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The US economy recorded the fastest first-quarter growth in almost four decades, the commerce department said on Thursday, helped by significant fiscal stimulus and looser lockdown restrictions.
Gross domestic product advanced 6.4 per cent on an annualised basis, topping economists’ expectations for 6.1 per cent growth, according to a Refinitiv survey.
Joe Biden hailed the country’s economic revival this week in an address to a joint session of Congress, declaring America was “ready for take-off” as he appealed for lawmakers to approve his sprawling spending agenda.
Jay Powell, the Fed chair, acknowledged this week that the US economic recovery had progressed “more quickly than generally expected” but added it remained “uneven and far from complete” and said the central bank was “a long way” from its goals for the economy.
US economic growth has accelerated as more Americans are vaccinated against coronavirus and states and cities have begun to relax pandemic curbs. By Thursday the US had administered 234.6m doses, and 98m Americans are fully inoculated — representing 29.5 per cent of the total population.
Wall Street welcomed the GDP figures. The benchmark S&P 500 index posted another record high and commodities rallied on hopes the recovery was strengthening. The 0.7 per cent increase in the S&P 500 share index took it above the record closing it achieved just two days ago, extending the year-long rally. US consumer spending data are released today.
The eurozone slid into a double-dip recession in the first three months of this year, with Germany’s economy shrinking 1.7 per cent in the period.
The UK government has asked businesses to help draw up policies on making flexible working the default option after the pandemic, despite concerns about the future of city centres should people continue to work from home.
The rare blood clotting disorder linked to the Oxford/AstraZeneca vaccine mostly affects younger adults, the UK medicines regulator found.
The dual blows of Myanmar’s military coup and the coronavirus pandemic will wipe out more than a decade of economic development in one of Asia’s poorest countries and push as many as 12m people into poverty, the UN has warned.
A coronavirus passport is seen as vital to restarting travel this summer. But in place of a unified global system, a mishmash of potentially conflicting initiatives is emerging.
In the news
EU charges Apple with antitrust abuse The EU has formally charged Apple with breaking antitrust law by charging high commission fees in its App Store and forbidding app developers from telling their customers about other ways to subscribe to their services.
Dozens crushed to death at Jewish festival in Israel At least 44 people were crushed to death and more than 100 injured at an overcrowded ultra-Orthodox religious festival in Israel on Thursday night. Prime Minister Benjamin Netanyahu called what is thought to be one of the country’s deadliest civilian accidents “a heavy disaster” as he visited the holy site of Mount Meron. Israelis took to the radio to publicise information on their missing relatives. (FT, Times of Israel)
Amazon reaps rewards With consumers shopping and streaming video online and homeworking boosting its cloud computing business, Amazon reported its second straight quarter of $100bn-plus sales, comfortably beating Wall Street’s targets. Twitter’s user growth fell short of expectations for the third consecutive quarter despite a broader digital advertising surge.
Chinese regulators summon tech groups Officials have instructed 13 tech companies including Tencent and ByteDance to “rectify prominent problems” on their platforms, a sign that the regulatory pressure on the fintech sector is extending beyond Jack Ma’s Ant Group. Sign up here to receive our #techAsia newsletter, your guide to the billions made and lost in Asia tech, in your inbox every Wednesday.
France to punish signatories of rightwing ‘call to arms’ The military command and the government have vowed to punish active officers and force rightwing reservists into retirement over an incendiary declaration that mourned the country’s “disintegration” because of Islamist radicalism and hinted at a coup d’état.
‘Chief heat officers’ Cities including Miami-Dade County, Athens and Freetown in Sierra Leone are responding to the threat of rising temperatures by creating dedicated “chief heat officer” executive positions to address a problem that will be accentuated by climate change.
Head of risk at Credit Suisse to step down Andreas Gottschling, the head of Credit Suisse’s risk committee, is to step down ahead of a threatened shareholder rebellion at the bank’s annual general meeting on Friday as the Swiss bank reels from the twin crises at Greensill and Archegos Capital.
Quantum computing coming to markets Quantum computing could be brought to bear on some of the most complex calculations in financial markets within five years, considerably earlier than expected, according to research jointly conducted by Goldman Sachs.
The days ahead
Earnings Oil majors Chevron and ExxonMobil report first-quarter earnings, with the latter under pressure from activist hedge fund Engine No 1 to reduce reliance on carbon fuel.
