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US plunges into recession as inflation hammers world’s biggest economy



Good morning.

On a busy morning for corporate results, there are two stand-out winners.

Shell and British Gas owner Centrica have both delivered a jump in profits over their most recent quarter as they cashed in on surging energy prices sparked by Russia’s war in Ukraine.

The companies are sharing the spoils with investors, with Shell announcing another share buyback of $6bn. That follows $8.5bn of stock repurchases in the first half of the year.

Centrica, meanwhile, is restarting its dividend for the first time since the start of the pandemic.

The payouts could draw political ire, as they come hot on the heels of the windfall tax targeting profits of oil and gas producers.

5 things to start your day 

1) UK bets the house on European energy  Wholesale gas and electricity prices on both sides of the Channel are at record levels 

2) Courts to be given power to award damages in Bitcoin  Move would mean damages could reflect large movements in value of digital currencies 

3) Facebook suffers first ever fall in revenues as advertising slows  Parent company Meta warns of cuts on hiring and spending plans 

4) Federal Reserve raises interest rates sharply in scramble to beat inflation  US decision piles pressure on the Bank of England to stamp down harder on surging prices

5) Saudi prince invests £190m in Britain’s biggest pension provider  Saudi royal Alwaleed bin Talal Al Saud has taken a stake of just over 3pc in Phoenix Group

What happened overnight 

Asian shares made cautious gains this morning as investors scented a possible slowdown in the pace of US rate hikes, comforting bond markets and sending the dollar to a three-week low on the yen.

As expected, the US Federal Reserve raised rates 75 basis points but did note some softening in recent data.

Just the hint of a less aggressive Fed was enough to send MSCI’s broadest index of Asia-Pacific shares outside Japan up 0.5pc. Japan’s Nikkei added 0.3pc and South Korea 0.9pc. Chinese blue chips firmed 0.6pc.

Coming up today

  • Corporate: Diageo (full-year results); Airtel Africa, Alliance Trust, Anglo American, BAE Systems, Barclays, Centrica, FDM Group, Greencoat UK Wind, Hammerson, Inchcape, Indivior, ITV, National Express, Rathbone Brothers, Relx, Rentokil, Schroders, Scottish American Investment Company, Segro, Shell, Smith & Nephew, St James’s Place, Vesuvius, Weir (interims); AVEVA, BT, CMC Markets, CVS Group, Discoverie Group, Evraz (trading update)
  • Economics: GDP (US), jobless claims (US), consumer confidence (EU), business climate (EU)





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