Aurelia Butler

This article is an on-site version of our FirstFT newsletter. Subscribers can sign up to our Asia, Europe/Africa or Americas edition to get the newsletter delivered every weekday morning. Explore all of our newsletters hereToday’s agenda: G7 summit; JPMorgan’s Europe chief relocates; Adnoc bids $19bn for Santos; profile of Gavin Newsom; and a deathbed letter to Vivienne WestwoodGood morning. We start the working week with the latest updates on the conflict between Israel and Iran, which has entered its fourth day.What’s the latest? Both sides traded strikes over the weekend and into this morning, with Iranian rockets hitting several locations in the greater Tel Aviv region today. Iranian state media claimed a power plant in Haifa was also struck. Earlier, the Israeli military said it had launched strikes against missile sites in central Iran. In a social media post, it also said it had hit “numerous” weapons production sites in Tehran.What’s the global fallout? Oil and gold prices jumped this morning. Israel’s decision to target Iran’s energy sector — with strikes on at least two gas processing plants and two fuel depots — has poured more risk into global energy markets. Investors are concerned that Iran could retaliate by striking energy targets in other Gulf countries or impede the flow of oil and gas through the Strait of Hormuz, through which a third of the world’s seaborne oil passes. What could come next: Benjamin Netanyahu has warned that regime change could “certainly be the result” of Israel’s attacks, in response to a question about assassinating Ayatollah Ali Khamenei. Israel’s prime minister declined to comment on reports that Donald Trump had vetoed an Israeli plan to kill Iran’s supreme leader, saying “we’ll do what we need to do”. The US president has also warned that the US “could get involved” in the conflict. We’ll bring you real-time updates on the war and its impact at our live blog. Here’s more analysis on the situation:Nuclear weapons? Experts say Iran has become a “threshold” state but question Israel’s claim that Tehran had begun an atomic bomb programme.What are Israel’s goals? If Iran’s Islamic regime falls, the alternative will not be a liberal pro-western government, writes former MI6 chief John Sawers.Why was oil output raised? With the conflict, the Opec+ cartel’s recent move to boost crude production is coming under intense scrutiny.Other world leaders, including European Commission president Ursula von der Leyen and UK Prime Minister Sir Keir Starmer, are hoping the G7 summit in Canada, which began yesterday, will help de-escalate the conflict. Apart from that, here’s what else I’ll be watching today:Opec: The cartel publishes its monthly oil market report.EU: Ministers meet to discuss how to wean the bloc off Russian nuclear imports.Five more top stories1. Exclusive: JPMorgan’s European chief plans to relocate from London to New York, while keeping his role running the bank’s Europe, Middle East and Africa business. The move by Filippo Gori, who is also the lender’s co-head of global banking, is the latest in a string of examples of senior bankers overseeing UK-based operations from the US. 2. Abu Dhabi’s national oil company is offering $19bn to take over Santos, leading a consortium to bid for one of Australia’s largest energy companies. Santos said its board would recommend the offer, subject to terms being agreed. Read the full story.3. Rachel Reeves will set out a 10-year infrastructure plan for Britain this week, starting with a new programme to repair crumbling bridges, flyovers and tunnels. Allies of the UK chancellor say she will commit to increasing the infrastructure budget to at least £725bn over the next decade.MI6: Blaise Metreweli has been appointed the new chief of the UK Secret Intelligence Service, becoming the first woman to lead the spy agency.4. Luca de Meo will step down as chief executive of Renault to take the helm at Kering, where he will lead efforts to turn around the struggling French luxury group, according to people briefed on the plan. The carmaker said he would remain in place at the company until July 15. More details on the move.5. Minnesota police have detained the suspect in the politically motivated killing of state representative Melissa Hortman and her husband, and the shooting of state senator John Hoffman and his wife. Vance Boelter was apprehended after a two-day manhunt across the US state. News in-depth© FT montage/GettyTo Israeli military planners, Iran’s Fordow facility is akin to Mount Doom: a tightly guarded nuclear enrichment plant, buried half a kilometre beneath a mountain, which is ringed by air defences and symbolically situated near the ancient religious city of Qom. Satellite