UK consumer confidence slides; less than half of fuel duty cut passed on – business live

In the markets, European stock are ending the week with gains.

In London, the FTSE 100 is up 0.3% at 7491 points, around its levels before the Ukraine invasion began.

The blue-chip index is on track for its third weekly rise in a row, as it continued to recover from its plunge early in the war. But housebuilders are down around 3%, after JP Morgan lowered its price targets.

Germany’s DAX and France’s CAC are both up around 0.8%. Oil prices have dropped around 2%, after the EU didn’t agree any new sanctions on Russian oil this week.

Raffi Boyadjian, lead investment analyst at XM, explains:

With inflation rates around the world skyrocketing amid the surge in most key commodity and raw material prices, the EU’s decision not to add to its long list of sanctions against Moscow has offered some respite to the markets. There is a growing fear of recession, not just in the euro area but globally too, the longer these price spikes last and the more amplified they become.

NATO is doing everything it can to support Ukraine without getting itself entangled in a direct military confrontation with Russia. But the downside of that is a potentially long drawn-out war and subsequently, a prolonged market fallout.

Oil prices pulled back yesterday after hitting two-week highs as no new significant economic measures were announced by the US or the EU. WTI and Brent futures were extending their declines today, sliding by more than 2%.

Billionaire Sir Christopher Hohn has urged shareholders to vote against bank directors who lobby against climate action while making net-zero promises, saying this was greenwashing”

Our environment reporter Helena Horton explains:

The hedge fund manager, who once had Britain’s highest salary at £1m a day, made headlines when he donated £50,000 to climate activist group Extinction Rebellion.

Hohn, who was once Rishi Sunak’s boss at hedge fund TCI, is also one of the nation’s biggest philanthropists, and has pumped billions into his own charity, The Children’s Investment Fund Foundation.

He said: “Any bank making a net zero promise while actively lobbying against necessary climate regulation – such as mandatory disclosure of borrowers’ emissions and climate action plans – is greenwashing. Shareholders should vote against the directors of banks who are hiding their exposure to climate risk.”

Less than half of the 5p per litre cut to fuel duty announced in Wednesday’s spring statement had been passed onto motorists yesterday.

The AA reports that petrol prices at the pumps were down just 2.71p per litre on average on Thursday, with diesel only 1.59p cheaper.

On Tuesday, petrol and diesel pump prices had jumped to new records yet again, at 167.30p and 179.72p a litre respectively. Yesterday, petrol averaged 164.59p a litre and diesel 178.13p.

The fuel duty cut (which is worth 6p/litre once you include VAT) began at 6pm on Wednesday night, just a few hours after Rishi Sunak’s statement [the chancellor then visited a Sainsbury’s petrol forecourt to fuel someone else’s car]

Luke Bosdet, the AA’s fuel price spokesman, says it’s ‘very disappointing’ that prices didn’t drop faster.

“The Chancellor rode to the rescue of drivers on Wednesday and even before the 6pm start of the fuel duty cut drivers were reporting the price cut at some Asda forecourts.

“Although we have to accept that, for many forecourts, the duty cut comes through with the next delivery of fuel, the size of the fall is very disappointing. I expect the Government will be watching very closely to see if pump prices reflect more of the fuel duty cut over the weekend.”

“The truth is that, while diesel wholesale costs have been climbing, petrol’s have fallen substantially since the peaks of 7/8 March. That should have brought a further 6p-a-litre cut in pump prices, effectively doubling the saving from the fuel duty cut.

“For now, the message to drivers is clear: head to the cheaper forecourts – you can’t miss them.”

The Petrol Retailers Association warned on Wednesday that retailers’ current petrol and diesel stocks had been purchased before the duty cut came in.

Gordon Balmer, Executive Director of the PRA, explained:

Retailers are holding duty-paid stock which will be sold before the fuel duty cuts come in. To give the motorist an immediate discount at the pumps, the Chancellor would have to backdate the fuel duty cut to 1 March,”

Business confidence in Germany has tumbled this month, as the Ukraine war hammers the economic outlook for Europe’s largest economy.

The Ifo research institute reports that “sentiment in the German economy has collapsed” since the war in Ukraine began. Its Business Climate Index has fallen to 90.8 points in March, down from 98.5 points in February.

Ther was a record collapse in expectations of 13.3 points (even worse than the 11.8 drop in March 2020, when the pandemic hit), as companies face the economic implications of the conflict, such as high energy prices and supply chain problems.

Here’s the details:

In manufacturing, the index fell faster than ever before. Companies’ expectations also saw a record drop, flipping from optimism to pronounced pessimism. Moreover, companies now rated their business outlook as extremely uncertain. Assessments of the current situation were also lower.

In the service sector, too, the business climate worsened notably. This was due to a conspicuous drop in expectations. The outlook for the coming months is particularly bleak in the logistics industry. In contrast, service providers left their assessments of the current situation practically unchanged.

In trade, the Business Climate Index crashed. The expectations indicator saw a record collapse. Assessments of the current situation, however, were almost unchanged and remain positive.

In construction, the business climate deteriorated significantly. This, too, was driven by considerably more pessimistic expectations. Assessments of the current situation also worsened, but a majority of construction companies are still satisfied with their current business.

Carsten Brzeski of ING says:

The risk is high that the economic implications of the war are much more of a structural game-changer for the European and particularly the German economy than the pandemic has ever been.

With high energy and commodity prices for a protracted period, possibly even energy supply interruptions, and an acceleration of deglobalisation, possibly Cold War 2.0, an export-oriented economy highly dependent on energy imports will suffer.

The risk of another contraction in the first quarter of the year and hence a technical recession is high, Brzeski adds.

IFO, though, suggest Germany could avoid recession this quarter (the economy shrank in Q4 2021).

The United States and European Commission have agreed a new partnership to cut Europe’s reliance on Russian energy.

Under the plan, the US and partners will “strive” to deliver at least 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe this year, the White House says.

Even larger shipments would be delivered in the future, with both sides aiming to boost deliveries from the US to 50 bcm per year over time.

The pledge is part of a new Task Force agreed by President Joe Biden and European Commission president Ursula von der Leyen, to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

The White House says:

It will work to ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels.

The EC is aiming to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”, following Russia’s invasion of Ukraine.

At a joint press conference in Brussels, Von der Leyen said:

“We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through… additional gas supplies, including LNG deliveries.

“We as Europeans want to diversify away from Russia towards suppliers that we trust, that are our friends, that are reliable.

In an attempt to keep climate goals on track, the new Task Force will try to reduce the greenhouse gas intensity of all new LNG infrastructure. That will include using clean energy to power onsite operations, reducing methane leakage, and building “clean and renewable hydrogen-ready infrastructure”.

The EC will also try to ensure demand for approximately 50 bcm/year of additional U.S. LNG until 2030.

The Commission says this will happen:

…on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals, and stability of the cooperation of the demand and supply side, and that this growth be consistent with our shared net zero goals.

