Today’s top stories
UK public sector borrowing fell unexpectedly in June while retail sales grew much more than anticipated. Net public sector borrowing hit £18.5bn last month, £400mn lower than in the same month in 2022, according to data published by the Office for National Statistics on Friday.
Walls close in on Western businesses in Russia as companies looking to get out are struggling with a dearth of buyers and hardening Kremlin attitudes.
Rishi Sunak’s Conservative party lost two seats in big by-election defeats. The once-safe Tory seat of Selby and Ainsty in Yorkshire went to Labour while the Lib Dems won the south-western seat of Somerton and Frome.
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Good evening.
Heatwaves have dominated the news this week, with scorching temperatures across much of southern Europe and the US south. Scientists have blamed a specific jet stream pattern that creates a series of “heat domes” which in turn drive up temperatures.
The fast-moving band of air has been locked for weeks in a pattern characterised by five large U-bend shapes scientists have called “wavenumber 5”.
Long periods of extreme heat at or near 40C aren’t just a feature of our climate’s future, FT’s John Burn-Murdoch argues; they are already here.
The south-western US state of Arizona has long been affected by very high temperatures but now it’s clear those very high temperatures are climbing. Between 1970 and 1990, an average of 16 people per year died from “exposure to excessive natural heat”. Between 1990 and 2015, the average rose to 38. In 2020, it was 210, and 257 in 2022.
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In his column John tries to explain why Phoenix in Arizona, where maximum temperatures have now exceeded 40C for 26 successive days, is America’s fastest growing big city.
Meanwhile in Germany, efforts to build a future supply of energy based on renewables is, perhaps surprisingly, being led by German coal giant Leag, which is headquartered in the Lausitz city of Cottbus.
All coal-fired power plants in Germany must be switched off by 2038, making the success of Leag’s transition towards renewables crucial for sustaining the livelihoods of its 7,000 workers.
Fabian von Oesen, a civil engineer who has spent much of the past decade working on offshore wind, leads Leag’s renewables division.
But environmental groups are sceptical about a coal company leading the energy transition, with one activist saying: “It’s like asking a villain to change course.”
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But Von Oesen and others hope this will help to secure future generations’ career prospects in the region that witnessed an exodus of talent after the fall of the Berlin Wall.
In the UK, on the other hand, efforts to boost renewable energy have suffered a significant setback after one of the country’s biggest wind farm projects, Vattenfall’s Norfolk Boreas site, has been halted after costs surged 40%.
Need to know: UK and Europe economy
UK consumer confidence plummeted in July, according to research group GfK. The consumer confidence index, which measures how Britons view their personal finances and wider economic prospects, fell six points to minus 30 in July compared with the previous month.
Turkey’s central bank lifted interest rates for a second consecutive month but the limited increase has prompted concerns that policymakers are prioritising growth over fighting inflation.
After Wednesday’s gigafactory announcement from Tata Group, the UK’s business and trade secretary Kemi Badenoch writes in the FT that the UK can’t pick winners but it can help the car industry succeed.
Need to know: Global economy
Russia is pushing a plan to supply grain to Africa and cut Ukraine out of the global market after Moscow’s withdrawal this week from a UN-backed deal. The Kremlin warned earlier this week it would treat all grain ships heading to Ukraine’s ports as military targets, a threat the EU said demonstrated Moscow’s “barbarian attitude” as it attacks food supplies.
China’s low-profile billionaires have come out in support of the Communist party’s efforts to restore private sector confidence as Beijing looks to reinvigorate the slowing post-pandemic recovery.
For the first time since 2017, net inflows into ‘ex-China’ emerging markets were more than $41bn, exceeding those into mainland Chinese equities, according to Goldman Sachs data.
Taylor Swift is the latest frontline in the ongoing war between Singapore and Hong Kong over leading financial hub status. The American singer, like Harry Styles and Coldplay, is performing in Singapore but skipping Hong Kong for next year’s international tour, which is being seen by many as a snub.
Just weeks after it was accused of being infiltrated by China’s Communist party, the Asian Infrastructure Investment Bank, Beijing’s answer to the World Bank, has approved one of its highest-profile international partnerships. The proposal will issue $1bn in credit guarantees against sovereign-backed loans made by the World Bank’s lending arm, the International Bank for Reconstruction and Development.
Need to know: business
McDonald’s has overhauled its UK complaints procedures after sexual assault and bullying claims emerged in a BBC investigation published earlier this week.
US cinema owners are hoping for box office success by cashing in on the meme-driven “Barbenheimer” phenomenon which has led to hundreds of thousands of film-goers buying tickets to see Barbie on the same day as Oppenheimer this weekend.
FTX has sued its founder Sam Bankman-Fried in an effort to claw back more than $1bn allegedly misappropriated in the months leading up to the bankrupt cryptocurrency exchange’s collapse last year.
The world’s largest contract chipmaker TSMC has warned that it expects its 2023 revenue to drop by 10 per cent as the AI boom fails to offset economic woes and China’s delayed recovery.
Record profits have been forecast by low-cost airline EasyJet this summer thanks to high ticket prices and strong demand for travel but concerns have been raised over “unprecedented” air traffic control disruption.
Science round-up
The FT revealed that the UK’s decision on rejoining the EU’s Horizon research programme would be delayed until the autumn.
Eli Lilly’s new Alzheimer’s drug donanemab, which phase 3 trials showed could slow memory loss and cognitive decline, was hailed as a “watershed moment” in the fight against the disease.
Farm robots like Harvard’s Wyss Institute’s “Robobees” — though yet to be tested outside the lab — could eventually perform tasks such as crop pollination and environmental monitoring.
Microsoft, OpenAI and Cohere are experimenting with “synthetic data” to train their AI systems as they reach the limits of information created by humans. John Thornhill, the FT’s innovation editor, explores the promises of AI-assisted healthcare.
How do machines learn? Pretty much the same way as humans: repeating a process and making adjustments after mistakes, to gradually improve outcomes. Here’s how they can be trained to recognise images. And here’s our explainer on the EU’s proposals for AI regulation.
Something for the weekend
Try your hand at the range of FT Weekend and daily cryptic crosswords.
Some good news
Filip Cegar, an Aberdeen teenager who broke his back sledging at a golf course in the Bieldside area last December, has successfully climbed the 674 steps of the Eiffel Tower. After learning to walk again, he’s raised more than £4,000 for the Royal Aberdeen Children’s Hospital.
Source: Economy - ft.com
