News

Russia’s war dead tops 70,000 as volunteers face ‘meat grinder’

Published

6 hours ago

September 20, 2024

NewsAdmin

Russia’s war dead tops 70,000 as volunteers face 'meat grinder'

Getty Images A woman in a graveyard in Kursk, Russia reaches out to touch a gravestone which has a picture of a soldier on it. There are other gravestones and images of soldiers on both sides of her.

More than 70,000 people fighting in Russia’s military have now died in Ukraine, according to data analysed by the BBC.

And for the first time, volunteers – civilians who joined the armed forces after the start of the war – now make up the highest number of people killed on the battlefield since Russia’s full-scale invasion began in 2022.

Every day, the names of those killed in Ukraine, their obituaries and photographs from their funerals are published across Russia in the media and on social networks.

BBC Russian and the independent website Mediazona have collated these names, along with names from other open sources, including official reports.

We checked that the information had been shared by authorities or relatives of the deceased – and that they had been identified as dying in the war.

New graves in cemeteries have also helped provide the names of soldiers killed in Ukraine – these are usually marked by flags and wreaths sent by the defence ministry.

We have identified the names of 70,112 Russian soldiers killed in Ukraine, but the actual number is believed to be considerably higher. Some families do not share details of their relatives’ deaths publicly – and our analysis does not include names we were unable to check, or the deaths of militia in Russian-occupied Donetsk and Luhansk in eastern Ukraine.

Among them, 13,781 were volunteers – about 20% – and fatalities among volunteers now exceed other categories. Former prisoners, who joined up in return for pardons for their crimes, were previously the highest but they now account for 19% of all confirmed deaths. Mobilised soldiers – citizens called up to fight – account for 13%.

Since October last year, weekly fatalities of volunteers have not dipped below 100 – and, in some weeks, we have recorded more than 310 volunteer deaths.

As for Ukraine – it rarely comments on the scale of its deaths on the battlefield. In February, its president, Volodymyr Zelensky, said 31,000 Ukrainian soldiers had been killed, but estimates based on US intelligence suggest greater losses.

The story of Rinat Khusniyarov is typical of many of the volunteer soldiers who died. He was from Ufa in Bashkortostan and had been working two jobs to make ends meet – at a tram depot and a plywood factory. He was 62 years old when he signed his contract with the Russian army in November last year.

He survived less than three months of fighting and was killed on 27 February. His obituary, in a local online memorial website, simply called him “a hardworking, decent man”.

Rinat Khusniyarov signed up to fight at the age of 62

Rinat Khusniyarov via ok.ru Montage of photographs of Rinat Khusniyarov in civilian life with a child, having fun and separately in army camouflage clothing — Rinat Khusniyarov signed up to fight at the age of 62

According to the data we analysed, most of the men signing up come from small towns in parts of Russia where stable, well-paid work is hard to find.

Most appear to have joined up willingly, although some in the republic of Chechnya have told human rights activists and lawyers of coercion and threats.

Some of the volunteers have said they did not understand the contracts they were signing had no end date, and have since approached pro-Kremlin journalists to, unsuccessfully, ask them for help ending their service.

Salaries in the military can be five to seven times higher than average wages in less affluent parts of the country, plus soldiers get social benefits, including free childcare and tax breaks. One-off payments for people who sign up have also repeatedly risen in value in many parts of Russia.

Most of the volunteers dying at the front are aged between 42 and 50. They number 4,100 men in our list of more than 13,000 volunteers. The oldest volunteer killed was 71 years old – a total of 250 volunteers above the age of 60 have died in the war.

Soldiers have told the BBC that rising casualties among volunteers are, in part, down to their deployment to the most operationally challenging areas on the front line, notably in the Donetsk region in the east, where they form the backbone of reinforcements for depleted units, Russian soldiers told the BBC.

Russia’s “meat grinder” strategy continues unabated, according to Russian soldiers we have spoken to. The term has been used to describe the way Moscow sends waves of soldiers forward relentlessly to try to wear down Ukrainian forces and expose their locations to Russian artillery. Drone footage shared online shows Russian forces attacking Ukrainian positions with little or no equipment or support from artillery or military vehicles.

