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“The prime minister’s office categorically denies, considering it ridiculous, that SpaceX was a topic during the meeting with U.S. President-elect Donald Trump,” Meloni’s office said in a note.Italy’s conservative prime minister made a surprise trip to Florida on Saturday to meet Trump at his Mar-a-Lago residence before his inauguration on Jan. 20.Bloomberg News reported on Sunday that Italy’s discussions with SpaceX, “which had stalled until recently, appeared to move forward” after Meloni’s meeting with Trump.     The PM’s office denied any agreement had been reached on the supply of new services.”Contacts with SpaceX are part of regular discussions that state departments have with companies, in this instance those that provide protected connections such as data encryption,” it said.Meloni has developed a strong relationship with tech billionaire Musk, a close ally of Trump.Musk’s aerospace business SpaceX owns Starlink, a telecommunications provider that relies on a network of low Earth orbit satellites.Starlink has been offering its services in Italy since 2021, but its business in the euro zone’s third-largest economy is modest, with a customer base of around 50,000.Italy is considering using Starlink services to boost Internet penetration in remote areas in response to slow progress in public-funded fibre rollout programmes.In October, the foreign ministry said Italy was also evaluating using Starlink systems to enhance communications for Italian diplomats and defence officials operating in risky areas across the Mediterranean.Starlink owns around 60% of the roughly 7,500 satellites orbiting earth and is a dominant player, particularly for low-orbit satellites.Sources told Reuters in December, Italy plans to begin tests as early as this month to see if Starlink is a viable solution to speed up the rollout of high-speed internet. More

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 hereGood morning and welcome back to FirstFT. On today’s agenda we have: Private equity’s hopes for the incoming Trump administrationUkraine launches fresh push for Russian territoryRuchir Sharma’s top 10 trends to watch in 2025And chef Clare de Boer shares her favourite places to eat in New YorkThe private equity industry is preparing to lobby Donald Trump’s incoming administration to give it access to broad pools of capital it has not historically been allowed to tap, including retirement savings. The $13tn industry is hoping the new White House will revive a deregulatory push from the final months of Trump’s first presidency, which allowed private equity investments to be included in professionally managed funds. Executives told the Financial Times that the industry was seeking to push past that first step and allow tax-deferred defined contribution plans, such as 401ks, to back unlisted investments such as leveraged buyouts, low-rated private loans and illiquid property deals.The executives said that the effort could give their higher-fee funds a chance to tap a class of investors with at least as much in assets as the sovereign wealth funds, pensions and endowments that have traditionally backed the world’s largest groups such as Blackstone, Apollo Global and KKR.Industry representatives said the deregulatory push was akin to “doubling demand” for the industry’s various funds. Read the full report.We are publishing a special edition of FirstFT Americas in the run-up to Donald Trump’s inauguration. Do you have any questions about the incoming administration? Please send them to firstft@ft.com and include your name and location and we will forward them to our experts for an answer and publish the results on Saturday January 18. And here’s what else we’re keeping tabs on today:Canada: Local media reports suggest that Justin Trudeau is preparing to resign and could step down as early as today. The Canadian prime minister has faced growing criticism over his government’s budget.New York: Today marks the first working day of operation for New York’s controversial congestion charge scheme, which stretches from the bottom of Central Park to the southern tip of Manhattan.Snowstorm: The polar vortex that has caused chaos across much of America is threatening to disrupt commuters in Washington and Baltimore. Follow updates from the national weather service.Economic data: The US and Canada release services purchasing managers’ indices for December.Central banks: US Federal Reserve governor Lisa Cook gives a speech on the economic outlook and financial stability at a conference in Ann Arbor, Michigan.WWE on Netflix: Tonight’s “Monday Night Raw” kicks off a 10-year, $5bn partnership between the entertainment brand and the streaming service as Netflix pushes deeper into live sports coverage.Five more top stories1. China’s currency dropped to a 15-month low and its stock markets extended their poor start to the year as investors worried about the impact of the incoming Trump administration on the world’s second-largest economy. Weak manufacturing data added to the sense of unease. The falls prompted authorities to intervene. 2. Investment banks are bracing for a crunch year in which they must deliver a step change in deal fees to justify record share prices and expensive hires made during a two-year downturn. The six listed independent investment banks — Evercore, Lazard, PJT, Moelis, Perella Weinberg and Houlihan Lokey — reached record highs in recent weeks. Here’s more on the outlook for investment banking and dealmaking this year. 3. Ukraine’s forces have launched a surprise new offensive in Russia’s southern Kursk region, even as its troops are struggling to hold the line elsewhere. The renewed push comes after Ukraine is estimated to have lost about half of the 1,200 sq km it captured in August in the Russian region. Here’s the latest on the war in Ukraine, which is nearing the end of its third year.4. Accounting firms are trying to block new rules that would reveal how many hours are being worked by auditors of US public companies and how much training and experience they have, saying the information risks being misinterpreted by investors. Read more on the new disclosure rules. 5. Elon Musk has called for Nigel Farage to be replaced as leader of Reform UK in a surprising U-turn hours after the British politician refused to endorse some of the tech billionaire’s latest online claims. The disagreement appears to be over Musk’s support for jailed rightwing activist Tommy Robinson. Keir Starmer vs Elon Musk: The British prime minister responded to comments by the billionaire about historic sex abuse scandals in the UK. “A line has been crossed,” he said.The Big Read© FT montage; Bloomberg/Getty Images/DreamstimeProjections about the coming year assume the Trump administration will dictate mar­ket shifts, argues Ruchir Sharma, but the world is not unipolar and does not revolve around one personality — even one as big as Trump’s, he says. Contrarian investing will make a return in 2025 and don’t discount China. Here are Ruchir’s top 10 trends to watch in 2025.We’re also reading . . . Chart of the dayAccording to Joseph Schumpeter, creative destruction is central to long-term economic growth, as it enables people, capital and other resources to be better deployed. A glance at the US would suggest it is alive and well. But pan out, and signs point to declining business dynamism, writes Tej Parikh. And sign up for Tej’s new newsletter, Free Lunch on Sunday, which in its first edition looked at the case for investing in Europe’s unloved equity market. Take a break from the newsFrom Lebanese and Italian in Brooklyn to Korean in Midtown and an old-school NYC lunch counter in Flatiron, restaurant owner Clare de Boer picks her favourite eateries on this eclectic tour of the Big Apple’s world of flavours for FT Globetrotter.Thank you for reading and remember you can add FirstFT to myFT. You can also elect to receive a FirstFT push notification every morning on the app. Send your recommendations and feedback to firstft@ft.comRecommended newsletters for youOne Must-Read — Remarkable journalism you won’t want to miss. Sign up hereNewswrap — Our business and economics round-up. Sign up here More

