Today’s top stories
A spring offensive by Russian forces in Ukraine appears to be advancing in “metres not kilometres”, according to UK defence secretary Ben Wallace.
UK prime minister Rishi Sunak was in Belfast today to seek backing from local politicians as he attempts to resolve the bitter dispute over post-Brexit EU trade relations.
The Pentagon’s senior China official is visiting Taiwan amid strained US-China ties. It is only the second trip to the island in 40 years by high-level US defence personnel.
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Today marked the start of London Fashion Week in the British capital. It promises five days of menswear and womenswear shows alongside more than 400 free experiences as part of its City Wide Celebration programme. Iconic British luxury brand Burberry will present its first collection under the new creative direction of Daniel Lee.
LFW is a chance to glimpse future trends. It stands to shape the preferences of potential buyers that then feed, broadly, into a fragment of national, and indeed global, consumptive habits. Today’s fashion industry, as the appointment of Pharrell Williams as Louis Vuitton’s new menswear creative director attests, is firmly in thrall to sales.
Globally, the luxury goods market shows remarkable signs of health as Chinese consumers emerge from a strict Covid-19 lockdown in the country. Figures released today by Hermès show a surge in Chinese demand for the French luxury group’s Birkin bags and other leather goods. Sales rose to almost €3bn in the three months to December. Kering, owner of the Gucci and Balenciaga brands, reported an uptick in Chinese sales after a pandemic-mired fourth quarter.
Lower down the fashion food chain, the success of online Chinese clothing group Shein has been remarkable. It has become the shopping destination of choice for young western consumers. Now, it is preparing for a blockbuster initial public offering in New York. It is projecting that annual revenues will double to almost $60bn by 2025, in new sales projections seen by the Financial Times. That would exceed the existing combined annual sales of retail giants H&M and Zara.
One of Shein’s rivals is UK-based Asos which has warned investors of a challenging outlook as the cost of living crisis bites. But shoppers in the UK have proved surprisingly resilient. According to new figures released today, retail sales, which measure the amount of goods sold in UK shops, rose 0.5 per cent between December and January, better than the 0.3 per cent fall widely predicted by economists. It follows a revised 1.2 per cent drop in the previous month, says the Office for National Statistics.
The figures point to a rallying of UK consumer activity, rebounding after two months of successive declines, in the face of assumptions that inflation is gradually easing. Consumer price inflation fell to a five-month low of 10.1 per cent in January, according to figures released by the ONS this week.
However, compared with January last year, overall sales volumes fell 5.1 per cent. In a further tempering of optimism, economists expect UK consumers’ real incomes to suffer a further hit in the coming months as wages struggle to keep pace with inflation and the reduction in energy support schemes from April 1 curtails discretionary spending.
Retail sales in the US grew more strongly last month, however, rising 3 per cent above December’s levels as shoppers belie inflationary predictions. One of the biggest monthly increases in recent years, it is a sign of how hot the US economy is at present and further complicates the Federal Reserve’s future policy options. Fed chair Jay Powell warned last week that the central bank’s route to curtailing inflation this year was “probably going to be bumpy”.
Although weaker sales volumes from Nestlé yesterday and Unilever last week point to a decline in consumers’ willingness to go along with recent price rises motivated by persistent inflation, the figures paint a broader picture of the relative global health of the consumer.
Need to know: UK and Europe economy
European natural gas prices fell to an 18-month low today, owing to milder than expected weather and sufficient storage capacity. By falling below €50 per megawatt hour, gas prices have collapsed as much as 85 per cent from their August 2022 peak, prompting suggestions of a turning point in the continent’s energy crisis as it weans itself off Russian supplies.
The aviation industry in Europe sparked fury from climate campaigners today after it unveiled plans to have newer aircraft classified as a green investment under EU sustainable finance rules that aim to guide private capital towards more socially agreeable ventures. Industry groups argue that investments in new planes are green because they produce fewer emissions per passenger than older, less efficient models.
In a blow to the booming influencer economy, HM Revenue & Customs has announced it is to write to 2,300 online traders, social media personalities and gamers that it suspects of not paying the correct UK tax on virtual profits. It marks a fresh development in institutional attempts to keep pace with a galloping digital economy. The number of “content creators” doubled to almost 16mn in the UK between 2020 and 2022.
Need to know: global economy
US energy companies are drawing up plans to go public at a rate not seen in more than half a decade as investors seek steady cash flows and balance sheet discipline at the expense of long-term growth. It marks a boost for a sector that has long suffered from turbulence in oil markets and a distaste for polluting companies among environmentally conscious portfolios.
These developments, however, may yet face long-run difficulties against US plans to become a global cleantech superpower, as yesterday’s Big Read explores. President Joe Biden’s colossal Inflation Reduction Act last year aimed to spur the private sector to act quickly on decarbonisation programmes through generous subsidies, leaving these newly offered companies exposed to future investment trends.
In a sign of how investors are becoming increasingly agitated by the prospect of further US interest rate rises, global equity markets fell today. Hawkish comments from Fed officials this week have raised the prospect of higher US interest rates for longer as the Fed fights persistent inflation.
Need to know: business
NatWest announced stronger than expected fourth-quarter earnings this morning, reporting a tripling of pre-tax operating profit to £1.4bn as revenue rose 43 per cent to £3.7bn. Despite benefiting from recent Bank of England rate increases, shares dipped sharply on Friday as the UK bank warned of a static net interest margin this year. A healthy quarterly balance sheet will embolden calls for the bank, in which the UK government still holds a 44 per cent stake, to pass on greater benefits to savers.
Bao Fan, one of China’s top dealmakers, has gone missing. The founder of China Renaissance, one of the country’s leading investment banks, said it was working to establish his whereabouts. Financial executives in China have often disappeared in mysterious “anti-corruption” investigations since the start of Xi Jinping’s presidency in 2012.
The FT’s sixth annual listing of the UK management consulting firms most recommended by clients and peers is published today. Part of a Special Report on the UK’s leading management consultants, other featured articles include the rising demand for restructuring experts in the sector and the value of employee flexibility. Check it out here.
What flies above the cruising height of commercial aircraft but below satellite orbits? Following the downing of a Chinese surveillance balloon from the upper stratosphere earlier this month, Clive Cookson and Ian Bott explore the “forgotten space” up to 40km above the Earth’s surface
Chinese pharmaceutical group CanSino Biologics says demand for its Covid vaccine in China is “dying down”. The rapid spread of the virus in the country may have prevented further uptake. Chinese health authorities recommend patients wait up to six months before receiving another shot.
A woman in Merseyside, England, has become one of the first patients in the world to undergo a pioneering form of cancer treatment. Part of the Mode Of Action Transgene (MOAT) study, it aims to help her immune system kill cancerous cells as an alternative to more debilitating treatment methods.
Some good news
A fitness club in south London is on a mission to change the narrative around exercising for older women. Personal trainer Anna Jenkins set out to saturate the internet stock photo ecosystem with alternative images of women lifting weights after growing tired of available images that paint exercisers as weak and half-witted. Building muscle mass is key to fighting bone density loss and helping with menopausal symptoms.
Something for the weekend
Interactive crosswords on the FT app
Subscribers can now solve the FT’s Daily Cryptic, Polymath and FT Weekend crosswords on the iOS and Android apps