Sometimes, hundreds of men have been killed on a single day. In recent weeks, the Russian military have made desperate, but unsuccessful, attempts to seize the eastern Ukrainian towns of Chasiv Yar and Pokrovsk with such tactics.

An official study by the primary military medical directorate of the Russian defence ministry says that 39% of soldiers’ deaths are a result of limb injuries and that mortality rates would be significantly improved if first aid and subsequent medical care were better.

The Russian government’s actions suggests it is keen to avoid forcing people to fight through a new, official wave of mobilisation – instead, it is ramping up calls for service volunteers, along with the incentives to do so.

Remarks by regional officials in local parliaments suggest they have been tasked from the top with trying to recruit people from their local districts. They advertise on job vacancy websites, contact men who have debt and bailiff problems, and conduct recruitment campaigns in higher education establishments.

Since 2022, convicted prisoners have also been encouraged to join up in return for their release, but now a new policy means people facing criminal prosecution can accept a deal to go to war instead of facing trial in court. In return, their cases are frozen and potentially dropped altogether.

A cemetery close to a military airfield outside Taganrog in south-west Russia

Getty Images Russian military helicopters flying near a cemetery close to a military airfield outside Taganrog, Rostov in July 2022. — A cemetery close to a military airfield outside Taganrog in south-west Russia

A small number of the volunteers killed have been from other countries. We have identified the names of 272 such men, many of whom were from Central Asia – 47 from Uzbekistan, 51 from Tajikistan, and 26 from Kyrgyzstan.

Last year saw reports of Russia recruiting people in Cuba, Iraq, Yemen and Serbia. Foreigners already living in Russia without valid work permits or visas, who agree to “work for the state”, are promised they will not be deported and are offered a simplified route to citizenship if they survive the war. Many have later complained that they did not understand the paperwork – as with Russian citizens, they have turned to the media for help.

The governments of India and Nepal have called on Moscow to stop sending their citizens to Ukraine and repatriate the bodies of the dead. So far, the calls have not been acted upon.

Many new recruits who have joined the military have criticised the training they have received. A man who signed a contract with the Russian army in November last year told the BBC he had been promised two weeks of training at a shooting range before deployment to the front.

“In reality, people were just thrown out onto the parade ground, and dished out some gear,” he said, adding the equipment was poorly made.

“We were loaded on to trains, then trucks, and sent to the front. About half of us were thrown into battle straight from the road. As a result, some people went from the recruitment office to the front line in just a week,” he said.

Samuel Cranny-Evans, an analyst at the Royal United Services Institute in the UK says: “Basic understanding of things like camouflage and concealment or how to move quietly at night, how to move without creating a profile for yourself during the day,” should be taught as basic infantry skills.

Another soldier also told the BBC that equipment is a problem, saying it “varies, but most often it’s some random set of uniforms, standard boots that wear out within a day, and a kit bag with a label showing it was made in the mid-20th Century”.

“A random bulletproof vest and a cheap helmet. It’s impossible to fight in this. If you want to survive, you have to buy your own equipment.”

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News

PSNI policy protects criminals, says victim

Published

7 mins ago

September 20, 2024

NewsAdmin

PSNI policy protects criminals, says victim

Liz and Catherine McSherry said the PSNI changing its policy is a welcome step

BBC Liz and Catherine McSherry sitting on a sofa - Liz has short red hair - wearing a black top and cream blazer. Catherine has brown hair in a ponytail with a fringe - wearing a black top. — Liz and Catherine McSherry said the PSNI changing its policy is a welcome step

The victim of a man convicted of voyeurism has said criminals are being protected by the Police Service of Northern Ireland (PSNI) not releasing mugshots.

Catherine McSherry welcomed the force’s plans to change its policy on custody images and said it was a “positive step”.

Unlike many police forces in the UK, the PSNI does not routinely issue mugshots of serious offenders after sentencing.

Chief Constable Jon Boutcher has said the PSNI will begin releasing the images “in line with the custom and practice elsewhere”.

The PSNI said the “logistics of how we do that are now being worked through”.

Catherine’s step-brother Christopher was found guilty of six charges of voyeurism and one of unauthorised computer access.

