FirstFT: Gas markets leap

Good morning. The global energy crisis deepened yesterday as another surge in natural gas prices in Europe and the US threatened to push some of the world’s largest economies into recession.

Gas markets in Europe jumped as much as 10 per cent to as high as €251 a megawatt hour, equivalent in energy terms to more than $400 a barrel of oil, as traders raced to secure supplies ahead of the winter. Prices have more than doubled from extremely elevated levels in June, though they later eased marginally yesterday.

Russia has restricted supplies to western powers in retaliation for their backing of Ukraine following Moscow’s invasion. European politicians have accused the Kremlin of weaponising supplies.

With gas prices at more than 10 times normal levels, the possibility of a deep recession has grown. Traders are fearful of competition for seaborne liquefied natural gas cargoes with Asian utilities before winter.

European gas prices are expected to remain near or at record levels, and Germany is discussing the possibility of rationing gas. Investors are more pessimistic about the German economy than at any time since the eurozone debt crisis.

Governments from London to Madrid are preparing to subsidise punishing utility bills. Further price gains would increase the cost of supporting households, including in the UK, where pressure has built for the next prime minister to cap bills even if Russia completely severs supplies.

Thanks for reading FirstFT Europe/Africa — Jennifer

Five more stories in the news

1. Russia blames ‘sabotage’ for northern Crimea explosions Moscow blamed “sabotage” for explosions at an ammunition depot in Crimea and claimed Ukraine was behind covert attacks in mainland Russia, a rare acknowledgment of Kyiv’s ability to strike behind enemy lines. Ukraine has not claimed responsibility, but it has had recent success targeting military infrastructure, including on the Black Sea peninsula.

2. UK ministers seek to maintain secrecy of Rwanda document The government yesterday urged a High Court judge to conceal parts of a document that refers to Rwanda’s alleged use of “torture and even killings” to enforce state control. A judicial hearing next month will determine the legality of Downing Street’s plan to send asylum seekers to the country.

3. Odinga rejects loss in Kenya’s presidential election Presidential contender Raila Odinga is taking legal steps to challenge deputy president William Ruto’s narrow victory, as fears of violence grow following scuffles at the national tallying centre. Odinga has until Monday to file a challenge.

• Opinion: The president-elect ran on bread-and-butter issues, but now must try to rally the restive young, writes Zeinab Badawi of the Commonwealth Observer Group.

4. UK launches legal proceedings against EU over Horizon access Britain has launched legal proceedings against Brussels for preventing its access to critical science and research programmes such as the flagship €100bn Horizon Europe scheme and nuclear organisation Euratom.

5. UK hospitality loses almost 200,000 overseas workers The pool of labour from the EU has shrunk at the fastest rate since the end of 2019, according to data collected by recruiter Caterer.com, as the effects of Brexit and the pandemic squeeze the British jobs market.

The day ahead

Nato crisis talks with Kosovo and Serbia Nato secretary-general Jens Stoltenberg will separately meet Kosovo’s prime minister Albin Kurti and Serbia’s president Aleksandar Vučić in Brussels amid rising concern over a potential conflict. Kurti and Vučić will hold talks with the EU’s diplomatic arm tomorrow.

Nasa makes one giant leap The US space agency will livestream the transfer of its Artemis 1 rocket to the launch pad, with the aim of lifting off this month. It is part of a mission to land the first woman and ethnic minority astronaut on the Moon and prepare for a long-term lunar presence that could provide a stepping stone to send humans to Mars. (Nasa)

Economic data The UK’s consumer price index for July is expected to have reached 9.7 per cent year on year, outpacing a 40-year record of 9.4 per cent the previous month. France’s wheat harvest quality report will indicate the impact of drought and heatwaves on crop levels, which have sunk to their lowest level in at least a decade. In the US, minutes from the Federal Reserve’s latest meeting could provide insight into future monetary policy tightening, as economists expect retail spending to have slowed in July. (FT, Reuters, WSJ)

Corporate earnings Companies delivering results today include Carlsberg, Cisco, Glanbia, Lowe’s, Persimmon, Santos, Swiss Life, Target and Tencent.

• Up in the air: Dubai International Airport, the world’s busiest for international passenger traffic, reports passenger traffic for the first half of the year.

What else we’re reading

Where do the Tory leadership candidates stand? In a few weeks, Conservative party members will decide the next UK prime minister. The contenders, Liz Truss and Rishi Sunak, have clashed on issues ranging from tax cuts to support for households during a cost of living crisis. The Financial Times has set out the rivals’ positions in eight critical areas.

The reinvention of Goldman Sachs After almost four years in charge, chief executive David Solomon’s strategy to diversify the US bank has not been as transformative as many had hoped, despite ploughing billions of dollars into businesses such as consumer banking. Now, analysts wonder whether the only way for Solomon to change Goldman is by acquisition.

Attack on Salman Rushdie threatens free speech Until the assault last weekend, it was tempting to believe that the “Rushdie affair” had been consigned to history. The fatwa against the Satanic Verses author was issued more than three decades ago. But the attack has underlined the need to defend freedom of expression with even more vehemence, writes our editorial board.

Heathrow’s hopelessness is its faux helplessness “Hopeless Heathrow” is what Ryanair boss Michael O’Leary dubbed the airport yesterday when it extended a summer cap on passenger numbers to the October half-term. But most of the industry’s hurt will come from airlines’ self-inflicted capacity cuts, writes Cat Rutter Pooley.

Anshu Jain, banker, 1963-2022 The first non-white, non-German to lead Deutsche Bank was known for his hard-charging style. Anshu Jain spearheaded the bank’s attempt to conquer Wall Street and faced cancer as he did professional challenges: by analysing the problem, trying to fix it and then moving forward. He died on Friday.

Food & drink

Soft on the inside, crispy at the edges and loaded with flavour, pierogi have long vied for the title of Poland’s national dish. Here’s your essential guide to the sticky dumpling.