Aurelia Butler

Today’s top storiesDonald Trump said he had been indicted in connection with classified documents found at his Mar-a-Lago residence in Florida, making him the first former president to face federal criminal charges as he campaigns for another White House run.Some 75 food producers in France have agreed to cut prices by July following pressure from the government.Odey Asset Management has told clients it is in “active discussions” with service providers as the hedge fund battles to shore up confidence in the group after a Financial Times investigation alleged its founder Crispin Odey had sexually assaulted or harassed 13 women.For up-to-the-minute news updates, visit our live blogGood evening.Sir Keir Starmer’s Labour party, if polls are to be believed, is set to form the next UK government. But faced with what is likely to be an economy in pitifully poor shape, do its proposals — and specifically its green prosperity plan — still stack up, and how do they compare with programmes from the US and Europe?As FT reporters detailed in this week’s series The Starmer Project, Labour’s plans are (surprisingly) bold, with an interventionist industrial policy strikingly different to the current Conservative government’s.Would-be chancellor Rachel Reeves, who was in Washington for talks this week, makes no bones about embracing “Bidenomics” as a blueprint. Her party’s version of the US president’s $369mn green industry plan (somewhat misleadingly titled the Inflation Reduction Act) involves borrowing £28bn a year until 2030 to spend on transition policies such as subsidising wind farms, insulating homes and accelerating Britain’s nuclear programme.The EU has also announced a green incentives programme to try to prevent European companies fleeing across the Atlantic to take up the offer of US subsidies.But given that government borrowing costs have risen sharply since Labour’s plan was announced in 2021, critics argue it is now less affordable for the UK and could draw funds away from other priorities such as health. The FT editorial board asks whether a programme that is bigger, in relative terms, than America’s can still be affordable.Reeves today acknowledged the scale of the challenge, saying the plan would now only start to take shape in the second half of Labour’s first term.The party also faces resistance from some of its supporters in the union movement who have attacked the plans to end new North Sea oil and gas licences. And some within the party suggest it would be better to take a leaf out of Joe Biden’s book and ditch the “green prosperity plan” title for a new focus on job opportunities rather than climate change. However the plans end up, Labour seems determined to take a more activist approach. Early in the energy crisis for example, it made a point of calling for a windfall tax on energy companies. This, in a diluted format, was eventually adopted by the government, and, as we reveal today, is being further softened by ministers after lobbying by industry, arguing the levy is deterring investment. One thing that does look nailed on is the dismal economic landscape a new government would inherit, with low growth, trading relationships strained by Brexit and weak public finances. And as economics editor Chris Giles reports, the picture could get even bleaker if the Conservatives plump for more tax cuts despite the evidence that they are not affordable.Need to know: UK and Europe economyAn “Atlantic Declaration” agreed by Biden and UK prime minister Rishi Sunak aims to strengthen economic ties as the allies turn away from globalisation and China’s role in supply chains. It hopes to increase US-UK trade in defence, nuclear materials and the critical minerals used in electric-car batteries.The eurozone is in technical recession after its economy shrank in both of the past two quarters by 0.1 per cent according to revised data. Analysts say the move could make the European Central Bank more hesitant about continuing with its rate-rise programme.President Recep Tayyip Erdoğan appointed former Goldman banker Hafize Gaye Erkan as Turkey’s central bank chief, underlining the shift from the unorthodox policies that have sent the country’s currency to record lows.Need to know: Global economyCould Tokyo become the “second city of the western world”? Asia business editor Leo Lewis examines its chances of becoming a global financial hub.Brazil is divided over a proposal to drill for oil in the sea off the mouth of the Amazon. National oil and gas company Petrobras has lodged an appeal after the environmental agency rejected its request to drill an exploratory well.Columnist Tim Harford says little stories can teach us that sometimes an economy can be dragged down by a simple mistake in monetary policy, while sometimes a recession occurs because the economy has hit an implacable obstacle. In this case, what an amusement park can teach us about central banks.Need to know: businessThe lucrative cable news era seems to be drawing to a close, judging by the crisis at CNN and the departure of Chris Licht, its embattled chief executive, after a 13-month stint featuring controversies, staff revolt and chaos. There are also more media upheavals in the UK, where two decades of the Barclay family’s ownership of The Telegraph has come to an end.Thought you’d heard about all the ways that the pandemic had disrupted business? Signet, one of the world’s biggest jewellery companies, said the Covid-induced lull in dating had hit demand for engagement rings. The 2021 claim from a former Whole Foods chief that the shift from meat to plant-based alternatives was a “megatrend akin to digitisation” now seems to ring hollow. It has been a painful two-and-a-half-year journey for investors in the sector since then. Investor appetite for environmental and social activism also appears to be waning, judging by this year’s annual meetings of US companies, reflecting increasing political tensions and opposition from politicians such as Florida governor and presidential contender Ron DeSantis.Can the return of Bob Iger revive Disney, faced with a legacy business in decline, streaming services losing money and a slumping share price? Watch the latest FT film.