The 35-year-old, from Portadown in County Armagh, was sentenced to 100 hours of community service, 18 months’ probation and a sex offences prevention order.

The judge said it was one of the worst cases of voyeurism seen by the court.

Catherine said victims felt “ignored and not taken seriously” when no mugshot was issued.

“I think it can be very validating for victims to have an actual mugshot taken of their perpetrator rather than just smiling photographs of them in their day-to-day life,” she said.

“I think it stops people being desensitised to the fact that this was a crime that was committed.”

Her sister, Liz, described the lack of custody photos as “a further failure” towards victims.

“Why are the PSNI protecting the criminal more than the victim? The whole system feels to me set up to protect perpetrators and not victims,” she said.

In April, the PSNI announced it was reviewing its policy.

It came after families whose loved ones were killed by drunk drivers questioned why police would not release photos of the offenders.

Internal emails seen by BBC News NI showed confusion among PSNI staff over the policy.

Mr Boutcher said logistics to facilitate publishing mugshots were being looked at

PA Media PSNI chief constable Jon Boutcher wearing police uniform - he has white short hair and is looking into the camera as he is speaking at a presser. — Mr Boutcher said logistics to facilitate publishing mugshots were being looked at

Mr Boutcher was asked for an update on the review at a recent Policing Board meeting.

He he said he had reviewed the policy.

“I have reviewed it. In short, we will be publishing photographs of people convicted of certain serious crimes where there is a policing purpose to do that,” Mr Boutcher said.

Catherine said the change was “definitely positive” and “a long time coming”.

“I think I speak for many other victims when I say that it would help massively, not just sexual abuse cases – any kind of criminal activity,” she added.

Former senior PSNI officer Jon Burrows also welcomed the move as a “positive, albeit long overdue step”.

He said he hoped the change would bring the PSNI “into line with UK-wide practice”.

“It is vital that justice is seen to be done and releasing the mugshots of those convicted of certain crimes will improve confidence in the justice system, encourage victims to come forward and send a clear message to perpetrators that actions have consequences,” he said.

“Given the epidemic of violence against women and girls, it is really important that those convicted of such crimes are included in the release of post conviction photographs.”

In a statement a PSNI spokeswoman said that the police “will be publishing photographs of people convicted of certain serious crimes where there is a policing purpose to do that”.

She emphasised logistics were being worked through but there was “no definite timeline for this at present”.

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Business

Europe is failing to protect Ukraine’s energy grid, says IEA head

Published

25 mins ago

September 20, 2024

NewsAdmin

This article is an on-site version of our Europe Express newsletter. Premium subscribers can sign up here to get the newsletter delivered every weekday and Saturday morning. Standard subscribers can upgrade to Premium here, or explore all FT newsletters.

Good morning. A scoop to start: The EU could bar imports of coffee from a number of countries within weeks unless Brussels delays a ban on products from deforested areas, commodity companies and governments have warned.

Today, the head of the International Energy Agency tells our energy correspondent that Europe isn’t doing enough to protect Ukraine’s power infrastructure, and our competition correspondent reveals a demand from 20 EU capitals for the European Commission to cut more red tape than it has already promised.

Have a great weekend.

Cold comfort

The head of the IEA has accused Europe of being too reticent in its support for Ukraine, calling for more generators and repair equipment for the war-torn country ahead of a difficult winter, writes Alice Hancock.

Context: Ukraine has suffered heavy attacks on its energy infrastructure by Russia, particularly in late August in retaliation for its incursion into Russia’s Kursk region. Half of all Ukraine’s energy infrastructure has been destroyed, roughly equivalent to the capacity of Latvia, Lithuania and Estonia.

In a report published yesterday, the IEA said Ukraine’s electricity deficit this winter could reach as much as 6GW, around a third of anticipated peak demand. The power shortfall this summer was 2.5GW when Kyiv was already enduring long blackouts.

“It’s time for everybody to understand that this winter could be consequential in Ukraine,” Fatih Birol, director-general of the IEA, told the FT. “It is the most pressing energy security issue today in the world.”

A lack of energy supplies meant a knock-on impact on the operation of hospitals, schools, water supplies and other “major implications”, Birol added.

