France’s electricity network operator requested emergency help from Britain as the cold snap caused demand to surge across Europe.
RTE asked the National Grid if it could halve its scheduled exports through one of its interconnectors to the UK between 8am and 9am this morning as it wrestled with a spike in demand.
A combination of the cold weather, strikes among its nuclear power workers and delayed maintenance on its fleet of reactors prompted the request.
Phil Hewitt, a director at EnAppSys, said: “The French market was particularly under stress today.
“It was always going to be in trouble because of the reduced nuclear reactor fleet, the temperature is low and there has been a big demand spike combined with low wind.”
It comes as the National Grid Electricity System Operator stood down two Drax coal-fired power stations in North Yorkshire, which had been instructed to warm up in case of a surge in demand for energy as a cold snap hits Britain.
Meanwhile, European Commission President Ursula von der Leyen has warned that the European Union could face a gas shortage next year if Russia further cuts supplies.
China sues US at World Trade Organisation over chip ban
China is suing the US through the World Trade Organization over restrictions placed on microchip exports by Joe Biden’s administration.
The action has been revealed by the state-owned Global Times newspaper, seen as a mouthpiece for the communist regime in Beijing.
In a tweet, the outlet claimed the move is necessary to defend China’s “legitimate interests”.
In October, the US placed fresh restrictions on China’s semiconductor sector designed to block its access to advanced graphics and memory processors, amid fears “dual use” western technologies are being exploited by the Chinese military.
Matthew Field, our senior technology correspondent, wrote about that decision at the time.
Chinese property tycoon fights US extradition in London court
The billionaire co-founder of a Chinese property developer is facing extradition from the UK to the US over claims he paid kickbacks to secure lucrative building contracts in California.
Zhang Li, a former government official behind Guangzhou R&F Properties Co, was arrested on November 30 by police in London and is facing extradition proceedings in Westminster Magistrates’ Court. He is fighting the transfer request.
According to Bloomberg, judge John Zani granted bail of £15 million on Monday – the joint highest sum ever recorded for the UK courts.
Under his bail conditions, Zhang will be confined for 24 hours a day in an apartment on the 43rd floor of a London tower, monitored by security and CCTV.
The 69-year old is alleged to have “provided kickbacks and funds to co-conspirators in order to obtain the appropriate permits for a construction project,” according to a court listing.
Thousands of RMT members rebel against Mick Lynch over 9pc pay offer
Another interesting line is emerging after Network Rail members were asked to vote on a pay deal: the number who rebelled against union leaders.
Some 36.4pc of Rail, Maritime and Transport workers union (RMT) members voted to accept a 9pc pay rise – as opposed to backing further strikes – in a show of defiance against leader Mick Lynch.
The RMT has roughly 20,000 members at Network Rail. Turnout in the ballot was 80pc, the union said. It means that around 5,800 RMT members voted in favour of the pay deal and against union leaders.
My colleague Oliver Gill, our chief business correspondent, has the story.
RMT’s Mick Lynch: Network Rail workers prepared to keep on striking
After RMT’s Network Rail members rejected the latest offer of pay, union leader Mick Lynch says the result “shows our members are determined to take further strike action”. He adds:
The government is refusing to lift a finger to prevent these strikes and it is clear they want to make effective strike action illegal in Britain.
We will resist that and our members, along with the entire trade union movement will continue their campaign for a square deal for workers, decent pay increases and good working conditions.
It’s undoubtedly a blow to Network Rail and, behind the scenes, ministers, who will be hoping to prevent rail chaos at the busiest periods this Christmas.
Train strikes to go ahead as RMT rejects latest pay offer
Hello, hello, welcome to the rest of your live blog. I’m afraid I begin with some gloomy news.
Members of the RMT on Network Rail have rejected the latest pay offer put to them in a ballot.
It means that all strike action this week, from 6pm Christmas Eve until 6am on December 27 and into the new year, remains on for both Network Rail and the 14 train operating companies under the DfT mandate.
See our full list of train strikes here.
In an announcement, the RMT said 63.6pc of Network Rail staff rejected the latest pay offer made to them, with turnout at 83pc.
That’s all from me today. Matt Oliver will guide you through the evening.
Oil regains some ground
Oil prices are up following a multi-week decline, as a weakening global economy offset from tighter supplies.
The closure of a key pipeline supplying the United States and Russian threats of a production cut have pulled the market have boosted prices.
