Unlock the Editor’s Digest for free

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

Israel has struck central Beirut for the first time in a year of fighting, hitting an apartment building and killing members of a Palestinian faction as it continues to expand its offensive against adversaries across the region.

The strike in the Kola bridge area of Beirut in the early hours of Monday marks the first time Israel has hit deep inside the Lebanese capital since the war between Israel and Hizbollah in 2006. It appeared to target a specific apartment, videos from the scene showed, and killed three leaders of the Popular Front for the Liberation of Palestine, according to the group.

It follows days of Israeli strikes on the southern suburbs of Beirut that have killed dozens of top commanders of the Iranian-backed Hizbollah militant group, including its influential leader Hassan Nasrallah, but marks the first hit within the city limits of the Lebanese capital.

The Israeli military has not commented on the late-night strike but said it continued to launch attacks overnight on Hizbollah targets in the Bekaa Valley in eastern Lebanon after its fighter jets on Sunday hit multiple sites in Yemen linked to the Houthi rebels, dramatically widening its offensive against the allied Iranian-backed groups.

Over the past two weeks, Israel’s offensive has killed more than 1,000 people in Lebanon, causing panic across the nation and forcing hundreds of thousands to flee, according to the Lebanese health ministry. More than 100 people were killed on Sunday alone.

Up to 1mn people may have been displaced by Israeli bombings in Lebanon, Prime Minister Najib Mikati said on Sunday, adding that the numbers were likely to have gone far beyond those recorded in official shelters.

Israeli Prime Minister Benjamin Netanyahu said the country was in the process of “changing the balance of power” in the Middle East and vowed to keep up its offensive on multiple fronts.

The Palestinian militant group Hamas said on Monday that one of its leaders in Lebanon had been killed in an Israeli strike on a Palestinian refugee camp near the city of Tyre in southern Lebanon.

In Yemen, Israeli warplanes targeted power plants, ports and other infrastructure in the Red Sea port of Hodeidah, a Houthi rebel stronghold, as well as Ras Issa, after Israel’s military on Saturday intercepted a missile launched from Yemen over central Israel for the third time this month.

The Houthis have launched missiles and drones at Israel, merchant ships and US naval vessels in the Red Sea since Hamas’s October 7 attack on southern Israel triggered the war in Gaza.

Videos from central Beirut on Monday showed rubble strewn across a busy street as ambulances raced to the scene. The Palestinian militant faction PFLP, whose members were killed in the strike, is designated a terrorist group by the US, EU and UK.

Netanyahu has insisted Israel will continue its offensive against Hizbollah and its allies until the more than 60,000 people displaced from Israel’s north by a year of cross-border fire are able to return home, despite calls by the US and other western powers for Israel to de-escalate.

US President Joe Biden on Sunday said he planned to speak to Netanyahu. When asked if an all-out war in the Middle East could be avoided, he replied: “It has to be.”

EU foreign ministers will hold an emergency crisis meeting via video conference on Monday afternoon, officials said, to devise a joint response to the spiralling crisis.

Mikati said the state was doing its utmost given its available resources to deal with what he called the “largest displacement in the region, in Lebanon and even in history”.

Additional reporting by Henry Foy in Brussels and Malaika Kanaaneh Tapper in Beirut

UK house prices have grown at their fastest rate in the past two years, according to Nationwide.

The building society says house prices increased by 0.7% in September.

1

This means that the annual price growth rate accelerated from 2.4% in August to 3.2% this month.

This is the fastest pace since November 2022 when there was a 4.4% rise.

The average UK house price in September is £266,094, which is an increase from £265,375 in August.

The news follows a pretty subdued period for the property market, with wider economic factors like wage stagnation and political uncertainty hitting the market hard.

But it’s a mixed picture across the UK, with most regions only seeing a fairly moderate increase in house prices.

Northern Ireland continues to be the most strongly for annual growth in the third quarter of the year, with prices up by 8.6% year-on-year, Nationwide said.

This means the average price of a property in Northern Ireland is now £196,197.

While East Anglia was the weakest performing region, with prices down by 0.8% over the year – with prices standing at £270,906.

Scotland saw a decent acceleration in annual growth to 4.3%, up from 1.4% in the second quarter.

Wales saw a more modest year-on-year rise from 1.4% in the previous quarter to 2.5%.