SAN FRANCISCO (Reuters) – A number of leading economists, including advisers to past U.S. presidents, have coalesced around the view that President-elect Donald Trump’s plans to broaden tariffs, cut taxes and curb immigration may not prove as inflationary as early analysis had suggested.At the same time, these economists said, any effort by Trump to exert control over the Federal Reserve would pose a real risk of reigniting price pressures, vexation with which helped get him elected. With two weeks to go before Trump’s inauguration, the uncertainty about what his second stint in the White House will mean for the U.S. economy was a central focus of discussion over the weekend at the American Economic Association conference in San Francisco, one of the premier annual gatherings of leading economists.Trump will inherit an economy growing at a brisk pace of around 3% even as inflation has come way down from its peak, with the unemployment rate at a historically low 4.2%. His economic agenda includes stiff tariffs, not just on China but on Mexico, Canada and the European Union that could lift prices of imported goods. He also aims to extend expiring tax cuts and possibly offer new tax breaks that could stoke demand just as the Fed is aiming to cool it. An immigration crackdown could dent the primary source of U.S. labor force growth, which some fear could fuel wage inflation.Nevertheless, former Fed Chair Ben Bernanke told the gathering, “Trump policies, whatever their merits on public finance grounds, probably will be modest in terms of their effect on the inflation rate.” Most of the expiring tax cuts were expected to be kept in place no matter which presidential candidate was elected, Bernanke and others point out, and congressional appetite for additional cuts against the backdrop of rising national debt may be limited. Bernanke, an adviser to the second Bush administration before leading the Fed, said that while immigration curbs might push up wages, they also mean fewer people buying goods and services, which could ease price pressures. And although the effect of tariffs “is very hard to forecast because we don’t know if the president wants to just put them on temporarily for bargaining purposes or whether he wants to keep them permanently,” said Bernanke, “barring some very unusual situation, including perhaps political risks, it doesn’t seem like that’s going to really shift the inflation path radically.”‘REMAIN ON TRACK’Some advisers to previous Democratic administrations shared Bernanke’s sanguine view. Christina Romer, an economics professor at the University of California, Berkeley, and a former Obama administration adviser, offered a similar analysis: “In terms of the overall macro economy … you won’t see a drastic change or things that are terribly frightening.”Still, she said, there are risks. Trump, for instance, could try to interfere with Fed Chair Jerome Powell’s attempts to bring inflation to heel.   “If there were an attack on Fed independence I think it would be very consequential,” said Romer, though the potential that doing so would undermine confidence and send financial markets into a tailspin makes the scenario unlikely in her view.Jason Furman, a Harvard economics professor who also advised former President Barack Obama, expressed a bit more worry, noting that even if Trump gains little sway over Fed policy over the next four years, he could pave the way for a successor to use partisan nominations or other means to chip away at Fed independence. And while he said he agreed that Trump’s policies would have a “relatively small” effect on inflation, he did make the point that even a few tenths of a percentage point on top of the current 2.4% inflation rate could be enough to put Fed rate cuts on hold this year and even prompt some hikes next year if price pressures don’t abate.Still, the current strength and momentum of the economy won’t easily be knocked off course, others noted.Karen Dynan, a Harvard economics professor who worked in the Obama administration, told a panel at AEA that while Trump’s proposed tariffs and immigration crackdown could pose headwinds to growth or fuel inflation or both, consumer and business confidence has been strong, bolstered by the prospect of future Fed rate cuts as well as stock market gains. Adding it all up, she said, “My own guess is there’s a good chance the economy’s going to remain on track, with this solid path forward and continued disinflation.”  More

