Good morning and welcome to FirstFT. In today’s newsletter:
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Trump says ceasefire with Iran is ‘over’
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Burnham weighs deputy UK PM in charge of ‘Number 10 North’
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Trump’s surprise Ukraine shift steadies nervous Nato allies
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The erosion of Britain’s power abroad
We begin with the Middle East where hostilities between the US and Iran have been reignited.
The latest: The US military said it had launched strikes against Iran for a second day, inflaming tensions hours after President Donald Trump said he considered the ceasefire with Tehran was “over”.
American forces began “additional strikes against Iran to further degrade their ability to threaten freedom of navigation in the Strait of Hormuz”, US Central Command said on Wednesday in Washington.
The US hit more than 80 Iranian military targets on Tuesday, according to Centcom, which oversees military operations in the Middle East, after Iran attacked three commercial ships in the strait.
Market reaction: The renewed clashes have fractured a ceasefire that promised to reopen the strait to oil shipments, sending global energy prices sharply higher. Brent crude, the international benchmark, rose 1.2 per cent to $78.93 in Asia trading.
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Cycle of tit-for-tat strikes: Trump’s push to get ships moving through the Strait of Hormuz keeps colliding with Tehran’s resistance to cede control.
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Oil profits: Record earnings will set energy majors on a collision course with the US president, who has accused them of price gouging.
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Dispatch from Mashhad: Ayatollah Ali Khamenei’s burial will leave his son Mojtaba to confront enormous challenges facing the Iranian regime.
Here’s what else I’m keeping tabs on today:
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Monetary policy: The European Central Bank publishes minutes from the most recent interest rate-setting meeting.
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EU: Eurozone finance ministers meet in Brussels.
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UK: Nominations for Labour Party leader start, following Prime Minister Sir Keir Starmer’s announcement last month of his intention to resign.
Five more top stories
1. Exclusive: Andy Burnham, the presumptive UK prime minister, is discussing plans to give the next deputy control over his new Downing Street outpost in Manchester in an attempt to give the body greater power, according to people close to the discussions.
2. Trump’s pivot from outspoken criticism of Volodymyr Zelenskyy to letting the Ukrainian leader manufacture US weapons was the standout moment of this week’s Nato summit in Turkey, leaving European allies cautiously optimistic that America’s mercurial leader had made a significant shift in favour of Kyiv.
3. Exclusive: Former Liberty Media president Greg Maffei, who oversaw a transformation in the fortunes of Formula 1, is launching a team-based horseracing league that will draw on elements of the motorsport in an attempt to draw in younger sports fans and gamblers.
4. Exclusive: Private equity groups TPG and Blackstone are seeking more than $4bn for medical technology company Hologic’s surgical unit, as they pay down debt and return cash from one of last year’s biggest leveraged buyouts.
5. Chinese manufacturers that use rare earths are seizing a “historic” opportunity to move up the industrial value chain and squeeze their foreign rivals, as Beijing’s export controls on critical minerals hit their Japanese counterparts.
The Big Read
Political infighting in the UK over the weeks leading up to Starmer’s resignation prompted the Foreign Office to send a WhatsApp message to Britain’s ambassadors around the world.
What did overseas governments make of the turmoil, the department wanted to know. A key theme, according to people familiar with the exchanges on the group chat, was that, in the view of some other nations, the UK had become too “inward-looking” and “insular”.
The comments confirmed what officials suspected: not only has much of the UK’s military firepower withered but its image across the world has also diminished.
In the past, even when the UK’s defence spending has ebbed, the country could rely on less tangible sources of international influence, such as the dominance of the English language and its role in multinational institutions, for example the UN.
But now the UK’s hard and soft power have both hit postwar lows, leaving the country exposed and less capable of adapting to a new world order.
We’re also reading . . .
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Taxing billionaires: The topic has risen up in the public agenda from California to France. Soumaya Keynes puts together a light-hearted guide to the key characters of the debate.
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Russia’s fuel crisis: Ukraine’s drone campaign against the country’s energy infrastructure has led to supply shortages that are now affecting 35 per cent of the population.
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‘Fundamental flaws’: The EU’s exit-entry system, which is forcing some passengers to wait on the tarmac in intense heat, needs to be overhauled, says the chief of Greek airports.
Chart of the day
Demand for transformers and other power equipment is surging as AI data centres compete with renewable energy projects, transport electrification and industrial expansion for scarce supplies. Average lead times for transformer orders, once measured in months, now stretch into years. Prices for certain large devices have almost doubled post-pandemic.
Take a break from the news . . .
The Bal des Pompiers is an annual Parisian tradition where more than 40 fire stations around the city open their doors for a night of dancing and revelry. Kalle Oskari Mattila joins the party brigade.
