Profits of oil companies have soared.

Profits at two of the world's largest oil producers have soared as BP and Saudi Aramco reaped a windfall from historically high energy prices that have fuelled inflation and stoked a global cost of living crisis. Despite oil prices falling from their highs earlier this year, the surging profits follow Moscow's invasion of Ukraine, which disrupted global energy markets. In the UK, new prime minister Rishi Sunak and chancellor Jeremy Hunt are looking at extending windfall taxes on oil groups following Shell's bumper profits and yesterday's BP results. It expected to pay about $2.5bn in taxes on production from its North Sea business in 2022, including about $800mn under the government's new energy profits levy.

Chief financial officer Murray Auchincloss told the Financial Times that «$2 out of every $3 we make is going to the government», noting it was a «tough time for society». BP's tax contribution far exceeds that of rival Shell, which, last week, new investments and decommissioning costs in the North Sea meant it had paid no UK taxes this year despite global profits of more than $30bn in the first nine months of 2022. However, Ben van Beurden, Shell's chief executive, has said the sector should «embrace» higher taxes.

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Cloud Bookkeeping

US FED rate rise.

The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...

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EU debt reduction

Brussels wants to give EU capitals extra time to curb their debts and create space for public investment as part of an overhaul of the EU’s deficit rules . The European Commission would table a proposal at the end of the month to reform the Stability and Growth Pact , under which it would work out multi-year , country-specific plans with capitals for getting their debt burdens under control , EU officials said . The proposals come as member states face mounting fiscal burdens as they spend hundreds of billions of euros sheltering businesses and households from the energy crisis . Under the new blueprint , the commission would propose a four- or five-year plan to an EU member state to get its public debt burden on a credible , downward trajectory , officials said . The national fiscal plan would need to pass a debt sustainability analysis and be approved by the commission and EU council . The new regime would ditch an EU ...

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