Royal Mail hit by cyber incident

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Tune in tomorrow for more essential updates. 

Hanah Darley, head of threat research at cyber security firm Darktrace, claims the nature of the cyber incident at Royal Mail suggests that it likely affects one of the company's contractors or a specific system:

The outage currently affecting Royal Mail’s international exports affects just outbound international parcels and mail, suggesting either an outsourced third party supplier is the source of the cyber disruption, or there is a specific isolated system, rather than something that is enterprise wide across Royal Mail. Details are still emerging but the scope of the outage is clearly extensive. 

Depending on the severity of the incident, it could take weeks to restore Royal Mail’s systems to trusted operational states. After a breach, the information cyber attackers gain from having been on the inside of an organisation’s digital infrastructure can leave the victim organisation vulnerable to further breaches in the future. 

If indeed this was a result of a supply chain vulnerability, it further confirms the cyber security industry’s broader concern around large organisations granting trusted access to third parties who may have vulnerabilities which the primary organisation have not foreseen.

Jake Moore, a global cybersecurity advisor at software firm ESET, has warned that Royal Mail could take weeks to recover after being hit by a cyber incident:

After multiple strikes and labour shortages, this attack will have come at one of the worst possible times for the postal service. 

The attack seems to have severely impacted their systems, and it could take weeks for things to return to the way they were before the incident.

If this is a ransomware attack, there will be difficult decisions to make and time will be limited, but it is vital to secure the data and to not immediately pay the ransom. 

Cyber attackers often increase ransoms over time and can even threaten to release internal and sensitive data should there have also been a data leak in the process, but paying criminal demands can unfortunately push the problem onto other companies and industries, causing further security risks.

Royal Mail says six sites are affected by the ongoing "cyber incident".

That includes the company's Heathrow sorting facility. 

A spokesman for Royal Mail has confirmed to the Telegraph that the company's Heathrow Worldwide Distribution Centre is among multiple sites experiencing problems following the "cyber incident". 

It is not yet known how many are affected. 

The Heathrow site, off the M4 and close to the airport, is where huge quantities of mail are sorted before being sent abroad by air.

The National Cyber Security Centre, part of intelligence service GCHQ, has confirmed it is assisting Royal Mail following a "cyber incident" at the company.

A spokesman told the Telegraph: "We are aware of an incident affecting Royal Mail Group and are working with the company, alongside the National Crime Agency, to fully understand the impact.”

Hello, hello.

We'll bring you more on the Royal Mail "cyber incident" as it comes, though so far the postal service has put out scant information.

Significantly, however, customers are being urged not to send mail abroad for the moment.

That's all from me on an eventful day. Matt Oliver will guide you through the evening.

Royal Mail is experiencing "severe service disruption" to its international export services following a cyber incident, the company announced.

The company said: "We immediately launched an investigation into the incident and we are working with external experts.

"We have reported the incident to our regulators and the relevant security authorities.

"We would like to sincerely apologise to impacted customers for any disruption this incident may be causing."

Analysts are saying that the outage that grounded US flights for about two hours today shows more funding is needed for air traffic control, which is a "house of cards."

Nick Allen in Washington has the latest:

Miles O'Brien, an aviation analyst, told CNN air travel was safe "because it is redundant" and there are "back-ups for back-ups".

He said: "Ironically, this Notam system is part of that layer of redundancy.

"It is part of the redundance system but perhaps doesn't have enough redundancy itself.

"And this is something we need to look at with the persistent underfunding of FAA technology and investment at the air traffic control level."

He added: "It's a bit of a house of cards. It's a commendable thing that air traffic control pulls off what it does on a daily basis despite technological problems.

"This is just one area the FAA needs to focus on and add this layer of redundancy."

Oil prices have rallied today underpinned by hopes that inflation was being tamed enough to ease the pace of interest rate hikes and reduce the chances of deep recession.

Brent crude, the international benchmark, has risen by 1.4pc to more than $81 a barrel.

US-produced West Texas Intermediate is up 1.3pc to more than $76.

