London, Europe Brief News- European stocks dropped for the sixth time in seven days, and the euro sank to a 20-year low, after Russia escalated the continent’s energy crisis by shutting off key gas taps, signaling a long cold winter ahead for businesses and households in the region.
European nations led by Germany announced measures over the weekend to tackle a cost-of-living crisis and spiraling energy prices after Russian state gas producer Gazprom PJSC Friday said it would indefinitely halt supplies through the Nord Stream pipeline.
The common currency fell as much as 0.7 per cent to $0.988 in London trading, the lowest level since 2002. European stocks also fell, with the regional Stoxx 600 index down 1 per cent, Germany’s Dax off 1.7 per cent and France’s Cac 40 down 1.8 per cent. London’s FTSE 100 slipped 0.7 per cent.
In energy markets, Dutch TTF gas futures, the benchmark European contract, jumped 30 per cent to €272 per megawatt hour, rising back towards all-time highs hit above €340 just under two weeks ago.
The fresh price rise comes as European capitals struggle to contain growing concerns over Russia’s “weaponisation” of gas supplies to the continent.
European countries including Sweden and Finland raced over the weekend to provide government funding for utilities struggling with sharply heightened collateral requirements on exchanges, warning that without intervention energy markets could seize up and potentially threaten the wider financial system.
The UK energy sector has warned electricity generators may also need government support, with Liz Truss or Rishi Sunak set to be announced as prime minister later on Monday following the conclusion of the Conservative party leadership campaign. Sterling was down 0.3 per cent to $1.1476 in recent trading.
The volatile start to the week came after Russia indefinitely suspended natural gas flows through the Nord Stream 1 pipeline, further throttling Europe’s energy supplies and heightening recessionary risks in the bloc. State-owned Gazprom said the suspension was due to a technical fault.
