Thursday, December 1 2022

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Liz Truss will try to rally Tory MPs behind her failing leadership today at a party conference that descended into acrimony, infighting and confusion.

Truss, who has been prime minister for less than a month, will urge his party in a 30-minute speech to unite behind his tax-cutting economic policy, which has spooked markets and sent Tory polls into a tailspin.

“We can’t have any more drift and delay at this vital moment” – Liz Truss

The Prime Minister was forced on Monday to scrap a plan to scrap the 45p top tax rate by rebel Tory MPs, prompting Home Secretary Suella Braverman to accuse her colleagues of having staged a “coup”.

Dissent erupted again yesterday after Truss refused to commit to raising benefits in line with inflation next year, reversing a pledge from his predecessor Boris Johnson.

Chancellor Kwasi Kwarteng’s ‘mini’ budget sparked a run on sterling and sent borrowing costs skyrocketing. The £39billion Pension Protection Fund was forced to provide £1.6billion as additional security for derivatives-related investment strategies during last week’s market turmoil.

Helen Thomas argues that the hidden risks revealed by the implosion of pensions could prompt “buy-out” deals that shrink the world of defined-benefit plans.

1. Elon Musk’s Twitter U-turn Tesla’s chief executive has offered to press ahead with his deal to buy Twitter at the originally agreed price of $44 billion, potentially ending one of the companies’ most high-profile legal battles in decades less than two weeks before a scheduled trial . Find the saga here.

Should Twitter go ahead with the deal? Vote in our poll or share your impressions with me on [email protected] — Jennifer

2. Ukraine faces a critical battle in the south ahead of winter U.S. officials and lawmakers have warned that Ukraine must capitalize on its easterly momentum to repel Russian forces in strategic southern regions before winter brings dangerous conditions if it is to deprive Russia of a chance to consolidate his hold.

3. The UK plans to hire more short-term foreign workers Liz Truss is drawing up plans to make it easier for multinationals to transfer talented overseas staff to the UK for short-term placements as employers complain about post-Brexit labor shortages.

4. Global accounting firms warned against local subsidiaries The biggest accounting firms have been told to expect tougher scrutiny from US regulators of their use of overseas subsidiaries, as concerns grow over substandard audit work in China and somewhere else.

5. Ray Dalio hands over the reins to Bridgewater The 73-year-old billionaire relinquished control of the hedge fund he founded, Bridgewater Associates, ending a long power transition that had come to define the industry’s succession issues. Dalio will remain on the board as founder and CIO mentor.

The day ahead

OPEC+ production cuts Riyadh, Moscow and other oil producers are set to announce deep production cuts as the OPEC+ cartel meets in Vienna, people familiar with the talks say, in a move that should prompt countermeasures US to keep prices low.

German-Spanish Summit Chancellor Olaf Scholz and Prime Minister Pedro Sánchez will hold a summit to strengthen bilateral relations in the Galician port of La Coruña.

UK rail strikes Unionized Aslef drivers at 12 rail operating companies are to stage another coordinated 24-hour strike in a dispute over pay and working conditions, causing disruption to the country’s rail network.

Economic data S&P Global/IHS Markit Services Purchasing Managers Indices are out for France, Germany, Italy, UK and US. Poland’s central bank is expected to raise its main interest rate by 25 basis points to 7%. The US Department of Commerce reports August’s trade deficit, after it narrowed 12.6% in July from the previous month. (FT, Reuters, WSJ)

Nobel Prize in Chemistry The award will be announced in Stockholm, Sweden. Yesterday, three scientists won the physics prize for translating the predictions of quantum theory into the foundations of a practical discipline of information and communications technology.

What else we read

Germany’s “double ka-boom” on energy When Berlin announced a €200 billion bazooka-sized energy support package for households and businesses last week, it had no intention of unleashing a volley of intra-EU friendly fire. . But that’s what happened. From now on, Berlin risks undermining the unity of the bloc, writes our editorial staff.

Five ways Kwasi Kwarteng can reduce Britain’s debt It will be difficult to get government accounts to add up and reduce debt in the medium term. The FT’s economics editor Chris Giles outlines the paths to fiscal discipline Chancellor Kwasi Kwarteng could take, ranging from reversing further tax cuts to cutting public spending.

Column chart of the loss of income in 2024-25 if Universal Credit was increased by income instead of inflation over the next two years (£pa) showing that not increasing UK benefits based on inflation would save money but would be politically controversial

Airports vs Airlines Nobody likes airports. Passengers are reluctant to wait for check-in, baggage drop-off and security. And investors are harmed because their stakes seem less stable and less risky than a few years ago. Rising costs and environmental restrictions require a different perspective, writes Peggy Hollinger.

#MeToo moment of the French left Far-left MP Adrien Quatennens’ admission that he hit his wife during their breakup drew attention to the opposition alliance’s handling of misconduct allegations and sparked a series of struggles intestines just as she fired to challenge President Emmanuel Macron.

Can China rebuild its growth model? China faces diminishing returns after years of relying on growth propelled by a debt-fueled real estate investment boom. Can leader Xi Jinping revive the economy by encouraging more consumer spending, while ceding some political control? This is the second part of a series on the Chinese real estate crash.

We want your opinion

Following the success of this year’s inaugural ranking of Africa’s fastest growing companies, the Financial Times is compiling its next list of high-growth companies, to be published in May 2023. Apply now to be considered.

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