Shoppers flocked to Argos after Royal Mail strikes put thousands off buying Christmas presents online over fears they would not arrive in time.

Senior business reporter Daniel Woolfson has the details:

Sales at Argos grew 7.1pc over the six weeks to January 7, according to latest data from its parent company Sainsbury's.

Walk-in sales over the Christmas week were up 50pc compared to the same week last year, as industrial action at the Royal Mail left shoppers wary of ordering online and posting goods.

Simon Roberts, chief executive at Sainsbury's, said: "Argos offered great value and quality, and, as train and postal strikes disrupted the country, customers appreciated its reliability and convenience."

Read how Sainsbury's has changed its strategy.

The US flight chaos began shortly after 7am Eastern Time after an outage on the Notice to Air Missions system, or Notam, that provides safety info to flight crews. 

It conveys urgent advisory information essential for flight operations. 

John Cox, a former airline pilot and aviation safety expert, said there has been talk in the aviation industry for years about trying to modernize the Notam system, but he did not know the age of the servers that the FAA uses.

He said: "I've been flying 53 years. I've never heard the system go down like this. So something unusual happened."

Geoff Freeman, president and chief executive of the US Travel Association, said: "America’s transportation network desperately needs significant upgrades.

"We call on federal policymakers to modernize our vital air travel infrastructure."

Despite the chaos of the last few hours, it has been a positive start for the markets on Wall Street.

The Dow Jones Industrial Average rose by 0.4pc at the opening bell to 33,840. 

The broad-based S&P 500 is up 0.5pc to 3,936 while the tech-heavy Nasdaq Composite was up 0.4pc to 10,779.

As flights are given the all clear to run again, the mission now is to clear the backlogs across America's runways and departure lounges.

Here are the scenes as flights slowly resume:

It is the news air passengers have been waiting for. 

Air travel has been given the all-clear to resume in the US by the FAA:

The halt in US air departures today comes in the wake of a large-scale aviation meltdown over the Christmas holiday.

A storm brought unseasonably cold temperatures to the majority of the country and caused chaos, with thousands of flights delayed or cancelled.

Hard-hit Southwest Airlines cancelled more than 15,000 flights over eight days after what it said was a breakdown in its scheduling systems.

 Virgin Atlantic has acknowledged that some departures may face delays as a result of the grounding of US flights.

A spokesperson said:

We're aware of the FAA's recent Notice to Air Missions system outage, and the ongoing effort to restore normal US airspace operations. 

We're working closely with the relevant authorities and following careful assessment, continue to operate our schedule of US flights departing from the UK. 

Due to FAA restrictions, some US departures may be affected by delays and we apologise in advance to affected customers. 

We encourage customers due to travel today to check their flight status in advance at virginatlantic.com.

Manchester Airport line does not expect any significant impact on operations today. 

There are only three outbound flights to the US from Manchester today, two of which have already departed, and the other is showing a slight delay of around half an hour.

Away from the US flights news, the FTSE 100 has surged to its highest level in more than four years.

The UK's blue chip index was last above its present 7,761 points in August 2018. The market has risen by 0.9pc today.

The biggest mover has been JD Sports Fashion, which reported its supply chain issues are over and that revenues grew more than 20pc in the last six weeks of 2022, sendings its share price 5.9pc higher.

The heavy lifting has been done by oil giant Shell, up 7.9 points today, while miner Glencore is up 4.9 points.

The FAA has confirmed that departures are resuming at Newark and Atlanta due to congestion in those areas. 

Jamie Johnson has the latest:

Atlanta is the busiest airport in the world, with 75.7m passengers last year.

"We expect departures to resume at other airports at 9 am ET" said the FAA.

The FAA has moved to reassure passengers that any planes in the air are safe to land.

"All flights currently in the sky are safe to land," it said in a statement. 

"Pilots check the NOTAM system before they fly. A Notice to Air Missions alerts pilots about closed runways, equipment outages, and other potential hazards along a flight route or at a location that could affect the flight."

