The Taiwanese government has said components in thousands of pagers used by the armed group Hezbollah that exploded in Lebanon earlier this week were not made on the island.

The comments come after Taiwanese company Gold Apollo said it did not make the devices used in the attack.

The Lebanese government says 12 people, including two children, were killed and nearly 3,000 injured in the explosions on Tuesday.

The incident, along with another attack involving exploding walkie-talkies, was blamed on Israel and set off a geopolitical storm in the Middle East.

“The components for Hezbollah’s pagers were not produced by us,” Taiwan’s economy minister Kuo Jyh-huei told reporters on Friday.

He added that a judicial investigation is already underway.

“I want to unearth the truth, because Taiwan has never exported this particular pager model,” Taiwan foreign minister, Lin Chia-lung said.

Earlier this week, Gold Apollo boss Hsu Ching-Kuang denied his business had anything to do with the attacks.

He said he licensed his trade mark to a company in Hungary called BAC Consulting to use the Gold Apollo name on their own pagers.

The BBC’s attempts to contact BAC have so far been unsuccessful. Its CEO Cristiana Bársony-Arcidiacono told the US news outlet NBC that she knew nothing and denied her company made the pagers.

The Hungarian government has said BAC had “no manufacturing or operational site” in the country.

But a New York Times report said that BAC was a shell company that acted as a front for Israel, citing Israeli intelligence officers.

In another round of blasts on Wednesday, exploding walkie-talkies killed 20 people and injured at least 450, Lebanon’s health ministry said.

Japanese handheld radio manufacturer Icom has distanced itself from the walkie-talkies that bear its logo, saying it discontinued production of the devices a decade ago.

Iran-backed Hezbollah has blamed Israel for what it called “this criminal aggression” and vowed that it would get “just retribution”.

The Israeli military has declined to comment.

The two sides have been engaged in cross-border warfare since the Gaza conflict erupted last October.

The difficulty in identifying the makers of the devices has highlighted how complicated the global electronics supply chain has become.

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

1. European Commission president Ursula von der Leyen travels to Kyiv.

Now read these

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.

[MUSIC PLAYING]

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.

[MUSIC PLAYING]

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.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Across the developed world, girls and young women have been pulling ahead of boys and young men in education for several decades, with much larger proportions going on to attend university than their male counterparts.

This trend has generally been treated more as something to remark upon than to act on. The myriad domains in which women remain at a disadvantage to men have understandably led to efforts at achieving gender equality becoming synonymous with advancing women’s opportunities and outcomes. Men have always gone on to have better labour market outcomes anyway, and if women outperform men in education, this helps narrow the overall male advantage — or so the thinking has gone.

The problem with this framing is that in an increasing number of countries, we have moved beyond a narrowing gap in socio-economic outcomes, and there is now a new and growing gap in the opposite direction.

Much less appreciated than the widening tertiary education gap is the fact that in several rich countries young women are now more likely to be in work than young men. The UK joined this group in 2020, and the female employment rate lead among 20-24s has since widened to three percentage points. The crossover is yet to happen in the US, but young women’s employment rate deficit has shrunk from almost 10 percentage points in 2006 to a single point last year.

Put another way, the UK is part of a growing list of countries where the answers to “who is doing most of the legwork raising children?”, “who is focused on getting a good education?” and “OK, but who is out working to bring home a good income?” are all: “Women.”

If this were simply a case of women making strides, it would be something to celebrate — and that side of the story certainly is — but a substantial minority of young men are actively moving backwards, with growing numbers increasingly disengaged from society.

Across the developed world, the portion of young men who are neither in education, in work nor looking for a job has been climbing steadily for decades. In countries including the UK, France, Spain and Canada there are now more young men than women in effect outside the economy for the first time in history. Unlike young women, these men are generally not occupied by caring for other family members either. They are adrift and likely to be the ones in need of care themselves. More than 80 per cent of this group in the UK report long-term health problems.

Perhaps most striking of all, 2022 was the first time the average young woman in the UK had a higher income than her male counterpart. This is due in large part to women becoming so much more likely to have a degree and the graduate salary that comes with it, but also to the deteriorating fortunes of non-graduate men, who have gone from earning 57 per cent more than non-graduate women in 1991, to 10 per cent less in 2022.

It is a similar story in the US, where young non-college women and college-educated people of both sexes have all seen incomes either hold up or increase, but non-college men have plummeted down the income distribution.

While shifting composition plays a role here — today’s non-college graduates are a very different group to non-graduates 30 years ago — it cannot explain the starkly different trajectories of non-college men and women, which owe more to the continuing transition from an economy where jobs requiring hands, hearts and heads were all plentiful and relatively remunerative, to one where the latter dominate.

