The European Commission inched closer to fixing prices in the natural-gas markets. Gas prices rose dramatically on Monday morning as markets reacted to Russia’s indefinite suspension of the Nord Stream 1 pipeline. The Financial Times reported that the EC would recommend options for an “emergency wholesale price cap”, to be observed by all member-states, along with ways to reduce demand. Meanwhile OPEC and its allies, including Russia, agreed to cut oil production in an effort to boost sagging prices. The reduction of output by 100,000 barrels per day corresponds to just 0.1% of global demand.
Liz Truss, who will replace Boris Johnson as Britain’s prime minister on Tuesday, has drafted a plan to freeze energy prices for British households, which are expected to rise by 80% in October. According to Bloomberg, the plan, costing up to £130bn ($151bn), will compel energy suppliers to charge households reduced rates in exchange for government-guaranteed loans. In his farewell speech Mr Johnson called his successor “compassionate”. He trumpeted his own achievements in office–citing Brexit, the rollout of the covid-19 vaccine and Britain’s aid to Ukraine.
Volkswagen, a German car giant, announced that it would list Porsche, its sports-car marque, in what could be one of the largest IPOs in years. Investors reportedly expect a valuation of between €60bn-85bn ($60bn-85bn). VW has owned the brand since 2012, but rumours about a decoupling have been circulating for months. VW hopes the listing will help fund its transition to making electric vehicles.
China’s central bank set the reference rate for the yuan at its weakest level in two years, at 6.91 to the buoyant dollar. China’s currency has suddenly weakened this year after lockdowns hampered exports. The central bank also reduced the amount of foreign currency that Chinese banks need to hold, another sign of its desire to prop up the sliding yuan.
Protests across Indonesia’s biggest cities broke out against government plans to increase subsidised fuel prices for the first time in eight years. On Saturday Joko Widodo, Indonesia’s president, said that inflation had necessitated a price increase of about 30%.
Vladimir Putin, Russia’s president, attended military exercises in the east of the country involving China and other allies such as Syria and India. The drills are due to last a week. On Monday Mr Putin approved a new foreign-policy doctrine, which seeks to justify armed intervention into countries with Russian-speaking populations.
Pakistan’s largest lake is at risk from overflowing and devastating heavily populated areas, officials said. An attempt failed on Sunday to drain Manchar Lake, in the southeastern Sindh province, where heavy rain has fallen for days. The province produces around half of Pakistan’s food, much of which has already been ruined. At least half a million people have lost their homes in catastrophic flooding across the country.
Fact of the day: 60%, the proportion of British Conservative Party voters who agree that the country is “in decline”. Read the full article.
Challenges for Britain’s new prime minister
PHOTO: PA
On Tuesday Liz Truss will fly to Balmoral Castle in Scotland, where Queen Elizabeth II will invite her to form a new British government. The meeting was secured by the 57.4% of Conservative Party members who picked the current foreign secretary as party leader over her rival, Rishi Sunak.
That was enough to give Ms Truss the job she craved. But her majority was not as impressive as polling had suggested. She also did worse than her immediate predecessors. Boris Johnson secured 66% of members’ votes in 2019. In 2005 David Cameron scooped 68%.
In an earlier round Ms Truss was backed by just 32% of Tory MPs. Behind Mr Sunak, hers was the lowest share of support of any candidate who has gone on to win since the current rules were introduced in 1998. A weak internal mandate is ominous. Ms Truss will need to lead her increasingly rebellious party through an energy crisis afflicting all of Europe. Recent Tory leaders have had short tenures. Ms Truss will have to work hard to secure her standing among her colleagues.
Painful reminders for Germany and Israel
PHOTO: GETTY IMAGES
Israel’s president, Isaac Herzog, addressed the German Bundestag on Tuesday. His speech marked the climax of a visit to mark the 50th anniversary of the massacre of 11 Israeli athletes and coaches by Palestinian terrorists at the Munich Olympics in 1972.
The run-up to the anniversary was tense. In July victims’ families rejected a German compensation offer and said they would not attend a commemoration ceremony on Monday. After a last-minute deal, including an official apology for security lapses and payments to families, that decision was reversed. Frank-Walter Steinmeier, Germany’s president, called it “shameful” that it had taken 50 years to reach a settlement.
Later Mr Herzog will travel to the site of the Bergen-Belsen Nazi concentration camp. As a soldier in the British army his father, Chaim Herzog, helped to liberate the camp in 1945. The elder Herzog later became the sixth president of Israel. The symbolism of the 11th president’s trip, both personal and political, is clear.
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Rainbow stagnation
PHOTO: GETTY IMAGES
South Africa ought to be the industrial engine of its continent. Yet its economic performance has been disappointing for a decade and a half. Though incomes grew for most people after the end of white rule in 1994, over the past ten years only the top 5% have gained in real terms. That has exacerbated already grotesque inequality.
So when the country gets its latest GDP figures on Tuesday, for the second quarter of this year, forgive South Africans for greeting them with a shrug. The data are expected to show a continuing slow rebound from an awful two years of the pandemic. But because firms have been hindered by record blackouts, due to the dysfunctional state power company, there will not be a huge surge in activity. That is what would be required to put a dent in an unemployment rate of 34%, the highest known rate in the world.
The end of Australia’s housing boom
PHOTO: ALAMY
Housing booms in many overheated markets are ending as policymakers raise interest rates to curb inflation. Australia’s market, one of the frothiest, is weathering its sharpest downturn in almost 40 years. Prices nationally have fallen by 3.4% since the central bank started tightening monetary policy in May, according to CoreLogic, a property-data firm. In Sydney house prices are shedding almost A$1,000 ($680) a day.
That may be only the start. Annual consumer-price inflation is at 6.1%. On Tuesday the Reserve Bank increased interest rates for the fifth consecutive month, by 0.5 percentage points, to 2.35%. Economists reckon that house prices could slump by up to 20% from their peaks. Since some Australian households are among the world’s most indebted, that will hurt. Yet a recession is not yet looming. And even if house prices fell by a fifth, they would still be higher than they were before the pandemic.
The story of Stewart Brand
PHOTO: AP
The Whole Earth Catalog, first published in 1968, was an eclectic compendium of tools to help its readers live more sustainable lives. A documentary, released on streaming platforms on Tuesday, about its editor, Stewart Brand, takes its name from the opening sentence of the Catalog: “We are as gods and might as well get good at it.”
Environmentalists loved the Catalog. But its most enduring impact was in Silicon Valley, where its techno-utopian philosophy took hold. Mr Brand mingled with early computer pioneers, and helped develop the open-source philosophy critical to modern software. Steve Jobs, the late boss of Apple, referred to the periodical as “one of the bibles of my generation.”
“We Are As Gods” chronicles one of Mr Brand’s more recent projects: using genetic engineering to bring back the woolly mammoth from extinction. To his critics this is hubristic meddling. But with his deep faith in technology, to Mr Brand it is just a new form of conservation.
Daily quiz
Our baristas will serve you a new question each day this week. On Friday your challenge is to give us all five answers and, as important, tell us the connecting theme. Email your responses (and include mention of your home city and country) by 1700 BST on Friday to QuizEspresso@economist.com. We’ll pick randomly from those with the right answers and crown one winner per continent on Saturday.
Tuesday: What term is used to describe a gambling strategy where the stakes are doubled till a win is achieved?
Monday: Which term is used for the set of cards received by a player in poker or bridge?
Learning music by reading about it is like making love by mail.