European Commission president Ursula von der Leyen will meet Ukrainian President Volodymyr Zelenskyy in Kyiv today to discuss the situation. They will also talk about where to direct €100mn the EU has given Ukraine for repairs and renewable energy, which came from the profits from immobilised Russian assets in the EU.

The EU will also provide €60mn in humanitarian aid for shelters and heaters. Average winter temperatures in Ukraine vary between -4.8C and 2C, according to World Bank figures.

Birol said there were “major shortages” of many crucial parts, including transformers, grid equipment and diesel generators. He said Europe had been too “conservative” in sending electricity to Ukraine and could step up exports without jeopardising European supply.

European consumers could help by cutting their own electricity demand, allowing more power to go to their eastern neighbour. This would be a “very decent way of showing solidarity”, Birol said.

Ukraine should have enough gas to see it through early winter, but the IEA said that once current contracts expire at the end of the year, there could be a need to increase west-to-east gas flows to Ukraine from central and eastern European neighbours.

Chart du jour: Rising tide

The Alternative for Germany looks set to win another state election in Brandenburg on Sunday, just weeks after the far-right party won its first regional poll in Germany’s postwar history. But the Social Democrats are closing in.

Cut it

If Europe wants to be globally competitive, it needs to go further than what Brussels plans to boost the single market, says a paper co-authored by 20 member states, including the Netherlands and Germany, writes Javier Espinoza.

Context: Two recent landmark reports — by former Italian leaders Mario Draghi and Enrico Letta — spelt out the stark risks of failing to reform the single market. They highlighted the need to reduce regulatory pressure on companies and to make it easier for businesses to access funding in order for the bloc to compete with the US and China.

Ursula von der Leyen’s second term at the head of the European Commission had to “continue to cut red tape . . . going beyond the announced 25 per cent reduction of reporting requirements”, the joint document states, referring to an existing promise.

She should also back “specific digital tools” that would allow companies to focus less on regulatory reporting.

The signatories, which also include Luxembourg and the Czech Republic, called on the commission to provide “an enabling and transparent regulatory environment” — technical language for forcing capitals to align their rules.

Lex Delles, Luxembourg’s economy minister, pointed to persistent barriers within the single market where “retailers cannot pick their suppliers in the country of their choice because of territorial supply constraints imposed by wholesalers”.

He added: “By prohibiting such practices, we would show businesses and consumers that the EU can deliver concrete results for them.”

What to watch today

European Commission president Ursula von der Leyen travels to Kyiv.

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News

Firm linked to exploding pagers in Lebanon linked to shabby, anonymous apartment block in Gulgaria

Published

28 mins ago

September 20, 2024

NewsAdmin

Firm linked to exploding pagers in Lebanon linked to shabby, anonymous apartment block in Gulgaria

BY James Halpin, Foreign News Reporter

ISRAEL’S pager plot could be inspired by a spy film and the country is goading Hezbollah into starting a war, an ex-Mossad agent says.

Nearly 3,000 people were injured on Tuesday and 12 were killed in the sabotage attack leaving Lebanon in chaos and hospitals full of bloodied and injured.

Avner Avraham claims Israel is directly challenging Hezbollah to start a war in retaliation, so it can then invade Lebanon and wipe them out.

Avraham says the chess move attack was Israel saying: “Don’t mess with us”.

He said: “The attack on Tuesday was so strong and wide if they [Hezbollah] do start a limited war, they will lose immediately.

“In the north, we have to start a limited war and we prefer that Hezbollah would make the first mistake.

“The response would be a huge damage to Lebanon, it would go 100 years back.”

But, the 28-year spy veteran says Hezbollah has been left weak with so many people injured and Lebanon plunged into chaos.

“Now they don’t have a different kind of communication system, all their hospitals are full with injured people, this is the best time to attack them.”

Avraham said he believed Israel needed to attack Lebanon and create a “dead zone” inside the country where nobody lived.

That buffer would provide safety for the Israelis living in the north of the country – tens of thousands of whom have been displaced since fighting began last year.

“To bring back the families to the north, you cannot bring them to the world without destroying and pushing all the Hezbollah from the border.”

Avraham also said it is possible that the attack could have been inspired by gadgets used in spy films, something he did as an agent.

