One year to go: US election race gets into gear

Today’s top stories

• The US said Israel had “no intent to reoccupy Gaza” after its war with Hamas. Follow our full coverage of the conflict here.

• Former European Central Bank president Mario Draghi warned that the EU would not survive as anything other than an economic bloc unless it deepened its integration, as he forecast a recession in Europe by the end of the year. Draghi has been tasked by the European Commission to prepare a report on how the EU can restore its competitiveness.

• 2023 is set to be the warmest year ever after an “exceptional” October. The UN secretary-general blamed governments for “runaway climate carelessness” by failing to cut fossil fuel production.

For up-to-the-minute news updates, visit our live blog

Good evening.

Strap yourself in: it’s now less than 12 months to go until a momentous US presidential election with huge ramifications for the rest of the world.

First, the latest political news. President Joe Biden will be cheered by Democrat wins in last night’s clutch of state and local elections, thanks partly to voter support for abortion rights, after polls showing his approval ratings on the slide. 

The focus now turns to his possible Republican challengers at the third primetime TV debate in Miami tonight. Frontrunner Donald Trump will (again) be conspicuous by his absence, opting instead for a campaign rally on the other side of the city. Trump will be cheered by news that the biggest donor of rival candidate Ron DeSantis — the space-exploring property baron Robert Bigelow — is considering backing him.

A win for Trump next November would change the world, says chief economics commentator Martin Wolf in his latest column. Wolf argues a Trump victory would be a blow for democratic norms at home, citing plans such as replacing career civil servants with loyal servants of the president, as well as abroad, weakening the trust on which US alliances are based at a time when the world is wracked by geopolitical tensions.

For the world economy, Trump’s plans for a 10 per cent across-the-board tariff on all imports could lead to retaliation and do huge damage to the World Trade Association, Wolf says. Equally important is the potential impact on global efforts on climate change, especially the possible reversal of clean energy measures in Biden’s Inflation Reduction Act. FT Alphaville separately rounds up what another round of Biden vs Trump might mean for investment.

As our Big Read explains, the election is likely to turn on whether American voters believe they are better off with Biden.

The president is betting everything on Bidenomics, his personal economic blueprint, founded on trillions of dollars of public investments, a focus on middle-income voters, an aggressive approach to competition policy and a decisive break from 40 years of “trickle-down” economics. 

Before last night’s elections at least, polls suggest many voters remain unconvinced, even with inflation falling and unemployment at its lowest level in decades.

Part of the problem for Biden is that even as Americans’ wages increased, the gains since 2021 did not keep up with inflation until this summer, putting a big squeeze on household budgets. At the same time, consumer prices for many items remain high, even though the speed of increases has slowed. 

In the meantime, fears are growing that election-related misinformation and disinformation could play a significant part in next year’s White House race. 

Biden last week issued an executive order on labelling AI-generated content in a bid to tackle “fraud and deception”, including deepfakes, while Meta, owner of Facebook and Instagram, said today that advertisers would have to disclose when they digitally create or alter political adverts to run on its platforms, including audio or video meant to depict an event that has allegedly occurred.

With user-generated disinformation also in the spotlight, one thing looks certain: social media moderators have a busy year in store.

Need to know: UK and Europe economy

Bank of England governor Andrew Bailey said it was “too early” to talk about cutting interest rates. UK gilts rallied sharply yesterday after the BoE’s chief economist had suggested cuts might be considered in the middle of next year.

The European Commission is set to recommend that member states open EU membership talks with Ukraine. Kyiv is carrying out a reform programme to align with EU standards even as it fights Moscow’s aggression.

The EU is moving ahead with its ban on Russian diamonds, one of the few major Russian exports still untouched by sanctions. The UK imposed sanctions on Dubai-based oil trader Paramount and others with Russian ties. Academic Elina Ribakova argues US economic sanctions risk losing their effectiveness as a policy weapon unless enforcement is stepped up and the private sector complies with the rules.

Portuguese prime minister António Costa, who has led the country since 2015, resigned hours after prosecutors issued arrest warrants and raided government buildings in a corruption investigation relating to several high-profile business ventures.

Radical centrist Pieter Omtzigt could become the new Dutch prime minister after his three-month-old New Social Contract party jumped to the top of opinion polls ahead of the November 22 election.

Need to know: Global economy

Central banks are split on how to respond to a possible jump in energy prices should the Israel-Hamas war escalate. For now, at least, the situation remains relatively calm, with oil prices giving up their gains since the hostilities began.

The latest in our Economists Exchange series features former Federal Reserve economist Claudia Sahm on talk of a US recession, the battle to beat inflation and the difficulties of forecasting.

US beef prices hit a record high as droughts in the south and west turn green pastures into dust fields and fuel higher feed costs. Scientists say the US is facing its worst dry spell in 1,200 years.

Falling pork prices, a heavily weighted component in China’s consumer price index — an update of which is due tomorrow — could push China back into deflation. In better economic news, the IMF upgraded its outlook for Chinese growth.

China is still the “billionaire capital of the world” but the number of super-rich has fallen, reflecting the property crisis and economic slowdown. Bottled water king Zhong Shanshan tops the Hurun Research Institute’s rich list for the third straight year.

The World Bank warned that high US interest rates were causing a “silent debt crisis” in smaller emerging economies. Debt interest payments as a share of government revenues are at their highest level since at least 2010.

Need to know: business

Amazon Prime members will be able to access benefits from US healthcare provider One Medical, for a fee, as the ecommerce company looks to expand in the $4tn industry.

Google and some of Europe’s largest telecoms operators urged Brussels to designate iMessage as a “core” service that would require Apple to make the chat app fully compatible with rivals. Currently, only Apple users are able to communicate via iMessage, making its texts a key factor in retaining iPhone owners’ loyalty.

Lloyd’s of London pledged $50mn to global development projects, as part of a programme addressing lasting inequalities from the transatlantic slave trade that it enabled. It has previously rejected calls to compensate descendants.

UK bellwether retailer Marks and Spencer announced its first post-pandemic dividend as strong food sales drove an increase in first half-profits from £208mn to £326mn. Survey data suggests UK grocery inflation has slowed to single digits for the first time in 16 months.

PwC plans to cut up to 600 jobs in the UK, starting with a voluntary redundancy programme. The firm was the last holdout against significant British headcount reductions among the Big Four accounting firms.

The battle for ownership of Manchester United is well into extra time, almost one year since the Glazer family said it would consider new investment into the club, a sale, or other transactions. Shareholders are not amused.

The US is following Europe and Australia in allowing consumers’ financial data to be shared easily, making it simpler to switch bank accounts and sign up for a range of financial products. Read this and more in our new special report: Next Tech Growth Markets.

The World of Work

What does the bankruptcy of WeWork mean for other flexible office providers? The business failed to escape the combined forces of expensive leases it had signed before the pandemic and weak occupancy rates as hybrid working gained popularity.

The UK is experiencing a severe shortage of ADHD medication. How can sufferers cope — and what can their managers do to help? Isabel Berwick speaks to specialist Dr Uthish Sreedaran, and ADHD patient, coach and author Leanne Maskell to find out in the new Working It podcast.

While you have your headphones on, check out the new Behind the Money podcast with US labour and equality correspondent Taylor Nicole Rodgers discussing if we’re in for a new era for American’s trade unions.

Some good news

UK regulators have authorised the use of a drug that could help prevent breast cancer in women. Anastrozole, which has hitherto been used to treat the disease, can now be used as a preventive treatment for post-menopausal women at moderate or high risk of developing the disease.  

Source: Economy - ft.com