Shell profits plunge amid falling oil prices - latest updates

The Governor of the Bank of England has signalled that households still face much more pain from interest rates after policymakers voted to hold borrowing costs at 16-year highs.

Andrew Bailey admitted about 30pc of the impact of higher interest rates - held at 5.25pc - is yet to come.

He said:

Back in November we said we thought about half the effect had come through and therefore half was still to come through.

Our view now is probably about 30pc is still to come through.

After George Osborne was hired as an adviser to crypto platform Coinbase, Andrew Bailey was asked his views about regulation of the digital currency sector.

He said he wanted to draw a distinction between unbacked crypto and stablecoins, adding they are “different animals”.

He said unbacked crypto “has no intrinsic value,” is a “highly volatile investment” and should be “regulated appropriately”.

He added: “You may want to hold it but please understand what you’ve got. It is not in any sense money.”

He said stablecoins are different but “will have to maintain the standards of money” if they are to win public trust.

Ben Broadbent, a member of the Bank of England’s Monetary Policy Committee, said the committee needs “more confidence” that its forecasts will come true before it will start cutting rates. He said:

We don’t need continual downside surprises relative to what we forecast before interest rates can fall. But what we do need is more confidence that that profile is being followed.

So I don’t think we yet have sufficient confidence that that profile will be followed for us to take that decision or think of taking it.

We’re in a pretty cautious state of mind, and given the uncertainties, we just need more evidence.

Bank of England governor Andrew Bailey has said that the Bank will not keep interest rates at current levels “any longer than we need to” to get inflation down and that will be better for households even if they face higher mortgages.

He said: 

The question we face now is how long we have to maintain that stance and we will not maintain it any longer than we need to do to achieve the objective of inflation being at 2pc on a sustained basis.

I’ll just finish by making a point I’ve made many times, but it’s a very important one: Of course having price stability and having inflation at 2pc is by far the best thing we can do for households.

Bank Governor Andrew Bailey has said the prediction that inflation is expected to reach the Bank’s 2pc target in the summer is not enough for him to cut rates.

He said:

I think the key thing to stress is that what we look at is the level of the degree of persistence of inflation.

So as I said earlier, you’re right that inflation is now falling faster than we expected. And as I said, we do expect it to come near to target this spring.

And that is, of course, very good news.

But we don’t expect that to be the sustained level, it’s going to rise again somewhat thereafter.

And it’s really that ‘thereafter period’ that we are most focused on when setting policy. We have to look through the short-run impact that energy prices in particular are having.

He added that only then would the Bank “be able to start then to consider taking the decisions on when we move rates”.

Bank of England governor Andrew Bailey said the hostilities in the Middle East have only had a “limited impact” on energy costs and other consumer prices. He said:

Sadly, geopolitical risks have intensified following events in the Middle East.

There has so far been a limited impact on wholesale energy prices but shipping volumes have fallen materially on Red Sea routes.

And shipping costs have increased on routes from East Asia to the Mediterranean and Northern Europe, albeit not to the levels seen during the pandemic.

So far, these price increases have not spilled over to other routes such as from East Asia to East Coast America, and the impact on consumer prices has been limited.

But that could change if trade disruptions continue. This poses an upside risk to our inflation projection over the first half of the forecast period.

Deputy Govenor Sir Dave Ramsden said that high services inflation was one of the key reasons the Bank is keeping rates higher despite falling inflation.

Services stood at 6.4pc in December, according to the Office for National Statistics. It is the dominant sector of the UK economy.

Sir Dave said services “is one of our key indicators of persistence,” adding “even when inflation is down to 2pc briefly in the spring, we still think services inflation will be much higher”. 

Andrew Bailey said that although inflation could return to 2pc this summer, the job is not done.

The Govenor of the Bank of England said:

Inflation is coming down primarily because the global inflationary shocks have been abating.

The prices of traded goods and food are no longer pushing inflation up as they did. Oil and gas prices have fallen significantly since November.

That pushes further down on headline inflation in the months ahead.

Our restrictive monetary policy stance is working to reduce domestic inflationary pressures.

Services price inflation, which is closely linked to domestic costs, has started to ease and somewhat more than we had expected, but services price inflation tends to be persistent, and it remains elevated.

So it is not as simple as ‘inflation returns to target in the spring and job is done’.