In particular, price formula should include consideration of Henry Hub Natural Gas Spot Price and other stabilising factors.

At the same time, the partnership will also attempt to cut demand for fossil fuels and greenhouse gas emissions.

The White House says:

Immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

The US and EC will also work to speed up planning and approval for renewable energy projects and strategic energy cooperation on technologies such as offshore wind.

The EC says the Task Force will also:

• Developing a strategy to accelerate workforce development to support the rapidly deployment of clean energy technologies, including an expansion of solar and wind.
• Collaborating to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, including by investing in technology development and supporting infrastructure.

London-listed Russian gold miner Petropavlovsk has warned that it cannot sell gold to its main lender, Gazprombank, after the bank was sanctioned in the UK on Thursday.

Petropavlovsk is also blocked from making an interest payment to Gazprombank today due to sanctions, putting the company in turmoil.

Petropavlovsk told shareholders that it has a $200m loan with Gazprombank (GPB) — under which it agrees to sells all its gold production to GPB.

Howwever, sanctions now prohibit it from selling any more gold to GPB at present.

Petropavlovsk adds that:

…restrictions on purchasing and selling gold in Russia may make it challenging to find an alternative purchaser for the Group’s gold output.

The company operates three gold mines in the far east of Russia, at Pioneer, Malomir and Albyn.

Petropavlovsk is due to make an interest payment of $560,000 today to GPB, but warns “the Company is currently prohibited from making such payment under the Regulations.”

The company is now “urgently considering” the implications for its activities and financing arrangements with its advisers.

Shares in Petropavlovsk have tumbled 21% this morning to 1.4p, and have slumped 90% since the Ukraine invasion began.

Matthew Weaver

The transport secretary, Grant Shapps, has called for the chief executive of P&O Ferries to resign over the sacking of 800 workers and pledged to force the ferry company to reverse the move and pay its crew the minimum wage.

Peter Hebblethwaite admitted to MPs on Thursday that his company broke the law by sacking the 800 workers without consultation.

Shapps said Hebblethwaite performance in front of the transport and business committee was “brazen, breathtaking, and showed incredible arrogance”.

Speaking to Sky News, Shapps said:

“I cannot believe that he can stay in that role having admitted to deliberately going out and using a loophole – well break the law – but also use a loophole.

“They flagged their ships through Cyprus avoided having to tell anybody about this, or they felt they did. And even though they know they’ve broken the law, what they’ve done is to pay people off in such a way to try and buy their silence. It’s unacceptable.”

February’s drop in retail sales is a sign of things to come for retailers, warns Martin Beck, chief economic advisor to the EY ITEM Club:

“2022 has got off to a mixed start for retailers, and things will soon get tougher. Though covid cases have been on the rise again of late, this doesn’t appear to be discouraging consumers from engaging in social consumption activities.

A normalisation of spending patterns back towards activities such as eating out and going to the cinema is likely to mean less spending in the retail sector.

“This headwind will be compounded by the intensifying cost of living squeeze. The EY ITEM Club now expects inflation to average well over 6% this year and, with this week’s Spring Statement offering limited support, there is still likely to be the biggest squeeze on household finances for more than a decade. Some households may be able to dip into savings accumulated during the pandemic, but many won’t have that luxury. So, retail demand is likely to come under increasing pressure as we move through 2022.”

“After a buoyant January, retail sales fell back a little last month,” said Heather Bovill, ONS deputy director for surveys and economic indicators.

“There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period.”

If you strip out fuel sales, retail sales volumes fell by 0.7% last month.

With petrol prices at record levels, the increased demand for petrol and diesel would have left less for other spending.

The retail sales report also shows the impact of inflation. Although retail sales volumes were down 0.3% month-on-month in February, the amount spent rose by 0.7%. Customers spent more, to get less.

Petrol sales rose in February, as the lifting of Plan B restrictions in England at the end of January 2022 increased travel.

Automotive fuel sales volumes rose by 3.6% during the month, and were above their pre-coronavirus February 2020 levels for the first time, the ONS says.

Just in: British retail sales fell unexpectedly in February.

Online shopping dropped back towards pre-pandemic levels, winter storms kept people away from the high street, and spending at food and drink retailers dropped as customers returned to pubs and restaurants.

The Office for National Statistics reports that sales volumes were down by 0.3% month-on-month, below the 0.6% rise expected by economists.

Internet sales fell sharply — non-store retailing sales volumes were down 4.8% over the month.

Sales volumes at food stores fell by 0.2% in February 2022, with large falls in alcohol and tobacco stores. This “may be linked to higher spending in pubs and restaurants as confidence increased in going out”, the ONS says.

Non-food stores sales volumes rose by 0.6% in February, though, with growth at clothing (13.2%) and department stores (1.3%).

That may be due to “wider socialising and the return to the office following the lifting of Plan B restrictions at the end of January”

But sales volumes at household goods stores dropped 2.5%, and “other non-food stores” dropped by 7%, with “some retailers suggesting the stormy weather during the month had impacted footfall”, the ONS says.

The UK was buffetted by three storms in February – Dudley, Eunice and Franklin.

February’s fall follows a 1.9% rise in retail sales volumes in January.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

UK consumer confidence has plummeted for a fourth month in a row as the Ukraine war, the surging cost of living, and the pandemic leave people facing a ‘wall of worry’.

GfK’s consumer sentiment index dropped by five points to minus 31 in March, levels last seen in October and November 2020.

With inflation at a 30-year high, and heading to 8% next month, people are much gloomier about their personal finances, and the general economic situation as the war in Ukraine continues.

Joe Staton, client strategy director at GfK, warns there is an “unmistakable sense of crisis in our numbers”.

Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation, record-high fuel and food prices, a recent interest-rate hike and the prospect of more increases to come, and higher taxation too – all against a background of stagnant pay rises that cannot compensate for the financial duress. This is the fourth month in a row that UK consumer confidence has dropped.

“With a headline score of -31, we are at a level last seen in October and November 2020 when Covid numbers were rising. Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood. The outlook for consumer confidence is not good; it’s certain there’s more bad news to come.”

The forecast for personal finances over the next 12 months fell four points to -18 — 28 points lower than this time last year.

Expectations for the general economic situation over the next year dropped by six points to -49; 32 points lower than March 2021.

Wednesday’s spring statement brought little help for those facing the toughest squeeze, with economists at the Resolution Foundation warning 1.3 million people will fall into absolute poverty next year.

The agenda

• 7am GMT: UK retail sales for February
• 9am GMT: Ifo index of Germany’s business climate for March
• 2pm GMT: University of Michigan’s US consumer sentiment report for March

In the markets, European stock are ending the week with gains.

In London, the FTSE 100 is up 0.3% at 7491 points, around its levels before the Ukraine invasion began.