This image from tracker Flightradar24 gives an insight to the knock on effects that will be felt by the decision to ground flights in the US:

US President Joe Biden says the cause of the FAA outage is still unclear and that it may not be known for another few hours, writes Jamie Johnson.

"I just spoke with Buttigieg," he told reporters, referring to US Transportation Secretary Pete Buttigieg.

"They don't know what the cause is. But I was on the phone with him. 

"I told them to report directly to me when they find out. Aircraft can still land safely, just not take off right now. 

"They don't know what the cause of it is, they expect in a couple of hours they'll have a good sense of what caused it and will respond at that time."

British Airways has said that so far its flights "to and from the US are continuing to operate as planned". 

A spokesman added: "We advise customers to check ba.com for the latest flight information."

One of the most pressing questions facing the FAA and airlines is what to do with planes already in the air.

Our reporter Jamie Johnson has the latest from Washington:

Red-eye cross-country flights are due to be landing on the East Coast this morning, while transatlantic flights are also scheduled to be arriving.

Early indications suggest that some may have to be diverted to airports where they can be guided in by air traffic controllers using visuals.

US Transportation Secretary Pete Buttigieg has tweeted, "I have been in touch with FAA this morning about an outage affecting a key system for providing safety information to pilots. FAA is working to resolve this issue swiftly and safely so that air traffic can resume normal operations, and will continue to provide updates."

Joe Biden has been briefed on the outage that has grounded all US flights, the White House has confirmed.

Press secretary Karine Jean-Pierre said there is "no evidence of a cyberattack at this point":

Failures in the Notice to Air Missions System run by the FAA has caused the grounding of all flights from the US.

Before commencing a flight, pilots are required to consult NOTAMs, or Notices to Air Missions, which list potential adverse impacts on flights, from runway construction to the potential for icing. 

The system used to be telephone-based, with pilots calling dedicated flight service stations for the information, but has now moved online. I

All aircraft are required to route through the system, including commercial and military flights.

European flights into the US appeared to be largely unaffected.

Irish carrier Aer Lingus said services to the country continue, and Dublin Airport's website showed that its flights to Newark, Boston, Chicago and Los Angeles were running on schedule.

Aer Lingus said it plans to "operate all transatlantic flights as scheduled today". 

It added: "We will continue to monitor but we do not anticipate any disruption to our services arising from the technical issue in the United States."

Flights remain grounded as technicians battle to fix the problem with the Notice to Air Missions system. 

Here is the latest from the FAA:

United Airlines has temporarily grounding flights to all destinations:

It's going to be a tough day for airline customer service teams:

The disruption to air travel has come after the failure of a key pilot notification system operated by the Federal Aviation Administration.

Thousands of passengers have been hit by delays, and there was no estimate available for the restoration of the Notice to Air Missions system, or Notam.

It conveys urgent advisory information essential for flight operations. Tracking website FlightAware has already listed more than 1,160 US delays.

The Notam system provides airlines with real time safety information for flight planning.

The US airlines association, Airlines for America, said it has been notified about the disruptions, and that it is "working with the FAA and awaiting further information regarding when these issues will be resolved." 

The Federal Aviation Administration has said some functions "are beginning to come back online" following the glitch that has prevented flights from landing or taking off in the US:

Planes appear to be circling JFK and Newark airports in New York as the Federal Aviation Administration deals with the glitch that is preventing planes from landing.

However, it appears some flights may be landing.

Plenty of passengers appear to have been affected by the technical glitch affecting US flights:

Here is the latest tweet from the Federal Aviation Administration:

Copper has extended its gains to a fifth day, rising above $9,000 a ton for the first time since June, as investors bet upcoming US data will show further softening of inflation.

The key industrial metal is trading at the highest level since June after rebounding in the past two months. 

Bets on a slowdown of the aggressive interest-rate rises seen in the US last year are brightening the outlook for demand, along with China's exit from stringent Covid restrictions.

Copper gained as much as 1.1pc to $9,007.50 a ton on the London Metal Exchange.

France's main unions have called a first day of strikes and protests in response to Emmanuel Macron's plan to raise the retirement age. 

