AFP

British business paid tribute Friday to Queen Elizabeth II, with department stores shut, flags lowered, clocks stopped and meetings postponed, but souvenir sales boomed near Buckingham Palace as well-wishers thronged.

London’s iconic Selfridges, on the capital’s Oxford Street shopping thoroughfare, and nearby Liberty on Regent Street closed out of respect for the nation’s longest serving monarch who died Thursday.

Many company headquarters lowered flags, while the Bank of England has delayed an interest rate meeting until after the funeral.

Fortnum and Mason, the Royal Family’s tea supplier, was shuttered and even stopped the clock on the front of its luxury department store in London’s Piccadilly quarter.

“We are proud to have held a warrant from Her Majesty since 1954, and to have served her and the royal household throughout her life,” F&M said on their website.

“As a sign of our deep respect, we have lowered our flag to half-mast and stopped the Piccadilly facade clock.”

Elsewhere, the remembrance business was in full swing nearer the palace, as well-wishers gathered to pay respects to the Royal Family — and hoped to catch a glimpse of King Charles III and Queen Consort Camilla.

– ‘Everyone wants a souvenir’ –

“Everyone wants a queen souvenir,” shop manager Nassir Abdel told AFP at Buckingham Gate, a stone’s throw from the main royal residence.

Abdel, who kept his shop open overnight owing to keen demand, said he had placed an order for souvenirs featuring King Charles III — but they will take a couple of weeks to arrive.

Customer Janet Saxton, a 73-year-old pensioner from Yorkshire in northern England, browsed the shop’s key rings, mugs and other trinkets bearing the likeness of the late monarch before heading to the palace gates.

On Oxford Street, souvenir salesman Nazz said business was brisk.

“In the coming days we’re going to sell” even more objects featuring the queen while awaiting Charles merchandise, he told AFP.

– ‘Object of fascination’ –

Worldwide coverage of the queen’s passing is expected to boost Britain’s economy to some extent as it looks to stave off recession caused by decades-high inflation.

Her funeral due September 19 “should have an impact on the tourism sector and the souvenir industry”, according to Mirabaud analyst John Plassard.

“The royal family, which regularly features on the front pages of newspapers, is an object of constant fascination, including well beyond the kingdom’s borders.

“Souvenir sales are expected to rise by £60 million ($69 million) as a result of the funeral,” he added.

Most shops remained open on Oxford Street, including department store John Lewis, where accountant Jo-Anne Allen was seeking out a coat.

Britain’s economy “needs to be kept going, it is no time to shut the country”, she said.

“I do not think she would have wanted more disruption to the country after her death, after Covid and the cost-of-living crisis.”

Tony Danker, head of UK business lobby group CBI, echoed the sentiment. 

“Times are hard right now — made more so by the loss of our much-loved queen — and our tribute should be to work tirelessly to build a better future for the people of this country in memory of Her Majesty.”

Stock markets and oil prices rallied Friday, with investors largely pricing in more interest rate hikes aimed at taming runaway inflation.

The dollar slid as much as one percent versus the pound and euro after recent hefty gains.

London’s stock market jumped 1.2 percent, mirroring advances in Paris and Frankfurt, while the British capital’s exchange mourned the death of Queen Elizabeth II.

“We are deeply saddened at the passing of Her Majesty Queen Elizabeth II,” the London Stock Exchange said in a message posted on its website.

The LSE is expected to shut on the day of the queen’s funeral following her death on Thursday.

“Markets are being very British about the whole thing, carrying on in a fashion that I suspect she would have approved of,” said IG analyst Chris Beauchamp.

– Dollar off highs –

The more confident mood across equity and oil markets was reflected in a cooler dollar, which had surged to multi-decade highs against major peers in recent weeks owing to the US Federal Reserve’s hawkish tilt to tighter monetary policy.

“There are hopes that the sharp rate increases from the Fed may already have dampened demand, causing US inflation to weaken,” said City Index and FOREX.com analyst Fawad Razaqzada. 

The greenback’s softness came even after Fed chief Jerome Powell reasserted the US central bank’s determination to keep hiking interest rates to fight prices, even at the cost of economic growth.

His warning that “we need to act now forthrightly, strongly” followed comments from his deputy Lael Brainard, who said policymakers would lift borrowing costs for as long as it takes to bring inflation down from 40-year highs.

Nevertheless, Wall Street has pushed higher on Thursday and Friday, putting markets on course for a weekly gain and easing some pressure after hefty losses in August caused by worries that rising rates would spark a recession.

In Asia, Hong Kong rose close to three percent heading into a long weekend.

Edward Moya, analyst at trading platform OANDA, said traders cheered as “Powell stuck to his hawkish script and affirmed the commitment to tighten policy until inflation is back towards their target.”

There was also some cheer from news that inflation in China had eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders’ strict zero-Covid strategy of growth-sapping lockdowns.

A Thursday pledge by Britain’s new Prime Minister Liz Truss to freeze domestic energy bills for two years also helped temper inflation concerns and boosted sentiment about the economy.

The euro was holding well above parity with the dollar, one day after the European Central Bank announced its own 75 basis-point rise as it warned inflation was “far too high” and likely to stay above target for “an extended period”.

ECB chief Christine Lagarde suggested policy would continue to be tightened for some time.

The yen strengthened as officials began speaking up after the unit approached a 32-year low versus the greenback.

The pick-up came after Bank of Japan chief Haruhiko Kuroda met Prime Minister Fumio Kishida on Friday before saying “the rapid weakening of the yen is undesirable”. 

