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This is an extraordinary moment.

We’ll get to the details in a moment but before we do let’s not lose sight of the big picture.

The Bank of England has just stepped in to fix a part of the financial market which had broken following the government’s mini-budget last Friday.

It has intervened – not with interest rate hikes but with an emergency financial stability operation – because part of the foundations for the economy had begun to malfunction.

I cannot remember another occasion like it.

Highest ever fall in mortgage deals over last 24 hours – economy news latest updates

We had interventions during the financial crash, but they were reactions to genuinely global movements. In this case, the UK’s is the only market seeing a breakdown quite like this.

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In this case the intervention was a direct reaction to UK economic policy. If the International Monetary Fund’s statement last night seemed chastening, then this is a level up.

Now the details (in brief).

Much of Britain’s financial markets rely on buying and selling of normally dull government bonds to manage risk over the long run.

This is part of the plumbing which allows money to flow from savers to borrowers. And it’s especially important for the pensions industry, where funds are especially reliant on long dated bonds (those dated over 20 years).

Those bond yields spiked at an unprecedented rate after the government’s announcements on Friday, sparking real problems for these so-called “liability driven investors”.

It’s a complicated and obscure part of the market, but it was getting close to a serious collapse. So the Bank has stepped in to buy those long-dated bonds and try to get it functioning again.

That might sound a lot like quantitative easing, but there are important (if ostensibly subtle) differences. QE was a pretty open-ended plan to boost the economy by getting cash flowing into people’s pockets.

This is a very specific (and time-limited, only two weeks) operation forensically focused on a few gummed-up categories of bonds.

Even so, there is a paradox here. Even as the Bank was in the process of trying to withdraw cash from the market, selling off the assets it bought in recent years as part of that QE scheme, it has been forced to do something which, at least to some extent, pushes in the opposite direction.

It has also been forced to pause its plan to reverse QE until October – though that may be the first of a number of pauses if the current instability persists.

Either way, this is a big moment. The Bank’s statement on Monday was unusual. The IMF’s statement on Tuesday was even more unusual.

Today’s intervention is nearly unheard of. For it to be a direct response to UK government policy is nearly unthinkable.

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Marmite maker Unilever to cut 7,500 jobs

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Marmite maker Unilever to cut 7,500 jobs

Unilever, the consumer goods firm behind brands including Marmite and Domestos, has revealed plans to cut 7,500 jobs across its global operations.

The UK-based firm, which employs around 128,000 staff, said the proposed losses would come mainly from office roles as technology advanced.

It admitted that the UK, where it has 6,000 workers, would be included in the three-year productivity drive.

Unilever said it would begin consultations with those affected once the roles had been fully identified.

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The company separately announced that it planned to spin off its ice cream business, which includes the Ben & Jerry’s, Magnum and Cornetto brands, by next year.

Other options, it added, would be considered to “maximise returns for shareholders”.

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It told investors Unilever was targeting mid-single digit underlying sales growth and modest margin improvement after the proposed demerger which, it said, would create a “simpler and more focused company”.

Unilever said its productivity programme was expected to deliver total cost savings of around €800m (£984m) over the next three years, with total restructuring costs anticipated to be around 1.2% of its turnover during the period.

Hein Schumacher, the company’s chief executive, said: “Under the Growth Action Plan we have committed to do fewer things, better, and with greater impact.

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Hein Schumacher succeeded Alan Jope as CEO in July last year

“The changes we are announcing today will help us accelerate that plan, focusing our business and our resources on global or scalable brands where we can apply our leading innovation, technology and go-to-market capabilities across complementary operating models.

“Simplifying our portfolio and driving greater productivity will allow us to further unlock the potential of this business, supporting our ambition to position Unilever as a world-leading consumer goods company delivering strong, sustainable growth and enhanced profitability.

“We are committed to carrying out our productivity programme in consultation with employee representatives, and with respect and care for those of our people who are impacted.”

It was the first major shift under his tenure since succeeding Alan Jope who retired last summer amid some unease over investor returns.

Shares rose by almost 5% at the market open.

Matt Britzman, equity analyst at Hargreaves Lansdown, said of the update: “Action is what shareholders wanted to see from the new team at the top, and that’s what’s been delivered today.

“Ice Cream always looked like the odd one out when you compare it to other product lines, and performance has struggled of late.

“It’s not a huge shock to see this move, but it’s something prior management wasn’t able to deliver.

“Unilever’s not an overly expensive name at the minute so expect markets to react positively to the news, perhaps more due to the decisive action than anything else.”

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National Grid: Nearly £60bn energy grid upgrade needed to hit green target

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National Grid: Nearly £60bn energy grid upgrade needed to hit green target

Nearly £60bn is needed to build the British energy grid of the future in order to meet climate change mitigation milestones in just over 10 years, according to the National Grid.

The British electricity network needs £58bn in investment to meet 2035 decarbonising targets, National Grid said.

New cables need to be built to bring electricity from renewable generating sources, such as offshore wind farms, to the places where that electricity is needed, such as cities.