The unions met Tuesday evening in Paris after Prime Minister Elisabeth Borne announced the government plan to gradually raise France's minimum retirement age to 64 by 2030 from 62 currently.

Laurent Berger, the head of the moderate CFDT union said: "The pension system is not in danger, nothing justifies such a brutal reform."

The January 19 strike would only be the first step of the union response, and further action will be decided in collaboration with student groups, he said.

Former Twitter UK staff sacked by Elon Musk have accused the billionaire of a "sham redundancy process" and threatened legal action against the company.

Senior technology reporter Matthew Field has the details:

Lawyers representing 43 ex-Twitter employees wrote to the company on Tuesday to protest the way the redundancies were handled.

In a letter, seen by The Telegraph, the law firm Winckworth Sherwood said the mass layoffs in November were "unlawful, unfair and completely unacceptable treatment".

The firm said its clients would take Twitter to an employment tribunal if their complaints are not dealt with.

Mr Musk has enacted sweeping layoffs at the social media company he bought for $44bn last year, in some cases locking staff out of IT systems with no notice.

In the UK, companies making more than 100 redundancies are required to launch a consultation of 45 days over the jobs at risk. Around 180 UK Twitter staff were laid off last year by Mr Musk.

Read the accusations from lawyers.

European natural gas prices have declined as strong supplies outweigh forecasts for colder weather next week that could boost demand.

Benchmark futures fell as much as 5.5pc, giving up earlier gains. 

Imports of liquefied natural gas have been undeterred by the halving of gas prices over the past month, as demand in Asia remains muted. 

That is providing a safety net against expectations of colder-than-usual conditions in the UK, Nordics and parts of southwest Europe.

Liquefied natural gas has been critical for Europe to fill in the gap left by Russia's deep pipeline-supply cuts following the country's invasion of Ukraine last year. 

Dutch futures, the European benchmark, were down 3pc to €67.90 per megawatt-hour after rising as much as 4.2pc earlier. The UK equivalent contract dropped 3.7pc. 

Spiralling prices looks set to come down this year, Sainsbury's finance chief has said, as the supermarket reported a record Christmas.

The supermarket said there were signs of inflation easing for products such as clothing and general merchandise.

However there was no end in sight for spiralling food prices.

Kevin O'Byrne, Sainsbury's chief financial officer, insisted: "There is some good news coming through on the inflation front."

It comes as the UK's second-largest supermarket said sales over the festive season were not only driven by higher prices but the volume of goods sold too.

Mick Lynch said he cannot currently see a "landing zone" for resolving the industrial dispute on the nation's railways.

Politics live blog editor Jack Maidment has the latest:

Rail union bosses are giving evidence on ongoing industrial action to the Transport Select Committee this morning. 

The general secretary of the RMT told MPs: "I can't see the landing zone from here.

"We will have to see what the talks say and I don't know what our members will make of that when they get to read this stuff in detail."

Follow the committee hearing in our politics live blog.

Bernard Arnault, the world's richest man and chairman of LVMH, has appointed his daughter as the chief executive of Dior as he tightens his family's grip on the luxury goods business.

Matthew Field has the details:

Mr Arnault appointed his daughter Delphine, his eldest child, to lead its important Dior brand as part of a management shakeup, having recently appointed his eldest son, Antoine, to lead the family's holding company.

LVMH, which was formed in a merger between fashion house Louis Vuitton and Moët Hennessy in 1987, owns brands including jewelry maker Tiffany & Co, Givenchy and Marc Jacobs.

Mr Arnault, who launched his luxury goods empire in the 1980s, regained his spot as the world's richest man at the end of 2022 after Elon Musk's net worth slipped amid a sell off in Tesla shares. Mr Arnault is worth around $196bn.

Despite speculation over succession planning, Mr Arnault, 73, has given no indication he plans to retire soon. The company recently raised the maximum age requirement for its chief executive to 80 from 75.

Read what Ms Arnault, 47, has done during two decades at her father's business.

The publisher of the Mirror and Express newspapers is cutting 200 jobs across its editorial department as it grapples with a slump in advertising.