The talks were seen as a sign of intent to act in support of the currency if it continued to weaken. 

– Key figures at around 1530 GMT –

New York – Dow: UP 1.0 percent at 32,086.36 points

EURO STOXX 50: UP 1.2 percent at 3,570.04

London – FTSE 100: UP 1.2 percent at 7,351.07 (close)

Frankfurt – DAX: UP 1.4 percent at 13,088.21 (close)

Paris – CAC 40: UP 1.4 percent at 6,212.33 (close)

Tokyo – Nikkei 225: UP 0.5 percent at 28,214.75 (close)

Hong Kong – Hang Seng Index: UP 2.7 percent at 19,362.25 (close)

Shanghai – Composite: UP 0.8 percent at 3,262.05 (close)

Euro/dollar: UP at $1.0037 from $1.0001 on Thursday

Pound/dollar: UP at $1.1580 from $1.1500

Euro/pound: DOWN at 86.66 pence from 86.93 pence

Dollar/yen: DOWN at 142.52 yen from 144.07 yen 

Brent North Sea crude: UP 3.0 percent at $91.82 per barrel

West Texas Intermediate: UP 3.1 percent at $86.15 per barrel

burs-rl/lth

The EU executive pledged Friday to come up with unprecedented measures in the coming days to solve an energy price shock triggered by Russia’s war on Ukraine, including a controversial gas price cap that could further anger the Kremlin.

Moscow’s invasion has seen the price of natural gas hit record levels, throwing the EU economy into deep uncertainty, with all eyes on whether Russian President Vladimir Putin will cut off the flow entirely.

European energy ministers tasked the European Commission in Brussels to work through the weekend to draw up legal texts that will include emergency funding for consumers sinking under the weight of soaring bills.

The EU will table “unprecedented measures next week for an unprecedented situation”, energy commissioner Kadri Simson said, after meeting the ministers.

Simson said compensation for struggling households and businesses would be covered by a levy on non-gas electricity companies, such as nuclear, solar or renewable firms, that are seeing a revenue bonanza on the back of high prices for electric power.

The market price of electricity in Europe is closely linked to the gas price, meaning non-gas utilities are enjoying huge revenues despite far lower costs.

Simson said fossil fuel companies would also be levied on their mega profits from the inflated energy prices.

– Gas price cap –

Despite heated debate among European countries, the EU will also attempt to lower the price on natural gas, possibly through a price cap on Russian imports or through negotiations with other suppliers.

Czech Industry and Trade Minister Jozef Sikela, whose country holds the EU presidency, said there was a “prevailing view” among EU countries that some form of price ceiling was necessary.

But he called for patience “to fine tune where properly … the cap should be implemented”, adding that nothing was decided at this stage.

Fears are rife that targeting Russia alone would only further rile Moscow, which has threatened to cut off the supply to Europe entirely if a cap is imposed.

Last week Russia caused a major scare when it halted gas deliveries to Germany via a key pipeline for an indefinite period, a move the Kremlin blamed on Western sanctions.

One leading approach would be for EU countries to jointly negotiate with major suppliers such as Norway, Algeria or the United States in order to squeeze out better terms.

“Countries are calling for new thinking about capping the gas price … and the question arises in different technical terms,” said French energy transition minister Agnes Pannier-Runacher. 

Despite the differences, she added, “what is interesting is that there is a common desire to move forward on this subject.”

– Binding measures? –

One proposal that has broad backing is an idea to rescue electricity companies that are struggling to hedge their spending on energy markets that have been extremely volatile.

This would be done by relaxing EU rules on state rescues of companies that are suddenly facing more onerous terms for cash as fears of a crisis spread.

The commission will also design a mechanism to cut back on energy demand, with mandatory cuts imposed if voluntary limits at peak hours fail.

“Member states are us usually very reluctant to support binding measures, but this is exactly what Commission is considering,” Simson said.

The commission, which draws up laws that are then ratified by member states and the European Parliament, will likely make its proposals as early as Tuesday.

“We will have a busy weekend and first days of next week before the final product…will be really ready,” Simson said.

US electric car maker Tesla is studying the possibility of building a lithium refinery in Texas and is seeking tax breaks from the state to complete the project, according to documents made public Friday. 

While the project is only in the feasibility stage, Tesla said the factory on the Gulf coast would be the first of its kind in North America, producing an element critical to the batteries used in the growing EV market. 

In an application sent to the Texas Comptroller at the end of August and made public on Friday, Tesla said the plant “will process raw ore material into a usable state for battery production.”

The finished product, battery-grade lithium hydroxide, would be shipped by road and rail to various Tesla battery plants throughout the country. 

Construction could begin by the end of the year with production staring by the end of 2024. 

The company led by billionaire Elon Musk stressed that “Tesla is still evaluating the feasibility of this project” which is in a “very preliminary” phase, so no contracts have been signed and no permits have been issued for construction.

The decision to go ahead “will be based on a number of commercial and financial considerations, including the ability to obtain relief regarding local property taxes,” the document said.

The cost of the project has not been quantified.

Tesla also is studying the possibility of building a similar site in the state of Louisiana as an alternative. 

Tesla’s proposed project comes amid soaring lithium prices due to strong demand for the component, essential for making electric batteries. 

Musk complained about the rising costs in a tweet in April, and hinted at the possibility of moving into production. 

“Price of lithium has gone to insane levels! Tesla might actually have to get into the mining & refining directly at scale, unless costs improve,” he said on Twitter. 

China, Australia, Chile and Argentina, where the world’s largest lithium resources are located, dominate the market for the production and exploitation of this highly coveted mineral.