Brent crude, the international benchmark, is up 3pc to $78.42, while US-produced West Texas Intermediate (WTI) is worth $73.83 a barrel, a rise of 4pc.
Unite rail workers accept pay deal
Members of Unite at Network Rail have accepted a pay offer and have called off planned industrial action.
They were set to join members of the Rail, Maritime and Transport union in taking action this week and again in January.
Members of the RMT were urged to reject the offer in a ballot which ended today. The result is expected soon.
Unite national officer Harish Patel said:
Unite’s members have voted in favour of accepting an improved offer put forward by Network Rail.
Industrial action by our members scheduled to take place over December and January will now not take place.
Unite represents electrical control room operators.
US markets on the rise
Wall Street stocks opened the week on a positive note, rising ahead of key inflation data and after biopharmaceutical firm Amgen announced the biggest health sector takeover of the year.
The Dow Jones Industrial Average was up 0.6pc at 33,667.79.
The broad-based S&P 500 gained 0.3pc to 3,944.20, while the tech-rich Nasdaq Composite also advanced 0.1pc to 11,005.86.
Among individual companies, Horizon Therapeutics jumped 14.6pc as it agreed to be acquired by Amgen for $27.8bn (£22.6bn).
Amgen said the deal would strengthen its offerings for patients suffering from rare diseases. Amgen shares fell 1.4pc.
Power generators cash-in on UK market
National Grid is paying sky high prices to power stations as it tries to fine tune supply and demand for electricity.
Swiss-based power generator Vitol is being paid £4,000 a megawatt-hour to generate in the UK’s balancing market.
Its Rye House gas-fired power plant near Hoddesdon in Hertfordshire turned down its availability in the wholesale market, prompting the grid operator to accept a sky-high price from its traders to keep it running.
Supplies are so tight that prices reached a record for 5pm to 6pm in an auction yesterday.
Heathrow doing ‘everything we can’ ahead of strikes
Heathrow has announced it is doing “everything we can” to ensure no flights are cancelled due to Border Force strikes.
It is one of six UK airports where Border Force workers will walk out from December 23.
There are fears that delays in checking the passports of arriving passengers could lead to long queues and even people being held on planes, disrupting subsequent departures.
Heathrow insisted “the vast majority of travellers will be unaffected”. It said in a statement:
We are doing everything we can to protect a full flight schedule on strike days, so departing passengers should expect to travel as normal.
Arriving passengers with UK, EU, US, Canadian and some other passports will be able to use e-gates as usual and their journeys should be largely unaffected on strike days.
Border Force has contingency measures to ensure other arriving passengers are cleared safely and as quickly as possible.
If passengers who cannot use e-gates are concerned about travelling during the strikes, their airline may be able to offer them alternative travel dates.
US markets enjoy strong start
Wall Street opened higher as investors awaited inflation data and the Federal Reserve’s interest rate policy decision later this week to gauge the US economic outlook.
The Dow Jones Industrial Average rose 0.4pc to 33,597.48, while the broad-based S&P 500 lifted 0.2pc to 3,942.76.
The tech-focused Nasdaq Composite gained 0.1pc to 11,019.30.
House prices forecast to fall 10pc as mortgage debt rises
House prices will fall by at least 10pc next year as rising interest rates and a year-long recession trigger a slump that will force families to cut spending, economists have warned.
Economic editor Szu Ping Chan has the details:
Credit Suisse said the rising cost of mortgages will squeeze households next year, as the burden of payments jumps to the highest since 2009.
Peter Foley, an economist at Credit Suisse, said: “We expect house prices to fall at least 10pc next year in the US and UK.”
He added that a “global housing slump will weigh on growth in developed economies in 2023”.
Credit Suisse expects borrowers in the UK to be hit harder by rising interest rates than the US because the “overwhelming majority of US mortgages” are fixed for 30 years. Most UK borrowers fix their interest rates for between two and five years.
GSK to move global headquarters in London
GSK has announced that its new global headquarters will be in central London and will be home to about 3,000 staff.
The company will move to the new headquarters in 2024 from its current location in Brentford, west London.
The site on the corner of New Oxford Street and Earnshaw Street, currently known as the Earnshaw, is under construction and scheduled for completion next year.
It is close to London’s fast-growing global life sciences hub, London’s Knowledge Quarter, and GSK collaborators like the Francis Crick Institute and King’s College London.