Video: Disney: Return of Iger, ‘King of Hollywood’ | FT Film

Science round upThe world’s remaining “carbon budget” — the amount of CO₂ that can be emitted to have a 50 per cent chance of limiting global warming to 1.5C, has halved in the past three years, according to new calculations. That budget would be exhausted in less than six years at current emissions levels. Here’s our new jargon buster: the A-Z of climate change.The UK’s data regulator warned that the rapid advance of technology that gathers and applies information directly from the human brain carries a serious risk of bias and discrimination at work and threatens privacy. It called for new regulations over neurotechnology applications in non-medical fields, such as wellbeing and marketing and in workplaces, to prevent ethical breaches.Mindful of the potential damage to military, civilian and commercial communications from a satellite blackout, so-called white hat — or ethical — hackers are being invited to probe for flaws in a US government Moonlighter launched into space last Sunday. Indian authorities dropped the periodic table and the theory of evolution from school textbooks as part of a campaign by the Hindu nationalist government. Science teachers warned the move could endanger the information technology sector, a big economic contributor to the country.Whither the Hitler beetle and the Taylor Swift millipede? Science commentator Anjana Ahuja discusses the politics of naming species and whether those bearing offensive names should be given new ones.Something for the weekendTry your hand at the range of FT Weekend and daily cryptic crosswords.Some good newsAs the Mercury rises in the northern hemisphere, many readers’ thoughts may be turning to barbecues. The bad news is that a typical outdoor cooking set for four people releases more greenhouse gases into the atmosphere than a 170-mile car journey. The good news is that there are five simple ways to make your BBQ more environmentally friendly. More

Here’s how governments are trying to help hard-hit consumers and companies:AMERICAS:* U.S. President Joe Biden’s drug pricing reform, part of the Inflation Reduction Act, penalises drugmakers for excessive prices, aiming to reduce out-of-pocket costs for Medicare recipients. The program has been challenged in court by drugmaker Merck & Co.* Brazil’s state oil company Petrobras in May approved a new fuel pricing policy for gasoline and diesel that will sharply lower costs for motorists. President Luiz Inacio Lula da Silva has pledged to introduce a bill making the annual minimum wage adjustment above inflation a permanent rule.* Mexico has raised the minimum wage by 20% for 2023. In March it opened the door to imported Brazilian bovine products for the first time as it looks to diversify its food supply to try to curb inflation.* Colombia raised the minimum wage by 16% for 2023.EUROPE:* The European Commission extended its gas price cap system to all trading hubs in the European Union from May. EU countries agreed on the cap in December.* French finance Minister Bruno Le Maire said 75 big food industry players had pledged to lower prices on hundreds of products starting next month. The government has been urging food retailers and manufacturers to cut prices to help households.* Hungarian Prime Minister Viktor Orban earlier in June imposed mandatory price cuts on some basic food items by large retailers.* Poland plans to raise the minimum wage twice more in 2024. It was increased from January 2023 and will be lifted again from July.* Germany is launching a programme that will make available tens of billions of euros for firms facing substantial energy costs. The government last year introduced electricity and gas price caps.* Most British households can expect cheaper energy bills from July after regulator Ofgem slashed its price cap to reflect a slump in wholesale costs. The new cap marks a near 40% fall compared with the previous level.* The Greek government in May extended to the end of September some of the measures it took last year to help households and businesses with soaring energy bills.* Italy in March approved measures worth almost 5 billion euros ($5.38 billion) to cut energy bills for families and firms. * Portugal in March announced a package to help low-income families, including scrapping value added tax on essential food products.* Spain raised the minimum wage from January by 8%.ASIA-PACIFIC:* Australia will raise the minimum wage by 5.75% from July 1. In May, the government said it would include A$14.6 billion ($9.79 billion) over four years in the federal budget for cost of living relief.* South Korea has cut tariffs from June on higher-priced edible products, including pork and sugar.* Pakistan in April capped the retail price rise in essential drugs at 14%.* India in March lifted the inflation-adjusted allowance for federal government employees by 4%.* Top Japanese companies in March agreed to their largest pay increases in a quarter of a century at annual labour talks, heeding Prime Minister Fumio Kishida’s call for higher wages.* Japan has allocated more than 2 trillion yen ($14.33 billion) from reserve funds to try to limit inflation.* Thailand in March agreed to extend an excise tax cut on diesel to July 20.* The Philippines in December extended lower tariff rates on rice and other food items to the end of 2023.AFRICA AND MIDDLE EAST:* Nigeria needs to review its minimum wage policy, President Bola Tinubu said earlier in June. The country’s main labour union is negotiating with the government after petrol prices soared following the removal of a decades-old subsidy. * Morocco in April adopted a decree cancelling VAT on agricultural inputs such as soil nutrients. * The majority of South Africa’s public sector unions in late March agreed to a 7.5% wage increase after five months of strike action. The two-year deal is significantly higher than what the government had factored into its 2023 budget.* Israel in early March reached a wage deal with its main public sector labour union, covering some 350,000 civil servants, and offering 11% increases between 2020 and 2027.* Turkey in December raised the monthly minimum wage for 2023 by 55% from the level determined in July. More