The blue-chip index is on track for its third weekly rise in a row, as it continued to recover from its plunge early in the war. But housebuilders are down around 3%, after JP Morgan lowered its price targets.

Germany’s DAX and France’s CAC are both up around 0.8%. Oil prices have dropped around 2%, after the EU didn’t agree any new sanctions on Russian oil this week.

Raffi Boyadjian, lead investment analyst at XM, explains:

With inflation rates around the world skyrocketing amid the surge in most key commodity and raw material prices, the EU’s decision not to add to its long list of sanctions against Moscow has offered some respite to the markets. There is a growing fear of recession, not just in the euro area but globally too, the longer these price spikes last and the more amplified they become.

NATO is doing everything it can to support Ukraine without getting itself entangled in a direct military confrontation with Russia. But the downside of that is a potentially long drawn-out war and subsequently, a prolonged market fallout.

Oil prices pulled back yesterday after hitting two-week highs as no new significant economic measures were announced by the US or the EU. WTI and Brent futures were extending their declines today, sliding by more than 2%.

Billionaire Sir Christopher Hohn has urged shareholders to vote against bank directors who lobby against climate action while making net-zero promises, saying this was greenwashing”

Our environment reporter Helena Horton explains:

The hedge fund manager, who once had Britain’s highest salary at £1m a day, made headlines when he donated £50,000 to climate activist group Extinction Rebellion.

Hohn, who was once Rishi Sunak’s boss at hedge fund TCI, is also one of the nation’s biggest philanthropists, and has pumped billions into his own charity, The Children’s Investment Fund Foundation.

He said: “Any bank making a net zero promise while actively lobbying against necessary climate regulation – such as mandatory disclosure of borrowers’ emissions and climate action plans – is greenwashing. Shareholders should vote against the directors of banks who are hiding their exposure to climate risk.”

Less than half of the 5p per litre cut to fuel duty announced in Wednesday’s spring statement had been passed onto motorists yesterday.

The AA reports that petrol prices at the pumps were down just 2.71p per litre on average on Thursday, with diesel only 1.59p cheaper.

On Tuesday, petrol and diesel pump prices had jumped to new records yet again, at 167.30p and 179.72p a litre respectively. Yesterday, petrol averaged 164.59p a litre and diesel 178.13p.

The fuel duty cut (which is worth 6p/litre once you include VAT) began at 6pm on Wednesday night, just a few hours after Rishi Sunak’s statement [the chancellor then visited a Sainsbury’s petrol forecourt to fuel someone else’s car]

Luke Bosdet, the AA’s fuel price spokesman, says it’s ‘very disappointing’ that prices didn’t drop faster.

“The Chancellor rode to the rescue of drivers on Wednesday and even before the 6pm start of the fuel duty cut drivers were reporting the price cut at some Asda forecourts.

“Although we have to accept that, for many forecourts, the duty cut comes through with the next delivery of fuel, the size of the fall is very disappointing. I expect the Government will be watching very closely to see if pump prices reflect more of the fuel duty cut over the weekend.”

“The truth is that, while diesel wholesale costs have been climbing, petrol’s have fallen substantially since the peaks of 7/8 March. That should have brought a further 6p-a-litre cut in pump prices, effectively doubling the saving from the fuel duty cut.

“For now, the message to drivers is clear: head to the cheaper forecourts – you can’t miss them.”

The Petrol Retailers Association warned on Wednesday that retailers’ current petrol and diesel stocks had been purchased before the duty cut came in.

Gordon Balmer, Executive Director of the PRA, explained:

Retailers are holding duty-paid stock which will be sold before the fuel duty cuts come in. To give the motorist an immediate discount at the pumps, the Chancellor would have to backdate the fuel duty cut to 1 March,”

Business confidence in Germany has tumbled this month, as the Ukraine war hammers the economic outlook for Europe’s largest economy.

The Ifo research institute reports that “sentiment in the German economy has collapsed” since the war in Ukraine began. Its Business Climate Index has fallen to 90.8 points in March, down from 98.5 points in February.

Ther was a record collapse in expectations of 13.3 points (even worse than the 11.8 drop in March 2020, when the pandemic hit), as companies face the economic implications of the conflict, such as high energy prices and supply chain problems.

Here’s the details:

In manufacturing, the index fell faster than ever before. Companies’ expectations also saw a record drop, flipping from optimism to pronounced pessimism. Moreover, companies now rated their business outlook as extremely uncertain. Assessments of the current situation were also lower.

In the service sector, too, the business climate worsened notably. This was due to a conspicuous drop in expectations. The outlook for the coming months is particularly bleak in the logistics industry. In contrast, service providers left their assessments of the current situation practically unchanged.

In trade, the Business Climate Index crashed. The expectations indicator saw a record collapse. Assessments of the current situation, however, were almost unchanged and remain positive.

In construction, the business climate deteriorated significantly. This, too, was driven by considerably more pessimistic expectations. Assessments of the current situation also worsened, but a majority of construction companies are still satisfied with their current business.

Carsten Brzeski of ING says:

The risk is high that the economic implications of the war are much more of a structural game-changer for the European and particularly the German economy than the pandemic has ever been.

With high energy and commodity prices for a protracted period, possibly even energy supply interruptions, and an acceleration of deglobalisation, possibly Cold War 2.0, an export-oriented economy highly dependent on energy imports will suffer.

The risk of another contraction in the first quarter of the year and hence a technical recession is high, Brzeski adds.

IFO, though, suggest Germany could avoid recession this quarter (the economy shrank in Q4 2021).

The United States and European Commission have agreed a new partnership to cut Europe’s reliance on Russian energy.

Under the plan, the US and partners will “strive” to deliver at least 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe this year, the White House says.

Even larger shipments would be delivered in the future, with both sides aiming to boost deliveries from the US to 50 bcm per year over time.

The pledge is part of a new Task Force agreed by President Joe Biden and European Commission president Ursula von der Leyen, to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

The White House says:

It will work to ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels.

The EC is aiming to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”, following Russia’s invasion of Ukraine.

At a joint press conference in Brussels, Von der Leyen said:

“We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through… additional gas supplies, including LNG deliveries.

“We as Europeans want to diversify away from Russia towards suppliers that we trust, that are our friends, that are reliable.

In an attempt to keep climate goals on track, the new Task Force will try to reduce the greenhouse gas intensity of all new LNG infrastructure. That will include using clean energy to power onsite operations, reducing methane leakage, and building “clean and renewable hydrogen-ready infrastructure”.

The EC will also try to ensure demand for approximately 50 bcm/year of additional U.S. LNG until 2030.

The Commission says this will happen:

…on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals, and stability of the cooperation of the demand and supply side, and that this growth be consistent with our shared net zero goals.

In particular, price formula should include consideration of Henry Hub Natural Gas Spot Price and other stabilising factors.

At the same time, the partnership will also attempt to cut demand for fossil fuels and greenhouse gas emissions.