Europe warned to prepare for even tougher winter next year
Europe must prepare for an even tougher winter next year as Russian gas supplies dwindle, the International Energy Agency (IEA) has warned.
My colleague James Warrington has the latest:
Fatih Birol, executive director of the IEA, said the EU was “off the hook” for this winter, but added: “The crisis is not over. Next year may be much more difficult than this year.”
He said the bloc could face a gas shortfall of 30bn cubic metres (bcm) in 2023 if Russia turned off the taps completely and countries struggled to refill storage sites.
It came as Mr Birol and Ursula von der Leyen, European Commission President, outlined new figures highlighting the impact of the Kremlin’s pipeline cuts.
Coal ‘a transition fuel’ towards net zero, says No 10
The commitment to end the use of coal for power generation by October 2024 remains in place, Downing Street said.
National Grid had earlier asked two coal-fired power stations to start warming up as freezing weather conditions heap pressure on Britain’s power network. They were stood down this afternoon.
The Prime Minister’s official spokesman said: “Coal is a transition fuel towards net zero.”
The spokesman said the Government was “confident in the diversity of our energy supply and we have a clear path to net zero”.
National Grid cancels standby notices
National Grid cancelled standby notices for two Drax coal power stations, a few hours after issuing the requests.
The network operator had said in its earlier notice that “the public should continue to use energy as normal” but said shortly after midday that the units have been stood down.
National Grid signed contracts in August with Drax Group and EDF to extend the life of four coal-fired power units, saying the contracts are intended to be used when all commercial options have been exhausted within the balancing mechanism.
Meanwhile, the UK’s nuclear fleet was running at its full available capacity for the first time this winter as the Hartlepool 1 reactor returned after a planned outage at the weekend, EDF Energy said
French request for emergency assistance ‘quite rare’
France has been battling to get its fleet of nuclear power plants back to full strength since discovering an issue with corrosion at one of its reactors this winter.
The plants were built in the 1970s and 1980s, so maintenance issues are to be expected, but the return to service has taken longer than expected.
Phil Hewitt, a director at EnAppSys, said: “With maintenance of nuclear power plants, you cannot get it wrong.”
He added that France’s request for emergency assistance today, where the country’s network asked to halve its scheduled exports through one of its interconnectors to the UK, is “quite rare”.
Government to hold emergency meeting on strikes
The Government will hold an emergency response meeting today to discuss contingency planning, including the use of the military and civil servants to cover for striking workers, Downing Street has said.
Britain is set to face a wave of strikes over the coming weeks with nurses, rail staff and border force officials among those staging strikes as part of the biggest wave of industrial action to hit the country in decades. The Prime Minister’s official spokesperson said:
This is more focused on the sort of mitigations for this week and contingency planning.
As well as military personnel, civil servants are being trained to provide services and the government is working very closely with a number of industries involved.
Twitter relaunches verification subscription service
Twitter’s subscription service that will allow users to pay to be verified on the platform is relaunching today after a failed rollout last month.
Twitter Blue will give users who sign up a blue tick badge, the ability to edit tweets and a range of other features in exchange for the eight dollar (£6.50) monthly fee.
The service had initially launched last month but was paused after it was flooded with bad actors who paid for verification and then posed as public figures and businesses, often posting potentially offensive and abusive content.
Twitter has said it will allow users to change their account handle and display name under the new system, but they will lose their verified badge until Twitter has reviewed their account again.
Wall Street expected to open higher
US stock futures edged higher ahead of monthly consumer inflation data tomorrow, while investors brace for the Federal Reserve meeting later this week when interest rates will be set.
Wall Street’s main indexes snapped a two-week winning streak last week, weighed down by fears of a potential recession next year due to extended central bank rate hikes.
The Nasdaq shed 4pc, and S&P 500 and Dow Jones Industrial Average lost 3.4pc and 2.8pc, respectively.
Consumer inflation data due on Tuesday is expected to show prices rose 7.3pc in November on an annual basis, easing from the 7.7pc rise in the previous month.
Dow contracts were up 0.2pc, S&P 500 were up 0.3pc, and Nasdaq 100 contracts were up 0.3pc.
Most rate-sensitive stocks including Apple, Amazon and Alphabet gained between 0.4pc and 0.5pc in premarket trading.