analysis shows how the underground site has become central to Tehran’s nuclear ambitions — and a major challenge for Israel.We’re also reading . . . Gavin Newsom: Trump’s decision to send troops to Los Angeles has allowed California’s governor to sell his brand of resistance to the rest of the country.Chinese economy: Mounting calls on Beijing to “rebalance” by encouraging more consumer spending are misguided, writes Ruchir Sharma.Brazil’s beef barons: The New York listing of food giant JBS marked a dramatic comeback for brothers Wesley and Joesley Batista, who were in jail eight years ago.Chart of the day US green bond sales have fallen since Trump won a second term as president, as companies seek to avoid unwanted attention by backing away from or playing down their environmental activities. Take a break from the newsMalcolm McLaren and Vivienne Westwood were partners in life and art but the bitterness of their rupture never faded. Now, a never-before-seen 16-page deathbed letter, written by the man who invented punk, has shed new light on their “tempestuous” relationship. © Mirrorpix/Getty Images More

Stay informed with free updatesSimply sign up to the More

Bank of England rate-setters already grappling with unpredictable US trade policy and unreliable UK data now face a fresh oil price shock as they meet this week to set borrowing costs in the wake of Israel’s air strikes against Iran. The potential for prolonged conflict and disruption to energy supplies would make the BoE’s Monetary Policy Committee even more inclined to caution at a meeting where it was already widely expected to hold interest rates at 4.25 per cent, economists said. Fallout from the air strikes on Friday would also make it even harder for the committee — deeply divided since its nine members split three ways in May — to convey a clear sense of how far or fast it might lower rates in future, they added. Jens Larsen, a former BoE official now at the Eurasia Group consultancy, said the Israel-Iran conflict was the latest in a sequence of geopolitical shocks making it difficult to set monetary policy around the world. “The Bank of England has said it will respond to the volatile geopolitical environment and repeated shocks by making greater use of scenarios to communicate all the uncertainty out there,” he said.“But so far this is very much a work in progress. It is hard to discern a clear narrative from the BoE on the outlook — they can’t afford to just throw up their hands and say they have no idea what is going on.” When the MPC cut rates by a quarter-point in May in a 5-2-2 vote, it repeated its guidance that it would take a “gradual and careful” approach to further monetary loosening. Markets have interpreted the wording as pointing to a 0.25 percentage point cut in interest rates each quarter. But the committee has rarely been so divided in its thinking. The last time there was a unanimous vote on monetary policy was in September 2021, when rates were at a historic low of 0.1 per cent. Last month, the MPC split three ways, with BoE chief economist Huw Pill joining external member Catherine Mann in voting for rates to be kept at 4.5 per cent, while fellow external members Swati Dhingra and Alan Taylor backed a jumbo half-point cut. Even among the five-member majority, the decision was “finely balanced”, according to minutes of the meeting, with some members, including governor Andrew Bailey initially minded to hold rates and swayed at the last minute by US President Donald Trump’s sweeping “liberation day” tariffs. The intense geopolitical uncertainty is only one reason why the MPC is so divided. The committee is also struggling to determine whether the UK economy — which suffered a fresh setback in April, with a 0.3 per cent drop in output — is on the brink of big job losses, or whether workers are still well-placed to press for wage rises that could fuel inflation. Doubt over the quality of crucial economic data is making it harder to answer these questions: in recent evidence to MPs, Bailey called attention not only to well-flagged problems with jobs data, but also to increasing volatility in GDP figures, and a “puzzle” in official data showing productivity had fallen in a way “usually associated with quite serious recessions”. Analysts are increasingly frustrated by the lack of clarity in the BoE’s own messaging. Andrew Wishart, senior UK economist at Berenberg, said one problem was that rate-setters appeared reluctant to comment too explicitly on the extent to which government tax policy had hit jobs. Bailey’s own reticence also made it harder to gauge the MPC’s direction of travel, Wishart said, with the governor giving “high-level” speeches on themes such as globalisation rather than a clear steer on his thinking.