Today’s top stories
The UK failed to attract offshore wind developers to its latest round of contracts for new projects, in a blow to the country’s decarbonisation plans.
Apple shares clawed back some ground after falling on news that China could crack down on the use of its devices by officials, denting hopes that the launch of its iPhone 15 next week could make it the world’s biggest smartphone maker.
European natural gas prices jumped after workers at LNG facilities in Australia, a key liquefied natural gas exporter, began strike action, fuelling fears of disruption to global supplies.
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Good evening.
“Solving the greatest challenges of the world together” sounds like a great slogan, but as world leaders arrived in India for a two-day G20 summit, tensions over China and the war in Ukraine have made the prospects of multilateral agreements on the big issues as distant as ever.
Although some of the lustre has gone from the event with the no-show of Chinese president Xi Jinping and Russian president Vladimir Putin, the meeting does offer a chance for India to burnish its credentials as a rising global power in the year its population overtook China and its economy was among the world’s fastest growing,
High on the agenda from US president Joe Biden is the bulking up of multilateral institutions as a counterweight to the rising power of China. Consensus has already been reached on making the African Union a permanent G20 member, while Biden is also pushing for the expansion of the World Bank’s lending capacity.
Still, the weekend is likely to be notable for its deep divisions, notes Brussels bureau chief Henry Foy [for premium subscribers], with a reminder that Europe and its allies are distinctly in the minority.
“It’s quite a lesson for us,” said one European diplomat. “We enjoy the G7 and get this feeling that everyone agrees with us. And then we come to the G20 and it’s brutally clear that’s really not the case.”
The biggest source of friction is over the war in Ukraine. UK prime minister Rishi Sunak is among those urging India to “call out” Moscow over its invasion. His Indian counterpart and summit host Narendra Modi has been neutral throughout the conflict, but has spoken about its impact on food and commodity prices. Sunak, Britain’s first prime minister of Indian descent, will also be hoping to make progress on a post-Brexit trade deal.
Climate change is another bone of contention. More than a dozen major Indian companies have written to G20 leaders for action on fossil fuels and support for the green transition but, as the FT reported in July, China, backed by Saudi Arabia, has obstructed negotiations and refused to debate issues such as emissions targets.
And on the subject of fossil fuels, US president Joe Biden, facing political heat at home over rising petrol prices, may also grab some time on the sidelines with Saudi Arabia’s Crown Prince Mohammed bin Salman to discuss the kingdom’s push with Russia for $100-a-barrel oil.
The economic backdrop adds extra pressures. G20 leaders were given a gloomy pre-summit update from the Financial Stability Board, the world’s most powerful financial watchdog, which warned of “further challenges and shocks” to the global financial system.
Some question whether the G20 has outlived its usefulness other than as an opportunity for bilateral meetings of leaders on the margins. Either way, hopes are not high for any major breakthroughs.
“We saw the growing international divisiveness at the last summit in Bali,” said one analyst. “The New Delhi summit is not going to be any different because of the widening international divisions.”
Need to know: UK and Europe economy
UK businesses expect inflation and wage growth to ease, according to a Bank of England survey, providing some relief for policymakers ahead of their next interest rate decision on September 21.
Columnist Camilla Cavendish says dodgy materials and poor construction in schools are emblematic of Britain’s addiction to short-termism and the tendency to drive down public sector costs via opaque contracts. Reinforced autoclaved aerated concrete, or Raac, has also been found at Heathrow and Gatwick airports.
German industrial production fell again in July, upping the pressure on the government to do more to lift the economy which has been beset by high energy prices, rising interest rates and a slowdown in trade with China, its second biggest export market.
Adding to the gloom, the EU’s statistics office cut its official estimate for eurozone growth in the second quarter from 0.3 per cent to 0.1 per cent. The widening gulf with the more robust US economy has sent the euro down for eight weeks in a row.
Ireland’s dairy farmers are in crisis. They face having to cull cows because an EU decision to limit the use of organic nitrogen on farms from the manure produced by their animals, just as milk prices are falling and land values are rising sharply.
Need to know: Global economy
China’s renminbi hit a 16-year low following data showing a slump in the country’s exports. Stimulus efforts have however brought some hope to the country’s stricken property sector.
US Treasury secretary Janet Yellen said the impact of China’s slowdown on her country would be small and that Beijing had “quite a bit of policy space” to address the challenges. Veteran investor Mohamed El-Erian said it was no longer certain that China would become the world’s largest economy.
The latest in our Big Government series looks at the $100tn path to net zero. The sums involved are huge: in 2021, the International Energy Agency calculated that annual investment would need to rise from an annual $2tn to almost $5tn, or 2.5 per cent of global GDP, by 2030. It would still total $4.5tn in 2050.
African leaders at a summit in Kenya backed a global carbon tax to help their green energy transition. They also called for a six-fold increase in renewable energy capacity across the continent, where hundreds of millions of people lack access to energy and clean forms of cooking.
In the meantime the threat of coups across the continent is spreading. Mali, Guinea, Burkina Faso, Chad, Sudan, Niger and now Gabon have all faced military takeovers over the past three years: here are some clues on spotting the next one.
Need to know: business
Germany is supporting the UK’s call to postpone tariffs on electric vehicle sales between the UK and the EU after the motor industry warned the measure would backfire. The debate comes as Europe’s carmakers buckle up for an onslaught of Chinese competition.
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British American Tobacco, the world’s biggest cigarette maker, finally agreed to sell its Russian business to local management, a year and a half after vowing to exit the country following the full-scale invasion of Ukraine. The Russian assets of Volvo AB, the Swedish truckmaker, are also to be transferred to a local investor.
The South Korean film industry has been hit by allegations about inflated box office performance.
A new FT film looks into the owners behind the gambling brands that sponsor top flight football clubs, uncovering a global network of shell companies and “front” organisations.
Science round up
The world is way off track to meet the Paris climate goals and is heading for a temperature rise of up to 2.6C, according to the first comprehensive UN stocktake of global efforts on global warming. Global temperatures between June and August this summer were at their highest since records began in 1940, according to the EU’s earth observation agency.
The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services warned that “invasive alien species” were having a catastrophic economic and environmental impact.
The UK confirmed it would rejoin the EU’s Horizon research programme, with an €800mn discount to compensate for being locked out for almost three years since Brexit. It is also participating in the Copernicus satellite observation scheme but has refused to join Euratom, the EU’s nuclear technology programme.
UK researchers have developed a 10-minute finger-prick blood test that can detect a range of diseases from long Covid to Alzheimer’s. Other UK scientists warned that delays at the medicines regulator meant an important UK trial looking for ways of treating long Covid risked running out of money before it finishes.
There was better news on Covid vaccines: test results have brought hope that the latest versions can protect against the highly-mutated new variant BA. 2.86.
Early onset cancer cases have risen 80 per cent in the past three decades, according to a new study, “upending received wisdom about the types of cancers typically affecting the under-50s”. Breast cancer has risen the fastest, alongside cancers of the windpipe and prostate.
In the absence of well-preserved DNA from ancient humans it is quite possible our real origin story will never be told, writes commentator Anjana Ahuja.
Could space mining really help us to replenish scarce resources on earth? Watch our new video.
Something for the weekend
Try your hand at the range of FT Weekend and daily cryptic crosswords.
Some good news
The Ticket Bank is a new UK programme offering free and heavily discounted tickets to arts and sports events for those who can’t afford them. Anyone who has received cost of living help from the government is eligible to apply.
Source: Economy - ft.com