Overall, across England prices were up 1.9% compared with the third quarter of 2023.

Northern England – which comprises North, North West, Yorkshire and the Humber, the East Midlands and West Midlands – continued to outperform the south, with prices up 3.1% year-on-year.

Nationwide found that the North West was the best-performing English region, with prices up 5% year-on-year.

Southern England – made up of the South West, Outer South East, Outer Metropolitan, London and East Anglia regions – saw a 1.3% increase compared to last year.

While, London remained the best-performing southern region with annual price growth of 2%.

Robert Gardner, Nationwide’s chief economist, said: “Average prices are now around 2% below the all-time highs recorded in summer 2022.

“Income growth has continued to outstrip house price growth in recent months while borrowing costs have edged lower amid expectations that the Bank of England will continue to lower interest rates in the coming quarters.

“These trends have helped to improve affordability for prospective buyers and underpinned a modest increase in activity and house prices, though both remain subdued by historic standards.”

BANGKOK (AP) — Indonesian shrimp farmer Yulius Cahyonugroho operated more than two dozen ponds only a few years ago, employing seven people and making more than enough to support his family.

Since then, the 39-year-old says the prices he gets from purchasers have fallen by half and he’s had to scale back to four workers and about one-third the ponds, some months not even breaking even. His wife has had to take a job at a watermelon farm to help support their two children.

“It is more stable than the shrimp farms,” said the farmer from Indonesia’s Central Java province.

As big Western supermarkets make windfall profits, their aggressive pursuit of ever-lower wholesale prices is causing misery for people at the bottom end of the supply chain — people like Cahyonugroho who produce and process the seafood, according to an investigation by an alliance of NGOs focused on three of the world’s largest producers of shrimp provided to The Associated Press ahead of its publication on Monday.

The analysis of the industry in Vietnam, Indonesia and India, which provide about half the shrimp in the world’s top four markets, found a 20%-60% drop in earnings from pre-pandemic levels as producers struggle to meet pricing demands by cutting labor costs.

In many places this has meant unpaid and underpaid work through longer hours, wage insecurity as rates fluctuate, and many workers not even making low minimum wages. The report also found hazardous working conditions, particularly in India and parts of Indonesia, and even child labor in some places in India.

“The supermarket procurement practices changed, and the working conditions were affected — directly and rapidly,” said Katrin Nakamura of Sustainability Incubator, who wrote the regional report and whose Hawaii-based nonprofit led the research on the industry in Vietnam. “Those two things go together because they’re tied together through the pricing.”

Tubagus Haeru Rahayu, the director general of aquaculture for Indonesia’s Maritime Affairs and Fisheries Ministry, said he was surprised by the report’s findings and had already reached out to people in the industry to investigate the price pressures.

“If there is pressure like that, there will definitely be a reaction — not only in Indonesia but in Vietnam and India too,” he told the AP in an interview at his Jakarta office.

Indian and Vietnamese officials refused to comment.

Supermarkets linked to facilities where exploited labor was reported by workers include Target, Walmart and Costco in the United States, Britain’s Sainsbury’s and Tesco, and Aldi and Co-op in Europe.

Switzerland’s Co-op said it had a “zero tolerance” policy for violations of labor law, and that its producers “receive fair and market-driven prices.”

Germany’s Aldi did not specifically address the issue of pricing, but said it uses independent certification schemes to ensure responsibly sourcing for farmed shrimp products, and would continue to monitor the allegations.

“We are committed to fulfilling our responsibility to respect human rights,” Aldi said.

Sainsbury’s referred to a comment from the British Retail Consortium industry group, which said its members were committed to sourcing products at a “fair, sustainable price” and that the welfare of people and communities in supply chains is fundamental to their purchasing practices.

None of the other retailers named in the report responded to multiple requests for comment on the report, titled “Human Rights for Dinner.”

In Vietnam, researchers found that workers who peel, gut and devein shrimp typically work six or seven days a week, often in rooms kept extremely cold to keep the product fresh.

Some 80% of those involved in processing the shrimp are women who rise at 4 a.m. and return home at 6 p.m., with the exception of pregnant women and new mothers who can stop one hour earlier.

“The work day for peelers consists of standing in a refrigerated and disinfected room and working extremely rapidly with a knife while taking care not to make a mistake,” researchers said.