“It’s hard to pin him down . . . and since he is effectively the swing voter on the committee, that does make it much more tricky,” Wishart added.The BoE says that it wants to explain the uncertainties around its forecasts by making greater use of scenarios, setting out how inflationary pressures could evolve in different situations and force it to vary its policy approach. But analysts say the two scenarios set out in May’s monetary policy report have shed little light on the committee’s thinking — especially since MPC members do not necessarily align their own views with either scenario. “The scenarios haven’t really been particularly helpful,” said Andrew Goodwin, at the consultancy Oxford Economics, adding that they “felt like a box-ticking exercise” to follow up on the recommendations of a highly critical review by former US Federal Reserve chair Ben Bernanke. Rob Wood, chief UK economist at consultancy Pantheon Economics, agreed that the experiments with scenarios had not yet paid off. “It amounts to saying inflation could be higher or lower than you think,” he said. “Maybe it will improve over time, but I don’t think it is saying very much.” Economists are hoping the BoE will give a clearer steer on Thursday, following a run of weak data that will lessen the worries about inflation persistence. But if the Israel-Iran conflict triggers a sustained rise in oil prices it will only heighten the difficult trade-offs faced by the MPC. BoE chief economist Huw Pill last month voting for rates to be kept at 4.5 per cent. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is author of ‘Blood and Treasure, the Economics of Conflict from the Vikings to Ukraine’Worries over geopolitical risks have regularly featured towards the top of polls of investor concerns over the past year. In recent months, “geopolitical risk” has often been a polite euphemism for unpredictable American tariff policies, preferred by US institutions which do not want to annoy the White House too much. But now the geopolitical risk which is materialising is a more traditional one, the threat of long-running conflict in the Middle East putting global oil supplies at risk.Oil prices rose as much as 12 per cent in the immediate aftermath of Israel’s attacks on Iran’s nuclear facilities. Over the weekend, the conflict escalated further with Israel hitting, among other targets, a major oil terminal in Tehran. Iran produces around 3.3mn barrels per day of crude, of which 2mn are exported. Given global oil demand is estimated at 103.9mn bpd by the International Energy Agency and that Saudi Arabia and the UAE are reported to be capable of raising production quickly by more than 3.5mn bpd, even a severe disruption in Iranian production is probably manageable. The increase in the oil price following the first Israeli strikes reflected wider concerns that the conflict could spiral to a point where Tehran attempted to close the Strait of Hormuz to tankers or even attack the oil facilities of its neighbours.The interplay of geopolitical uncertainty, oil prices, and macroeconomics is rarely straightforward, as some useful research from the European Central Bank published in 2023 indicates. It points out Brent crude prices leapt by 5 per cent in the immediate aftermath of 9/11 terrorist attacks in New York as investors priced in the chance of war in the Middle East disrupting supplies. But they were down by 25 per cent within 14 days as fears that a slowing global economy would weaken oil demand came to the fore. In the two weeks following Russia’s invasion of Ukraine in February 2022, Brent prices rose by 30 per cent. But they were back at their pre-invasion level eight weeks later.The ECB research suggests geopolitical shocks impact the global economy through two channels. In the short term, the most important of these is usually the risk channel. As financial markets price in the chance of further disruptions to global oil supplies, it causes an increase in the cash value of holding oil contracts — known as the convenience yield — putting upward pressure on oil prices. But in the longer term, the economic activity channel comes into play. Higher geopolitical tensions tend to act as negative shock to global demand as increased uncertainty weighs on investment and consumption and potentially disrupts trade. This channel usually dampens global oil demand and prices. In other words, oil price pressures resulting from geopolitical shocks have tended to be short-lived.This has not always been the case. The oil price shocks of 1973 and 1979 were both followed by US recessions and the potential for a geopolitically driven oil price spike to capsize the global economy still tends to concern both policymakers and