Von der Leyen warns EU faces gas shortage next year
The European Union has secured enough gas for this winter but could face a gas shortage next year if Russia further cuts supplies, the European Commission and the International Energy Agency has said.
European Commission President Ursula von der Leyen told a press conference: “Despite the action that we have taken, we might still face a gap of up to 30 billion cubic metres (bcm) of gas next year.”
She was referring to data from the International Energy Agency due to be published today.
Microsoft takes £1.5bn stake in London Stock Exchange
Microsoft has taken a £1.5bn stake in the London Stock Exchange Group in a stunning approach by the big tech giant for one of the world’s oldest financial institutions.
Matthew Field and Gareth Corfield have the details:
The investment, part of a 10-year deal which will see the bourse using Microsoft’s internet “cloud” technology, gives the US company a 4pc stake in one of Britain’s most storied financial services companies.
The US giant will buy shares from a consortium made up of Thomson Reuters and Blackstone, which took a stake in the LSE after selling data company Refinitiv to the UK-listed exchange for £21bn.
Shares in the LSE jumped 4pc in trading today, making Microsoft’s stake worth roughly £1.5bn. The UK-listed stock is up 9pc so far this year in a rare bright spot amid an otherwise gloomy UK equities market.
Read how the Microsoft investment comes after the LSE failed, on a third attempt, to secure a blockbuster merger with German rival Deutsche Borse in 2017.
Hunt says Britain must ‘stay the course’
Jeremy Hunt reiterated his message that things are “likely to get worse before it gets better” as figures show the economy contracted 0.3pc in the three months to October.
The Chancellor has warned the UK is “no different” to the third of the world’s economies predicted to be in recession either this year or in 2023.
He backed his plan to “deal with this challenging situation”:
Metro Bank fined £10m for publishing incorrect information
Metro Bank has been fined £10m by the City watchdog after the lender failed to disclose an accounting blunder to investors.
Banking and financial services correspondent Simon Foy has the latest:
The Financial Conduct Authority (FCA) said Metro had breached its UK listing rules by publishing incorrect information to investors.
The regulator also fined Craig Donaldson, its former chief executive, and David Arden, its former finance chief, £223,000 and £134,000, respectively.
Metro said in January 2019 that it was not holding enough capital and had to increase its risk-weighted assets by £900m, wiping hundreds of millions of pounds off its share value in a day and forcing its top bosses to quit.
Customers save £2.50 an hour from reducing energy usage
Octopus Energy customers across the country have been paid £1m for reducing their energy usage during the company’s first four “Saving Sessions”.
National Grid’s Electricity System Operator allows households to get paid for shifting their energy usage out of peak times under its new Demand Flexibility Service.
More than a quarter of a million customers took part in each of the hour long sessions. There have been four sessions in total so far, with each hour shaving about £2.50 off a customer’s electricity bill.
Tom Hayes reveals how it is among many schemes aimed at helping households cut their energy bills.
Pound gains after data show recovery in October
The pound is up 0.2pc and heading towards the $1.23 mark after data showed Britain’s economy recovered in October after the public holiday for the late Queen’s funeral.
However, it is 01.pc down against the euro, which is worth 86p, after the figures from the Office for National Statistics still pointed to a bleak outlook, with the economy shrinking 0.3pc in the three months to October.
Britain ‘needs options,’ National Grid admits, as it warms up coal power stations
Coal will “be entirely gone from the energy mix” in Britain, despite the issues with renewable sources being subject to the weather, National Grid has insisted.
Wind is generating 2.4pc of the energy made in Britain at the moment, with two Drax coal-fired power stations in North Yorkshire being warmed up in case demand exceeds supplies this evening.
Fintan Slye, executive director of the network’s Electricity System Operator, told the BBC Radio 4 Today programme:
We have always known that wind and solar and the energy you get from them is dependent on the weather.
Therefore we know that as we go through the winter we will get periods where there is low wind and therefore we need a portfolio of options available to meet that demand, be that gas units that can come on or interconnectors to flexibly trade power with our European neighbours.
Asked if coal is part of that portfolio of options, Mr Slye said:
So it is at the moment in the short term but coal is being fazed out of the energy system in the UK. It represents a really small proportion of the energy mix at the moment and in a few years time it will be entirely gone from the energy mix.
“One of the things that we did earlier on in the summer is we were looking towards this winter and put in place arrangements to keep some of those coal units available to us on a contingency basis if we thought that supply and demand margins were getting too tight.
