Europe will plunge into recession this year, warns Morgan Stanley

Good morning. 

Britain will cut off gas supplies to mainland Europe as part of an emergency plan drawn up to counter the Russian energy crisis.

The so-called interconnector pipelines to the Netherlands and Belgium would be shut down by National Grid if supplies fall short in the coming months, the Financial Times reports.

It’s part of a four-stage emergency plan that could also include rationing gas to large industrial users and urging households to cut consumption.

But European gas firms warned it would undermine efforts to counter Putin’s aggression and exacerbate the energy crisis on the continent.

Germany and the Netherlands have already triggered their own emergency plans after Russia slashed gas supplies to Europe, sparking fears of shortages this winter.

5 things to start your day 

1) Electric vehicle shift ‘puts 22,000 jobs at risk’  Transition to electric will mean fewer jobs available and many people forced to retrain, report warns 

2) Cut meat, fly less and cycle to work to achieve net zero, say climate change chiefs  Climate Change Committee’s progress report ventures into the sensitive territory of lifestyle choices to help the environment

3) Inflation leaves British military spending facing cuts despite Boris Johnson’s rallying cry  Prime Minister urges allies to ‘dig deep’ on defence spending

4) Why a 30pc pay rise for doctors is far too unrealistic  British Medical Association pay demands would pile pressure on the public finances and benefit already ultra-high earners

5) Disney chief survives row over Florida ‘Don’t say gay’ bill  Board renews embattled Bob Chapek’s contract for another three years

What happened overnight 

Hong Kong stocks dropped more than 1pc this morning, following a sharp sell-off on Wall Street amid concerns about the impact of runaway inflation on the economy.

The Hang Seng Index fell 1.3pc, the Shanghai Composite Index slipped 0.3pc and the Shenzhen Composite Index on China’s second exchange also fell 0.3pc.

Tokyo stocks opened lower, with the benchmark Nikkei 225 index down 0.7pc, while the broader Topix index slipped 0.8pc.

Coming up today

• Corporate: Moonpig, Mulberry (full-year results); B&M, Meggitt (trading statement)
• Economics: GDP (US), core personal consumption expenditures (US), business climate (EU), consumer confidence (EU)