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Good morning.
New legislation to mandate annual North Sea oil and gas licensing rounds will be at the heart of the King’s Speech tomorrow, as Rishi Sunak looks to exploit a key policy divide with Labour ahead of the next UK general election.
The prime minister insisted the bill, which would allow companies to bid yearly for new licences to drill for fossil fuels in the North Sea, would protect jobs and strengthen Britain’s energy security by reducing its exposure to volatile international markets.
The announcement, which comes in the wake of the energy shock sparked by Russia’s invasion of Ukraine that has sent prices soaring, will allow Sunak to highlight how his “pragmatic, proportionate and realistic” approach to achieving net zero by 2050 contrasts with Labour’s policies.
However, the North Sea Transition Authority, the regulator, has acknowledged that any new licensing will do little to reduce Britain’s dependence on imports or affect prices of oil or gas significantly, given that the basin’s reserves are in decline and the commodities are traded on international markets. More details on the prime minister’s latest announcement.
Here’s more on UK politics:
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Rough sleepers: Suella Braverman’s plan to crack down on the use of tents by homeless people will cause a “totally preventable” rise in street deaths, charity leaders wrote in a letter to the home secretary.
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Jewish community: Britain’s Jews are “fearful” and UK society is showing a lack of “moral clarity” about the importance of Jewish lives in the wake of Hamas’s attack on Israel, deputy prime minister Oliver Dowden said yesterday.
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Productivity: Chancellor Jeremy Hunt’s ambitions to bolster growth will falter if he fails to extend key tax breaks aimed at boosting investment, business leaders have warned ahead of this month’s Autumn Statement.
Want the inside track on British politics? Sign up for our Inside Politics newsletter by Stephen Bush.
Here’s what else I’m keeping tabs on today:
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French politics: Justice minister Éric Dupond-Moretti is set to face a special tribunal over alleged conflicts of interest and abuse of office, the first time a sitting member of the French government has appeared before the body.
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Bank of England: The central bank’s chief economist Huw Pill answers questions over cost of living and current economic conditions in an online session.
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Economic data: S&P Global has its services purchasing managers’ indices for the EU, France and Germany, and its construction PMI for the UK.
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Donald Trump: The former US president is due to testify in the civil fraud trial in which he and his family businesses are accused of manipulating asset values. Trump was ahead of Joe Biden in two polls yesterday as fears over war and the economy hurt the current president.
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Results: BioNTech and Ryanair report.
Join us tomorrow in Brussels or online for the FT’s Tech & Politics Forum 2023, which will gather CEOs, policymakers, investors and civil society to debate topics including digital ecosystems, sovereignty, security and infrastructure amid shifting global geopolitics. Register for free.
Five more top stories
1. Exclusive: The world’s most prestigious consulting firms have frozen US starting salaries for new graduates, with McKinsey and BCG among the firms holding salaries at 2023 levels for undergraduate and MBA students taking up positions next year, according to people familiar with the matter. Here’s how much the firms are offering.
2. The US sees the Palestinian Authority as “playing a central role” in any post-Hamas government in Gaza, Antony Blinken told PA president Mahmoud Abbas yesterday during the US secretary of state’s second visit to the region since Israel declared war on Hamas. But Abbas said the PA would only assume power in Gaza as part of a “comprehensive political solution” to the Israeli-Palestinian conflict.
3. Exclusive: Brussels is probing the recent rise in air fares across Europe after airlines pushed up prices by as much as 30 per cent over the summer, the EU’s transport commissioner told the Financial Times. The European Commission has no power to regulate air fares, but Adina Vălean said it was still investigating to get a full explanation. Read the full interview.
4. Elon Musk’s xAI start-up has released its first artificial intelligence model with “real-time access” to information from his social media platform X, which the tech billionaire said gives the chatbot an edge over competitors that have largely relied on older archives of internet data. Here’s more on Grok, the new chatbot that “loves sarcasm”.
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More Big Tech: Amazon, Microsoft and Google parent Alphabet look set to pour billions of dollars into cloud computing capacity to serve the growth of generative AI.
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Opinion: We need less focus on Terminator-style scenarios for AI and more on specific economic data disclosure in regulating the new technology, writes Rana Foroohar.
5. Exclusive: A large insurer of Greensill Capital has alleged the failed lender deceived German regulators in an attempt to reduce the capital requirements of its Bremen-based unit. Insurance Australia Group, which is being sued by Greensill investors nursing billions of dollars of losses, made the accusation against the defunct supply-chain finance group last week in a court filing.
The Big Read
A new era of high borrowing costs is starting to bite in corporate America. Businesses accustomed to cheap debt during more than a decade of ultra-low interest rates must now adjust by either repaying their loans or refinancing them at substantially higher cost. But the bankruptcy of Bed Bath & Beyond shows how refinancing can be punishing or even impossible for businesses. With more than $3tn of corporate debt due for repayment over the next five years, investors are starting to fret about a wave of defaults.
We’re also reading . . .
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Susan Neiman: Instead of tribalist labels such as pro-Israel or pro-Palestinian, the Jewish-American moral philosopher tells Henry Mance: “I’m pro-peace.”
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North Korea: Western surveillance of the country’s illicit oil shipments has angered China, which sees it as a pretext to expand military operations in the Pacific.
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Toyota vs Tesla: The Japanese group is taking on Elon Musk’s company for the future of carmaking as it seeks to increase production of electric cars.
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Amazon drought: An unprecedented dry spell has wreaked havoc on local communities and highlighted threats to the rainforest’s role as a carbon sink.
Chart of the day
As longstanding structural issues undermine the effectiveness of the EU’s single market, European policymakers who fear lagging further behind are looking for a new strategy to help the bloc regain its competitive edge.
Take a break from the news
Van Gogh in Auvers-sur-Oise: The Final Months is the Musée d’Orsay’s supremely enjoyable show on the artist’s last, productive weeks. Jackie Wullschläger reflects on an unforgettable exhibition in Paris.
Additional contributions from Benjamin Wilhelm
