FirstFT: Sunak and Mordaunt emerge as Tory leadership frontrunners

Former chancellor Rishi Sunak and trade minister Penny Mordaunt yesterday emerged as the frontrunners in the race to be the next Conservative party leader as MPs prepared to further narrow the field.

In the first round of voting by Tory MPs for their next leader and prime minister, Sunak came first with 88 votes — a quarter of the parliamentary party — while Mordaunt was second with 67.

Mordaunt, a mid-ranking trade minister who has found grassroots appeal, has promised to return to old Tory themes of “low tax, a small state and personal responsibility”. A YouGov poll yesterday showed she was the favourite among party activists who will have the final say.

Two contenders were knocked out of the race to succeed Boris Johnson: former health secretary Jeremy Hunt and chancellor Nadhim Zahawi, who both failed to secure the requisite backing of 30 MPs.

Conservative MPs will reduce the number of candidates in the second round of voting today, in which the contender with the lowest level of support will fall out of the race. Follow the contest with our tracker.

Thank you to everyone who took part in yesterday’s poll. Fifty-seven per cent of respondents think Sunak will win the leadership contest, while 30 per cent do not. Thanks for reading FirstFT Europe/Africa. Here is the rest of today’s news — Jennifer

Five more stories in the news

1. Deutsche Bank’s core IT restructuring takes a hit Germany’s largest lender has suffered projected months-long delays and cost overruns on the integration of two IT systems, threatening a pillar of chief executive Christian Sewing’s turnround plans for the bank.

2. Hindenburg Research backs Twitter Shares in the social media company jumped 8 per cent after short selling focused Hindenburg said it had built “a significant” stake in Twitter, which has launched a lawsuit to force Elon Musk to complete his $44bn acquisition. Hindenburg in May closed out a short position in Twitter, which is said now “makes for a compelling long”.

3. UN: Ukraine and Russia make progress on grain talks The sides have made “very substantial progress” on a plan to avert a global food crisis by securing the safe passage of millions of tonnes of grain through the Black Sea, said António Guterres, UN secretary-general, who expressed hopes a final deal could be reached as soon as next week.

4. UK lags EU in authorising new medicines Britain fell behind the bloc in the race to attract innovative medicines in the first year after Brexit, researchers at Imperial College, London found. Experts attributed the shortfall to the smaller size of the UK market and the complexity of dealing with the NHS.

5. Euro falls to parity with US dollar for first time in two decades The risk of aggressive interest rate rises tipping the US into recession, combined with likely damage to the European economy because of its dependence on Russian energy, shoved the euro down to parity against the US dollar yesterday for the first time in 20 years.

The day ahead

Joe Biden in Israel During a four-day Middle East tour to improve regional relations and press Gulf states to produce more oil, the US president is expected to sign a joint declaration with Israel committing both countries to preventing a nuclear-armed Iran. Biden is also set to push Saudi Arabia on a timeline for upgrading ties with Israel.

Gerhard Schröder’s fate A German Social Democrats conference in Hannover will discuss whether to expel the former chancellor from the party over his close links with Russia.

Economic data Brussels publishes summer economic forecasts while the UK’s Royal Institution of Chartered Surveyors has its monthly residential market survey. The US June producer price index is out after consumer prices for the month jumped 9.1 per cent on an annual basis. (FT, WSJ)

Corporate results It’s a day of second-quarter earnings for US banks JPMorgan Chase and Morgan Stanley. Swedish telecom Ericsson and UK-based mining and metals group Rio Tinto also report while trading updates are due from Barratt Developments, Experian and Tullow Oil.

Join FT journalists on Friday July 15 at 1pm BST for a virtual briefing for FT subscribers on what awaits Britain and business after Boris Johnson, as rival Conservative candidates battle to succeed him as prime minister. Register for free.

What else we’re reading and watching

Can Russia win the war? Days after his troops seized the last city in Luhansk, Vladimir Putin said his war in Ukraine had not started “in earnest yet”. Analysts have projected Kyiv that has six months to drive out the invading forces before fatigue and a prolonged military gridlock sets in.

Inside the fall of Celsius The decline of Celsius has been labelled the crypto community’s “Lehman Brothers moment”. It loaned deposits from retail investors to large crypto companies and promised exceptionally high interest rates. But it now has a hole in its balance sheet as big as $2bn and has filed for bankruptcy.

This week, the FT is launching a crypto newsletter to help guide you through the crash. Premium subscribers can sign up here.

Web3: a new serving of old crypto nonsense Web3 is the inexorable destiny of the internet — the magical fabric from which blockchain-based decentralised dreams are made and dystopian big-tech nightmares destroyed. But look beneath the surface and gaping holes appear in this vision, writes Jemima Kelly.

Video: what’s next for scandal-hit Credit Suisse? The Swiss lender’s story is one of high profile scandals, from corporate espionage to cocaine smugglers, and about how finance went wrong at one of the most important banks in Europe. Credit Suisse’s new chair, Financial Times reporters and banking industry experts look at what could come next.

The ‘miracle’ weight-loss drug that works — but with questions Novo Nordisk’s Wegovy uses a hormone to regulate appetite. It is wildly effective, reducing appetite and creating a feeling of fullness. But is it misguided?

Books

The Work & Careers team recommends what to read this month, including lessons for business from University of Alabama American football coach Nick Saban and a guide to how to succeed in a changing world by Seamus Gillen.