IPO Vaccitech, the company that owns the technology behind the Oxford/AstraZeneca coronavirus vaccine, raised $111m through its initial public offering on Thursday, valuing it at $579m. Shares begin trading on the Nasdaq exchange on Friday.
Allied troops withdraw from Afghanistan US, UK and Nato forces will begin their withdrawal from Afghanistan on Saturday ahead of a September 11 deadline.
What else we’re reading
Bitcoin: too good to miss or a bubble ready to burst? The year-long rally has so far defied fears of a repeat of bitcoin’s spectacular price crash of 2018, turning former crypto bears such as Jamie Dimon more bullish. FT Money has spoken to finance professionals inside and outside the cryptomarket.
Fund earns ‘Gamma Hammer’ moniker with bet on tranquil markets The $350bn fund manager Parametric has earned itself the nickname ‘Gamma Hammer’ by selling options contracts worth billions of dollars that protect against a near-term jolt in US equity markets to other players on Wall Street. By some calculations, the trade’s size is worth roughly $5bn in notional exposure each week.
‘Scenes from Dante’s inferno’: a doctor on India’s Covid crisis The virus has shown the roots of India’s problem are systemic — in the chronic under-investment and neglect of public health, writes a consultant physician and researcher in Mumbai.
The country’s catastrophic Covid-19 response has exposed a creeping erosion of democratic values and traditions under Narendra Modi, writes Ramachandra Guha.
A new deal for the young: saving the environment No generation should face a future blighted by climate and environmental devastation, writes our editorial board. All is by no means lost. Investment in renewables and other clean technologies has reached record levels, as have green bonds and electric car sales. Read more in our FT Series.
Elon Musk’s SpaceX is seizing power in space with satellites Governments ruled the skies above our heads in the days of the Sputnik and Apollo missions. The balance of space power has now shifted away from countries to companies, writes John Gapper, with operators such as Elon Musk’s SpaceX controlling orbital space.
Five years ago, Elon Musk unveiled Tesla’s latest innovation: aesthetically pleasing solar panels. The product is finally rolling out in a significant way — but customers aren’t necessarily getting the products they were promised at the price they were quoted. (NYT)
Malcolm Gladwell: ‘My writing had better have changed’ Journalism doesn’t have a lot of superstars, but when Lilah Raptopoulos met Malcolm Gladwell, she said it felt less like meeting a celebrity and more like she had disturbed a college professor in the middle of a Big Thought. They discussed crime, challenging convention and changing one’s mind.
Podcast of the day
Amazon caps big week of tech earnings San Francisco-based reporter Elaine Moore looks back on a busy week for tech earnings, with Amazon reporting its second straight quarter of $100bn-plus sales and Apple revealing revenues jumped more than 50 per cent in the first three months of the year.
Gastronomes look beyond pandemic to a revolution in French fine-dining
Chef Yannick Alléno used to serve a €395 menu featuring langoustines and foie gras at his three-starred Michelin restaurant near the Champs-Elysées.
But as France prepares to allow restaurants to reopen for outdoor service next week after six months of closure, he will instead be serving up burgers at his wine bar for a fraction of the price.
That a superstar chef such as Alléno, whose stable of high-end restaurants from Courchevel to Marrakesh hold more than a dozen Michelin stars, is changing strategy underscores the difficulties facing France’s grands restaurants as they seek to recover from the ravages of the coronavirus pandemic.
“We have to inspire people to come here by sparking their curiosity,” he said of the Pavillon Ledoyen, the neoclassical building that houses several of his restaurants, including the three-starred Alléno Paris.
Such temples to French gastronomy have long catered to wealthy foreign tourists, who will happily pay more than €1,000 for a meal for two as long as they experience l’art de vivre à la française. But with international travel severely curtailed by the pandemic, such customers are not expected back for some time.
Attracting locals is the new challenge, as well as retaining employees, many of whom have left the sector and its notoriously challenging working conditions. Many restaurants are also saddled with large debts after taking state-guaranteed loans to ride out the crisis.
“I have three years of struggle ahead,” said Alléno, adding that half the group’s €4m in cash reserves had been spent. “For three-star restaurants, there will be many casualties.”
His flagship restaurant used to generate more than three-quarters of revenue from foreign diners, mostly from Asia and the US. As there is little point reopening without them, the doors will remain shut until September. Alléno will for now experiment in the less-formal location as he plots an overhaul that seeks to drag fine-dining into the 21st century.