The White House says:

Immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

The US and EC will also work to speed up planning and approval for renewable energy projects and strategic energy cooperation on technologies such as offshore wind.

The EC says the Task Force will also:

• Developing a strategy to accelerate workforce development to support the rapidly deployment of clean energy technologies, including an expansion of solar and wind.
• Collaborating to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, including by investing in technology development and supporting infrastructure.

London-listed Russian gold miner Petropavlovsk has warned that it cannot sell gold to its main lender, Gazprombank, after the bank was sanctioned in the UK on Thursday.

Petropavlovsk is also blocked from making an interest payment to Gazprombank today due to sanctions, putting the company in turmoil.

Petropavlovsk told shareholders that it has a $200m loan with Gazprombank (GPB) — under which it agrees to sells all its gold production to GPB.

Howwever, sanctions now prohibit it from selling any more gold to GPB at present.

Petropavlovsk adds that:

…restrictions on purchasing and selling gold in Russia may make it challenging to find an alternative purchaser for the Group’s gold output.

The company operates three gold mines in the far east of Russia, at Pioneer, Malomir and Albyn.

Petropavlovsk is due to make an interest payment of $560,000 today to GPB, but warns “the Company is currently prohibited from making such payment under the Regulations.”

The company is now “urgently considering” the implications for its activities and financing arrangements with its advisers.

Shares in Petropavlovsk have tumbled 21% this morning to 1.4p, and have slumped 90% since the Ukraine invasion began.

Matthew Weaver

The transport secretary, Grant Shapps, has called for the chief executive of P&O Ferries to resign over the sacking of 800 workers and pledged to force the ferry company to reverse the move and pay its crew the minimum wage.

Peter Hebblethwaite admitted to MPs on Thursday that his company broke the law by sacking the 800 workers without consultation.

Shapps said Hebblethwaite performance in front of the transport and business committee was “brazen, breathtaking, and showed incredible arrogance”.

Speaking to Sky News, Shapps said:

“I cannot believe that he can stay in that role having admitted to deliberately going out and using a loophole – well break the law – but also use a loophole.

“They flagged their ships through Cyprus avoided having to tell anybody about this, or they felt they did. And even though they know they’ve broken the law, what they’ve done is to pay people off in such a way to try and buy their silence. It’s unacceptable.”

February’s drop in retail sales is a sign of things to come for retailers, warns Martin Beck, chief economic advisor to the EY ITEM Club:

“2022 has got off to a mixed start for retailers, and things will soon get tougher. Though covid cases have been on the rise again of late, this doesn’t appear to be discouraging consumers from engaging in social consumption activities.

A normalisation of spending patterns back towards activities such as eating out and going to the cinema is likely to mean less spending in the retail sector.

“This headwind will be compounded by the intensifying cost of living squeeze. The EY ITEM Club now expects inflation to average well over 6% this year and, with this week’s Spring Statement offering limited support, there is still likely to be the biggest squeeze on household finances for more than a decade. Some households may be able to dip into savings accumulated during the pandemic, but many won’t have that luxury. So, retail demand is likely to come under increasing pressure as we move through 2022.”

“After a buoyant January, retail sales fell back a little last month,” said Heather Bovill, ONS deputy director for surveys and economic indicators.

“There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period.”

If you strip out fuel sales, retail sales volumes fell by 0.7% last month.

With petrol prices at record levels, the increased demand for petrol and diesel would have left less for other spending.

The retail sales report also shows the impact of inflation. Although retail sales volumes were down 0.3% month-on-month in February, the amount spent rose by 0.7%. Customers spent more, to get less.

Petrol sales rose in February, as the lifting of Plan B restrictions in England at the end of January 2022 increased travel.

Automotive fuel sales volumes rose by 3.6% during the month, and were above their pre-coronavirus February 2020 levels for the first time, the ONS says.

Just in: British retail sales fell unexpectedly in February.

Online shopping dropped back towards pre-pandemic levels, winter storms kept people away from the high street, and spending at food and drink retailers dropped as customers returned to pubs and restaurants.

The Office for National Statistics reports that sales volumes were down by 0.3% month-on-month, below the 0.6% rise expected by economists.

Internet sales fell sharply — non-store retailing sales volumes were down 4.8% over the month.

Sales volumes at food stores fell by 0.2% in February 2022, with large falls in alcohol and tobacco stores. This “may be linked to higher spending in pubs and restaurants as confidence increased in going out”, the ONS says.

Non-food stores sales volumes rose by 0.6% in February, though, with growth at clothing (13.2%) and department stores (1.3%).

That may be due to “wider socialising and the return to the office following the lifting of Plan B restrictions at the end of January”

But sales volumes at household goods stores dropped 2.5%, and “other non-food stores” dropped by 7%, with “some retailers suggesting the stormy weather during the month had impacted footfall”, the ONS says.

The UK was buffetted by three storms in February – Dudley, Eunice and Franklin.

February’s fall follows a 1.9% rise in retail sales volumes in January.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

UK consumer confidence has plummeted for a fourth month in a row as the Ukraine war, the surging cost of living, and the pandemic leave people facing a ‘wall of worry’.

GfK’s consumer sentiment index dropped by five points to minus 31 in March, levels last seen in October and November 2020.

With inflation at a 30-year high, and heading to 8% next month, people are much gloomier about their personal finances, and the general economic situation as the war in Ukraine continues.

Joe Staton, client strategy director at GfK, warns there is an “unmistakable sense of crisis in our numbers”.

Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation, record-high fuel and food prices, a recent interest-rate hike and the prospect of more increases to come, and higher taxation too – all against a background of stagnant pay rises that cannot compensate for the financial duress. This is the fourth month in a row that UK consumer confidence has dropped.

“With a headline score of -31, we are at a level last seen in October and November 2020 when Covid numbers were rising. Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood. The outlook for consumer confidence is not good; it’s certain there’s more bad news to come.”

The forecast for personal finances over the next 12 months fell four points to -18 — 28 points lower than this time last year.

Expectations for the general economic situation over the next year dropped by six points to -49; 32 points lower than March 2021.

Wednesday’s spring statement brought little help for those facing the toughest squeeze, with economists at the Resolution Foundation warning 1.3 million people will fall into absolute poverty next year.

The agenda

• 7am GMT: UK retail sales for February
• 9am GMT: Ifo index of Germany’s business climate for March
• 2pm GMT: University of Michigan’s US consumer sentiment report for March

In the markets, European stock are ending the week with gains.

In London, the FTSE 100 is up 0.3% at 7491 points, around its levels before the Ukraine invasion began.

The blue-chip index is on track for its third weekly rise in a row, as it continued to recover from its plunge early in the war. But housebuilders are down around 3%, after JP Morgan lowered its price targets.

Germany’s DAX and France’s CAC are both up around 0.8%. Oil prices have dropped around 2%, after the EU didn’t agree any new sanctions on Russian oil this week.

