European and US stocks are trading lower as investors await US inflation figures tomorrow, with the exception of the UK’s FTSE 100 index, which has edged 0.2% higher to 7,47, a gain of 15 points.

The UK fund manager Abrdn is the biggest loser, down 5.8%, after it swung to a loss in the first half of the year, after being hit by market turmoil.

Chief executive Stephen Bird, who scrapped the Standard Life Aberdeen brand for a new name last year, said the pretax loss of £320m in the six months to June “largely reflected the challenging global economic environment and market turbulence.” The fund manager had reported profits of £113m a year earlier.

Crude oil prices are up by about $1 a barrel after Russia said oil exports to Europe via the southern leg of the Druzhba pipeline had been suspended since early August.

Our main story today:

Pressure is mounting on the UK government to announce a fresh support package for struggling households as energy bills are now forecast to top £4,200 from January.

The consultancy Cornwall Insight said on Tuesday that it expected the energy price cap to reach £4,266 a year for the first three months of next year.

Liz Truss has doubled down on her refusal to offer significant help to people with soaring energy bills this winter, despite a forecast that these could exceed £4,200 annually from January, and rise further during 2023.

Truss, the runaway favourite to succeed Boris Johnson as prime minister next month, has already said she does not want to give “handouts” to people struggling with bills, preferring to prioritise tax cuts.

While she has not definitively ruled out other direct help, questioned on Tuesday the foreign secretary would only confirm plans to reverse the recent increase in national insurance, and to temporarily suspend green levies on energy bills.

Here is a round-up of today’s other stories:

Thank you for reading. We’ll be back tomorrow. Take care, JK

Crude oil prices have reversed earlier declines and are now up by more than $1 a barrel, after Russia said oil exports to Europe via the southern leg of the Druzhba pipeline had been suspended since early August.

Brent crude is trading at $97.91 a barrel and US light crude at $91.9 a barrel.

The state-controlled pipeline transport company Transneft said Ukraine had suspended oil flows via the pipeline leg from 4 August because Western sanctions had stopped a payment from Moscow for transit fees.

Gazprombank, which handled the payment, said the money was returned because of European Union restrictions, Transneft said.

There is also scepticism whether the 2015 nuclear Iran deal can be salvaged which would pave the way for a sizeable boost to oil exports from Iran. The EU tabled a “final” text on Monday, which needs to be approved by Washington and Tehran. Talks have dragged on for months.

According to tanker trackers, Iran’s oil exports are at least 1m barrels per day below their rate in 2018, when then-US president Donald Trump exited the nuclear agreement with Iran, Reuters reported.

British Gas parent Centrica, Britain’s biggest energy supplier, has struck a £7bn deal to buy liquefied natural gas from US firm Delfin Midstream from 2026.

The company said the 15-year deal would involve buying 1m tonnes of LNG a year from the Delfin Deepwater Port off the coast of Louisiana. Countries across Europe are trying to wean themselves off Russian gas following Moscow’s invasion of Ukraine.

Centrica chief executive Chris O’Shea said:

Natural gas has now been recognised as an essential transition fuel on the path to net zero just at the point geopolitical uncertainty is impacting the global gas market.

The UK is home to three of the largest LNG terminals in Europe – two terminals at Mildford Haven and another at the Isle of Grain – where the super chilled fuel is transformed back into gas.

The price of olive oil is set to rise by up to 25% as heatwaves hit production in Spain, a leading exporter has warned.

Spain produces nearly half the world’s olive oil. Soaring temperatures across Spain and other big exporters such as Italy, Greece and Portugal, have hit olive oil production.

Acesur, which supplies the UK’s biggest supermarkets, told the BBC this would feed through into prices in shops in the next three to four months when companies renew their contracts. The company’s export manager, Miguel Colmenero, said customers could see prices rise by 20-25%.

Acesur accounts for more than 200,000 tonnes of olive oil a year, out of the 1.4m tonnes produced in Spain annually, and sells its products in more than 100 countries.

It sells around 20,000 tonnes a year in the UK and packs own-label brands for Sainsbury’s, Tesco, Waitrose, Morrisons and Asda. The supermarkets also stock its La Espanola brand, which is the third biggest in the UK.

Most of the olives in its products are grown in Andalucia, southern Spain, which has had very little rainfall in recent weeks.

Colmenero said the dry weather could also affect next season’s crop if olive trees cannot grow new branches due to lack of water.

The UK faces an “impending disaster” and “serious hardship on a massive scale” unless the government takes action to offer at least double the support for households facing the prospect of rising energy bills, according to a thinktank focused on poverty.

The Joseph Rowntree Foundation said payments worth £400 to every UK household, announced in May by then-chancellor Rishi Sunak, would not be enough to cope with the surge in energy costs expected during the winter.

It came after energy researchers at Cornwall Insights, whose analysis is closely watched by the industry and politicians, on Tuesday issued a forecast suggesting that the average annual energy bill allowed under the government’s price cap could break above £4,200 in January.

