Today's news headlines:

‘Strains mount on European power market as UK generators call for help’. Energy prices are expected to rise sharply this week after Friday’s announcement that Russia will stop supplying gas to the rest of Europe through the Nord Stream 1 pipeline indefinitely. This is due to a supposed technical fault. The Swedish government said yesterday that it would provide $23 billion in credit guarantees to Nordic utilities to help them avoid defaults on their loans. Meanwhile, Finland has proposed a $10 billion loan and guarantee package to help its energy producers. UK electricity generators are now calling on the British government to follow suit as wholesale gas prices experience historic highs. (Financial Times).

‘Truss plans would give big banks a tax break, charges Labour’. As the next UK Prime Minister is due to be announced imminently, the opposition party has claimed that Tory frontrunner Liz Truss’ intention to abolish the scheduled UK corporation tax increase next year would be particularly beneficial to large banks, as they would see a net cut in their tax bills. Conservative rival, Rishi Sunak, announced in his October 2021 budget that from April 2023, the surcharge on bank profits would be cut from 8% to 3%. At the same time, corporation tax for all businesses would rise from 19% to 25%, effectively helping banks at the expense of other UK companies. Meanwhile, Truss’ plan to scrap the corporation tax rise while going ahead with the 5% cut in the bank surcharge has received backlash for giving big banks an effective tax break during an economic crisis. (Financial Times).

Today

As expected, European gas prices jumped at opening this morning after the news that the Nord Stream 1 would see no more gas flow from Russia to the rest of Europe for the foreseeable. Meanwhile, all eyes turn to Downing Street as the next UK PM will be announced early this afternoon.

Events

UK Prime Minister announced: 12:30PM
OPEC JMMC Meetings: All day
US and Canadian Bank Holiday: All day

Interbank rates*:

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EUR/USD: 0.9895
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