investors. They can perhaps take some solace from research published earlier this year by the Federal Reserve Bank of Dallas. The authors of this study adopted a novel approach, attempting to separate out oil price uncertainty from wider macroeconomic uncertainties. They found that geopolitically driven oil price risks are unlikely to generate sizeable recessionary effects. Even a large increase in the risk of a production shortfall on the scale of 1973 or 1979 would only, according to the model, lower economic output by 0.12 per cent.While high uncertainty about future oil supplies can raise crude prices in the short term, unless those risks materialise, the global macroeconomic fallout is likely to be limited. A similar impact is evident in asset prices more generally. According to the IMF’s most recent Global Financial Stability Report, geopolitical risk events since the second world war have usually been associated with a modest fall in equity prices in the short term but, in most cases, with no lasting impact. Global equity markets eventually shrugged off both Iraq’s invasion of Kuwait in 1990 and Russia’s of Ukraine in 2022. Again though 1973 stands out as an exception, with the oil embargo of that year leaving global equity markets sharply lower 12 months later.Much will, of course, dependent on how long the Israel-Iran conflict lasts and how it escalates. It should be remembered that even during the “Tanker War” of the 1980s, in which during the Iran-Iraq more than 200 oil tankers passing through Hormuz were bombed, oil prices stabilised after an initial spike. The effects of anything short of a major disruption in Middle Eastern oil output are likely to be contained. More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The US has fallen out of the top three growth markets for UK manufacturers for the first time in nearly four decades, according to an industry survey that highlights the impact of higher tariffs.In May, just 18 per cent of British manufacturers expected “positive demand conditions” in the US over the next three months, less than 56 per cent for Europe, 23 per cent for the Middle East and 20 per cent for Asia, according to a quarterly survey by manufacturers association Make UK. “This is the first time the US has not been the second-most favoured destination for export growth for UK manufacturers, behind the EU,” said Make UK, which started the survey in 1988.The figures come after official trade data showed UK exports of goods to the US falling by £2bn in April, the largest monthly decrease since records began in 1997. It follows four months of consecutive increases, suggesting businesses anticipated exports to beat incoming tariffs. Some content could not load. Check your internet connection or browser settings.Seamus Nevin, chief economist at Make UK, said: “Manufacturers are facing a gathering storm of huge uncertainty in one of their major markets.”The Make UK/BDO survey of 324 companies was carried out between April 30 and May 22. This includes the period of the announcement of a trade agreement between the UK and the US on May 9, which cut punitive tariffs on car and steel exports but left a flat 10 per cent levy that applies to most goods. Last week, officials said they were close to signing off on crucial parts of the deal that will deliver lower tariffs for British car exports to the US in return for improved access to the UK for American beef and ethanol producers.Make UK also renewed its call on the government to take “bold measures” in its forthcoming industrial strategy to bring down the high cost of energy.Manufacturing orders were less negative than in the previous quarter, according to the latest survey. The index tracking orders rose to minus 2 from minus 6 in the previous quarter. The index is based on the proportion of businesses reporting expansions or contractions. The index tracking output rose to 9 from minus 1 over the same period.Despite increased employer national insurance contributions and the national living wage, headcount expectations were marginally positive in the second quarter. However, the companies surveyed said their investment intentions for the year ahead were lower, with the difference in the proportion of businesses expecting expansion and contraction falling to 2 from 5 in the previous quarter and 10 at the end of 2024. Richard Austin, head of manufacturing at BDO, said: “This quarter’s results are a testament to the increasingly challenging landscape our British manufacturers are operating in.” He noted some “pockets of positivity”, but added that businesses “need urgent clarity and targeted investment from the government if this recovery is to continue into next quarter”.Show video info More

