UK retail sales slump in April, says CBI; gas prices rise as Gazprom cuts supplies – as it happened

Natural gas prices jumped as much as 20% in Europe as Russia’s energy company Gazprom cut gas supplies to Poland and Bulgaria, which refused to pay for gas in roubles.

Four European gas buyers have paid for deliveries in roubles, caving in to Vladimir Putin’s demand, Bloomberg News is reporting, citing a person close to Gazprom. Ten European companies have already opened accounts at Gazprombank, enabling them to make payments in the Russian currency.

US and European shares are rising, following Tuesday’s declines across some of the major indices.

The dollar has hit a five-year high against a basket of international currencies, as investors seek out safe havens, while the euro fell to a five-year low versus the dollar of below $1.06.

Crude oil, priced in dollars, is falling, as the stronger dollar made barrels more expensive and Germany, Europe’s biggest economy, is seeking to speed up plans to wean itself off Russian oil. Brent crude and US light crude erased earlier gains and are down more than 1% at $103.80 and $100.34 a barrel respectively.

German consumer confidence hit an all-time low heading into May, according to analytics firm GfK, following a slump in sentiment in the UK last week.

UK retail sales slumped in April, according to a monthly survey from the CBI.

Our other main stories today:

Thank you for reading! We’ll be back tomorrow. – JK

On the currency markets, the dollar index measuring it against a basket of international currencies has hit a five-year high of 103.05, up 0.7%.

Europe’s main stock indices are pushing cautiously higher, despite the escalation in the row between Russia and the west over gas payments.

The FTSE 100 index in London is up 37 points, or 0.5%, at 7,423, while Germany’s Dax is also 0.5% ahead, France’s CAC has edged 0.3% higher and Italy’s FTSE MiB has dipped back into negative territory.

Oil prices have reversed earlier gains and are now down on the day. Brent crude, the global benchmark, has slipped 0.5% to $104.45 a barrel while US light crude is trading at $101.01 a barrel.

Sarah Butler

WH Smith is taking on 800 more staff at its airport stores in the UK as sales have topped pre-pandemic levels in recent weeks, reports our retail correspondent Sarah Butler.

The company said it was “confident” about the business amid strong books by tour opertors and the popularity of new product lines in the airport stores including health and beauty and technology.

“We had a really good Easter and think the summer is going to be huge, said Carl Cowling, the chief executive of WH Smith. “We have still got a recovery in passenger numbers to come.”

Natural gas prices continue to climb on wholesale markets, as Russia made good on its longstanding threat to cut gas supplies to countries that don’t pay in roubles – starting with Poland and Bulgaria. Poland and Bulgaria say this amounts to breach of contract, as the contracts stipulate payments in euros.

The British wholesale gas contract for immediate delivery has climbed nearly 14% to 146.50 pence per therm. The Dutch futures contract for winter delivery, the European benchmark, rose 20% earlier and is now about 8% ahead at €106 per megawatt hour. Prices are about six times higher than they were a year ago.

The euro fell to a five-year low against the dollar, falling below $1.06.

Gazprom said in a statement:

Gazprom has completely suspended gas supplies to Bulgargaz (Bulgaria) and PGNiG (Poland) due to non-payment in roubles.

Ursula von der Leyen, the European Commission president, accused Russia of trying to use gas as “an instrument of blackmail”. She said Gazprom’s action was “unjustified and unacceptable” and that it showed Russia was an unreliable gas supplier.

We are prepared for this scenario. We are in close contact with all member states. We have been working to ensure alternative deliveries and the best possible storage levels across the EU.

You can read more about the political reaction on our Ukraine live blog:

British retail sales slumped in April, with the first drop in volumes in more than a year, according to the Confederation of British Industry’s closely-watched monthly survey.

The CBI’s headline retail sales balance plunged to -35 in April from 9 in March. The balance deducts the number of retailers saying sales increased from those reporting a fall.

CBI economist Martin Sartorius said:

Retail sales were below seasonal norms in April as consumer spending continued to shift back towards services and rising prices impacted households’ spending power.

The Russian energy firm Gazprom said it has halted gas supplies to Poland and Bulgaria after both countries refused to pay in roubles, rather than euros, as the row between Moscow and the west over Russia’s invasion of Ukraine escalated.

Poland has confirmed that supplies have been cut, while Bulgaria said it would find out soon. Both accused Gazprom of breaching longstanding supply contracts.

The Bulgarian energy minister, Alexander Nikolov, said:

Because all trade and legal obligations are being observed, it is clear that at the moment the natural gas is being used more as a political and economic weapon in the current war.

Vladimir Putin has demanded that buyers from “unfriendly” countries pay for gas in roubles or be cut off, starting in April. The European Union has resisted this demand, saying it breaches contracts that called for payments in euros.