“Sometimes we use examples ideas from James Bond films, we took ideas, I can tell you this for sure.

He said: “No one could write the script for Tuesday. This is the real example of thinking outside the box… All the world saw what happened Tuesday, this is the money time.

“If Mossad is doing something and wants to declare it, they will declare it… In all cases they just do it and disappear.

“That’s the whole idea, you don’t know who is responsible for this, you don’t have any idea.”

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Money

Britain’s ultra-wealthy exit ahead of proposed non-dom tax changes

Published

29 mins ago

September 20, 2024

NewsAdmin

Britain's ultra-wealthy exit ahead of proposed non-dom tax changes

Street scene in Old Bond Street, Mayfair, London, United Kingdom.

Pawel Libera | The Image Bank | Getty Images

LONDON — Monaco, Italy, Switzerland, Dubai. They’re just a few of the destinations trying to lure away the U.K.’s uber wealthy ahead of proposed changes to the country’s divisive non-dom tax regime.

Almost two-thirds (63%) of wealthy investors said they plan to leave the U.K. within two years or “shortly” if the Labour government moves ahead with plans to ax the colonial-era tax concession, while 67% said they would not have emigrated to Britain in the first place, according to a new study from Oxford Economics, which assesses the implications of the plans.

The U.K.’s non-dom regime is a 200-year-old tax rule, which permits people living in the U.K. but who are domiciled elsewhere to avoid paying tax on income and capital gains earnings overseas for up to 15 years. As of 2023, an estimated 74,000 people enjoyed the status, up from 68,900 the previous year.

Labour last month set out plans to abolish the status, expanding on a pledge set out in its election manifesto and stepping up earlier proposals by the previous Conservative government to phase out the regime over time. It comes as Prime Minister Keir Starmer had pledged to improve fairness and shore up the public finances, with further announcements expected in the Oct. 30 Autumn budget statement.

Finance Minister Rachel Reeves has said that scrapping the program could generate £2.6 billion ($3.45 billion) over the course of the next government. However, Oxford Economics’ research, which was produced earlier this month in collaboration with lobby group Foreign Investors for Britain, estimates the changes will instead cost taxpayers £1 billion by 2029/30.

“We are ringing out the alarm bell that this is a perilous time,” Macleod-Miller, CEO of Foreign Investors for Britain, told CNBC over the phone. “If the government doesn’t listen they’ll put at risk revenues for generations.”

Other countries are smelling the fear and actively promoting their jurisdictions.

Leslie Macleod-Miller
CEO at Foreign Investors for Britain

Under the proposals, the concept of “domicile” will be eliminated and replaced with a resident-based system, while the number of years in which money earned abroad goes untaxed in the U.K. will be cut from 15 to four.

Individuals will also have to pay inheritance tax after 10 years of U.K. residency and would remain liable for 10 years after leaving the country. They will also be prevented from avoiding inheritance tax on assets held in trust.

However, Macleod-Miller, a private wealth practitioner who launched the lobby group in response to the proposals, said the changes would stymy wealth generation and is instead calling for a tiered tax regime.

According to the Oxford Economics research, which surveyed 72 non-doms and 42 tax advisors representing a further 952 non-dom clients, virtually all (98%) said they would emigrate from the U.K. sooner than previously planned if the reforms were implemented. The 72 non-doms surveyed were said to have invested £118 million each into the U.K. economy.

The majority (83%) cited inheritance tax on their worldwide assets as their key motivator for leaving, while 65% also referenced changes to income and capital gains tax.

Where the wealthy are moving

It comes as other countries are shaking up their tax regimes to incentivize wealthy investors.

Switzerland, Monaco, Italy, Greece, Malta, Dubai and the Caribbean island of the Bahamas are among the various destinations proving most attractive to wealthy investors, according to industry experts and agents CNBC spoke to.

“Wealthy investors have a lot of choices now and a lot of domiciles are fighting for them,” Helena Moyas de Forton, managing director and head of EMEA and APAC at Christie’s International Real Estate, told CNBC.

Moyas de Forton, whose team advises clients on international relocation, said Labour’s plans were the latest in a string of political developments which have shaken the U.K.’s reputation as a safe haven over recent years.