National Grid has ‘enough supplies’ for rest of the day
National Grid is not expecting an interruption to supply today, its executive director said, despite freezing weather putting a strain on the grid.
Fintan Slye, executive director of the network’s Electricity System Operator, told the BBC Radio 4 Today programme: “We have enough supplies secure through the rest of the day that we can manage that and ensure that there’s no disruption to customer supplies as we manage through this very, very cold weather.”
Asked about warnings about the risk of outages this winter, Mr Slye said: “It is still a possibility however we remain cautiously optimistic throughout the winter that we will be able to manage it.
“[The weather] is driving up energy demand. We are seeing some really high prices in the wholesale market.”
Mr Slye said the National Grid triggered its scheme to pay people not to use energy at peak times this evening as a test to “see how consumers would respond when the weather was really cold”. He added:
It is a new service. It is the first time ever it has been implemented and it is an innovative product right around the world.
We committed, working with the supply companies, to run a number of tests through the year. One of the tests is planned for today.
Markets fall as data show economy shrinking
The export-oriented FTSE 100 has dropped in early trading, dragged down by miners, as investors tread with caution ahead of the Bank of England’s interest rates decision later this week.
The blue-chip index slipped 0.4pc to 7,449.64, while the mid-cap FTSE 250 fell 0.6pc to 18,807.72.
The Bank of England is expected to raise rates by 50 basis points each later in the week.
The decline also comes after data showed the UK economy shrank 0.3pc in the three months to October.
Miners lost 1.5pc, tracking copper prices lower, while energy stocks fell 0.3pc, bogged down by losses in heavyweights such as Shell and BP.
London Stock Exchange Group rose 3.8pc after Microsoft Corp agreed to buy a roughly 4pc stake in the bourse operator as part of a deal to migrate the exchange’s data platform into the cloud.
Metro Bank fell 0.9pc after the Financial Conduct Authority (FCA) fined it £10m for publishing incorrect information to investors.
UK’s trade deficit narrows
Britain’s trade deficit narrowed in the three months to October after accounting for price rises.
Economics editor Szu Ping Chan has the latest:
The deficit narrowed by £5.1bn to £9.8bn, according to the ONS, after removing the effect of inflation.
However, in nominal terms, it grew to £23.9bn, reflecting a huge jump in energy costs in the past year in the wake of Russia’s invasion of Ukraine.
Goods imports increased in the three months to October compared with the previous three months to July 2022, while exports decreased.
Britain’s autumn vaccine drive was also reflected in the trade figures, with higher imports of medical and pharmaceutical products from Germany and Denmark helping to fuel an increase in EU imports in October.
Falling gas prices saw imports of fuels from non-EU countries fall by £3.6bn in October, continuing the downward trend after prices peaked in August. “This decrease was driven by lower gas imports from Qatar, Peru, and Norway,” the ONS said.
UK ‘faces long-term loss of competitiveness’, warns BCC
Today’s data showing the UK economy shrank in the three months to October comes as businesses predict the UK will be in recession for five straight quarters.
David Bharier, head of research at the British Chambers of Commerce, said:
Business confidence has been falling dramatically as firms face into a wall of higher prices and energy bills, increased taxation, and rising borrowing costs.
Unless the Government helps create a stable environment to allow businesses to invest, the UK faces a long-term loss of competitiveness.
Businesses need to see concrete action to resolve the immediate disruptions facing the UK economy, such as soaring energy costs and the burdens in our trading relationship with Europe.
They also need to see a long-term plan on infrastructure, skills, trade, and green innovation.
Microsoft buys £1.6bn stake in London Stock Exchange owner
Microsoft has agreed to buy a stake in the London Stock Exchange Group (LSEG) that will give the software company a 4pc equity holding as part of a new long-term strategic partnership between the two companies.
Microsoft will acquire shares held by a consortium made up of Blackstone and Thomson Reuters, LSEG said in a statement.
At Friday’s closing price, a 4pc stake was valued at around £1.6bn.
The stake is part of a broader, 10-year agreement to help the London Stock Exchange owner develop data analytics and cloud infrastructure using Microsoft’s products, the company said in the statement.
Scott Guthrie, Microsoft’s executive vice president for cloud and artificial intelligence, will be appointed as a director.
UK economy shrinks in three months to October as economists warn of recession
The UK economy shrank by 0.3pc in the three months to October, suggesting the economy is already in recession even as an increase in retail sales and a rise in GP appointments drove a monthly rebound.
