection in place if they were absent from work, while 27% of people said they could only last a month. The poll surveyed 2,003 people between 10 and 14 February who are self-employed or received Statutory Sick Pay.
 
A survey by Which? has found that a higher percentage of electric car owners reported problems with their vehicle in its first four years, and that electric vehicles also spend longer off the road when they are faulty. 31% of electric car owners reported a problem with their vehicle in its first four years, compared with 19% of people with petrol cars, and 29% with diesel cars. The survey also found that faulty electric vehicles spend five days off the road, compared with just three and four days for petrol and diesel cars respectively. The most common faults with electric vehicles, according to the drivers surveyed, were software issues, rather than motor or battery problems. The survey also showed that the most reliable cars of any fuel type were full hybrids, which have a battery that is recharged from the main combustion engine.
 
Average UK house prices exceeded £260,000 for the first time ever in February, climbing at an annual rate of 12.6%. According to the Nationwide house price index, the price of an average property in Britain is now £29,162 more than it was a year ago, coming in at £260,230. This is the largest year-on-year increase since the start of the monthly index in 1991 and puts prices some 20% or £44,000 higher than before the coronavirus pandemic.
 
Britain’s biggest housebuilder, Persimmon, has announced profits of nearly £1bn for 2021, an average of £66,000 per house built. Profits jumped by nearly a quarter to £970m thanks to “positive pricing conditions” in every British region in which it operated. Vistry, the sixth biggest London-listed housebuilder, also announced bumper results yesterday, saying it had more than tripled its annual profits to £320m. Both companies expect to improve performance still further in 2022 despite inflationary pressures. Persimmon also said yesterday it would not claim cash from the government’s building safety fund. The company had previously put aside £75m to fund any cladding issues following the Grenfelltragedy. It has identified 33 sites in need of work.
 
Foxtons said yesterday that it has swung to a full-year profit and that it will not now sell its Alexander Hall mortgage broking business. In the year to the end of December 2021, the estate agent swung to a pre-tax profit of £5.6m from a loss of £1.4m a year earlier, with revenues of £126.5m, up from £93.5m. In 2019, the company had made a pre-tax loss of £8.8m and revenues of £106.9m. CEO Nic Budden said the jump in revenue reflects "improved market conditions, market share growth and contribution from lettings portfolio acquisitions including Douglas & Gordon". Of the mortgage broking business, he said it would now “increase its financial adviser base, to fully realise the financial services cross-selling opportunity and grow profits significantly".
 
FTSE 250-listed office space provider Workspace has agreed to buy London-listed commercial property investment company McKay Securities for £272m. Under the terms of the deal, each McKay shareholder will receive 209p per share and 0.115 new Workspace shares. The prices represents a premium of around 36.2% to the McKay closing share price on Tuesday.
 
Lloyd's of London firm Hiscox reported its strongest underwriting profit for five years yesterday. The specialist insurer reported a 5.9% rise in gross premiums written in the year to 31 December, to $4.27bn, while net premiums written rose 17% to $2.92bn. Bermuda-based Hiscox, which is listed in London, said group pre-tax profits came in at $190.8m, compared to a pre-tax loss of $268.5m the previous year.
 
Close Brothers has appointed Eddy Reynolds as the new CEO of its asset management arm, succeeding Martin Andrew. Reynolds has over 30 years' experience in the fund and wealth management industries. He held several executive positions at Standard Life Aberdeen, most recently as managing director of Standard Life Savings. Earlier in his career he was head of investment at Lloyds Private Bank, and previously held a number of senior roles at Aegon Asset Management and Scottish Widows Investment Partnership. Reynolds will take up the new position at the FTSE 250 firm with effect from 7 March.
 
Ryanair boss Michael O'Leary has warned that air fares this summer will be "materially higher" due to soaring oil prices and Covid effects. He said the impact of the Ukraine crisis on oil prices was "steep and severe". The fact airlines also had fewer seats available after cutting capacity during the Covid pandemic meant fares overall were likely to be 10-15% higher than before the pandemic.  
 
Amsterdam-based meal delivery company Just Eat Takeaway.com has reported a smaller-than-expected annual loss, but says it is exiting the Norway and Portugal markets. Core losses came in at €350m (£290m) against analyst forecasts of €366m (£304m) for 2021. The firm made a profit of €363 (£301.6m) million a year earlier. Revenue rose 34% to €5.33bn (£4.4bn), €1.3bn (1.08bn) ahead of Just Eat’s 2020 Covid pandemic figure when lockdown restrictions led to a surge in takeaway orders.
 
Former Nissan executive Greg Kelly has been found guilty of assisting the Japanese car giant's ex-CEO Carlos Ghosn to evade pay disclosure laws. The BBC says the court in Tokyo heard Kelly had helped Ghosn hide part of 9.3 billion yen (£60m) of his income from financial regulators. Kelly was sentenced to six months in jail, suspended for three years. Ghosn fled Japan for his home country Lebanon in 2019 hidden in a box on a private jet. The ruling means that Kelly, who is a US citizen, will not be jailed as long as he adheres to the conditions of his sentence for the next three years.
 
[1] Russia was the fifth largest European retail market in 2021, valued at £337.2bn. Some brands may not want to burn their bridges, if there's a chance of returning at some later date, the BBC says. With sanctions limiting forms of payment, restrictions on taking foreign exchange out of the country and huge uncertainty over future prices and consumer appetite, the decision to hit pause has been made easier, according to Chris Weafer, chief executive of consulting firm Macro-advisory Limited, who has worked in Moscow for the past 24 years.
 
[2] Cars are the biggest UK export to Russia, but still only 1% of UK cars went to Russia last year, so any decision to stop exporting won't be particularly costly and will have been made easier by nagging concerns over whether or not payments will arrive, investment analyst, Russ Mould told the BBC. Transporting cars to Russia could prove difficult anyway, with the world's two largest cargo shipping companies, MSC and Maersk, suspending routes to and from Russia, except for food, medical and humanitarian supply deliveries. Some car manufacturers, such as Volkswagen and BMW have had to pause production at some European plants because of a lack of parts from Ukraine.

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