FirstFT: UK energy groups feel the heat

Good morning. Britain’s electricity generators will face pressure from ministers to invest their “extraordinary profits” in new green energy projects, rather than paying out the windfall to shareholders.

Some have made huge profits from surging electricity prices that have risen in line with the soaring cost of gas, even if the power they produce comes from renewables or nuclear energy.

Chancellor Nadhim Zahawi will today keep alive the prospect of hitting generators with a windfall tax if they do not invest their profits in renewable energy schemes. He has told officials to draw up a list of policy alternatives for whoever becomes UK prime minister on September 5.

Zahawi and business secretary Kwasi Kwarteng will meet generators including Centrica and RWE to discuss the energy crisis, including the jump in household bills, with average annual gas and electricity bills forecast to hit £4,420 by spring — more than three times the level at the start of 2022.

Kwarteng has had officials working on a range of “reasonable worst-case scenarios”, including a potential shortfall in electricity supplies of up to a sixth of peak demand this winter, in case Russia turns off gas to Europe.

Liz Truss, a Tory leadership frontrunner, yesterday vowed to do all she could to help households struggling with the cost of living crisis, in what her rival Rishi Sunak described as a “major U-turn” of a big policy issue.

Thanks to readers who took our poll yesterday. Seventy-two per cent of respondents said outgoing prime minister Boris Johnson, Truss and Sunak should convene to agree on an emergency Budget to tackle soaring household bills. Here’s the rest of today’s news. — Jennifer

Five more stories in the news

1. Credit Suisse steps up $400mn SoftBank dispute The Swiss lender has intensified its legal fight against the Japanese tech investor as it seeks to recoup hundreds of millions of dollars on behalf of its wealthiest clients that it had lent through the defunct Greensill Capital.

2. Disney adds 14.4mn streaming subscribers Walt Disney defied concerns about an industry slowdown by adding subscribers to its Disney Plus service in the latest quarter, pushing its total number of paying customers to 221mn. But the media group reduced its long-term guidance due to its loss of rights to stream Indian Premier League cricket matches.

3. Elon Musk sells almost $7bn of Tesla stock ahead of court fight with Twitter The Tesla chief executive has taken advantage of a recent rebound in the electric carmaker’s stock price to sell $6.9bn worth of its shares since the end of last week, according to regulatory filings.

4. UK to ‘urgently’ offer polio vaccine booster to London children aged 1 to 9 The Health Security Agency said the move would help strengthen protection against polio-related paralysis and interrupt transmission of the virus that sewage surveillance suggests is occurring in parts of the capital.

5. Donald Trump pleads the Fifth in New York state probe The former US president refused to answer questions at a deposition in a New York state probe into his businesses yesterday, invoking his constitutional right against self-incrimination amid deepening legal woes.

The day ahead

Russian crude restored to southern Druzhba pipeline Hungarian energy company MOL has paid oil transit fees to Ukraine on behalf of a Kremlin-controlled company in order to restart flows of crude. The Energy Information Administration and Opec also publish their monthly oil market reports.

Timothy Schools sentencing A former solicitor who funnelled almost £20mn from a “no win, no fee” litigation finance fund into his own pocket will be sentenced. He was found guilty of all five counts against him at Southwark Crown Court on Tuesday after a UK Serious Fraud Office probe.

Corporate earnings Companies due to report quarterly results include Aegon, Deutsche Telekom and Siemens. Results for the first half of the year are also in for Salzgitter and Zurich Insurance.

PGA Tour playoffs begin A US judge has denied a request from three professional golfers to play in the first event of the playoffs in Memphis, Tennessee, after they defected this summer to the LIV Golf circuit, a start-up league backed by Saudi Arabia’s sovereign wealth fund.

US economic data Producer price index figures are expected to have risen at a slower pace in July than in June, but they were still at elevated levels. Unemployment insurance filings are also forecast to have increased during the week ended August 6. (FT, WSJ)

Join us in person or online for the FTWeekend Festival on Saturday, September 3, and enjoy a day of debates, tastings, performances and more. Hear from speakers that include Great British Bake Off winner Nadiya Hussain, MP and former health secretary Jeremy Hunt, Ukrainian chef Olia Hercules and psychotherapist Esther Perel. Claim £20 off your festival pass by using the promo code FTWFxNewsletters.

What else we’re reading

The shopping revolution will be livestreamed Internet platforms including TikTok, YouTube and Amazon are declaring live ecommerce as the future of retail. But early experiments in the UK and the US suggest there is still a long way to go to overcome low viewing numbers, poor sales, clunky tech and logistical challenges.

In praise of boredom The last time Jemima Kelly was truly bored was a year ago, during a seemingly never-ending church service in France. But after the ordeal was over, she noticed that her feelings of pleasures had intensified. Boredom, it turns out, could help our ultra-connected lives.

Germany’s economy stutters The country’s prospects have become “fragile”, according to its finance minister, with growth forecasts downgraded and life becoming “much more expensive for lots of people”. Here’s how the eurozone’s powerhouse became a weak link.

Tory terror spurs war with the state Following his resignation last year, David Frost, Boris Johnson’s Brexit negotiator, published an essay — the latest salvo in the ever-shortening cycle of disavowal that characterises Conservative politics. In his essay, Frost captures the terror of a party that fears it has lost the creed of true Toryism, writes Robert Shrimsley.

What’s next for Brittney Griner — and for women’s sport? Griner is currently the most famous basketball player in the world, not for her two Olympic gold medals or her five professional championships across the EuroLeague and the WNBA, but because she’s become a political pawn.

Prime property

A €1 dream scheme is sparking a wider homebuying trend in Sicily, with abandoned houses helping to draw in buyers from northern Italy and abroad.