“Everything must change,” he said, quoting the title of the book he co-wrote during lockdown. In it, he called for a revamp of everything from the style of service (warmer, more personalised) to staffing (more flexible and family-friendly).
French haute gastronomie traces its roots back to visionary 19th-century chefs such as Auguste Escoffier and Marie-Antoine Carême, who created a cuisine based on rich sauces and meticulous — often theatrical — service. For decades it was considered the world’s best and became a key part of French identity.
But its popularity has faded in recent decades thanks to competition first from the flashiness of molecular gastronomy and then the pared-back Nordic style. As French haute cuisine lost ground, it became much more expensive, putting it out of the reach of many.
“The pandemic has exposed that the business model of high-end restaurants in France simply doesn’t function without tourists,” said Joerg Zipprick, co-founder of La Liste group, which ranks the world’s best restaurants.
“This is a relatively new development. It used to be that . . . a local doctor or manager would come to these places to celebrate a special occasion. No longer.”
Zipprick said that for the top chefs, many of whom had spent the past year experimenting with takeouts and meal kits, success depended on their willingness to adapt.
Diners would not want fussy and experimental dishes on their return, he predicted, but would instead want to eat good food at a nice restaurant in the company of friends and family.
“No more technical stuff or food that requires a long explanation from the waiter about the fermentation process. People don’t want their meal to be a work of art,” Zipprick said.
The last time French cuisine reinvented itself was in the 1970s when chefs such as Paul Bocuse and the Troisgros brothers created nouvelle cuisine. The movement, less opulent and calorific than the fine-dining that preceded it, put fresh and high-quality ingredients to the fore and service became less formal.
Alléno believes top restaurants must aim to tailor experiences by talking to clients beforehand about the occasion for their dinner, the guests and their tastes.
This “concierge service” approach would allow menus to be better planned, improving the customer experience and the economics for the restaurant.
“If I know I only have three people who’ll eat langoustine on a given night then I don’t need to order six kilos just in case,” he said. “It really changes things for the kitchen.”
Others are being even more radical. Daniel Humm’s three-starred Eleven Madison Park in New York will no longer serve meat and seafood when it reopens next month, as the Swiss chef seeks to show that sustainable and environmentally conscious eating can be compatible with luxury.
However, Éric Fréchon, the three-Michelin-starred chef behind restaurant Epicure at the five-star Le Bristol Paris hotel, played down expectations of radical change.
“Things will return much as they were before,” Fréchon said, noting that the hotel’s restaurants had a significant local client base. “People have missed the experience of haute gastronomie for so long they’ll be eager to come back.”
Fréchon said he would retain some coronavirus-era innovations, including the €1,390 “gastronomy and to bed” package that is marketed as a one-night staycation for locals that includes dinner in their suite or hotel room.
“For New Year’s Eve we had 60 servers running back and forth to rooms, it was really difficult,” he said. “But it allowed us to reach new clients who perhaps would not have dared to come to a three-star restaurant. Now we have to keep them.”
Additional reporting by Domitille Alain in Paris
Ireland’s healthcare system taken down by cyber attack
Ireland has shut down most of the major IT systems running its national healthcare service, leaving doctors unable to access patient records and people unsure of whether they should show up for appointments, following a “very sophisticated” cyber attack.
Paul Reid, chief executive of Ireland’s Health Service Executive, told a morning radio show that the decision to shut down the systems was a “precautionary” measure after a cyber attack that impacted national and local systems “involved in all of our core services”.
Some elements of the Irish health service remain operational, such as clinical systems and its Covid-19 vaccination programme, which is powered by separate infrastructure. Covid tests already booked are also going ahead.
However the system for processing referrals from GPs and of close contacts is down, the HSE tweeted, adding that those in need of testing should go to walk-in centres which would prioritise symptomatic cases.
“This is having a severe impact on our health and social care services today, but individual services and hospital groups are impacted in different ways. Emergency services continue, as does the @AmbulanceNAS [National Ambulance Service],” health minister Stephen Donnelly wrote on Twitter.
No group has yet claimed responsibility for the attack. Speaking on Friday morning, Reid said the HSE had also not yet been served with a ransom demand. “We are at the very early stages of fully understanding the threat, the impact and trying to contain it,” he said, adding that it was receiving assistance from the Irish police force, defence forces and third-party cyber support teams.
The master of Dublin’s Rotunda Maternity Hospital said it was advising patients who were less than 36 weeks pregnant not to present for appointments on Friday. In a statement, Cork University Hospital said patients should present for outpatient appointments, chemotherapy and surgery “unless you are contacted to cancel”, but that X-ray and radiotherapy appointments for Friday were cancelled.