Peter Matejic, chief analyst at the Joseph Rowntree Foundation, said:

The latest projections of annual energy bills exceeding £4,200 from January is the latest in a series of terrifying warnings over the past week, from the Bank of England and others. Families on low incomes cannot afford these eye watering sums and as a nation we can’t afford to ignore an impending disaster.

Both candidates to be prime minister must now recognise the extraordinarily fast-changing situation and act to protect the hardest hit from the coming emergency.

Every day action is delayed is increasing anxiety for low-income families who do not know how they will get by this winter. The payments promised by the government earlier in the year offer some help but their scale has been overtaken by events, and they must now be at least doubled if they are to protect people from serious hardship on a massive scale.

Hundreds of thousands of nurses in England and Wales will vote next month on whether to strike in a row over pay.

The strike ballot will open on 15 September and run until 13 October, said the Royal College of Nursing, the biggest union representing nurses.

RCN’s Wales director Helen Whyley told Times Radio that more than 250,000 nurses would be balloted. If they vote to strike, it would be the first walkout in the RCN’s 106-year history.

The union says a £1,400 pay rise announced by the government last month is not enough to cushion the impact of soaring consumer prices. UK inflation has hit a 40-year high of 9.4% and is set to rise above 13% in the coming months, pushed higher by spiralling energy and food costs.

Carol Popplestone, chair of RCN Council, said in a message to union members:

This year’s pay award does not help you with the rising cost of living. It will do nothing to help to recruit or retain more nursing staff where you work and will not keep patients safe.

A strike would mean further disruption to an already understaffed health service. Strikes have been staged by a number of other sectors including railway workers as the cost of living crisis deepens.

On the currency markets, the US dollar has come off recent highs, ahead of US inflation data tomorrow.

The pound has strengthened 0.36% to $1.2119 while the euro is also up against the dollar, at $1.0236, a 0.4% gain. The yen held at 134.94 per dollar.

Ray Attrill, head of foreign exchange strategy at National Australia Bank in Sydney, told Reuters:

The market understandably is waiting for the numbers to then reprice, rather than moving in anticipation in of them.

We’ve had six CPI [consumer price index] numbers this year, four of those six have been upside surprises... but the impact on the dollar is a little bit ambiguous.

Further interest rate hikes look likely as the Bank of England battles inflation of more than 9%, a 40-year high.

The central bank will probably have to raise interest rates further from their current 14 year-high to tackle inflationary pressures that are gaining a foothold in Britain’s economy, its deputy governor, Dave Ramsden, said today.

The spread of inflation was showing up in rising British pay and companies’ pricing plans, having originally been triggered by the reopening of the world economy from Covid-19 lockdowns and then by Russia’s invasion of Ukraine, Ramsden told Reuters in an interview.

Inflation is expected to return to the Bank’s 2% target – down from above 9% now and a projected peak of 13% in October – as the economy goes into a recession and borrowing costs rise.

But there was also a risk of an inflation mentality developing, Ramsden said.

Personally, I do think it’s more likely than not that we will have to raise the Bank rate further. But I haven’t reached a firm decision on that.

I’m going to look at the indicators, look at the evidence as we approach each upcoming meeting.

The Bank raised borrowing costs last week by the most since 1995 as it took the Bank rate to 1.75% from 1.25%, its sixth increase since December, compounding the biggest two-year disposable income hit for households since at least the 1960s. Ramsden said:

We know that what we’re doing is adding to an already very challenging environment. But our assessment is we needed to act forcefully to ensure that inflation doesn’t become embedded.

Pressure is mounting on the government to announce a fresh support package for struggling households as energy bills are now forecast to top £4,200 from January.

Consultancy Cornwall Insight said on Tuesday that it expects the energy price cap to reach £4,266 a year for the first three months of next year, reports our energy correspondent Alex Lawson.

The consultancy forecasts that bills could hit £4,426 in the second quarter of next year before easing. Only a week ago Cornwall Insight predicted the energy price cap was on track to rise to £3,615 a year from January.

Cornwall Insight said a revision of the methodology used by regulator Ofgem to calculate the price cap was behind the increase in its forecasts.

Germany, Europe’s biggest economy, is set to lose more than €260bn in added value by 2030 because of the Ukraine war and high energy prices, according to a study by the Institute for Employment Research.

Germany’s price-adjusted GDP will be 1.7% lower next year as a result and there will be 240,000 fewer people in employment. This fall in employment is expected to persist until 2026 when expansive measures kick in and the institute is predicting that by 2030, 60,000 more people will be employed than now.

One of the big losers is the hospitality industry, which was hit hard by the pandemic and will be feeling the pinch from lower consumer spending. Energy-intensive sectors, such as the chemical industry and metal production, are also among the worst-affected.