Canada’s Mark Carney will host world leaders in Kananaskis in coming days, with his plans for a unity G7 summit to unblock trade at the mercy of a new Mideast war and the temperament of Donald Trump. More than a dozen leaders are heading to the Rocky Mountain resort for a gathering on Monday under the shadow of a rapidly escalating Israel-Iran conflict that threatens further upheaval for markets.“Never before has a G7 summit confronted so many severe, interconnected crises, with so many new leaders and an unpredictable US president,” said John Kirton of the G7 Research Group at the University of Toronto.Presidents and prime ministers will attend from states spanning the global north and south. But for Carney, who wants to project credentials earned as a central banker during Brexit and the 2008 financial crisis, the summit may boil down to one goal: showing he can handle Trump. “It’s like preparing the red carpet for Godzilla,” noted a Canadian government official, who spoke on the condition of anonymity so they could speak openly.The last time Trump was in Canada for a G7 meeting was in 2018, and that ended in an argument with then-prime minister Justin Trudeau, whom the president called “very dishonest and weak”. Trump refused to sign the traditional communiqué that signals unity among the world’s most important democracies. In his current term, Trump has raised tariffs on Canada and repeatedly declared that the country should become the “51st state” of the US.  “We just want unity at the summit but we don’t know what headspace the president will be in,” said an official from the prime minister’s office.Carney, who was elected less than two months ago, has dropped the formality of the joint communiqué, preferring to “break it up into thematic statements” to avoid messy debates over language, the official said.Heading into the summit, Trump has been consumed by the outbreak of war between Israel and Iran, his deployment of US troops to Los Angeles to quell protests over his immigration crackdown, and the military parade in Washington on Saturday. He has focused little on the G7. A senior US official said Trump, who will arrive in western Canada on Sunday night, wanted to “make progress on top-level economic and security issues of shared concern”. Among them were making “America’s trade relationships fair and reciprocal, unlocking new markets for American energy exports, and positioning the US to be the world leader and international partner of choice on AI technology”, the US official said. The senior US official gave a nod to Carney by saying that Canada had “worked with G7 colleagues to craft short, action-oriented leader statements”. “We appreciate Canada’s co-operation in the planning of this summit and their choice of a great location in Canada for these important conversations,” the official said.Asked if he would challenge Trump over his assertion that Canada should become the 51st US state, UK Prime Minister Sir Keir Starmer said: “But let me be absolutely clear: Canada is an independent, sovereign country and a much-valued member of the Commonwealth.” An EU official on Saturday said the Israel-Iran conflict was “certainly going to change a bit the character of the meeting”.“From our perspective, we have been concerned about Iran’s support to Russia for a while,” they said.Part of Carney’s political calculations for the G7 has been to invite global power brokers such as India, the United Arab Emirates and Saudi Arabia’s Crown Prince Mohammed bin Salman, although the latter is not attending.“The invitation of India’s Modi and MBS shows a significant shift in Canada’s global outlook under Carney,” said Carlo Dade, from the Calgary-based Canada West Foundation.As part of these preparations, Carney last week announced Canada’s plan to reach Nato’s defence spending obligation of 2 per cent of GDP by the end of the financial year in preparation for the G7 and a Nato summit at the end of the month. Defence spending has angered Trump, who wants Nato members to spend 5 per cent of GDP on defence.Ukraine’s President Volodymyr Zelenskyy, who has a fraught relationship with Trump, will be seeking assurances from the US president regarding a sanctions package that will slap 500 per cent tariffs on any country buying energy from Russia. Ukraine “remains a difficult discussion with the US” but “G7 partners are moving forward with additional pressure on Russia”, the EU official said.Kyiv has been pushing for western allies to increase economic sanctions against Russia in a bid to get Moscow to the negotiating table, even as Russian forces remain on the offensive. Trump’s response to the EU-led push for a lowering of the G7-agreed Russian oil price cap, and how the US president treats Zelenskyy, will be closely followed as part of the summit’s choreography, a European official said.The G7, held in the idyllic tourist location of the Rocky Mountains, will also be the first opportunity for the US, Mexico and Canada to meet to discuss their USMCA trade pact that is set for review next year but has been undermined since Trump launched wide-ranging tariffs on both of America’s trading partners.