The tensions in the Red Sea post a risk to inflation, Governor Andrew Bailey has said.

However, the Bank of England still thinks that GDP growth will pick up gradually.

Policymakers think supply will likely outpace demand during its forecast period.

The Bank of England’s latest forecast shows inflation staying above its 2pc target for longer.

The consumer prices index (CPI) is expected to hit 2pc in the second quarter of this year as energy prices put downward pressure on the figure.

But the Bank said that this victory against its inflation target would only be temporary and inflation was actually likely to rise again after.

After that it will take until the fourth quarter of 2026 for inflation to consistently return to the 2pc target, the Bank said.

That is a year later than it had previously forecast.

It means that while inflation appears to be falling faster than previously thought, it will also stick around for longer than the Bank anticipated in its forecast in November.

Andrew Bailey has begun his press conference saying “things are moving in the right direction” on inflation.

He said policymakers “have to be more confident” that inflation will fall to 2pc and stay there.

Yael Selfin, Chief Economist at KPMG UK, said the Bank of England has “opened the door for rate cuts later this year”. He said:

Favourable developments in the Bank of England’s battle against inflation, coupled with continued weakness in the domestic economy, have enabled the MPC to tentatively shift its hawkish stance. While interest rate cuts as early as spring may be premature, the MPC’s forward guidance was more dovish.

Wage-price spiral worries have receded in recent months, with the Bank revising down its forecast for both wage growth and inflation relative to November in the short term. Nonetheless, persistence in services inflation together with disruptions in the Red Sea pose a potential risk to the inflation outlook, with the latter adding an upside risk to goods price inflation.  

The Bank of England will be wary of running the risk of overtightening, particularly with the impact of previous rate hikes yet to feed through to the economy, and with the Fed and ECB expected to cut rates several times this year. However, we expect the Bank to pause for some time yet before beginning to cut interest rates. Cuts could happen from the summer onwards, by around 100 basis points in total this year, with interest rates potentially settling at around 3pc by the second half of 2025.

After announcing today’s decision, Governor Andrew Baileys said:

Today we’ve decided to hold interest rates at 5.25pc. We have had good news on inflation over the past few months.

It has fallen a long way, from 10pc a year ago to 4pc.

But we need to see more evidence that inflation is set to fall all the way to the 2pc target, and stay there, before we can lower interest rates.

Government borrowing costs ticked up as Bank of England governor Andrew Bailey has said that he and his colleagues “need to see more evidence” that inflation is going to stay around 2pc before they start cutting interest rates.

The yield on benchmark 10-year UK gilts has risen about three basis points to 3.82pc, although the gains were lower than those across other major European economies.

The pound ticked up ever so slightly as interest rates were held at 5.25pc but most market moves had already been priced in well before this heavily anticipated decision.

Sterling was last down 0.1pc against the dollar at $1.26 and was down 0.1pc against the euro at 85p.

Policymakers have increased their forecast for growth in the UK economy in the coming years.

Gross domestic product (GDP) is expected to grow by 0.25pc this year, which is less than 0.5pc that the Bank forecast in November.

But while it downgraded its expectations for last year, growth is now expected to be higher this year, at 0.25pc instead of 0pc.

GDP will also grow faster than previously expected in 2025 - at 0.75pc compared with 0.25pc - and in 2026 - at 1pc instead of 0.75pc - the Bank’s economists said.

Governor Andrew Bailey said the Bank of England needs more evidence “before we can lower” interest rates.

In its Monetary Policy Report, decision makers said interest rates need to remain “restrictive”.

However, the Bank thinks that inflation will fall to the 2pc target during the second quarter of this year before accelerating again.

Policymakers at the Bank of England said they would keep interest rates “under review” as they held borrowing costs at 5.25pc.

The Monetary Policy Committee voted to hold rates by a majority of 6 to 3, although two members voted for a rise and one voted for a cut.

The Bank of England has held interest rates at 5.25pc, maintaining borrowing costs at their highest level since 2008.

Just a few minutes now until the Bank of England announces its next interest rate decision.

Joel Kruger, market strategist at LMAX Group, said:

The broad consensus is that the Bank of England will leave rates on hold at 5.25pc for the fourth consecutive time, but we do expect things to get interesting in the accompanying communication regarding the outlook for monetary policy.