Monte Carlo skyline surrounded by sea and mountains, Monaco.

Alexander Spatari | Moment | Getty Images

“It’s just another hit,” she said. “I’m not sure if they’re all leaving but definitely they’re questioning and taking their time to see what’s changing.”

A record number of millionaires are expected to leave the U.K. this year, according to a June report from migration consultancy Henley & Partners, which cited the July general election as adding to a period of post-Brexit political flux. It is estimated that Britain will record a net loss of 9,500 high-net-worth individuals in 2024, more than double last year’s 4,200.

“It is definitely a danger. The markets are so fungible nowadays. It’s easy for people to move home. It’s easy for people to move their businesses,” Marcus Meijer, CEO of real estate investor Mark, told CNBC’s “Squawk Box Europe” of the non-dom changes last week from Monaco.

A lot of people are worried. They would rather get out now before it’s too late

James Myers
director at Oliver James

Among the alternative offerings available to the ultra wealthy are indefinite inheritance tax exemptions in Monaco, Malta and Gibraltar, and an absence of income, capital gains and inheritance tax in Dubai. In Italy and Greece, flat tax regimes allow the wealthy to avoid paying tax on their worldwide assets for an annual fee of 100,000 euros for up to 15 years.

Italy last month doubled its fee for new arrivals to 200,000 euros ($223,283) in a move its economy minister said was designed to avoid “fiscal favors” for the wealthy. However, Macleod-Miller said the regime would likely remain appealing to the top 1% even at a slightly higher rate.

“Other countries are smelling the fear and actively promoting their jurisdictions and attracting their investment and their families,” Macleod-Miller said.

“Italy is one of those countries which is courting the wealthy and seems to think if you treat them well they will contribute,” he added.

UK prime real estate faces a hit

That is also impacting the U.K.’s prime real estate market. James Myers, director at London-based luxury real estate agency Oliver James, saw an uptick in sales activity in anticipation of Labour’s election in July. But now, around 30% to 40% of clients are lowering asking prices to generate a quicker sale.

“A lot of people are worried. They would rather get out now before it’s too late,” Myers told CNBC over the phone. Many of Myers’ multimillionaire and multibillionaire clients have already started to put down roots in Monaco and Dubai, with Italy “becoming a thing” more recently, too, he said.

Transactions in London’s super-prime residential market, which covers homes valued at £10 million and above, fell 22% in the year to July compared to the previous 12 months, according to whole market data published Wednesday by property agency Knight Frank.

Elegant townhouses in South Kensington, London, England, UK.

Benedek | Istock | Getty Images

The decline was most pronounced in properties valued above £30 million, with just 10 sales generated compared to 38 the previous year, which the report attributed to higher buyer discretion.

Stuart Bailey, Knight Frank’s head of super-prime sales for London, noted that Autumn Statement uncertainty had now replaced election uncertainty, with non-doms not the only group being spooked by Labour’s anticipated tax changes.

Ultra-wealthy U.K. citizens, who are typically highly active in the super-prime market, are also in “wait and see” mode ahead of possible changes to capital gains and inheritance tax. It follows previously announced VAT (tax levy) charges for private schools.

“Non doms are a sector of that super-prime market, but they’re not the be all and end all,” Bailey said over the phone.

That is, however, creating opportunities for other investors, Bailey noted. U.S. citizens, who are already subject to U.S. tax on their worldwide assets, and so-called 90 dayers, whose annual stay in the U.K. falls below the tax threshold, could ultimately benefit from reduced competition.

“U.S. buyers, especially those sitting on a lot of cash, would be crazy not to think it’s a good time to buy right now,” he said.

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News

London Broncos argument riddled in contradictions as pleas for help highlight shortcomings

Published

49 mins ago

September 20, 2024

NewsAdmin

London Broncos argument riddled in contradictions as pleas for help highlight shortcomings

The Broncos will bow out of Super League at the end of the season, and the club faces an uncertain future.

