FirstFT: France seeks UK loan guarantee for Hinkley Point C nuclear plant

Stay informed with free updates

Simply sign up to the World myFT Digest — delivered directly to your inbox.

Good morning. We start the day with an update on rising tensions between the UK and France over a nuclear power plant.

The French government is pushing British ministers to provide loan guarantees for Hinkley Point C to try to ease EDF’s financing costs on Britain’s new flagship nuclear power station as its price tag has soared.

EDF, the French state-owned utility, said last week that the cost of the new station it is building in Somerset could hit as much as £46bn, up from £18bn in 2015 prices, as it pushed the completion date of the first of two reactors back by at least two years to 2029 at the earliest.

Under the contract drawn up a decade ago, any construction cost overruns at Hinkley fall on EDF rather than the British taxpayer.

But French officials are pushing the UK to provide EDF with state guarantees on new Hinkley-related loans, according to three people familiar with the matter. This could allow EDF to issue project-level debt and relieve pressure on the company’s finances. Here’s more on the latest development.

And here’s what else I’m keeping tabs on today:

• Interest rates: The US Federal Reserve is expected to leave benchmark rates unchanged in its announcement today. Chris Giles explains why the bank’s inflation battle is almost over in his latest Central Banks newsletter. Sign up here if you’re a premium subscriber, or upgrade your subscription here.

• Economic data: France and Germany report preliminary consumer price index for the month and retail sales figures. Nationwide has its house price index for the UK.

• Northern Ireland: After two years of paralysis, a landmark deal which could restore the region’s power-sharing executive is set to be unveiled, but the deal still faces threats, writes Stephen Bush in Inside Politics. Sign up for his newsletter here.

• Brexit: Today marks the fourth anniversary of the UK leaving the EU, which new data shows has sharply increased the complexity and cost of trading for British businesses.

• Results: Troubled plane maker Boeing reports after withdrawing a request to expedite approval of its 737 Max 7 jet. Santander, GSK and Novo Nordisk are among others with earnings. See the full list in our Week Ahead newsletter.

Five more top stories

1. The latest Red Sea attacks by Houthi rebels have pushed up fuel tanker rates and diesel prices, with shipping executives and oil market analysts forecasting further rises in both. Charter prices for the largest tankers used for oil products — such as diesel, petrol and jet fuel — have more than doubled in the past week. Read the full story.

2. A US judge has voided Elon Musk’s record $55bn pay package from Tesla, sending the company’s shares down more than 4 per cent in after-market trading yesterday. Delaware judge Kathaleen McCormick ruled that the remuneration was improperly approved by the electric-car maker’s board of directors and had short-changed the company’s shareholders, adding that Musk had “dominated the process”.

• More Big Tech: Microsoft and Google warned of more large costs this year in the race to develop cutting-edge artificial intelligence products, damping investor buzz about their strong quarterly results yesterday.

3. Universal Music is set to pull its songs from TikTok today after a breakdown in negotiations over payment. The music giant, which controls a third of the world’s music, accused TikTok of “bullying” and said the company wanted to pay a “fraction” of the rate that other social media sites pay for access to its music catalogue. As a result, Universal said it would stop licensing its content to TikTok when its contract expires today. Here are more details on the spat.

4. Rachel Reeves has vowed to “unashamedly champion” Britain’s financial services sector if Labour wins the general election, denouncing politicians who have been “embarrassed” by the City’s success. The shadow chancellor will launch her party’s blueprint for financial services tomorrow, pledging to cut red tape, embrace artificial intelligence, bolster regional financial centres and promote green finance. But the plan is most notable for what it omits.

• Jeremy Hunt: The chancellor has rejected the IMF’s warning yesterday that the UK needs to curb public borrowing, boost spending in key areas and not cut taxes.

5. Volodymyr Zelenskyy is preparing to replace his top general in what would be the biggest shake-up of Ukraine’s military command since Russia’s full-scale invasion began. The president on Monday offered Valeriy Zaluzhny a new role as a defence adviser but the general refused, according to people familiar with the discussions. Here’s why Zaluzhny’s removal could cause an uproar.

• ‘Ukraine fatigue’: Western countries must display the will to help ensure Russia does not prevail, or the price could prove to be beyond reckoning, writes Martin Wolf.

Visual story

Norwegian-farmed salmon is widely sold across Europe, including at UK retailers such as Tesco, Sainsbury’s, Aldi and Lidl. But these sales have a dark side: the farms’ fishmeal is being sourced in a way that could create a “food crisis” on another continent. Stocks of smaller fish crucial to west African diets have become a casualty of the salmon supply chain, worsened by corruption and rule-breaking suggested in interviews with the Financial Times. Our visual investigations team digs into the hidden cost of your supermarket salmon.

We’re also reading . . . 

• UN in Gaza: The main UN agency helping Palestinians in the besieged territory could shutter operations in weeks after funding was withdrawn over Israel’s claims that several of its staff took part in the October 7 Hamas attack.

• EU spending: Russia’s war on Ukraine and tightening national budgets have prompted a shift in the bloc’s funding priorities from climate to defence.

• Non-state actors: It isn’t China or Russia that will dominate the post-American world, writes Janan Ganesh.

• Sunak’s asylum plan: Lawyers warn that the UK prime minister’s rush to clear a costly backlog has backfired, driving some asylum applicants into the hands of criminals and pushing others towards destitution.

Chart of the day

Corporate insolvencies in England and Wales rose to their highest level since 1993 last year, according to official figures that lay bare the challenges facing companies amid slowing demand and high production costs.

Take a break from the news

Looking for things to do in London? Check out our cultural guide to the UK capital’s best arts, sports, festivals and events this year, starting with the return of the Taylor Wessing Photo Portrait Prize and The Time Is Always Now exhibition, both at the National Portrait Gallery.

Additional contributions from Benjamin Wilhelm and Gordon Smith