There is an expectation that the Bank will follow in the footsteps of the Fed, and other central banks, signalling a move towards rate cuts at some point in the future. 

At the same time, it is unlikely the Bank will want to jump to any conclusions in its battle against inflation, which should keep it from signalling an imminent rate cut.

If there is to be one big change that comes from today’s decision, it will likely come from the voting split as last seen in December when three members voted for a rate hike while the remaining six voted to maintain the bank rate.

Since then, GDP readings have been less than impressive, retail sales has disappointed and wage and inflation data have cooled. Therefore, we expect today’s meeting to produce a unanimous decision where the hawks relent and all members vote for rates to stay on hold.

US stock indexes rose in premarket trading following a Wall Street sell-off after the Federal Reserve dashed hopes for early interest rate cuts.

The S&P 500 and the tech-laden Nasdaq on Wednesday notched their biggest one-day percentage declines since September and October, respectively, while the Dow saw its steepest decline in six weeks.

Keeping interest rates unchanged on Wednesday, the Fed reminded markets of its undeterred focus on battling inflation and smashed speculations of policy easing kicking off in March.

Focus moves back to Big Tech earnings that could shed light on whether megacap stocks can sustain their recent rally, fuelled by the hype around artificial intelligence and hopes of early rate cuts.

Apple, Amazon and Meta all reveal their latest results after markets close tonight. Apple’s iPhone sales are expected to have seen the best growth in five quarters, while investors will monitor whether Amazon can cash in on its delivery heft by boosting fee revenue from its “Buy With Prime” service.

Facebook owner Meta is likely to see a muted impact from generative AI on its advertising business.

Ahead of the opening bell, the Dow Jones Industrial Average was flat, the S&P 500 was up 0.3pc and the Nasdaq 100 had gained 0.5pc.

The UK’s manufacturing sector saw its recent downturn continue last month as firms said rerouted deliveries due to troubles in the Red Sea added to supply chain difficulties, according to a new survey.

The closely-watched S&P Global/CIPS UK manufacturing PMI survey increased to 47 in January from a reading of 46.2 in December.

It meant that the rate of decline in the sector reduced slightly.

However, the reading was still below the 50 threshold, which indicates that the sector is contracting.

Rob Dobson, director at S&P Global Market Intelligence, said: 

The downturn in UK manufacturing continued at the start of 2024, with output, new orders and employment all reduced in January.

The contraction was widespread, with declines in all three variables seen across the consumer, intermediate and investment goods sub-industries.

Labour says it will not raise corporation tax as Rachel Reeves says she sees profits “as a mark of business succeeding”.

Our economics reporter Melissa Lawford has the details:

The shadow chancellor hinted that Labour could introduce corporation tax cuts, if Britain’s business tax rate became higher than in other countries.

Speaking to business leaders in a standing-room-only conference room at London’s Oval cricket ground, Ms Reeves said that if Labour came into power, it would cap corporation tax at 25pc for the duration of the parliament to give businesses long-term certainty.

Ms Reeves stressed that Labour is “pro-business” and that the Party “sees profit not as something to be disdained but as a mark of business succeeding.”

Ms Reeves said: “There have been 26 changes to our corporation tax arrangements in this parliament alone. We can’t go on like this.”

When he was Chancellor, Rishi Sunak announced a rise in the corporation tax rate from 19pc to 25pc for companies with profits over £250,000, which came into effect in April 2023. 

Ms Reeves said she rejected calls for a corporation tax cut, noting that Britain’s rate is still the lowest in the G7, but said that Labour would reexamine the rate if it became uncompetitive internationally.

“Should our competitiveness come under threat, if necessary, we will act,” she said.Her words show Labour is continuing to take great pains to distance itself from its former leader Jeremy Corbyn, who in Labour’s 2019 general election manifesto pledged to raise corporation tax to 26pc.

Labour will also publish a roadmap for business taxation within the first six months of government, Ms Reeves said.

Shares in French banking giant BNP Paribas tumbled as struggles in its consumer credit and real estate business took the shine off a third straight record annual profit.

The lender said its net profit rose 11.4pc to almost €11bns (£9.4bn) last year.

Its annual results were driven by rising interest rates, its investment services and the $16.3bn sale of US unit Bank of the West.