James Warrington has the details:

Reach said it would accelerate the removal of duplication as part of an effort to save at least £30m.

The move will affect roles across editorial and lead to more sharing of resources across the group's different titles. Reach already has an internal news wire service used by journalists across its various publications.

It comes after Reach, which also owns regional titles including the Manchester Evening News, reported a sharp slump in advertising revenues as the economic outlook darkens.

Digital ad revenue fell 5.9pc in the fourth quarter, while print revenue slumped by more than a fifth.

Thirteen investors caught up in the collapse of cryptocurrency exchange FTX have made fraud reports to the police.

Trading platform FTX filed for bankruptcy on November 11 after it was alleged that then-chief executive Sam Bankman-Fried, 30, had illegally diverted massive sums of customer money from the company to a second firm that he owned, Alameda Research. He denies criminal charges.

According to a Freedom of Information request made on behalf of the Investing Reviews website, 13 people made reports to Action Fraud, the UK's national reporting centre for alleged fraud, in November last year.

The total loss reported was £1.16m, with the biggest individual loss at £1m.

Simon Jones, chief executive of InvestingReviews.co.uk, said: "The bad news is that the British investor who lost £1 million is unlikely to ever see a penny of their money again.

"The Financial Conduct Authority has been at pains to warn investors about the dangers of cryptocurrency, so if you're tempted, make sure you don't put all your eggs in one basket."

Soaring prices triggered by Russia's war in Ukraine and the painful journey towards securing new energy supplies will continue until 2025, according to the World Economic Forum. 

Our economics editor Szu Ping Chan has the latest:

The WEF's annual global risks report warned that energy and food supply crunches were likely to persist for the next two years, as it named the cost of living crisis as the biggest challenge facing the world. 

It warned that the end of more than a decade of low interest rates and inflation would be painful for all. 

"As an economic era ends, the next will bring more risks of stagnation, divergence and distress," it said. 

With the International Monetary Fund expecting a third of the world to plunge into recession this year, the WEF added that there were downside risks to the gloomy outlook if rapid price rises continued. 

Central banks have been raising interest rates in an attempt to keep a lid on price rises, and the WEF highlighted that global mortgage rates had hit their highest level in more than a decade. 

The great and the good gather in Davos, Switzerland for the WEF next week.

Heathrow said it recorded the largest increase in passengers of any European airport last year.

The airport was used by 61.6m passengers in 2022, up 42.2m compared with 2021.

It experienced a surge in passenger numbers after the Government scrapped all coronavirus travel restrictions in March last year, after having some of Europe's toughest rules in 2021.

Some 5.9m passengers travelled through the airport in December, up 90pc compared with the same month in 2021.

The busiest route was New York JFK.

Heathrow said arriving travellers reported a "friendly and efficient journey through immigration" as armed forces personnel and volunteer civil servants manned passport desks during a strike by Border Force officers.

Shares in Darktrace have tumbled below the price when the company floated in April 2021 for the first time as the cyber security firm lowered its sales guidance for the year.

Its share price tumbled as much as 18pc to 240p this morning, below its initial public offering (IPO) price of 250p, before paring its losses. It is down 12pc to 259p.

While it said it expected annual recurring revenue for 2022 to have grown at least 36.5pc, it warned that macro-economic uncertainites were taking a larger-than-expected toll on acquiring new customers.

The exporter-heavy FTSE 100 has edged higher in early trading as mining stocks gained on firmer metals prices.

The blue-chip index advanced 0.3pc, after closing in the red on Tuesday for the first time this year. 

Industrial metal miners took an early lead, gaining 2.4pc as copper prices hovered near their highest in more than six months, helped by optimism over top consumer China's decision to reopen its borders.

Glencore gained more than 2pc with Rio Tinto up 1.7pc.

The more domestically focused FTSE 250 mid-cap index shed 0.1pc, dragged down by Direct Line.

The insurer's share price has crashed 29pc after it said it is scrapping its final dividend for 2022 following a surge in claims, and weighed on FTSE 100 peer Admiral, which has dropped 15pc.