“There’s rumblings of a sit-down but nothing confirmed,” said an official in the prime minister’s office. “But this is not going to be a miracle meeting, it is just about face time.”It will also be the first G7 for Starmer, Germany’s Friedrich Merz, Japan’s Shigeru Ishiba and Carney. But a host of world leaders, including those from Australia, Brazil and South Korea, will also attend. South Africa’s President Cyril Ramaphosa is set to meet Trump only three weeks after a tense Oval Office meeting in which the US president made false accusations about a “genocide” of white farmers in the country.Indian Prime Minister Narendra Modi’s attendance is also viewed as part of Carney’s global play to improve relations after Canadian officials last year accused India of involvement in the 2023 murder of Canadian Sikh separatist Hardeep Singh Nijjar. A small contingent of Khalistan supporters is scheduled to protest against Modi’s appearance at the G7.“This is all about pragmatism and practicality and less finger-waving as we saw before with Trudeau; Canada can’t afford to do that any more,” said Canada West Foundation’s Dade. Additional reporting by David Sheppard More

This article is an on-site version of our The Week Ahead newsletter. Subscribers can sign up here to get the newsletter delivered every Sunday. Explore all of our newsletters hereHello and welcome to the working week.The gathering of most of the world’s most powerful nations for the G7 summit in Kananaskis, Alberta, was supposed to focus on international trade and pushing US President Donald Trump’s administration to continue supporting Ukraine. Israel and Iran have disrupted that agenda, but it has perhaps heightened the importance of this gathering amid the Canadian pine forests.Trump holds the most sway over Israel, with Washington the country’s biggest financial donor. Other leaders such as Canada’s Mark Carney and the UK’s Sir Keir Starmer are likely to urge caution, though their own relationship with Israel has frayed in recent weeks over the Netanyahu government’s continued refusal to allow in additional aid to Gaza. For more on what to expect over the coming days, read this.Over in Europe, ministers in Brussels are expected to set out legal measures to end the import of the last vestiges of Russian fossil fuels into the EU. Since Moscow’s full-scale invasion of Ukraine, EU countries have paid more than €200bn to Russia for fuel. Coal and oil imports have had sanctions imposed on them and gas should be phased out by 2027. The announcement, however, is unlikely to include plans to wean the bloc off a smaller but far more tricky reliance: Russian nuclear technology.Corporate and economic data is undergoing a summer lull this week, but the central bankers will be busy with a triple run of rich economy rate announcements. The monetary policy committees at the Bank of Japan, US Federal Reserve and the Bank of England vote on whether to move their base rates on Tuesday, Wednesday and Thursday respectively.The Fed is expected to hold borrowing costs at between 4.25 per cent and 4.5 per cent, in anticipation of further rises in inflation due to Trump’s tariffs feeding into consumer and producers prices — despite these being yet to appear in the data. Markets are pricing in two US rate cuts by the end of the year, with the first arriving in September or October.For the UK and Japan, the monetary policy decisions will come amid inflation updates. The Bank of Japan will make its rate decision ahead of the official inflation update on Friday. The core inflation rate climbed at its fastest rate in more than two years in April, and the expectation is that prices will rise more than expected this time, possibly prompting discussions about raising interest rates if global trade tensions ease. However, the BoJ’s benchmark rate is likely to be held at 0.5 per cent this time.Bank of England Monetary Policy Committee members, who split three ways last month when the majority voted to cut the benchmark rate to 4.25 per cent, have made it clear that they see a slowdown in wage growth as the key to further monetary loosening. But perhaps not now. Despite the recent rise in the unemployment rate the MPC is almost certain to hold off on any change this time. If you want more comment and data on inflation and interest rate movements, the FT has a handy tracker.The