Chief executive Jean-Laurent Bonnafe said: “BNP Paribas achieved a very good performance in 2023.”

He pointed to “the solidity of our diversified model, the efficiency of our platforms, and the group’s ability to continue its development in order to address the needs of its individual, corporate and institutional clients”.

But BNP shares fell by more than 8pc on the Paris stock exchange as its fourth quarter results disappointed.

RBC bank analyst Anke Reingen said its fourth-quarter results “missed on lower revenues and slightly higher costs”.

As eurozone inflation fell, Morningstar’s European market strategist Michael Field said:

Record high interest rates in the Eurozone have had the desired effect, driving inflation down in 12 of the last 13 months, so today’s fall should come as no real surprise. 

Granted, we are still not at the ECB’s targeted 2pc level of inflation, but with the momentum we have witnessed over the last year, that goal is well within sight.

Data this morning also showed that the unemployment rate within the European area was broadly steady at 6.4pc, a level it has generally stayed at for the last 18 months. 

Central bankers had originally feared that falling inflation might put the economy in danger of overheating, but a steady unemployment rate is just another signal to the ECB that interest rates have room to fall in the coming months.

Inflation in Europe edged lower in January, keeping alive speculation about quick interest rate cuts that would lower borrowing costs for businesses and consumers.

Prices rose 2.8pc on an annual basis, according to the European Union statistics agency Eurostat, down from 2.9pc in December. It matched what was expected by market analysts.

Energy prices fell 6.3pc, contributing to the drop in inflation in the 20 European Union countries that use the euro currency. 

The overall decline brings the European Central Bank closer to its goal of 2pc considered best for the economy.

Inflation has fallen steadily as the ECB rapidly raised interest rates to a record 4pc, the typical antidote to out-of-control price increases.

Wholesale gas prices have held firm as subdued industrial usage and high storage levels keep a lid on demand.

Dutch front-month futures, Europe’s benchmark contract, held around €30 per megawatt hour despite potentially frosty conditions later this month, which could boost the need for heating.

The contract has stayed around this level in recent weeks amid mild weather in January, which counteracted any risks to supply posed by the tensions in the Middle East.

The UK equivalent contract has fallen 1.5pc.

Jeremy Hunt has rebuked the boss of the UK’s economic watchdog after he appeared to liken last year’s public finance forecasts to a “work of fiction”.

Our politics live blog editor Jack Maidment has the latest:

The Chancellor said Richard Hughes, the chairman of the Office for Budget Responsibility, was “wrong” and the comment “shouldn’t have been said”. 

Mr Hughes had told a House of Lords committee last month: “Some people call (the projections) a work of fiction, but that is probably being generous when someone has bothered to write a work of fiction and the Government hasn’t even bothered to write down what its departmental spending plans are underpinning the plans for public services.” 

Read what Mr Hunt told the BBC’s Political Thinking podcast.

The pound slumped after Federal Reserve chairman Jerome Powell pushed back against bets of a US interest rate cut as soon as March.

Sterling dropped 0.2pc to $1.26, while the dollar was also up 0.1pc against the euro at $1.08, as Federal Reserve left interest rates unchanged at their 23-year highs.

The dollar has been buoyed by US economic data suggesting the Fed can wait longer before cutting interest rates, and Mr Powell gave the currency another push overnight by calling a cut in March “not the base case”.

He told a press conference he does not think policymakers “will reach a level of confidence by the time of the March meeting” to ease policy, “but that’s to be seen”.

The Bank of England announces its next decision on interest rates at noon.

Deutsche Bank plans to cut 3,500 jobs over the coming years as the boost to its earnings from higher interest rates fades.

The German lender, which employs about 7,000 people in the UK, set out the job losses as it revealed profits fell by 16pc to €4.2bn (£3.6bn), after the previous year’s earnings were boosted by a one-off tax benefit.

Costs related to the company’s savings and efficiency programme also weighed on net profit, with Deutsche spending €566m on restructuring and severance expenses.

Revenues, jumped 6pc year-on-year to €28.9bn thanks to the European Central Bank’s higher interest rates but a 5pc growth in fourth quarter revenues was below analyst expectations.

Chief executive Christian Sewing wants to boost profitability and return more money to shareholders.