JD Sports climbed 4.8pc after the clothes and footwear retailer reported total revenue growth of more than 20% for six weeks in the run-up to Christmas.

More than £750m was wiped off the value Direct Line after it said it would no longer pay its final dividend.

Shares in the insurer slumped more than 26pc, the most on record, in what analysts at Jefferies said would be a "major shock" to the markets.

Direct Line blamed the scrapping of the dividend on a surge in claims following a bout of severe weather in Britain in December, which pushed the motor and home insurer to an underwriting loss for the year.

Motor insurers performed strongly when the pandemic first hit in 2020, as restrictions meant fewer drivers on the round and fewer accidents.

But inflationary pressures and supply chain issues due to the pandemic and the war in Ukraine have pushed up the cost of repairs.

Chief executive Penny James said: "The board recognises the importance of the dividend to our shareholders, and continues to take actions to restore balance sheet resilience and dividend capacity as a priority, consistent with our track record of delivering returns for shareholders."

Sainsbury's share price has dropped 2.2pc despite its announcement of record Christmas sales and profits expected to at the "upper end" of expectations.

Sainsbury’s stock fell 21pc last year and investors may be concerned about tightening margins as the supermarket battles with discounters Aldi and Lidl to maintain its market share.

It has been another tentative start on the markets as traders work out what to do after Federal Reserve chairman Jerome Powell declined to give any hints on the future direction of interest rates.

The FTSE 100 opened 0.4pc lower at 7,696 while the FTSE 250 was up 0.1pc to 19,416.

House builder Barratt Developments has seen a sharp slowdown in sales as high borrowing costs and the threat of falling house prices hit the property market.

The company's average number of weekly private sales has more than halved. Bosses warned the company may deliver fewer homes than expected.

Net private reservations per week fell to 0.3pc in the second half of last year, compared to 0.69pc over the same period in 2021.

Its forward order book has dropped to 10,511 homes over the same period, compared to 14,818 the year before.

Chief executive David Thomas said: "Political and economic uncertainty impacted the first quarter; this was then compounded by rapid and significant changes in mortgage rates which reduced affordability, homebuyer confidence and reservation activity though the second quarter."

Retail chain JD Sports Fashion has said annual profits will be towards the top end of expectations after cheering festive sales growth of more than 20pc.

The chain said the performance in the six weeks to December 31 was "particularly impressive" across both stores and online, helping it notch up total sales growth of 10pc in the 22 weeks so far of its second half.

This compared with growth of 5pc in the first six months.

JD Sports said it now expects group underlying pre-tax profits for the year to January 28 to be towards the top end of market expectations, which range from £933m to £985m.

It said: "The ultimate outturn will, however, reflect trading through the remainder of January with the post-Christmas sale period still to take place in some of our most important European markets."

It also guided for underlying profits to edge up to just over £1bn in the next financial year.

Sainsbury's claims to be raising prices slower than rivals, putting at odds with discounters like Aldi.

Britain's second-largest supermarket said it had a record Christmas with a gain in sales that was not only driven by higher prices but the volume of goods sold too.

Sainsbury has had to absorb some of its own surging costs while at the same time keeping prices keen and shoppers loyal. 

British supermarkets fought fiercely to attract customers in the approach to Christmas and German discounters Aldi and Lidl saw record sales as consumers sought to save money on groceries.

Chief executive Simon Roberts said: 

We delivered the best possible Christmas for customers as millions of households managed their budgets differently, hosting larger gatherings again and treating themselves at home.

Customers shopped early, buying Christmas treats and fizz more than once and looked for deals, taking advantage of Black Friday and other seasonal offers.

Argos offered great value and quality, and, as train and postal strikes disrupted the country, customers appreciated its reliability and convenience.

Sales were also boosted by the World Cup as people celebrated more at home.

Our determined focus on delivering the best value alongside new and exciting festive food, plus outstanding customer service and availability, meant we delivered record sales and market outperformance at both Sainsbury's and Argos.