Wages are generally not disclosed ahead of time and are based upon production. Sometimes workers make minimum wage, but frequently they do not.

The Vietnam Association of Seafood Exporters and Producers issued a statement calling the allegations in the report “unfounded, misleading and detrimental to the reputation of Vietnam’s shrimp exports.”

It cited government labor policies in a four-page statement but did not specifically address the findings, and did not respond to queries.

After food supply chain disruptions during the COVID-19 pandemic, the U.S. Federal Trade Commission reported earlier this year that some grocers have used the situation “as an opportunity to further raise prices to increase their profits, which remain elevated today.”

The demands for lower wholesale shrimp prices — combined with rising production costs and an oversupply — means farmers often must sell their products under cost just to keep operations going, the Sustainability Incubator analysis found.

Cahyonugroho said he’s stuck selling his shrimp at the price offered by middlemen who then sell it to factories for processing. He can’t scrape together the startup costs needed to sell directly to factories or markets to earn more.

“The opportunity is there,” he said, “but you need a lot of capital if you want to jump into something like that.”

The middlemen who buy the shrimp obfuscate the true sources of shrimp that appear in Western supermarkets, so many retailers may not be following ethical commitments they’ve made about procuring shrimp.

Only about 2,000 of the 2 million shrimp farms in the major producing countries of India, Indonesia, Vietnam, Ecuador, Thailand and Bangladesh are certified by either the Aquaculture Stewardship Council or the Best Aquaculture Practices ecolabel.

“With the yield from most certified shrimp farms being very small, it is mathematically impossible for certified farms to produce enough shrimp per month to supply all of the supermarkets that boast commitments to purchasing certified shrimp,” the report said.

Ideally, supermarkets should pay higher wholesale prices and ensure that the extra money makes it all the way down the supply chain, Nakamura said.

U.S. policymakers could use antitrust and other laws already in place to establish oversight to ensure fair pricing from Western retailers, rather than adding punishing tariffs on suppliers for labor violations, she said.

Awareness about the trends hurting suppliers is growing.

In July, the European Union adopted a new directive requiring companies to “identify and address adverse human rights and environmental impacts of their actions inside and outside Europe.”

Britain’s Groceries Code Adjudicator office published a “deep dive” into views of suppliers about the conduct of supermarkets, saying they had chosen to conduct “warfare” with suppliers.

Higher wholesale prices don’t have to mean higher prices for consumers, Sustainability Incubator said.

“Prices to farmers would be at least 200% higher than today if the shrimp sold in Global North supermarkets was made at minimum wage rates and in compliance with applicable domestic laws for labor, workplace health, and safety,” the report said. “This would not necessarily mean higher consumer prices, because supermarkets are already profiting at existing consumer prices.”

Researchers from the Corporate Accountability Lab found that Indian shrimp industry workers face “dangerous and abusive conditions” and that highly-salinated water from newly-dug hatcheries and ponds, tainted with chemicals and toxic algae, are contaminating surrounding water and soil.

Unpaid labor prevails, including salaries below minimum wage, unpaid overtime, wage deductions for costs of work and “significant” debt bondage, the report found.

Child labor was also identified, with girls aged 14 and 15 being recruited for peeling work.

In Indonesia, three non-profit research organizations found that shrimp workers’ wages have declined since the pandemic and now average $160 per month, below Indonesia’s minimum wage in most of the biggest shrimp-producing provinces. Shrimp peelers were found to be routinely required to work at least 12 hours per day to meet minimum targets.

Still, given widespread poverty most workers said they’re happy to have their jobs, said lead researcher Kharisma Nugroho of the Migunani Research Institute.

“It’s exploitation of the vulnerability of the workers, because they have a lack of options,” he said.

“They’re paid the minimum wages but they have to work 150% of the normal,” he told the AP. “Can they live? Yes. Can they move? Yes. Do they make a complaint? No. They’re still there.”

The regional report compiled more than 500 interviews conducted in-person with workers in their native languages, in India, Indonesia and Vietnam, supplemented with secondary data and interviews from Thailand, Bangladesh and Ecuador.

After the Indonesia country report was issued recently, government officials asked to meet with the authors, and Nugroho said they showed a “genuine willingness to improve the situation.”

Vietnamese officials have also engaged with Sustainability Incubator to talk about the findings.