Raffi Boyadjian, lead investment analyst at XM, explains:

With inflation rates around the world skyrocketing amid the surge in most key commodity and raw material prices, the EU’s decision not to add to its long list of sanctions against Moscow has offered some respite to the markets. There is a growing fear of recession, not just in the euro area but globally too, the longer these price spikes last and the more amplified they become.

NATO is doing everything it can to support Ukraine without getting itself entangled in a direct military confrontation with Russia. But the downside of that is a potentially long drawn-out war and subsequently, a prolonged market fallout.

Oil prices pulled back yesterday after hitting two-week highs as no new significant economic measures were announced by the US or the EU. WTI and Brent futures were extending their declines today, sliding by more than 2%.

Billionaire Sir Christopher Hohn has urged shareholders to vote against bank directors who lobby against climate action while making net-zero promises, saying this was greenwashing”

Our environment reporter Helena Horton explains:

The hedge fund manager, who once had Britain’s highest salary at £1m a day, made headlines when he donated £50,000 to climate activist group Extinction Rebellion.

Hohn, who was once Rishi Sunak’s boss at hedge fund TCI, is also one of the nation’s biggest philanthropists, and has pumped billions into his own charity, The Children’s Investment Fund Foundation.

He said: “Any bank making a net zero promise while actively lobbying against necessary climate regulation – such as mandatory disclosure of borrowers’ emissions and climate action plans – is greenwashing. Shareholders should vote against the directors of banks who are hiding their exposure to climate risk.”

Less than half of the 5p per litre cut to fuel duty announced in Wednesday’s spring statement had been passed onto motorists yesterday.

The AA reports that petrol prices at the pumps were down just 2.71p per litre on average on Thursday, with diesel only 1.59p cheaper.

On Tuesday, petrol and diesel pump prices had jumped to new records yet again, at 167.30p and 179.72p a litre respectively. Yesterday, petrol averaged 164.59p a litre and diesel 178.13p.

The fuel duty cut (which is worth 6p/litre once you include VAT) began at 6pm on Wednesday night, just a few hours after Rishi Sunak’s statement [the chancellor then visited a Sainsbury’s petrol forecourt to fuel someone else’s car]

Luke Bosdet, the AA’s fuel price spokesman, says it’s ‘very disappointing’ that prices didn’t drop faster.

“The Chancellor rode to the rescue of drivers on Wednesday and even before the 6pm start of the fuel duty cut drivers were reporting the price cut at some Asda forecourts.

“Although we have to accept that, for many forecourts, the duty cut comes through with the next delivery of fuel, the size of the fall is very disappointing. I expect the Government will be watching very closely to see if pump prices reflect more of the fuel duty cut over the weekend.”

“The truth is that, while diesel wholesale costs have been climbing, petrol’s have fallen substantially since the peaks of 7/8 March. That should have brought a further 6p-a-litre cut in pump prices, effectively doubling the saving from the fuel duty cut.

“For now, the message to drivers is clear: head to the cheaper forecourts – you can’t miss them.”

The Petrol Retailers Association warned on Wednesday that retailers’ current petrol and diesel stocks had been purchased before the duty cut came in.

Gordon Balmer, Executive Director of the PRA, explained:

Retailers are holding duty-paid stock which will be sold before the fuel duty cuts come in. To give the motorist an immediate discount at the pumps, the Chancellor would have to backdate the fuel duty cut to 1 March,”

Business confidence in Germany has tumbled this month, as the Ukraine war hammers the economic outlook for Europe’s largest economy.

The Ifo research institute reports that “sentiment in the German economy has collapsed” since the war in Ukraine began. Its Business Climate Index has fallen to 90.8 points in March, down from 98.5 points in February.

Ther was a record collapse in expectations of 13.3 points (even worse than the 11.8 drop in March 2020, when the pandemic hit), as companies face the economic implications of the conflict, such as high energy prices and supply chain problems.

Here’s the details:

In manufacturing, the index fell faster than ever before. Companies’ expectations also saw a record drop, flipping from optimism to pronounced pessimism. Moreover, companies now rated their business outlook as extremely uncertain. Assessments of the current situation were also lower.

In the service sector, too, the business climate worsened notably. This was due to a conspicuous drop in expectations. The outlook for the coming months is particularly bleak in the logistics industry. In contrast, service providers left their assessments of the current situation practically unchanged.

In trade, the Business Climate Index crashed. The expectations indicator saw a record collapse. Assessments of the current situation, however, were almost unchanged and remain positive.

In construction, the business climate deteriorated significantly. This, too, was driven by considerably more pessimistic expectations. Assessments of the current situation also worsened, but a majority of construction companies are still satisfied with their current business.

Carsten Brzeski of ING says:

The risk is high that the economic implications of the war are much more of a structural game-changer for the European and particularly the German economy than the pandemic has ever been.

With high energy and commodity prices for a protracted period, possibly even energy supply interruptions, and an acceleration of deglobalisation, possibly Cold War 2.0, an export-oriented economy highly dependent on energy imports will suffer.

The risk of another contraction in the first quarter of the year and hence a technical recession is high, Brzeski adds.

IFO, though, suggest Germany could avoid recession this quarter (the economy shrank in Q4 2021).

The United States and European Commission have agreed a new partnership to cut Europe’s reliance on Russian energy.

Under the plan, the US and partners will “strive” to deliver at least 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe this year, the White House says.

Even larger shipments would be delivered in the future, with both sides aiming to boost deliveries from the US to 50 bcm per year over time.

The pledge is part of a new Task Force agreed by President Joe Biden and European Commission president Ursula von der Leyen, to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

The White House says:

It will work to ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels.

The EC is aiming to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”, following Russia’s invasion of Ukraine.

At a joint press conference in Brussels, Von der Leyen said:

“We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through… additional gas supplies, including LNG deliveries.

“We as Europeans want to diversify away from Russia towards suppliers that we trust, that are our friends, that are reliable.

In an attempt to keep climate goals on track, the new Task Force will try to reduce the greenhouse gas intensity of all new LNG infrastructure. That will include using clean energy to power onsite operations, reducing methane leakage, and building “clean and renewable hydrogen-ready infrastructure”.

The EC will also try to ensure demand for approximately 50 bcm/year of additional U.S. LNG until 2030.

The Commission says this will happen:

…on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals, and stability of the cooperation of the demand and supply side, and that this growth be consistent with our shared net zero goals.

In particular, price formula should include consideration of Henry Hub Natural Gas Spot Price and other stabilising factors.

At the same time, the partnership will also attempt to cut demand for fossil fuels and greenhouse gas emissions.

The White House says:

Immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

The US and EC will also work to speed up planning and approval for renewable energy projects and strategic energy cooperation on technologies such as offshore wind.

The EC says the Task Force will also:

• Developing a strategy to accelerate workforce development to support the rapidly deployment of clean energy technologies, including an expansion of solar and wind.
• Collaborating to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, including by investing in technology development and supporting infrastructure.