Sainsbury's has said early Christmas shopping helped sales jump over the latest quarter despite pressure on consumers from the rising cost of living.

The UK's second largest supermarket chain revealed that total sales, excluding fuel, grew by 5.2pc over the 16 weeks to January 7, compared with the same period last year.

It said that growth was buoyed by "inflation and relatively resilient volume trends".

Sainsbury's told shareholders that profits for the year are now expected to be towards the "upper end" of its previously announced guidance of between £630 million and £690 million.

The price cap on Russian oil imposed by the G7 group of nations is costing the Kremlin about £140m a day.

Russia's earnings from fossil fuel exports fell 17pc in December, to the lowest level since the country’s invasion of Ukraine, according to a report from the Helsinki-based Centre for Research on Energy and Clean Air.

The cost to Vladimir Putin’s regime will rise to about £246m a day when the EU’s ban on refined oil imports, the extension of the price cap to refined oil and reductions in pipeline oil imports to Poland come into force on February 5.

The EU, China, India, Turkey and Japan were the largest importers of Russian fossil fuels last week.

The Research on Energy and Clean Air report said crude oil shipments from Russia appear to have bottomed out after the fall in the weeks after the introduction of the price cap and the EU's import ban.

Russia is still making an estimated £565m per day from exporting fossil fuels, down from a high of £883m in March to May 2022.

The G7 oil price cap has led to a 12pc drop in Russian crude oil exports and a 23pc drop in sales prices.

This has resulted in a 32pc drop in Russian crude oil revenues in December,  the Centre for Research on Energy and Clean Air said.

At the end of December, they decreased by another 5pc due to the termination of pipeline oil imports by Germany.

So far, Russia has earned about £2.7bn from transporting crude oil on vessels subject to the price cap, resulting in approximately £1.8bn in tax revenue for the Kremlin. 

This could be almost completely eliminated, the Centre for Research on Energy and Clean Air said, by reducing the marginal price to a level much closer to the cost of Russia-producing oil.

It said the price cap coalition has powerful leverage to lower the price cap, adding that Russia has not found a viable alternative to vessels owned and/or insured by G7 countries to transport Russian oil products, particularly crude oil, from Baltic and Black Sea ports.

The impact of the price cap on Russian oil has been laid bare this morning, as a new report shows it is costing the Kremlin about £140m a day.

This figure will rise to around £246m a day once the cap is extended to refined products on February 5, according to the Centre for Research on Energy and Clean Air.

The EU remained the largest importer of oil from Russia in December, when pipeline crude oil and all oil products are included. 

This will have changed as Germany ceased to import Russian pipeline oil at the end of December and the EU oil products ban enters into force in February. 

5 things to start your day 

1) Central banks must not lead fight on climate change, says Fed chief. Jerome Powell said it was essential that institutions “resist the temptation” to wade into “social issues” that go beyond their remit.

2) Electric car production slows as drivers opt for cheaper models. The Advanced Propulsion Centre has slashed its estimate for UK EV production in 2025 by a quarter.

3) Macron confronts the grim reality of France’s pension time bomb. as France confronts a difficult economic climate and an aging population, President Emmanuel Macron is making yet another fraught attempt to overhaul the pension system. 

4) Lockdown and recession will blight careers of over a million graduates, warns Institute for Fiscal Studies. 

5) Bank of England cracks down on buy-to-let mortgages. Threadneedle Street has warned banks that it intends to scrutinise risky areas more heavily given rising interest rates and a surge in inflation. 

What happened overnight 

Asian equities edged higher, while the dollar steadied as investors braced for US inflation data that will influence the Federal Reserve's interest rate policy.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.28pc higher, while Japan's Nikkei grew 1pc and Australia's S&P/ASX 200 index climbed 0.80pc.

China's stocks opened 0.1pc higher and Hong Kong's Hang Seng index gained 0.6pc at the start of the day.

Overnight, US stocks ended higher as investors heaved a sigh of relief after Fed Chair Jerome Powell refrained in a speech from commenting on rate policy but said the Fed's independence was essential for it to battle inflation.