Professor Donal O’Shea, consultant endocrinologist at St Vincent’s Hospital in Dublin, told RTE radio that there could be implications for patient care. “Clinical systems haven’t been targeted, but if you can’t access your computer, then getting results is impossible . . . so before long, there are going to be clinical implications,” he said. In its statement, Cork University Hospital said “only emergency bloods” would be processed at this time.
Reid said that patients nationally “should still come forward until they hear something different” and that an update should be available later on Friday. A spokeswoman for the HSE was unable to provide a further update on patient care by mid-morning. “We apologise for the inconvenience to the public and will give further information as it becomes available,” she added.
Healthcare workers told the FT they were told to turn off their laptops, leaving staff at home offline and those working in hospitals reverting to pen and paper to manage patients’ information.
In a statement on its website, Ireland’s child and family agency Tusla said that its emails, internal systems and portal for child protection referrals was also offline because it was hosted by the HSE’s network.
The attack comes as actions by cyber criminals to disrupt public services have increased during the pandemic. Earlier this month, hackers believed to be from eastern Europe breached the IT systems of the Colonial Pipeline, a major fuel conduit that supplies much of the eastern US.
“Opportunistic cyber attackers targeting flooded healthcare organisations has been a common theme throughout the course of the pandemic,” said Charlie Smith, consulting solutions engineer at Barracuda Networks. “These scammers are aware of the huge significance of health services’ IT systems at this time, and so will stop at nothing to disrupt said systems or steal valuable data in exchange for ransom.”
Watchdog turns on Polish government over coronavirus election
Poland’s supreme audit office has accused prime minister Mateusz Morawiecki of exceeding his powers, as it unveiled a highly critical report into the government’s attempt to hold last year’s presidential election by post because of the pandemic.
The salvo by the supreme audit office (NIK) is the latest in a series of disputes over last year’s election, which was meant to be held in May, but was eventually postponed until June as coronavirus swept through Europe.
It is also the latest in a series of clashes between the ruling Law and Justice party and Marian Banaś, a former finance minister who was put in charge of the NIK in 2019 thanks to the support of politicians from the ruling camp, but has since become a thorn in the government’s side.
Representatives of NIK, which is responsible for auditing government spending, on Thursday said the attempt to hold the presidential election by post in May — which was ultimately abandoned after disagreements in the ruling camp — had cost at least 76m zloty ($20.2m).
They also said that there had been no legal basis for the prime minister to give any orders to two state-controlled entities, the Polish Post and the Polish Security Printing Works (PWPW), in relation to holding the election, such as the printing of voting cards.
“The only body entitled to organise elections was the State Election Commission,” Banaś said during a press conference. “Organising the elections on the basis of an administrative decision should not have happened and was without legal basis.”
He said the NIK had informed prosecutors of possible crimes committed by the boards of the Polish Post and PWPW, which were involved in the preparations for the postal ballot.
The Polish Post said “categorically” that “all its actions taken to implement the prime minister’s decision of April 16 2020 were founded on legal provisions”. PWPW said it considered NIK’s move “unjustified” and “baseless”.
Banaś added that the NIK was analysing whether to notify prosecutors of concerns relating to the actions of other parties involved in the preparations for the election.
The government said that “all decisions on beginning technical preparations for postal voting in the presidential elections were in accordance with the law”.
“All the actions [of the prime minister and the head of the chancellery of the prime minister] were aimed at holding elections by the constitutional deadline,” the government’s information office said in a statement.
“The prime minister never called for presidential elections or for postal voting. The goal of the actions taken was to allow the participation in the elections of those who were entitled to vote, but whose life and health were at risk as a result of the pandemic.”
Jacek Sasin, minister for state assets, took a similar line, and told Polish state radio that the NIK report was “a certain element in the fight between the government and . . . Marian Banaś”.
Banaś has been under pressure to step down from his post since media reports emerged alleging that a building he owns was used as a brothel. In an interview with Politico, he dismissed the allegations as a “smear campaign” aimed at ousting him.
He concluded his press conference by drawing attention to the fact that the NIK was one of a series of institutions targeted by fake bomb threats earlier this week, and to an email sent to the NIK this morning falsely claiming that Banaś’s son was going to commit suicide.
“I ask you yourselves for a comment on this,” he said to the assembled journalists.
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