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Business

Europe’s battery darling runs out of juice

Published

57 mins ago

September 20, 2024

NewsAdmin

This is an audio transcript of the FT News Briefing podcast episode: ‘Europe’s battery darling runs out of juice’

Sonja Hutson
Good morning from the Financial Times. Today is Friday, September 20th and this is your FT News Briefing. The markets are saying let’s party like it’s 2019. Meanwhile, Swedish battery maker Northvolt is entering its austerity era. Plus, people can get obsessed with their frequent flyer status. So when some airlines announced stricter rules, the gloves really came off.

Brooke Masters
And now US regulators are asking, is this a bait and switch and is it illegal?

[MUSIC PLAYING]

Sonja Hutson
I’m Sonja Hutson and here’s the news you need to start your day.

[MUSIC PLAYING]

Looks like Wall Street is going to be putting some champagne on ice. The S&P 500 closed at an all-time high yesterday. Investors bet that the Federal Reserve’s mega half-point rate cut is going to steer the economy into a soft landing. In other words, dodge a recession. Big Tech stocks at the top of the index led the rally, and the tech-dominated Nasdaq Composite was up 2.5 per cent yesterday. It’s a sector that really loves low rates because when money’s cheaper, debt feels lighter and riskier, assets start to look a little less scary. And it wasn’t just a party in the USA. European and Japanese indices were also up by a percentage point or two.

[MUSIC PLAYING]

A Swedish battery company has been a symbol of Europe’s fight against US and Chinese dominance in electric vehicles. But Northvolt is now struggling to scale up its operations and stay afloat. I’m joined now by the FT’s Richard Milne to discuss what this could mean for Europe’s auto industry. Hi, Richard.

Richard Milne
Yeah, hi there.

Sonja Hutson
So first off, why was Northvolt this kind of beacon of hope for Europe’s green energy ambitions?

Richard Milne
Yeah. So it was founded in 2017 by two former Tesla executives and then very quickly got the likes of Volkswagen, Goldman Sachs, BMW, Siemens, Ikea, all sorts of people on board to shareholders you know created a lot of optimism. And they went pretty quickly. They opened their gigafactory just below the Arctic Circle in northern Sweden at the end of 2021, producing the first battery. And it raised more money than any other privately held start-up in Europe. It’s raised more than $15bn, but since then, not a lot has gone right.

Sonja Hutson
Yeah. And what kind of problems is Northvolt facing?

Richard Milne
At its most basic, it just isn’t producing enough batteries. Battery making is just incredibly complex. One expert said it was like getting a million ballet dancers and everything has to go right. And it just has struggled to make its production lines work at the right speed, the right quality at the right cost levels. So it’s just massively behind schedule. It’s burning through a lot of cash. And at the same time, it’s up against these Asian competitors, particularly CATL and BYD of China, that are able to produce batteries extremely cheaply.

Sonja Hutson
And what’s the company doing to try to overcome those challenges?

Richard Milne
So the first thing it’s doing really is scaling back its ambitions. At one stage it was going to try and build so four gigafactories at the same time. It stopped or paused a lot of that and it really focusing just on this gigafactory in northern Sweden first. It realises that that is what it’s got to get right. But basically, if investors don’t give it more capital fairly soon, then it’s going to be in trouble. And the backdrop here is that in Europe, the demand for electric vehicles has been less than expected. This, in some ways may help given that it’s not making very much of them, but it also is giving investors sort of pause for thought. You know, is this green industry sector as hot as we thought it was?

Sonja Hutson
Hmmm. Now if Northvolt can’t get its act together, what would that mean for Europe?

Richard Milne
So this is really the big question. I mean, the car industry’s hugely important in Europe, and we’re in this transition to electric vehicles that are going to be dependent on batteries. If Northvolt doesn’t succeed and other European start-ups also don’t succeed, then basically you’re giving that part of your supply chain to Asian players. And that leaves a lot in the car industry worried because you want to have a close relationship with your battery maker. You probably want to tailor the batteries to your cars rather than to your rivals. So this is sounding big alarms in Europe.

Sonja Hutson
Richard Milne is the FT’s Nordic and Baltic correspondent. Thanks, Richard.

Richard Milne
Thanks so much.