Government and industry intervention has already helped in Thailand, which has been criticized after the AP exposed serious labor abuses in the shrimp industry in the past. That, however, has led to higher prices for Thai shrimp, leading some buyers to shift sourcing to India and Ecuador.

Ecuador has an industrial approach to shrimp farming — unlike the smaller, often family-run operations in Southeast Asia — and is now the world’s largest exporter of shrimp. It has the lowest prices, followed by India; China, which wasn’t included in the report; then Vietnam and Indonesia.

But with the demand for lower wholesale prices, while Ecuador’s exports rose 12% in volume in 2023, they fell 5% in value. India’s exports rose 1% but dropped nearly 11% in value.

Meantime, with their relatively higher prices, Vietnam’s exports were down 25% in 2023 in volume Indonesia’s dropped 9.5%.

“Labor exploitation in shrimp aquaculture industries is not company, sector, or country-specific,” the report concluded. “Instead, it is the result of a hidden business model that exploits people for profit.”

___

Associated Press writer Edna Tarigan in Jakarta, Indonesia, contributed to this report.

___

This story was supported by funding from the Walton Family Foundation. The AP is solely responsible for all content.

UK economic growth between April and June was less than previously estimated, according to official figures.

Gross domestic product (GDP) – which measures all the economic activity of companies, governments and people in a country – rose by 0.5%, down from an initial reading of 0.6%.

The manufacturing and construction sectors fell by more than first thought.

The data has emerged as the Labour government, which has made economic growth one of its key policies, prepares to announce its first Budget in four weeks’ time.

The Office for National Statistics (ONS), which published the figures, said the production of transport and related equipment tumbled by 3.1% between April and June after a long period of growth.

It was first estimated to have fallen by 0.7%.

The ONS said there was evidence to suggest that factories had reduced manufacturing as they prepared for the shift to making electric cars.

Construction also dropped due to a continuing decline in building new homes. However, the ONS said there were some signs this was beginning to ease.

Paul Dales, chief UK economist at Capital Economics, said the downward revision “shouldn’t make the Bank of England worry too much about the economy running out of momentum”.

However, he added: “It may add to the Bank’s view that interest rates need to be reduced further.”

The Bank of England cut interest rates for the first time in nearly four years in August, to 5% from 5.25%.

Financial planning firm Calton has appointed Bruce Hendry as executive director to lead its head office in Edinburgh

He will take up the role from today (30 September).

The appointment is the capstone of a year of growth and consolidation and is key to Calton’s strategy for UK growth.

Hendry is a chartered fellow of both the Personal Finance Society and the Chartered Institute for Securities and Investment.

He holds an Executive MBA from Edinburgh University Business School and has previously lectured at Dundee and Edinburgh Universities.

He has held previous roles at Thomson Cooper Accountants, Charles Stanley and Co and Barclays Wealth and Investment Management.

He will join Tom Ham, Laura Bruce, Gary Dale and Mark Polson on the company’s board of directors.

Commenting on his appointment, Hendry said: “I have been watching Calton’s development closely. The firm’s vision aligns with mine – to build client confidence through delivering exceptional outcomes and service.

“Much of that is about values, but Calton is also breaking new ground in developing systems that will help make that vision a reality. I look forward to showcasing this to the profession.”

Calton Wealth uses AI to cut out ‘menial tasks’ for advisers

Calton founder and group chief executive Tom Ham said: “Bruce choosing Calton is a vote of confidence in our mission and ambition.

“He has already built a distinguished senior career in advising and investment management across the UK and has a proven track record of building and growing departments.

“His expertise and dynamism is second to none. He will be an essential force in taking Calton and our talented team to new heights in the service we offer our clients.”

Over the past 12 months, Calton has moved to a new flagship office in Rutland Square in the heart of Edinburgh’s financial district.

Calton Wealth makes first acquisition in ‘key step’ for growth plans

It has increased its client-facing and support staff and launched a new digital presence. A groundbreaking new management system will launch later this autumn.

Ham added: “We are focused firmly on a future in which technological solutions will ease friction in our day-to-day processes while ensuring that we adhere to the highest professional standards.

“Our bespoke management system will be an essential tool across our team, from advisers to paraplanners, to marketing, monitoring and reporting.”

Calton is a financial planning and investment management firm founded in Edinburgh by Tom Ham in 2021.

With offices in London and the Scottish Borders, it has clients across the UK.