corporate news run is limited, partly because of the US financial markets being closed for Juneteenth on Thursday. TikTok is likely to get another reprieve from the threatened US ban from Thursday — Trump said as much in an interview with NBC. More details on the rest of the announcements below.One more thing . . . This Sunday we have a date with time. On June 22 1675, King Charles II issued a warrant authorising the construction of “a small observatory within our royal park at Greenwich”. Three hundred and fifty years later I think we can all agree that this British infrastructure project, designed by Sir Christopher Wren no less, was one of the monarchy’s better ideas. If you haven’t had a chance to visit, the FT’s Globetrotter section will take you on a virtual tour of Britain’s original time machine.What do you plan to do with the passing hours this week? Email me at [email protected] or, if you are reading this from your inbox, hit reply, and have a good week.Key economic and company reportsHere is a more complete list of what to expect in terms of company reports and economic data this week.MondayCompetition Appeal Tribunal hearing expected for the case of Blur drummer Dave Rowntree, who is leading a class action law suit against the Performing Right Society for allegedly misallocating hundreds of millions of pounds in music royalties for songwritersTjeerd Jegen becomes B&M European Value Retail chief executive.Opec Monthly Oil Market ReportChina: May retail sales, industrial output and house price index dataUK: Rightmove June house price indexTuesdayFT Women in Business Summit (online). Register here.IEA Oil Market ReportJapan: interest rate decisionUS: May industrial production figuresResults: Ashtead Q4, Capita pre-close trading update, Jabil Q3, John Wiley Q4, Kenedix Office Investment Q4, La-Z-Boy Q4, Lennar Q2, RWS Holdings HYWednesdayDavid Bailey, executive director, prudential policy, at the Bank of England speaks at Risk.net Live Europe on ‘Innovation and growth: the PRA’s approach to competitiveness’Brazil: interest rate decisionEU: May harmonised indices of consumer prices (HICP) inflation rate dataGermany: Q1 producer price index (PPI) inflation rate dataUK: May consumer price index (CPI) and PPI inflation rate dataUS: interest rate decisionResults: AO World FY, GMS Q4, Korn Ferry Q4, Speedy Hire FYThursday30th anniversary of London’s Alternative Investment Market (Aim) for smaller, growing companiesAustralia: May labour force dataUK: interest rate decisionUS: Juneteenth National Independence Day. Financial markets closedResults: Cordiant Digital Infrastructure FY, NCC HY, Syncona FY, Urban Logistics Reit FY, Whitbread Q1 trading update, XPS Pensions FYFridayChina: interest rate announcementEU: European Central Bank Economic BulletinGermany: May PPI of industrial products inflation rate dataJapan: May CPI inflation rate dataSouth Korea: May PPI inflation rate data (AM local time)UK: May public sector finances data. Also, May retail sales figures for Great Britain and UK tax receiptsUS: Conference Board May leading indicators reportResults: Accenture Q3, Berkeley FY, CarMax Q1, Darden Restaurants Q4, Kroger Q1World eventsFinally, here is a rundown of other events and milestones this week. MondayCanada: G7 Summit continues in Kananaskis, Alberta, concluding tomorrowDenmark: International Conference on the Science of Science and Innovation begins in Copenhagen, discussing the dynamics of scientific research. The event, involving experts from business and academia, runs until Wednesday.UK: King Charles attends a service at Windsor Castle for National Garter Day, celebrating the Order of the Garter, founded in 1348 by Edward IIITuesdayPhilippines: Circular Economy Forum 2025, a two-day event at the Asian Development Bank in Manila to discuss reducing plastic pollution.UK: Royal Ascot horse-race meeting begins. The event was founded by Queen Anne in 1711, with the first four-day June meeting taking place in 1768. Also, in London, the 257th Royal Academy of Arts Summer Exhibition begins, running until August 17WednesdayRussia: Vladimir Putin will welcome attendees to the three-day 28th St Petersburg International Economic Forum, boasting participants from 137 countries and provincesUK: 33rd Raindance Film Festival, the annual celebration of independent cinema, begins in London. The festival closes on June 27 with the international premiere of The Academy, starring Maja BonsThursdayUK: Chatham House’s 10th London conference, a flagship event involving speakers from government, business and the media to discuss global governance in a world without rulesUS: TikTok ban is (again) due to come into force, with its owner, Chinese internet company ByteDance, required to either shut