London-listed Russian gold miner Petropavlovsk has warned that it cannot sell gold to its main lender, Gazprombank, after the bank was sanctioned in the UK on Thursday.

Petropavlovsk is also blocked from making an interest payment to Gazprombank today due to sanctions, putting the company in turmoil.

Petropavlovsk told shareholders that it has a $200m loan with Gazprombank (GPB) — under which it agrees to sells all its gold production to GPB.

Howwever, sanctions now prohibit it from selling any more gold to GPB at present.

Petropavlovsk adds that:

…restrictions on purchasing and selling gold in Russia may make it challenging to find an alternative purchaser for the Group’s gold output.

The company operates three gold mines in the far east of Russia, at Pioneer, Malomir and Albyn.

Petropavlovsk is due to make an interest payment of $560,000 today to GPB, but warns “the Company is currently prohibited from making such payment under the Regulations.”

The company is now “urgently considering” the implications for its activities and financing arrangements with its advisers.

Shares in Petropavlovsk have tumbled 21% this morning to 1.4p, and have slumped 90% since the Ukraine invasion began.

Matthew Weaver

The transport secretary, Grant Shapps, has called for the chief executive of P&O Ferries to resign over the sacking of 800 workers and pledged to force the ferry company to reverse the move and pay its crew the minimum wage.

Peter Hebblethwaite admitted to MPs on Thursday that his company broke the law by sacking the 800 workers without consultation.

Shapps said Hebblethwaite performance in front of the transport and business committee was “brazen, breathtaking, and showed incredible arrogance”.

Speaking to Sky News, Shapps said:

“I cannot believe that he can stay in that role having admitted to deliberately going out and using a loophole – well break the law – but also use a loophole.

“They flagged their ships through Cyprus avoided having to tell anybody about this, or they felt they did. And even though they know they’ve broken the law, what they’ve done is to pay people off in such a way to try and buy their silence. It’s unacceptable.”

February’s drop in retail sales is a sign of things to come for retailers, warns Martin Beck, chief economic advisor to the EY ITEM Club:

“2022 has got off to a mixed start for retailers, and things will soon get tougher. Though covid cases have been on the rise again of late, this doesn’t appear to be discouraging consumers from engaging in social consumption activities.

A normalisation of spending patterns back towards activities such as eating out and going to the cinema is likely to mean less spending in the retail sector.

“This headwind will be compounded by the intensifying cost of living squeeze. The EY ITEM Club now expects inflation to average well over 6% this year and, with this week’s Spring Statement offering limited support, there is still likely to be the biggest squeeze on household finances for more than a decade. Some households may be able to dip into savings accumulated during the pandemic, but many won’t have that luxury. So, retail demand is likely to come under increasing pressure as we move through 2022.”

“After a buoyant January, retail sales fell back a little last month,” said Heather Bovill, ONS deputy director for surveys and economic indicators.

“There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period.”

If you strip out fuel sales, retail sales volumes fell by 0.7% last month.

With petrol prices at record levels, the increased demand for petrol and diesel would have left less for other spending.

The retail sales report also shows the impact of inflation. Although retail sales volumes were down 0.3% month-on-month in February, the amount spent rose by 0.7%. Customers spent more, to get less.

Petrol sales rose in February, as the lifting of Plan B restrictions in England at the end of January 2022 increased travel.

Automotive fuel sales volumes rose by 3.6% during the month, and were above their pre-coronavirus February 2020 levels for the first time, the ONS says.

Just in: British retail sales fell unexpectedly in February.

Online shopping dropped back towards pre-pandemic levels, winter storms kept people away from the high street, and spending at food and drink retailers dropped as customers returned to pubs and restaurants.

The Office for National Statistics reports that sales volumes were down by 0.3% month-on-month, below the 0.6% rise expected by economists.

Internet sales fell sharply — non-store retailing sales volumes were down 4.8% over the month.

Sales volumes at food stores fell by 0.2% in February 2022, with large falls in alcohol and tobacco stores. This “may be linked to higher spending in pubs and restaurants as confidence increased in going out”, the ONS says.

Non-food stores sales volumes rose by 0.6% in February, though, with growth at clothing (13.2%) and department stores (1.3%).

That may be due to “wider socialising and the return to the office following the lifting of Plan B restrictions at the end of January”

But sales volumes at household goods stores dropped 2.5%, and “other non-food stores” dropped by 7%, with “some retailers suggesting the stormy weather during the month had impacted footfall”, the ONS says.

The UK was buffetted by three storms in February – Dudley, Eunice and Franklin.

February’s fall follows a 1.9% rise in retail sales volumes in January.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

UK consumer confidence has plummeted for a fourth month in a row as the Ukraine war, the surging cost of living, and the pandemic leave people facing a ‘wall of worry’.

GfK’s consumer sentiment index dropped by five points to minus 31 in March, levels last seen in October and November 2020.

With inflation at a 30-year high, and heading to 8% next month, people are much gloomier about their personal finances, and the general economic situation as the war in Ukraine continues.

Joe Staton, client strategy director at GfK, warns there is an “unmistakable sense of crisis in our numbers”.

Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation, record-high fuel and food prices, a recent interest-rate hike and the prospect of more increases to come, and higher taxation too – all against a background of stagnant pay rises that cannot compensate for the financial duress. This is the fourth month in a row that UK consumer confidence has dropped.

“With a headline score of -31, we are at a level last seen in October and November 2020 when Covid numbers were rising. Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood. The outlook for consumer confidence is not good; it’s certain there’s more bad news to come.”

The forecast for personal finances over the next 12 months fell four points to -18 — 28 points lower than this time last year.

Expectations for the general economic situation over the next year dropped by six points to -49; 32 points lower than March 2021.

Wednesday’s spring statement brought little help for those facing the toughest squeeze, with economists at the Resolution Foundation warning 1.3 million people will fall into absolute poverty next year.

The agenda

• 7am GMT: UK retail sales for February
• 9am GMT: Ifo index of Germany’s business climate for March
• 2pm GMT: University of Michigan’s US consumer sentiment report for March

In the markets, European stock are ending the week with gains.

In London, the FTSE 100 is up 0.3% at 7491 points, around its levels before the Ukraine invasion began.

The blue-chip index is on track for its third weekly rise in a row, as it continued to recover from its plunge early in the war. But housebuilders are down around 3%, after JP Morgan lowered its price targets.

Germany’s DAX and France’s CAC are both up around 0.8%. Oil prices have dropped around 2%, after the EU didn’t agree any new sanctions on Russian oil this week.

Raffi Boyadjian, lead investment analyst at XM, explains:

With inflation rates around the world skyrocketing amid the surge in most key commodity and raw material prices, the EU’s decision not to add to its long list of sanctions against Moscow has offered some respite to the markets. There is a growing fear of recession, not just in the euro area but globally too, the longer these price spikes last and the more amplified they become.