Confidence among U.K. firms has tumbled to its lowest level since the market-rocking “mini-budget” crisis of fall 2022, according to a survey by the British Chambers of Commerce.
The trade group said sentiment had “declined significantly” in its largest poll since the Labour government’s debut budget last October, which included a hike in the amount many employers pay out in National Insurance (NI), a tax on earnings. 
The BCC cited firms in hospitality, manufacturing, construction and health-care expressing worries about how they would cover additional costs and saying they would likely scale back investment.

UK firms are planning to raise prices to cover higher tax payouts as confidence among businesses tumbled to its lowest level since the market-rocking “mini-budget” crisis of fall 2022, according to a survey by the British Chambers of Commerce.
The trade group said sentiment had “declined significantly” in its largest poll since the Labour government’s debut budget last October, which included a hike in the amount many employers pay out in National Insurance (NI), a tax on earnings. 

The BCC said 63% of businesses cited tax as a worry in the survey, up from 48% in the third quarter. More than half (55%) said they expect prices to go up in the next three months, primarily due to higher labor costs.
The percentage of companies saying they expected turnover to increase in the next twelve months fell to 49%, from 56%. Concerns about inflation and interest rates remained roughly steady.
The BCC cited firms across hospitality, manufacturing, construction and healthcare expressing worries about how they would cover additional costs and saying they would likely scale back investment.

“We recognize what [Reeves] said, that she’s got to increase taxes to fill her black hole, but what we need to see her do now is mitigate against that. What are we going to do to drive the economy?” Shevaun Haviland, head of the BCC, told CNBC’s “Squawk Box Europe” on Monday.
“Businesses are going to have to shoulder this tax increase, but what we want to see her do is act, and they need to act quickly. It’s important that they’re putting strategies in place, industrial strategy, trade strategy, infrastructure plan, for later on this year, but we need to see action now.”
U.K. borrowing costs have climbed following the October 2024 budget, exceeding the levels they spiked to following the “mini-budget” of September 2022, which saw then-Prime Minister Liz Truss announce sweeping, uncosted tax cuts.
However, economists say the recent rise in bond yields is not equivalent to the surge seen in 2022 as the moves have been significantly less dramatic and the macro backdrop — including a cooling of inflation — has changed.