He praised the bank’s performance in “an uncertain environment” and highlighted that Deutsche had achieved a pre-tax profit of nearly €5.7bn, the highest “in 16 years”.

Deutsche Bank rose 1.1pc in early trading in Frankfurt and the stock has gained about 7pc since Mr Sewing was named as boss in 2018. Its share price has more than doubled from the lows reached almost four years ago.

Shadow business secretary Jonathan Reynolds today conceded that Labour may not reach its wobbling £28bn green investment commitment.

He told BBC Radio 4’s Today programme: 

That’s our level of ambition but how quickly we get there and if we can get there has to have respect to, and heed to, the overall position of our economy.

We haven’t had the last budget before the election.

I’m extremely confident in the overall pitch - there’s not one thing that needs to happen in the British economy to make everything fine, to see it grow faster.

Pressed on why Labour was no longer committing to the sum, or why it was not admitting it was no longer a cast-iron commitment, Mr Reynolds said: “I don’t think we’re struggling to make our minds up, I think we’re very clear we want to see public investment rise.”

The competition regulator has announced it has launched an inquiry into the merger of the printing activities of the Daily Mail’s publisher and The Times owner News Corp.

The Competition and Markets Authority said it wanted to see if the tie up might “result in a substantial lessening of competition” in the UK.

The owners of The Sun and Daily Mail announced plans in October to combine the printing operations of News UK and DMG Media printing sites in Thurrock in Essex and Dinnington in South Yorkshire. 

Under the proposal, a new company, NewCo, would be created to run the combined print operations.

It comes as national print newspaper circulation has declined by more than 60pc in the past 10 years.

Casino and bingo hall firm Rank Group has swung back to a profit for the past half-year as more punters returned to its venues.

The Mecca Bingo operator said it was boosted by “busy trading” through Christmas and New Year.

The group recorded a pre-tax profit of £10.4m for the six months to December 31, bouncing back from a £109.1m loss over the same period a year earlier.

Chief executive John O’Reilly said: 

After what has been a very challenging few years for Rank due to a wide range of external macro factors, we are starting to build revenues and, with our strong operational leverage, we are improving our profitability, with the group delivering revenue and operating profit growth across all businesses.

We are well positioned to optimise the opportunities afforded by the UK Government’s planned land-based regulatory reforms which will hopefully be implemented through the passing of secondary legislation in the summer of 2024.

These reforms cannot come soon enough in enabling us to modernise our proposition to better meet our customers’ expectations.

The FTSE 100 has edged higher after Shell announced its annual results, even after overnight losses on Wall Street.

Investors have scaled back bets of a US interest rate cut in March after Federal Reserve chairman Jerome Powell warned markets that there will be no imminent reductions in borrowing costs.

However, Britain’s flagship stock index gained 0.2pc as Shell climbed 1.2pc. The energy giant increased its dividend by 4pc and extended its share repurchases despite reporting a drop in annual profits.

Shares of BT gained as much as 5.8pc after Britain’s biggest broadband and mobile operator said it was on track to grow revenue and profit this year after reporting a better-than-expected third-quarter revenue.

Airtel Africa as the largest gainer on the FTSE 100 after the telecoms company announced a share buyback worth up to $100m (£79m).

Meanwhile the midcap FTSE 250 dropped 0.4pc.

Both the FTSE indexes closed out January with their worst monthly performance since October, as investors reined in bets of aggressive interest rate cuts this year.

The Bank of England looks set to keep interest rates at their highest levels in nearly 16 years later, with investors looking for hints of potential rate cuts later this year.

Interest rates are expected to be held at their nearly 16-year high for at least another month, as the Bank of England’s cautious policymakers await further signs that the cost-of-living crisis is easing.

Decision-makers on the Bank’s Monetary Policy Committee (MPC) are widely expected to keep interest rates at 5.25pc for the fourth time in a row when they meet today.

It would continue to take some of the pressure off borrowers who have seen costs go up steadily from lows of 0.1pc at the end of 2021, to the highest rate since early 2008.

Inflation has dropped sharply in recent months, as fuel prices have come down and food price rises have slowed.

However, the rate of consumer prices index (CPI) inflation rose to 4pc in December, from 3.9pc in November, the first time it had increased since February last year.