the app down or sell itFridayFrance: Paris Air Show opens to the public, running until SundayLuxembourg: Economic and Financial Affairs Council meets to discuss expansion of the euro area and the EU’s response to the Ukraine conflict among other itemsSaturdaySummer solstice commemorations, in which crowds gather at sites such as Stonehenge in the British county of Wiltshire to witness sunriseUK: London Climate Action Week kicks off with a series of events in the British capital. The event is now in its seventh yearSunday350th anniversary of King Charles II ordering the building of the Royal Observatory on a hill in London’s Greenwich ParkUK: Windrush Day, marking the anniversary of the arrival in 1948 of HMT Empire Windrush, one of the first ships to carry West Indian migrants to Britain during the postwar periodRecommended newsletters for youInside Politics — What you need to know in UK politics. Sign up hereWhite House Watch — What Trump’s second term means for Washington, business and the world. Sign up here More

Unlock the White House Watch newsletter for freeYour guide to what Trump’s second term means for Washington, business and the worldFor years international policymakers have pushed to make it cheaper for migrants to send remittances home. As with so many of Donald Trump’s interventions, the US president has turned that logic on its head: he wants to make it more expensive. Contained in the 1,000-plus pages of the “big, beautiful bill” going through Congress is a mean-spirited measure to tax money sent abroad by non-US citizens, including visa holders and permanent residents. The average fee to transfer $200 abroad is 6.4 per cent, according to the Migration Data Portal. The US levy would push that to nearly 10 per cent, making the US — the world’s top source of remittance flows with annual transfers of at least $80bn — the most expensive G7 country from which to transfer money. Claudia Sheinbaum, president of Mexico, which receives remittances worth 4 per cent of GDP, has called the levy a tax on the poor. Countries in Central America, including Nicaragua, Guatemala and Honduras, which rely on remittances for as much as a quarter of GDP, are likely to be far harder hit. Coming on top of savage cuts to aid and the threat of punitive tariffs against some of the world’s poorest countries, such as Lesotho and Madagascar, the proposed levy on remittances is a further blow to countries in desperate need of capital. Trump’s remittance tax, of course, is not a design flaw, but part of a deliberate strategy to flush out immigrants, legal or otherwise. Americans sending money abroad will have to prove they are citizens to avoid the levy. That could plausibly deter some illegal migration to the US. More likely, remittances will be pushed into crypto and stablecoins or through underground hawala “trust” networks, making flows harder to monitor by tax and law-enforcement authorities. The proposed levy is part of a broader Trump strategy to weaponise the tax system against perceived foes, whether groups such immigrants or, institutions such as Harvard University.Senators ought to oppose a punitive tax on hardworking people who send part of their wages home, especially at a time of tax giveaways for the rich. Countless studies have shown that such flows improve health and education outcomes in recipient countries. In 2024, remittances hit $685bn, dwarfing aid flows of $212bn that year, a gap that will only widen with cuts to overseas aid. Such flows have proved resilient to global shocks such as the 2008 financial crisis and the Covid pandemic. In the 10 years to 2024, according to the World Bank, remittances rose 57 per cent while FDI fell 41 per cent. In 2019, they overtook foreign direct investment to developing countries for the first time. From the perspective of recipient countries, remittances then are a vital source of finance. The most remittance-dependent countries include Tajikistan, at 45 per cent of GDP, and Lebanon, at 27 per cent. Liberia receives about $800mn in remittances a year, nearly the same as its entire budget. Faced with swingeing debt repayments and an exorbitant cost of commercial capital, many developing countries have come to rely on these transfers. That does not make remittances a viable development strategy. Developing economies should do everything to create the conditions for sustainable investment, the only long-term route out of poverty. Sending the best and brightest abroad can only take an economy so far. Still, the reality is that, in an environment of shrinking access to capital, remittances are a global safety valve. Trump’s levy is part of a much bigger squeeze on capital flows to the poorest countries. Little good is likely to come of it. More