NATO is doing everything it can to support Ukraine without getting itself entangled in a direct military confrontation with Russia. But the downside of that is a potentially long drawn-out war and subsequently, a prolonged market fallout.

Oil prices pulled back yesterday after hitting two-week highs as no new significant economic measures were announced by the US or the EU. WTI and Brent futures were extending their declines today, sliding by more than 2%.

Billionaire Sir Christopher Hohn has urged shareholders to vote against bank directors who lobby against climate action while making net-zero promises, saying this was greenwashing”

Our environment reporter Helena Horton explains:

The hedge fund manager, who once had Britain’s highest salary at £1m a day, made headlines when he donated £50,000 to climate activist group Extinction Rebellion.

Hohn, who was once Rishi Sunak’s boss at hedge fund TCI, is also one of the nation’s biggest philanthropists, and has pumped billions into his own charity, The Children’s Investment Fund Foundation.

He said: “Any bank making a net zero promise while actively lobbying against necessary climate regulation – such as mandatory disclosure of borrowers’ emissions and climate action plans – is greenwashing. Shareholders should vote against the directors of banks who are hiding their exposure to climate risk.”

Less than half of the 5p per litre cut to fuel duty announced in Wednesday’s spring statement had been passed onto motorists yesterday.

The AA reports that petrol prices at the pumps were down just 2.71p per litre on average on Thursday, with diesel only 1.59p cheaper.

On Tuesday, petrol and diesel pump prices had jumped to new records yet again, at 167.30p and 179.72p a litre respectively. Yesterday, petrol averaged 164.59p a litre and diesel 178.13p.

The fuel duty cut (which is worth 6p/litre once you include VAT) began at 6pm on Wednesday night, just a few hours after Rishi Sunak’s statement [the chancellor then visited a Sainsbury’s petrol forecourt to fuel someone else’s car]

Luke Bosdet, the AA’s fuel price spokesman, says it’s ‘very disappointing’ that prices didn’t drop faster.

“The Chancellor rode to the rescue of drivers on Wednesday and even before the 6pm start of the fuel duty cut drivers were reporting the price cut at some Asda forecourts.

“Although we have to accept that, for many forecourts, the duty cut comes through with the next delivery of fuel, the size of the fall is very disappointing. I expect the Government will be watching very closely to see if pump prices reflect more of the fuel duty cut over the weekend.”

“The truth is that, while diesel wholesale costs have been climbing, petrol’s have fallen substantially since the peaks of 7/8 March. That should have brought a further 6p-a-litre cut in pump prices, effectively doubling the saving from the fuel duty cut.

“For now, the message to drivers is clear: head to the cheaper forecourts – you can’t miss them.”

The Petrol Retailers Association warned on Wednesday that retailers’ current petrol and diesel stocks had been purchased before the duty cut came in.

Gordon Balmer, Executive Director of the PRA, explained:

Retailers are holding duty-paid stock which will be sold before the fuel duty cuts come in. To give the motorist an immediate discount at the pumps, the Chancellor would have to backdate the fuel duty cut to 1 March,”

Business confidence in Germany has tumbled this month, as the Ukraine war hammers the economic outlook for Europe’s largest economy.

The Ifo research institute reports that “sentiment in the German economy has collapsed” since the war in Ukraine began. Its Business Climate Index has fallen to 90.8 points in March, down from 98.5 points in February.

Ther was a record collapse in expectations of 13.3 points (even worse than the 11.8 drop in March 2020, when the pandemic hit), as companies face the economic implications of the conflict, such as high energy prices and supply chain problems.

Here’s the details:

In manufacturing, the index fell faster than ever before. Companies’ expectations also saw a record drop, flipping from optimism to pronounced pessimism. Moreover, companies now rated their business outlook as extremely uncertain. Assessments of the current situation were also lower.

In the service sector, too, the business climate worsened notably. This was due to a conspicuous drop in expectations. The outlook for the coming months is particularly bleak in the logistics industry. In contrast, service providers left their assessments of the current situation practically unchanged.

In trade, the Business Climate Index crashed. The expectations indicator saw a record collapse. Assessments of the current situation, however, were almost unchanged and remain positive.

In construction, the business climate deteriorated significantly. This, too, was driven by considerably more pessimistic expectations. Assessments of the current situation also worsened, but a majority of construction companies are still satisfied with their current business.

Carsten Brzeski of ING says:

The risk is high that the economic implications of the war are much more of a structural game-changer for the European and particularly the German economy than the pandemic has ever been.

With high energy and commodity prices for a protracted period, possibly even energy supply interruptions, and an acceleration of deglobalisation, possibly Cold War 2.0, an export-oriented economy highly dependent on energy imports will suffer.

The risk of another contraction in the first quarter of the year and hence a technical recession is high, Brzeski adds.

IFO, though, suggest Germany could avoid recession this quarter (the economy shrank in Q4 2021).

The United States and European Commission have agreed a new partnership to cut Europe’s reliance on Russian energy.

Under the plan, the US and partners will “strive” to deliver at least 15 billion cubic metres (bcm) of liquefied natural gas (LNG) to Europe this year, the White House says.

Even larger shipments would be delivered in the future, with both sides aiming to boost deliveries from the US to 50 bcm per year over time.

The pledge is part of a new Task Force agreed by President Joe Biden and European Commission president Ursula von der Leyen, to reduce Europe’s dependence on Russian fossil fuels and strengthen European energy security.

The White House says:

It will work to ensure energy security for Ukraine and the EU in preparation for next winter and the following one while supporting the EU’s goal to end its dependence on Russian fossil fuels.

The EC is aiming to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel “well before 2030”, following Russia’s invasion of Ukraine.

At a joint press conference in Brussels, Von der Leyen said:

“We aim to reduce this dependency on Russian fossil fuels and get rid of it. This can only be achieved through… additional gas supplies, including LNG deliveries.

“We as Europeans want to diversify away from Russia towards suppliers that we trust, that are our friends, that are reliable.

In an attempt to keep climate goals on track, the new Task Force will try to reduce the greenhouse gas intensity of all new LNG infrastructure. That will include using clean energy to power onsite operations, reducing methane leakage, and building “clean and renewable hydrogen-ready infrastructure”.

The EC will also try to ensure demand for approximately 50 bcm/year of additional U.S. LNG until 2030.

The Commission says this will happen:

…on the understanding that the price formula of LNG supplies to the EU should reflect long-term market fundamentals, and stability of the cooperation of the demand and supply side, and that this growth be consistent with our shared net zero goals.

In particular, price formula should include consideration of Henry Hub Natural Gas Spot Price and other stabilising factors.

At the same time, the partnership will also attempt to cut demand for fossil fuels and greenhouse gas emissions.

The White House says:

Immediate reductions in gas demand can be achieved through energy efficiency solutions such as ramping up demand response devices, including smart thermostats, and deployment of heat pumps.