The surprise increase led economists to say it is unlikely that the Bank will look to cut interest rates - a tool they use to control inflation - any time soon.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “With inflation ticking back up in December, it’s likely to have quelled immediate urges from policymakers around the table for rate cuts any time soon.”

But Andrew Goodwin, chief UK economist for Oxford Economics, said December’s surprise rise in inflation is “unlikely to worry the MPC too much”, because it was driven by an increase in tobacco duties and a jump in air fares which are more volatile measures.

Shell’s share price has leapt higher after it announced another $3.5bn share buyback and growing profits for the final three months of 2023.

The energy giant’s shares surged 1.2pc to £24.76.

The FTSE 100 shifted higher as trading began ahead of the Bank of England’s next decision on interest rates.

The UK#s blue chip index gained 0.1pc to 7,637.29 while the midcap FTSE 250 fell 0.4pc to 19,286.07.

Businesses have urged unions to consider the “far-reaching consequences” of rail strikes as the hospitality sector warned over a hit of up to £350m from the latest walkouts.

The Night Time Industries Association (NITA) warned it was “deeply concerned” about the “significant repercussions” that recent industrial action - organised by the train drivers’ union Aslef - will have on the night-time business economy.

The advocacy group representing night-time businesses said strikes over the past few years have already caused firms to lose more than £4bn in revenue, which has worsened the effects of rising inflation and led to a “significant” increase in hospitality businesses falling into administration.

It has urged the Prime Minister Rishi Sunak and Chancellor Jeremy Hunt to take “decisive action” to remedy the “critical situation”.

Trade association UKHospitality estimates that the current train strikes will cost the sector up to another £350m, which comes as swathes of firms in the industry are already being forced to close their doors.

In 2023, 1,641 companies went into administration, with 190 of those from the hospitality sector.

Here are the services that are still affected by rail strikes.

Shell has said annual profits tumbled in 2023 after lower oil and gas prices knocked its bottom line.

Brent crude, the international benchmark, has fallen by 37pc since hitting $127 a barrel in March last year following Vladimir Putin’s decision to invade Ukraine. 

Brent is trading at about $80 today but was as low as $71 in June.

Meanwhile, wholesale gas prices have plummeted by 90pc from a peak of €339 per megawatt hour to about €30 today.

BT has said it remains on track to meet its targets for the current financial year after higher revenues and earnings over the latest quarter.

The telecoms giant said adjusted revenues increased by 3pc to £15.8bn over the three months to December 31, compared with the same period last year.

It said this was driven by price increases and fibre product sales in its Openreach business.

Adjusted earnings increased by 3pc to £6.1bn for the quarter as cost improvements offset inflation, while pre-tax profits rose 15pc to £1.5bn.

New chief executive Allison Kirkby said:

BT Group has delivered another quarter of revenue and ebitda growth, while rapidly building and upgrading customers to our full-fibre broadband and 5G networks, and we continue to be on track to achieve our financial outlook for the year.

We are providing great digital connectivity and services, while laying the foundations for future growth that will benefit our customers, investors and the UK.  

As I assume the role of chief executive, we remain committed to our purpose and our strategic focus, and I am looking forward to leading BT Group into its next phase of development.

Shell was able to announce a fresh $3.5bn (£2.8bn) share buyback after a strong performance from its gas traders.

The FTSE 100 energy giant said it had benefited from both “exceptional” trading opportunities in the global gas market and high volumes of liquified natural gas for sale.

The latest buyback matches the level of the previous quarter and comes after Shell returned $23bn (£18.2bn) to shareholders last year.

Elon Musk has pledged to hold a shareholder vote on moving Tesla’s registration from Delaware to Texas after his $56bn (£44bn) pay package in 2018 was annulled by a state judge.

The billionaire said the electric car company would “move immediately” to hold a vote on shifting its incorporation to Texas after holding a public poll on his social media platform X, formerly known as Twitter.

He had asked: “Should Tesla change its state of incorporation to Texas, home of its physical headquarters?” 

The result showed 87.1pc of voters thought Tesla should change states.

Read on for the latest.

Shell profits dropped by nearly a third as the energy giant adjusted to lower oil and gas prices.

Shell revealed adjusted earnings of $28.3bn (£22.3bn) for 2023, down 29pc from the record $39.9bn (£32.2bn) recorded in the wake of the energy shock triggered by Russia’s invasion of Ukraine.