The upcoming release of U.S. inflation data next week added to investors’ caution as it could potentially influence the Federal Reserve’s decision on the pace of rate hikes necessary to tackle the price pressures.Refinitiv Lipper data showed investors offloaded a net $16.44 billion worth of U.S. equity funds in their biggest weekly net selling since March 29.A U.S. Labor Department jobs report last week showing a rise in employment in May, coupled with a rise in core inflation in April, has raised expectations of more interest rate hikes by the Federal Reserve.Among U.S. funds, large- and mid-cap funds experienced net outflows of $7.53 billion and $1.07 billion, respectively. However, small-cap funds saw net inflows totalling approximately $1.15 billion.Tech sector funds faced outflows of $1.31 billion after five consecutive weeks of inflows, while industrials and consumer discretionary funds pulled in $616 million and $399 million, respectively.Money market funds received inflows of $19.83 billion, according to the data, reflecting investors’ continued preference for these funds as net buyers for the seventh consecutive week.U.S. bond funds witnessed withdrawals of $561 million, following five consecutive weeks of inflows. Investors sold U.S. general domestic taxable fixed-income and short/intermediate investment-grade funds amounting to $1.79 billion and $1.45 billion, respectively, while purchasing government funds totalling $1.76 billion. More

Annual inflation, which spiked to over 20-year highs in 2022, has slowed to below the bank’s 4% target in recent months as last year’s base effect took hold. But it is expected to pick up, with consumer prices rising 0.21% in the week to June 5.The bank’s next rate-setting meeting is scheduled for July 21.Friday’s decision to hold the rate at current levels was in line with a Reuters poll and analysts had said that Wednesday’s inflation data could lead the bank to issue a tighter signal.”The option of hiking the rate was considered, but by consensus we decided to hold the rate, but tighten the signal,” Governor Elvira Nabiullina said at a media conference. “The likelihood of a rate hike has increased.” The Bank of Russia forecasts year-end inflation at 4.5-6.5% in 2023, returning to the 4% target in 2024. In a statement, the bank said it was holding open the prospect of increasing the key rate at its next meetings to stabilise inflation close to 4% in 2024 and further on.In a series of rate cuts last year, the bank gradually reversed an emergency hike that took the rate to 20% in late February 2022. That jump followed Russia’s launch of what it calls its “special military operation” in Ukraine, and the imposition of wide-ranging Western sanctions in response.The central bank has now held rates steady at 7.5% for six meetings in a row since the last cut in September. INFLATION PRESSUREThe bank has maintained a hawkish stance this year, unable to find room to ease monetary policy. On Friday it said the overall balance of inflation risks has “tilted even more to the upside”. “Accelerating fiscal spending, deteriorating terms of foreign trade and the situation in the labour market remain pro-inflationary risk drivers,” the bank said.The central bank had turned its hawkish rhetoric up a notch, said Liam Peach, Senior Emerging Markets Economist at Capital Economics, describing the bank’s signal as “the strongest signal yet that policy tightening is in the pipeline”. Inflation risks such as a weakening rouble, rapid wage growth and a recovery in consumer demand have picked up since the last meeting in late April, said Mikhail Vasilyev, chief analyst at Sovcombank.Russia’s budget spending is well above plan this year, pushing the deficit to $42 billion for January-May, data showed this week. Further budget deficit expansion could require tighter monetary policy, the bank said. More