But while discourse and policy remain focused on other things, the repercussions of these tectonic shifts are quietly playing out everywhere you look.

With socio-economic trajectories heading in different directions, a growing minority of young men and women do not see eye to eye. Young male support for populist rightwing parties is on the rise, particularly among those without jobs and degrees. Violent unrest is more likely with a growing pool of young men with little stake in society or their future.

And relationship formation itself is being affected, as growing numbers of female graduates discover a shortage of male socio-economic counterparts, and simultaneously have less need than ever to pair up with a man for financial support.

Reversing the slide among non-graduate men will not be easy, nor must it become a zero-sum game with young women, but it is an essential challenge for the decades ahead and will have positive spillovers well beyond those directly affected.

john.burn-murdoch@ft.com, @jburnmurdoch

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Britain’s foreign secretary David Lammy is pushing for an emergency top-up to development spending as ballooning costs of supporting asylum seekers threaten to drain overseas aid to its lowest level since 2007.

The UK government spent £4.3bn hosting asylum seekers and refugees in Britain in the last financial year, more than a quarter of its £15.4bn overseas aid budget, according to official data. This more than consumed the £2.5bn increases in the aid budget scheduled between 2022 and 2024 by former Conservative chancellor Jeremy Hunt.

People familiar with Lammy’s thinking say he fears that if Rachel Reeves, the chancellor, resists calls to at least match Hunt’s offer, the aid budget will be further eviscerated, undermining the government’s ambitions on the global stage.

Currently, the housing of asylum seekers in hotels is controlled by the Home Office but largely paid for out of the aid budget, a set-up introduced in 2010 when spending on the programme was relatively modest.

In the longer term, development agencies and some Foreign Office officials want the costs capped or paid for by the Home Office itself.

However, such a move would be politically fraught, the people said, as it would require billions of pounds of extra funding for the Home Office at a time the government is preparing widespread cuts across departments.

Sir Keir Starmer, the prime minister, is due to attend a string of upcoming international events, starting with the UN general assembly this month, then a Commonwealth summit in Samoa, a G20 meeting in Brazil, and COP-29 climate talks in Azerbaijan later this autumn.

International partners will be looking at these meetings for signs that the change of government in the UK marks a change in direction on development.

Britain’s leading role was eroded by Rishi Sunak after he cut the previously ringfenced spending from 0.7 per cent of gross national income to 0.5 per cent when he was chancellor in 2020.

“When he turns up at the UN next week and the G20 and COP a few weeks later, the PM has a unique opportunity to reintroduce the UK under Labour as a trustworthy partner that sees the opportunity of rebooting and reinvesting in a reformed fairer international financial system,” said Jamie Drummond, co-founder of aid advocacy group One.

“But to be that trusted partner you need to be an intentional investor — not an accidental cutter.”

Speaking on Tuesday in a speech outlining UK ambitions to regain a leading role in the global response to climate change, Lammy said the government wanted to get back to spending 0.7 per cent of GNI on overseas aid but that it could not be done overnight.   

“Part of the reason the funding has not been there is because climate has driven a migration crisis,” he said. “We have ended up in this place where we made a choice to spend development aid on housing people across the country and having a huge accommodation and hotel bill as a consequence,” he said.

Under OECD rules, some money spent in-country on support for refugees and asylum seekers can be classified as aid because it constitutes a form of humanitarian assistance.

But the amount the UK has been spending on refugees from its aid budget has shot up from an average of £20mn a year between 2009-2013 to £4.3bn last year, far more than any other OECD donor country, according to Bond, the network of NGOs working in international development.

Spending per refugee from the aid budget has also risen from an average of £1,000 a year in 2009-2013 to around £21,500 in 2021, largely as a result of the use of hotels to accommodate asylum seekers.

The Independent Commission for Aid Impact watchdog argues that the Home Office has had little incentive to manage the funds carefully because they come from a different department’s budget.

In her July 29 speech outlining the dire fiscal straits that Labour inherited from the previous Conservative government, Reeves projected the cost of the asylum system would rise to £6.4bn this year.

Labour was hoping to cut this by at least £800mn, she said, by ending plans to deport migrants to Rwanda. A Home Office official said the government was also ensuring that asylum claims were dealt with faster and those ineligible deported quickly.

But the Foreign Office projects that on current trends, overseas aid as a proportion of UK income (when asylum costs are factored in) will drop to 0.35 per cent of national income by 2028.

Without emergency funding to plug the immediate cost of housing tens of thousands of migrants in hotels, that will happen as soon as this year, according to Bond, bringing overseas aid levels to their lowest as a proportion of national income, since 2007.

The Foreign, Commonwealth and Development Office said: “The UK’s future [official development assistance] budget will be announced at the Budget. We would not comment on speculation.”