Economics editor Szu Ping Chan has the details:
The Office for National Statistics (ONS) said a rise in appointments alongside rising A&E attendance and more Covid booster shots helped the economy grow by 0.5pc in October.
This follows a contraction of 0.6pc in September and was in line with expectations.
September’s decline was affected by the extra bank holiday to mark the funeral of Queen Elizabeth II.
October’s growth was driven by the dominant services sector, which was driven by a rise in retail and car sales. Construction output also rose, while Britain’s industrial sector was broadly flat.
Metro Bank fined £10m for giving investors false information
Metro Bank has been fined £10m by the UK’s financial regulator for knowingly publishing incorrect information to investors in 2018.
Two of the bank’s former bosses, chief executive Craig Donaldson and chief financial officer David Arden, have been given individual fines of £223,100 and £134,600 respectively for being aware of the breach.
The Financial Conduct Authority (FCA) said the incorrect information was published as part of the bank’s quarterly financial results on October 24, 2018.
The inaccuracy concerned its risk weighted assets figure, which is a measure of the amount of the bank’s assets, adjusted for its exposure to risk.
Metro Bank was aware at the time that the figure was wrong and failed to qualify it or explain that it was subject to a review and would require a correction, the FCA found.
It concluded that the bank failed to take reasonable care to ensure the statement was not false and misleading and did not omit relevant information.
Mr Donaldson and Mr Arden are appealing the decision.
Wind producing 2.7pc of Britain’s energy
Wind is generating just 2.7pc of the energy being produced in Britain at the moment.
The renewable energy source has produced 28.5pc over the past year but that proportion plummeted over the weekend, prompting the National Grid to warm up two of its Drax coal power stations.
UK markets open lower
The markets have lost ground following data showing the UK economy contracted by 0.3pc in the three months to October.
The FTSE 100 opened down 0.3pc to 7,454.72 while the midcap FTSE 250 dropped 0.2pc to 18,870.90.
Postal strikes boost couriers and employment agencies
One in eight businesses said they were affected by industrial action in October, according to the Office for National Statistics.
However, Royal Mail walkouts actually boosted revenues for some businesses.
Darren Morgan, the ONS director of economic statistics, told BBC’s Radio 4’s Today programme that businesses said the most common impacts “were they weren’t able to get the necessary goods or services and were unable to operate fully”. He added:
If we look at the survey that underpins our figures this morning, we can see the impact of different kinds of strikes.
Businesses are telling us the rail strikes hit hospitality pretty hard in particular.
The port strikes hit haulage, logistics and shipping companies but the postal strikes actually tell us, in terms of the couriers and employment agencies, that postal strikes led to increased revenue for them – so a bit of a mixed picture on the impact of the strikes so far.
Construction at record levels
Construction output is at its highest level on record, official data show, with strong order books and a drive in housebuilding set to make the sector’s growth trend continue.
Darren Morgan, the ONS director of economic statistics, told BBC’s Radio 4’s Today programme:
The story on the month is those industries recovering ground from their falls in September.
Motor traders bounced back pretty strongly.
But there are two industries probably worth flagging that are a bit different as they actually grew in September and this has continued into October.
Their underlying performance is stronger. The first is construction, which continued a strong trend over the last year and stands at its highest level on record, with new housebuilding driving growth this month.
Businesses are also telling us that their order books remain healthy and the construction industry is well above where they were pre-pandemic.
Health is the second sector I would pull out. GP appointments, A&E attendance and the Covid booster programme have all been driving up that sector.
‘Probably sensible’ to focus on bigger GDP trend, says ONS
The Office for National Statistics (ONS) has warned people not to get too excited about the improvement in Britain’s economy in October.
Darren Morgan, the ONS director of economic statistics, told BBC’s Radio 4’s Today programme:
We estimated that in September that one fewer working day lowered economic growth by at least 0.3 percentage points so what we are seeing is the economy recovering ground from a natural bounceback, given there was the usual number of working days in October.
If you look at the latest three months with the previous three months, which is probably sensible, the economy fell by 0.3pc in the three months to October.
Covid testing boosts growth in services
The UK’s dominant services sector managed strong monthly growth in October, expanding by 0.6pc compared to a contraction of 0.8pc the previous month.