Funds are required to allow new sources of power, such as solar farms, to be connected to the grid and transported across the country, the electricity systems operator (ESO) said.

The system had been designed around the old sources of electricity, such as coal fields.

Under the proposed green energy plan, far more offshore wind power would be pumped into the energy mix that powers homes and businesses.

Roughly five times more electricity will come from Scottish offshore by 2035 than will be used in Scotland during peak times, the Beyond 2030 report from the ESO said.

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Renewing the UK’s energy grid

In the process of expanding grid capacity, 20,000 jobs could be created and 90% of them would be outside London and the southeast, the report added.

The plans, however, are said to be in the early stages – with planning permission yet to be sought and community consultation yet to take place.

National Grid is the London Stock Exchange-listed company that owns and runs the electricity network. The company also owns and operates infrastructure in the United States.

However, the government will take the electricity systems operator portion into state ownership later this year.

As well as changing types and locations of electricity generation, a beefed-up grid is needed to deal with more power use.

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UK’s electricity grid problem

As economies decarbonise more systems that run on electricity, such as transport and heating, a bigger electricity network is required to ramp up supply.

British electricity demand is expected to rise 64% by 2035 and could double by 2050, according to the report.

To meet the 2035 deadline to decarbonise the power system, action must be “swift and coordinated”, it added.

Grid upgrades are funded by the government, energy project developers and bill payers.

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Car industry insists 2,000% increase in sales to Azerbaijan has nothing to do with Russia

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Car industry insists 2,000% increase in sales to Azerbaijan has nothing to do with Russia

Britain’s car industry has insisted that an unprecedented 2,000% increase in vehicle exports to Azerbaijan has nothing to with Russia and is explained by the fact that the former Soviet state is a “flourishing market in its own right”.

Sky analysis has found that the British car sector sent another £40m worth of cars to Azerbaijan in the first month of this year, raising fresh questions about whether those cars were being sent there to circumvent sanctions on Russia.

New data from HM Revenue & Customs shows that while direct car exports to Russia remain at zero, where they have been since the imposition of sanctions in 2022, in January £43m worth of cars were sent to Azerbaijan, the former Soviet state neighbouring Russia.

new, edited UK monthly car export

That meant Azerbaijan, which hitherto had rarely made the top 75 export destinations for British cars, is now the 12th biggest foreign market, by value, for British-made cars: above Switzerland, Canada and Spain.

final edited UK car exports to Azerbaijan

UK carmakers have pledged not to send cars to Russia, with sanctions formally banning the export of “dual use” items which could be repurposed as weapons in the Ukraine war. There are separate sanctions specifically banning the trade of cars worth over £42,000.

However, Sky News analysis found last week that over precisely the same period as British car exports to Azerbaijan rose sharply, there was a near-simultaneous rise in car exports from Azerbaijan to Russia.

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British-made luxury cars still being bought by rich Russians

The average value of cars sent from the UK to Azerbaijan in January was just over £115,000.

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Trade data shows that similar increases in British exports have been seen in other former Soviet Russian neighbours, including Kazakhstan, Armenia and Georgia.

final edited Change un UK car exports since 2018/19

A spokesman from Britain’s motoring lobby group, the Society of Motor Manufacturers and Traders (SMMT), said it had detected no evidence the vehicles being sent to Azerbaijan were destined for Russia – and that they were evidence that it was a “flourishing market in its own right”.

“UK vehicle exports to Azerbaijan – as to many countries globally – have increased due to a number of factors, not least a flourishing economy, new model launches and pent-up demand,” it said.

Azerbaijan’s flatlining economy

However, the notion that the exports were evidence of a flourishing economy stands in stark contrast to the economic data, which show that Azerbaijan’s GDP per capita has been flat for a decade and a half at around $15,000 in purchasing power parity terms.

Since two years preceding the pandemic, the value of car exports to Azerbaijan has risen by more than 2,000%. No other sizeable car market in the world has come close, save for Kazakhstan, the other Russian neighbour, whose imports of British-made cars are up 800%.

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Carmakers told to act after Sky report

The SMMT said: “Wherever the UK automotive industry exports, it is committed to compliance with all trade and economic sanctions, and continues to work closely with government and the new Office For Sanctions to ensure the effective implementation of the regulations.

“There is no evidence available of that commitment being compromised, and it is right to monitor for any potential vulnerabilities in a fast-moving and evolving environment.

“The automotive industry remains in dialogue with government and other international partners enforcing co-ordinated trade restrictions, to ensure adherence to both the letter and the spirit of the sanctions, across all vulnerable sectors.”

While the sheer number of cars going to Azerbaijan is small, the value of those cars is consistently high, averaging well over £100,000 and suggesting they are mostly luxury cars.

There have been similar flows detected from other European nations, including Germany and Poland, to other former Soviet states neighbouring Russia.

Following the original Sky News story last week, Foreign Office Minister Anne-Marie Trevelyan said car companies should examine their orders to ensure they are complying with sanctions rules.

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