Eurozone in crisis as inflation hits record high

Good morning.

Shell could be forced to abandoned its investment in a major Russian gas project after Putin threatened to seize the rights to the facility.

The Kremlin said rights to the Sakhalin-2 plant will be transferred to a new Russian company, citing threats to the country’s national interests and economic security.

Shareholders have a month to say if they’ll take stakes in the new company, but have been warned they may not get their money back if they don’t.

The move could spark complications for Shell, which holds a 27.5pc stake in Sakhalin-2. 

The firm previously said it will sell its holding – whose value Shell impaired to $1.6bn (£1.3bn) earlier this year – with Chinese state energy companies linked to a potential deal.

5 things to start your day 

1) BT workers to strike for first time since Thatcher privatisation  40,000 staff to strike in broadband blow as they reject ‘unsustainable’ pay rise offer

2) How Heinz provoked Tesco in the battle of the beans  Showdown shines a spotlight on supermarket-supplier tensions as inflation bites

3) Elon Musk escalates Tesla’s war on working from home with ‘please explain’ emails  Staff receive automated communications if they fail to go into the office often enough

4) Surge in early retirement is fuelling inflation, says top Treasury mandarin  Exodus of almost half a million workers from the jobs market is damaging the economy

5) Amazon blocks LGBTQ searches in UAE after political pressure  Online giant says it adheres to laws in the countries where it operates

What happened overnight 

Asian markets struggled again this morning following another sell-off on Wall Street fuelled by recession fears, with warnings of a bleak outlook for the global economy as central banks slam on the brakes to battle soaring inflation.

Data showing US consumers – the backbone of the world’s top economy – were growing increasingly reticent about spending dealt a fresh blow to equities on Thursday, with the S&P 500 suffering its worst January-June since 1970.

With the war in Ukraine showing no sign of ending – keeping energy costs elevated – there is an expectation that borrowing costs will continue to rise and send economies into recession.

After a broad retreat on Thursday in Asia, markets battled to recover but with little conviction.

Tokyo, Shanghai, Seoul, Taipei and Bangkok all fell, though there were small gains in Sydney, Singapore, Manila and Jakarta. Hong Kong was closed for a holiday.

Coming up today

• Corporate: No scheduled updates
• Economics: Inflation (EU), manufacturing PMI (UK, US, EU China), mortgage approvals (UK)