It comes as Brent crude oil has fallen by 37pc since hitting $127 a barrel in March last year following Vladimir Putin’s decision to invade Ukraine. Wholesale gas prices have plummeted 90pc since the shock to energy markets.

However, Shell also revealed that for the fourth quarter it increased adjusted profits by 17pc to $6.3bn (£5bn) as Greenpeach activists held a “profit party” outside its headquarters in London.

The energy giant also announced a new $3.5bn share buyback for the upcoming quarter, matching the level of the previous three months.

Chief executive Wael Sawan said: “Shell delivered another quarter of strong performance, concluding a year in which we made good progress across the targets outlined at our capital markets day.

“As we enter 2024 we are continuing to simplify our organisation with a focus on delivering more value with less emissions.

“In 2023, Shell returned $23bn to shareholders. In line with our progressive dividend policy, Shell is now increasing its dividend by 4pc. We are also commencing a $3.5bn buyback programme for the next three months.” 

Greenpeace campaigners responded by dancing behind a burning sign bearing the words “Your Future” outside the company’s headquarters.

Jonathan Noronha-Gant, a senior campaigner at Global Witness said:

Shell’s shareholders remain some of the biggest winners of ongoing global instability and reliance on fossil fuels. The turmoil in fossil fuel markets, caused by war in Europe and the Middle East, has helped Shell rake in enormous profits – but instead of investing in clean energy, the company has doubled down on oil, and gas, choosing climate-wrecking U-turns and shareholder pay-outs.

Shareholders be warned that this unstable and short-termist business outlook will ultimately make your investments worthless in the future. When the history books are written, Shell and its shareholders will be held accountable for their devastating impacts on global temperatures, displacement of millions, support for dictators, and disruption of food supplies.

Thanks for joining me. Shell has revealed annual profits tumbled in 2023 after lower oil and gas prices knocked its bottom line.

The oil giant reported adjusted earnings of $28.3bn (£22.3bn) for 2023, down 29pc from the record $39.9bn (£32.2bn) on the record results seen in 2022, when soaring oil prices drove profits to an all-time high.

5 things to start your day 

1) Banks at risk from 99pc mortgages, warns Santander chief | Mike Regnier expresses concerns as Chancellor mulls scheme for first-time buyers

2) Zuckerberg rejected Nick Clegg’s plea for more child protection on Facebook and Instagram | Meta founder turned down request for new staff because of ‘other pressures and priorities’

3) Tory rebels demand Hunt scrap tourist tax | British shops lose £1.5bn per year as visitors head to France and Italy, research finds

4) Andrew Orlowski: Why AI threatens a new age of fake news and disinformation | Artificial intelligence’s poisonous feedback loops threaten the destruction of the Information Age

5) Chris Hayward: Brexit hasn’t crushed the City – it’s thriving | Recent reforms are honing the Square Mile’s competitive edge

What happened overnight 

Asian shares were mixed after Wall Street fell to its worst loss since September as the Federal Reserve indicated cuts to interest rates are not imminent.

Hong Kong’s Hang Seng advanced, but ceded much of its early gains. It was up 0.8pc at 15,601.77 while the Shanghai Composite index lost 0.4pc to 2,779.15.

Tokyo’s Nikkei 225 sank 0.9pc to 35,975.44 and the Kospi in Seoul climbed 1.7pc to 2,538.76.

In Australia, the S&P/ASX 200 skidded 1.2pc to 7,588.20.

Bangkok’s SET rose 0.5pc while the Sensex in India edged 0.1pc higher.

The S&P 500 dropped 1.6pc to 4,845.65 for its worst day since September. It veered between more modest and sharper losses through a shaky afternoon as traders delayed bets for when the Fed would begin easing its main interest rate from its highest level since 2001.

Tech stocks dragged the Nasdaq Composite index down by 2.2pc to 15,164.01 as investors realised that expectations for growth had got out of hand. The Dow Jones Industrial Average, which has less of an emphasis on tech, fell a more modest 0.8pc to 38,150.30.

The yield on the 10-year Treasury fell to 3.92pc from 4.04pc late Tuesday. In October, it was above 5pc and at its highest level since 2007.