Today’s top stories
Turkish leader Recep Tayyip Erdoğan appeared on course to extend his rule into a third decade, as he entered an election run-off, having comfortably beaten his main opponent in the first round. The result prompted some soul-searching among Turkey’s opposition.
EU regulators cleared Microsoft’s $75bn acquisition of Activision Blizzard, breaking from the UK and US which are holding up the gaming industry’s biggest ever deal.
UK Prime Minister Rishi Sunak promised to send hundreds of attack drones and other military hardware to Ukraine after face-to-face talks with President Volodymyr Zelenskyy.
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Good evening.
Brussels today raised its inflation and growth forecasts, arguing that the EU economy had weathered disruption from the war in Ukraine and the energy crisis and avoided what was once seen as an “inevitable” winter recession.
EU-wide consumer price inflation would now hit 6.7 per cent this year and 3.1 per cent next year, the European Commission said, compared with its previous forecasts of 6.4 per cent and 2.8 per cent.
The forecast for GDP growth for this year was revised up from 0.8 per cent to 1.0 per cent and for 2024 up from 1.6 per cent to 1.7 per cent.
Eurozone inflation has fallen from an all-time high of 10.6 per cent in October to 7 per cent last month, mainly due to a sharp drop in energy prices. The improvement is a much-needed shot in the arm for business: separate data this morning showed eurozone industrial production fell by a more-than-expected 4.1 per cent in March, led by drops in factory activity in Ireland and car production in Germany.
However, consumers may need some convincing that inflation is on the way down. According to the ECB’s latest survey, people are becoming more pessimistic about rising prices. The trend is likely to spook policymakers: if people expect price pressures to stay high for longer they are more likely to push for higher wages and accept higher prices, fuelling more inflation.
High price growth will also leave a lasting drag on household finances, analysts warn, with consumers continuing to feel much poorer than before the pandemic.
Meanwhile the debate continues about how quickly the ECB’s tightening of monetary policy will bring eurozone inflation down. The central bank said today that its efforts were only just starting to have an impact and would peak in 2024. The programme will also cut economic growth by an average of 2 percentage points over the next three years, it said.
Need to know: UK and Europe economy
Former Bank of England policymaker Michael Saunders echoed recent findings from current Monetary Policy Committee members that “greedflation” — where businesses drive up inflation by increasing prices beyond what they need to — did not “reflect the reality for the UK”.
New data from the Office for National Statistics highlighted the deterioration in Britons’ mental wellbeing, especially among the young, thanks to the twin blows of the pandemic and the cost of living crisis.
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The G7 and EU will ban the restart of Russian gas imports, the first time trade has been blocked by western powers since the invasion of Ukraine. The move will prevent exports to countries such as Poland and Germany, where Russia cut off supplies last year.
A new FT visual presentation shows how covert voyages allegedly took South African arms to Russia.
Need to know: Global economy
Optimism that US headline inflation is heading in the right direction is being tempered with lingering concern over the stubbornly high “core” measure, which strips out volatile food and energy prices.
A deal to end the stand-off over the US debt ceiling is appearing to take shape after talks at the weekend.
Signals that Chinese president Xi Jinping has ambitions on Taiwan would wreck the progress Beijing has made over the past 40 years, writes chief foreign affairs columnist Gideon Rachman.
Thailand’s opposition party leader Pita Limjaroenrat said he was ready to be prime minister and was in coalition talks after beating the country’s military rulers in yesterday’s election.
Argentina is bringing in new emergency measures to deal with its worst economic crisis in two decades, including raising interest rates to 97 per cent.
Ghana has long been thought of as a model for African development, but its reputation now lies in ruins after defaulting on its debts. Our Big Read looks at the lessons for neighbouring countries which also overspent when debt was cheap.
Global demand for platinum — a key metal in car catalytic converters as well as in glass-fibre for wind turbines, electronics and petrochemical plants — is expected to surge 28 per cent this year as supply falters in top producer South Africa. China holds about 85 per cent of the world’s stocks.
Need to know: business
Once-feted Vice Media filed for bankruptcy protection ahead of a proposed deal to sell the business to a consortium of lenders. The company’s anarchic style was popular with millennials but has struggled to become financially successful as traditional media groups hit back, and tech giants such as Meta tighten their grip on digital advertising.
Chinese tech entrepreneurs are going on the global offensive following the success of companies such as TikTok and Shein and continuing economic turmoil and fierce competition at home.
China’s highly competitive electric vehicle market is set for a shakeout as prices plunge and foreign carmakers enter the fray. One projection says the number of EV companies in China will shrink from about 200 to between five and 10 in the coming years.
The board of Australia’s Newcrest Mining unanimously backed a A$29bn ($19bn) takeover offer by its US rival Newmont, paving the way for the world’s largest gold miner to strengthen its grip on the sector.
The World of Work
The UK’s opposition Labour party is planning sweeping changes to the labour market should it get elected, including ending “fire and rehire” and the introduction of a “right to disconnect” from out-of-hours emails and texts, as has been introduced in countries such as France, Italy and Portugal.
Demand for supply chain managers has surged following recent disruptions to global trade, propelling once-overlooked professionals to increasingly important positions in multinational companies.
Lockdowns may have spelt the end for much of formal office gear but, Emma Jacobs asks, do we still need boundaries between work and weekend wardrobes?
Uncertain future demand for office space has made workplaces the epicentre of anxiety about the wider UK commercial property market. The situation is echoed in Germany, where empty offices have tripled since the pandemic.
Some good news
Deforestation in Brazil’s Amazon rainforest fell 68 per cent in April from the previous year, according to preliminary government data. The data are the first sign of progress for President Luiz Inácio Lula da Silva who won last year’s election with a promise to end the destruction.
Source: Economy - ft.com