A surge in coronavirus testing and vaccination boosted health, which made the second-biggest contribution to services. That follows a campaign to give booster shots to vulnerable people.
Travel services, including agencies, tour operators and other reservation services rebounded in October to 7.1pc growth, after contracting by 9.7pc in September.
The largest contribution to the growth in gross domestic product (GDP) came from wholesale and retail trade, as well as repair of motor vehicles and motorcycles, which rose by 1.9pc in the month.
The figures brought GDP 0.4pc above its level in February 2020, the month before Covid-19 lockdowns started. On a quarterly basis, the economy remains smaller than it was before the pandemic started.
Hunt issues warning despite economy’s growth
The Chancellor has warned that “there is a tough road ahead” despite data showing the UK economy grew in October. Jeremy Hunt said:
While today’s figures show some growth, I want to be honest that there is a tough road ahead.
Our plan has restored economic stability and will help drive down inflation next year, but also lay the foundations for long-term growth through continued record investment in new infrastructure, science and innovation.
UK economy grows 0.5pc
Britain’s economy grew by 0.5pc in October from September when output was affected by a one-off public holiday to mark the funeral of Queen Elizabeth, official data showed this morning.
The growth was ahead of economists’ expectations of a 0.4pc bounce-back in October after September’s 0.6pc contraction.
The Bank of England said last month that Britain’s economy was probably already in a recession that could last until the end of 2023.
National Grid orders coal plants to fire up to avoid blackouts
National Grid has given notice to two of its reserve coal-fired power stations to fire up as Britain tries to avoid blackouts.
The network is facing a surge in demand as temperatures drop below zero and swathes of the country is covered in snow. Soaring demand sent day ahead UK power prices to an all-time high.
The National Grid Electricity System Operator said the emergency plan “should give the public confidence in Monday’s energy supply” as millions are expected to work from home and turn up the heating.
The notice does not mean the coal-fired power stations will be used but means they will be ready to produce energy if called on by the Grid.
Snow covered London and the south-east of England on Sunday evening, with forecasters predicting up to six inches in parts of Essex.
Travel disruption is expected during Monday morning rush hour, with six yellow warnings of ice, fog and snow in place for much of the UK.
National Grid data suggests that power consumption is set to peak at almost 46,700 megawatts at 5pm on Monday, up from Sunday’s high of just under 43,000.
The Grid is set to run another test of the so-called demand flexibility service between 5pm and 7pm tonight.
National Grid has defended warming up two of its Drax coal-fired power stations by saying the move is what a “prudent system operator” should do.
The Department for Business, Energy and Industrial Strategy asked to delay their closure this summer until after winter to protect the nation’s electricity supply.
Today is the first day the coal power units have been put on notice since then.
National Grid has put two of Britain’s emergency coal fired power stations on standby as snow and freezing temperatures squeeze the nation’s energy supply.
The electricity network operator said it was warming up its “contingency” coal stations, meaning they are on hand to produce energy if a surge in demand requires it.
The UK usually imports electricity from France in times of need, but issues with the country’s nuclear power generation have affected supply this year.
5 things to start your day
1) Power prices surge to record high as cold snap hits | Gas props up supplies as weather conditions depress renewable sources
2) Four-way split on rates looms at Bank of England as strikes stoke downturn | Policymakers grow increasingly divided on how to tame inflation
3) ‘No growth’ becoming the norm, Chancellor warned, as real wages suffer biggest drop since 1977 | Manufacturers continue to be battered by high costs and worker shortages
4) The ten ‘megathreats’ facing the global economy – according to ‘Dr Doom’ himself | Interview with Nouriel Roubini, the man who correctly predicted the 2008 financial crisis
5) Channel 5 in bid to scuttle longer ad breaks on rival ITV | Easing restrictions could ‘dampen revenues’ for smaller channels, industry body says
What happened overnight
Asian shares dropped on Monday and the dollar edged higher at the start of a hectic week, as markets awaited a flurry of rate decisions from the US Federal Reserve, the European Central Bank and others.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 1pc after rising 1.3pc the previous week, buoyed by optimism that China is finally opening up its economy with the dismantling of its zero-Covid policy.
Japan’s Nikkei eased 0.3pc, meanwhile the S&P 500 futures dipped 0.2pc and Nasdaq futures fell 0.3pc.
In China, blue-chip shares were 0.5pc lower and Hong Kong’s Hang Seng index was down 1pc.