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LONDON (Reuters) -Elon Musk said Nigel Farage should quit as leader of Britain’s right-wing Reform UK party in an abrupt withdrawal of support by the U.S. billionaire for the Brexit campaigner who is trying to shake up the British political establishment again.”The Reform Party needs a new leader. Farage doesn’t have what it takes,” Musk said on his social media platform X on Sunday, a few hours after Farage described him as a friend who made Reform look “cool”.Musk – a close ally of U.S. President-elect Donald Trump – had seemingly backed Farage and posed for a photograph with him last month.Reform won 4.1 million votes or 14% of the total and five seats in parliament in last July’s national election.Farage has previously said he is in negotiations with Musk about the billionaire donating to Reform to help it challenge the dominant Labour and Conservative parties.But Farage has distanced himself from comments made by Musk in support of British anti-immigration and anti-Muslim activist Stephen Yaxley-Lennon, known by the pseudonym Tommy Robinson, who is serving a prison sentence for contempt of court.Farage responded to Musk’s post on Sunday saying: “Well, this is a surprise! Elon is a remarkable individual but on this I am afraid I disagree. My view remains that Tommy Robinson is not right for Reform and I never sell out my principles.” Last month, Musk endorsed the Alternative for Germany, an anti-immigration, anti-Islamic party labelled as right-wing-extremist by German security services, ahead of national elections in February.Musk has previously sought to influence British politics and has criticised Prime Minister Keir Starmer repeatedly since anti-immigration riots last summer. The Tesla (NASDAQ:TSLA) founder last week backed calls for a national inquiry into the handling of cases of rape by men of Pakistani heritage of underage girls by the government’s prosecution service which Starmer previously ran.A 2014 inquiry found at least 1,400 children were subjected to sexual exploitation in Rotherham, northern England, between 1997 and 2013.The Times said Starmer was expected to address the criticism at a news conference on Monday by saying he gave the green light to prosecuting paedophile gangs in 2013 and reformed the way that child abuse cases are handled by prosecutors.But he was unlikely to criticise Musk directly given the billionaire’s proximity to Trump, the newspaper said.A spokesperson in Starmer’s office declined to comment.On Sunday, UK health minister Wes Streeting defended Starmer and another member of his cabinet, Jess Phillips, who incurred Musk’s ire for reportedly saying that any fresh inquiry into another gang rape case should be handled by the local authority.”It’s all very easy to sit there and fire off something in haste and click ‘send’ when people like Keir Starmer and Jess Phillips have done the hard yards of actually locking up wife beaters, rapists and paedophiles,” Streeting told the BBC. More

Lombard said that an easier belt-tightening effort was necessary in order to preserve economic growth, adding the budget bill currently being drafted would target a deficit in a range of 5.0% to 5.5% of gross domestic product (GDP).The previous government, which collapsed last month after opposition parties rejected part of its 2025 budget, had hoped to reduce the deficit to 5% this year from 6.1% in 2024.”We have to support the economy. I’m thinking about companies that are lacking confidence, we can’t hold growth back,” Lombard told France Inter radio.Lombard began consultations with opposition parties on Monday in an effort to preemptively win support before proposing the new budget bill in hope of avoiding a no-confidence vote like the one that brought down the previous government in early December amid a backlash against its belt-tightening proposals.France’s failure to pass a 2025 budget has spooked investors and ratings agencies, but the savings needed to get France’s public finances in line have proven too much for lawmakers in the deeply divided parliament. The previous government headed by Michel Barnier had targeted savings totalling 60 billion euros.To pass its budget, the new government will likely need support in particular from the Socialists, who have been pushing for higher taxes on the wealthy and on big companies.Lombard said the new bill would not create new taxes that were not already in the failed budget but that it would rework a planned additional tax on France’s biggest companies with the aim of bringing in about 8 billion euros as well as a tax hike on the wealthiest taxpayers.He added he was open to increasing a 30% flat tax on capital gains and income introduced by President Emmanuel Macron in 2018 to make France more attractive to global investors. The flat tax spurred criticism of Macron as a president for the rich.($1 = 0.9678 euros) More

Unemployment is at a record low 6.3% as firms continue to hire, a puzzle to some since the bloc’s economy has been stagnating for the past year and historical precedent would suggest growing labour market weakness in such an environment. Employment typically expands at about half the rate of real GDP growth but it has actually surpassed GDP growth since 2022, the ECB said.”The euro area labour market’s performance has been exceptional as compared with changes in output,” the ECB said in an Economic Bulletin article. “Rising profit margins enabled firms to retain their workers for longer than usual, despite falling revenues.”But real wages are now rising and catching up to historical trends while energy prices, a key input in costs, are stabilizing, reducing the disconnect between output and employment. Labour hoarding peaked in the third quarter of 2022 and firms’ ability to or willingness to hang onto their workers is now slowly diminishing, the ECB said. “The euro area labour market is expected to return closer to its historical correlation with output,” the ECB said. However, there is also no dramatic weakness ahead, the ECB argued.Some policymakers have been fearing a quick erosion in the labour market, which could reduce disposable incomes, weaken demand and lower inflation far more than the bank now predicts.However, the ECB’s study does not appear to back those fears.”The unemployment rate is expected to remain low over the coming quarters,” it said. “Overall, survey data suggest a relatively stable labour market looking ahead.” More