The study said that if energy prices, which have soared by 160% so far, were to double again, Germany’s 2023 economic output would be almost 4% lower than it would have been without the war and its knock-on effects. Under these assumptions, 660,000 fewer people would be employed after three years and 60,000 fewer by 2030.

Crude oil prices have dipped, as traders are factoring in the chance that Iran could boost supply – talks to salvage the 2015 Iran nuclear accord are under way which would allow the country to export more oil.

Brent crude, the global benchmark, fell 71 cents, or 0.7%, to $95.94 a barrel while US West Texas Intermediate declined by a similar amount to $90.07 a barrel. A revival of the nuclear accord is expected to lead to a sharper drop in oil prices, analysts said.

Analysts at ANZ bank said:

The spectre of a US-Iran nuclear deal continues to hover over the market.

Last night, the EU tabled a “final” text to salvage the 2015 deal aimed at reining in Iran’s nuclear ambitions, which needs to be approved by Washington and Tehran. A senior EU official said a final decision on the proposal was expected within “very, very few weeks”.

Commonwealth Bank analyst Vivek Dhar said:

While the details around the timing of he resumption of Iran’s oil exports remain uncertain even if the accord is revived, there is certainly scope for Iran to increase oil exports relatively quickly.

He said Iran could raise its oil exports by 1m to 1.5m barrels per day, or up to 1.5% of global supply, in six months.

A revival of the 2015 nuclear accord will likely see oil prices fall sharply given that markets probably don’t believe a deal will be reached.

A rejection of the deal by either Tehran or Washington, or both, would mean a resurgence of US sanctions and a probable decrease in Iranian oil and condensate exports from an estimated average of 1.5m barrels a day in 2022 to about 1m barrels through 2023 to 2026. By contrast if the deal is accepted, Iranian exports could reach 2.5m barrels a day leading to a surge in Iranian revenues.

The oil market has been knocked by global recession fears, with Brent crude suffering its biggest weekly drop since April 2020 last week. However, since then prices have been underpinned somewhat by stronger-than-expected export figures from China and the surprise pick-up in US jobs growth in July, which suggest demand for crude could hold up.

Good morning, and welcome to our live, rolling coverage of business, economics and financial markets.

The European Union’s gas emergency plan has come into effect today, asking countries to voluntarily cut gas use by 15% this winter to prepare for a potential full Russian cut-off. The reductions could become mandatory in a supply emergency, albeit with opt-outs for some countries and industries.

The head of Germany’s network regulator welcomed the plan, and said it could stabilise or even lower gas prices. Klaus Müller, head of Bundesnetzagentur, told the ZDF broadcaster:

If all countries in Europe save gas, this can stabilise the price so to speak, maybe even reduce it, and contribute to making sure that there is enough gas supply for us to make it through the autumn and winter.

Retail sales in the UK rose 2.3% last month, as the heatwave boosted sales of summer clothing, picnic treats and electric fans despite the intensifying cost of living crisis.

Experts said it could be the “lull before the storm,” with the Bank of England predicting a recession lasting longer than a year and inflation rising above 13.3%.

The latest monthly survey from the British Retail Consortium (BRC) showed a 2.3% sales rise in July compared with a 6.4% rise the year before. But the sales growth was largely caused by inflation, which is running at a 40-year high of 9.4%, and masked a larger drop in the number of items sold.

Retail sales have held up as people have been splashing out on summer clothes amid warm weather as well as wedding outfits, enjoying the opportunity to go on holiday and to family events that had been delayed by the pandemic.

However, Paul Martin, the UK head of retail at the advisory firm KPMG, said:

The summer could be the lull before the storm with conditions set to get tougher as consumers arrive back from summer breaks to holiday credit card bills, another energy price hike and rising interest rates. With stronger cost of living headwinds on the horizon, consumers will have to prioritise essentials, and discretionary product spending will come under pressure.

Consumers are determined to enjoy delayed holidays and an unrestricted summer. Pent up demand, especially for new clothes, has so far been at significant enough levels to keep the overall retail sector in relatively good health.

The boss of John Lewis said this morning that she has “never seen anything quite like” the country’s current economic situation throughout her entire career.

Dame Sharon White, the chair of the department store chain and a former Treasury civil servant, urged the next government to encourage people in their 50s to return to work after retiring during the pandemic.

She told BBC radio 4’s Today programme that with “one million fewer people in work or looking for work,” higher inflation was inevitable.

Regardless of what has happened coming out of Covid, if the labour market is that tight, if we continue to have far fewer people in work, looking for work - you’ve inevitably got more inflation and more wage inflation.

I guess I would encourage...any government to really think much more about how to we encourage more people back into work.

There’s not a business in the UK that’s not finding it very difficult to recruit at the moment because there are so many more jobs and so far fewer people looking for work. It’s a big issue.

The Agenda

• 11am BST: Ireland Industrial production for June
• 12pm BST: Mexico inflation for July (forecast: 8.13%)
• 1pm BST: Brazil inflation for July (forecast: 10.1%)