The US and EC will also work to speed up planning and approval for renewable energy projects and strategic energy cooperation on technologies such as offshore wind.

The EC says the Task Force will also:

• Developing a strategy to accelerate workforce development to support the rapidly deployment of clean energy technologies, including an expansion of solar and wind.
• Collaborating to advance the production and use of clean and renewable hydrogen to displace unabated fossil fuels and cut greenhouse gas emissions, including by investing in technology development and supporting infrastructure.

London-listed Russian gold miner Petropavlovsk has warned that it cannot sell gold to its main lender, Gazprombank, after the bank was sanctioned in the UK on Thursday.

Petropavlovsk is also blocked from making an interest payment to Gazprombank today due to sanctions, putting the company in turmoil.

Petropavlovsk told shareholders that it has a $200m loan with Gazprombank (GPB) — under which it agrees to sells all its gold production to GPB.

Howwever, sanctions now prohibit it from selling any more gold to GPB at present.

Petropavlovsk adds that:

…restrictions on purchasing and selling gold in Russia may make it challenging to find an alternative purchaser for the Group’s gold output.

The company operates three gold mines in the far east of Russia, at Pioneer, Malomir and Albyn.

Petropavlovsk is due to make an interest payment of $560,000 today to GPB, but warns “the Company is currently prohibited from making such payment under the Regulations.”

The company is now “urgently considering” the implications for its activities and financing arrangements with its advisers.

Shares in Petropavlovsk have tumbled 21% this morning to 1.4p, and have slumped 90% since the Ukraine invasion began.

Matthew Weaver

The transport secretary, Grant Shapps, has called for the chief executive of P&O Ferries to resign over the sacking of 800 workers and pledged to force the ferry company to reverse the move and pay its crew the minimum wage.

Peter Hebblethwaite admitted to MPs on Thursday that his company broke the law by sacking the 800 workers without consultation.

Shapps said Hebblethwaite performance in front of the transport and business committee was “brazen, breathtaking, and showed incredible arrogance”.

Speaking to Sky News, Shapps said:

“I cannot believe that he can stay in that role having admitted to deliberately going out and using a loophole – well break the law – but also use a loophole.

“They flagged their ships through Cyprus avoided having to tell anybody about this, or they felt they did. And even though they know they’ve broken the law, what they’ve done is to pay people off in such a way to try and buy their silence. It’s unacceptable.”

February’s drop in retail sales is a sign of things to come for retailers, warns Martin Beck, chief economic advisor to the EY ITEM Club:

“2022 has got off to a mixed start for retailers, and things will soon get tougher. Though covid cases have been on the rise again of late, this doesn’t appear to be discouraging consumers from engaging in social consumption activities.

A normalisation of spending patterns back towards activities such as eating out and going to the cinema is likely to mean less spending in the retail sector.

“This headwind will be compounded by the intensifying cost of living squeeze. The EY ITEM Club now expects inflation to average well over 6% this year and, with this week’s Spring Statement offering limited support, there is still likely to be the biggest squeeze on household finances for more than a decade. Some households may be able to dip into savings accumulated during the pandemic, but many won’t have that luxury. So, retail demand is likely to come under increasing pressure as we move through 2022.”

“After a buoyant January, retail sales fell back a little last month,” said Heather Bovill, ONS deputy director for surveys and economic indicators.

“There was a notable decline for companies that predominantly trade online, following a strong performance over the festive and new year period.”

If you strip out fuel sales, retail sales volumes fell by 0.7% last month.

With petrol prices at record levels, the increased demand for petrol and diesel would have left less for other spending.

The retail sales report also shows the impact of inflation. Although retail sales volumes were down 0.3% month-on-month in February, the amount spent rose by 0.7%. Customers spent more, to get less.

Petrol sales rose in February, as the lifting of Plan B restrictions in England at the end of January 2022 increased travel.

Automotive fuel sales volumes rose by 3.6% during the month, and were above their pre-coronavirus February 2020 levels for the first time, the ONS says.

Just in: British retail sales fell unexpectedly in February.

Online shopping dropped back towards pre-pandemic levels, winter storms kept people away from the high street, and spending at food and drink retailers dropped as customers returned to pubs and restaurants.

The Office for National Statistics reports that sales volumes were down by 0.3% month-on-month, below the 0.6% rise expected by economists.

Internet sales fell sharply — non-store retailing sales volumes were down 4.8% over the month.

Sales volumes at food stores fell by 0.2% in February 2022, with large falls in alcohol and tobacco stores. This “may be linked to higher spending in pubs and restaurants as confidence increased in going out”, the ONS says.

Non-food stores sales volumes rose by 0.6% in February, though, with growth at clothing (13.2%) and department stores (1.3%).

That may be due to “wider socialising and the return to the office following the lifting of Plan B restrictions at the end of January”

But sales volumes at household goods stores dropped 2.5%, and “other non-food stores” dropped by 7%, with “some retailers suggesting the stormy weather during the month had impacted footfall”, the ONS says.

The UK was buffetted by three storms in February – Dudley, Eunice and Franklin.

February’s fall follows a 1.9% rise in retail sales volumes in January.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

UK consumer confidence has plummeted for a fourth month in a row as the Ukraine war, the surging cost of living, and the pandemic leave people facing a ‘wall of worry’.

GfK’s consumer sentiment index dropped by five points to minus 31 in March, levels last seen in October and November 2020.

With inflation at a 30-year high, and heading to 8% next month, people are much gloomier about their personal finances, and the general economic situation as the war in Ukraine continues.

Joe Staton, client strategy director at GfK, warns there is an “unmistakable sense of crisis in our numbers”.

Consumers across the UK are experiencing the impact of soaring living costs with 30-year-high levels of inflation, record-high fuel and food prices, a recent interest-rate hike and the prospect of more increases to come, and higher taxation too – all against a background of stagnant pay rises that cannot compensate for the financial duress. This is the fourth month in a row that UK consumer confidence has dropped.

“With a headline score of -31, we are at a level last seen in October and November 2020 when Covid numbers were rising. Confidence in our personal financial situation and in the wider economy are severely depressed while the daily news of unimaginable suffering from a horrifying war in Europe and rising COVID numbers at home is adding to the bleak mood. The outlook for consumer confidence is not good; it’s certain there’s more bad news to come.”

The forecast for personal finances over the next 12 months fell four points to -18 — 28 points lower than this time last year.

Expectations for the general economic situation over the next year dropped by six points to -49; 32 points lower than March 2021.

Wednesday’s spring statement brought little help for those facing the toughest squeeze, with economists at the Resolution Foundation warning 1.3 million people will fall into absolute poverty next year.

The agenda

• 7am GMT: UK retail sales for February
• 9am GMT: Ifo index of Germany’s business climate for March
• 2pm GMT: University of Michigan’s US consumer sentiment report for March