[MUSIC PLAYING]

Sonja Hutson
Another day, another central bank meeting. The Bank of England said yesterday that it’s holding interest rates at 5 per cent for now, which isn’t a surprise. A majority of analysts predicted that it would keep things steady. That’s because inflation did not change in August and the BOE already cut borrowing costs by a quarter point last month. But future rate cuts are still on the table. The bank said it would take a gradual approach to loosening policy so long as there is no major changes in the economy. So most people assume that means the next rate cut is likely to come in November.

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There is no better feeling than booking a vacation. Well, except for maybe when you get that free business class upgrade because you have status. Frequent flyers love collecting points from their loyalty programs. But over the past couple of years, airlines have started making it even harder to maintain that status. And customers are not letting this fly. Here to explain more is the FT’s Brooke Masters. Hi, Brooke.

Brooke Masters
Hi.

Sonja Hutson
So for the uninitiated, how exactly do these airline loyalty programs work?

Brooke Masters
The basic way is you get a certain number of points for flying a certain number of miles, and then you can use those points to buy upgrades or buy seats. And as you hit certain levels of points, you get a status. For example, I am this year a gold status member on Delta.

Sonja Hutson
Gold? You?

Brooke Masters
My husband is a diamond, which is much better. My husband’s diamond status means basically if he flies business class and there’s a free seat in first class, they automatically upgrade him and you used to get into lounges. Now it’s a lot harder to get in lounges.

Sonja Hutson
Well, I hope you achieve diamond status one day. And just how profitable are these programs for the airlines?

Brooke Masters
These days they are absolute cash cows. That’s because they’ve figured out a new trick instead of just giving you points when you fly. They now cut deals with credit card companies where the credit card companies buy the points from the airlines and offer them to their customers for charging on the credit card. The airlines and the credit card companies also offer co-branded credit cards, which give fees to the airlines, as well as to the credit card companies. As a result, IAG, which is the parent of British Airways and Iberia, actually makes more money from its credit card program than it does from flying any of its airlines.

Sonja Hutson
So why are some customers annoyed with these programs right now?

Brooke Masters
There’s been a problem since Covid with too many people with too many points, because if you imagine people built up their points during Covid, they now want to fly. And so there was just too many people trying to use too few benefits, and it became very unpleasant. So the airlines have basically changed the rules, saying, we know we told you a credit card would get you lounge access. Actually, not so much. You know, it’s better for all of us. We’re trying to build loyalty. And now US regulators are asking, is this a bait and switch and is it illegal?

Sonja Hutson
And so if customers get so annoyed that they start to ditch these programs, where does that leave the airlines, especially because these programs are so, so profitable?

Brooke Masters
It will be tough for their bottom lines, I mean, because this is absolutely an important part of their growth plans and their profit programs. American Airlines got itself into big trouble a couple of months ago when it tried to say that if you booked your corporate flights, unless you booked them directly with American or through a couple of preferred travel partners, you wouldn’t get points at all. And people stopped flying. I mean, it showed up in their bottom line. They had to reverse the policy. The airlines do run the risk that they may choose not to fly them if the frequent flyer program is too bad.

Sonja Hutson
OK. So people are obviously heavily invested in these programs. But why is that? Like, what is it about them that gets everyone so riled up?

Brooke Masters
When Delta changed its rules the travel boards lit up and one of the best comments was somebody who referred to the alterations as a stinking, odorous sack of shites. There is this emotional feeling that when the program works, you love them. But, you know, every time I walk by the lounge and realise I can’t get in, it makes me really angry. And that’s what it’s about. It’s a game. People are absolutely emotionally attached to their programs. One of the consultants I talked to said you should always keep in mind people will pay anything to get something for free.

Sonja Hutson
Brooke Masters is the FT’s US financial editor. Thanks, Brooke.

Brooke Masters
Always a pleasure.

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Sonja Hutson
You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing is produced by Niamh Rowe, Fiona Symon, Marc Filippino, Kasia Broussalian and me, Sonja Hutson. Our engineer is Monica Lopez. We had help this week from Michela Tindera, Mischa Frankl-Duval, Sam Giovinco, David Da Silva, Michael Lello, Peter Barber, Gavin Kallmann and Persis Love. Our executive producer is Topher Forhecz. Cheryl Brumley is the FT’s global head of audio and our theme song is by Metaphor Music.

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