FirstFT: Boris Johnson to resign

Boris Johnson is due to quit as UK prime minister later today after a dramatic two days in which more than 50 members of his government resigned, demolishing his political authority.

Two senior government officials told the Financial Times Johnson is expected to make a statement at lunchtime when he will announce plans to remain as a caretaker prime minister until the Conservative party conference in October.

The pound jumped 0.5 per cent against the dollar, from $1.193 to a high of $1.199 as investors reacted positively to the news of Johnson’s expected resignation.

Confirmation of the prime minister’s departure came after another rush of ministerial resignations this morning, taking the total number of departures from the government in the past 48 hours to more than 50.

Johnson’s decision to quit marks the end to a political career in which he helped lead the successful Vote Leave campaign to exit the EU in 2016 and took the Conservative party to a historic general election victory in 2019.

You can follow the prime minister’s resignation speech on our live blog.

Read more

• Boris Johnson’s replacement Now the prime minister has indicated he will step down, speculation has begun about who will replace him. Here are the frontrunners to take over at No 10.

Thanks for reading FirstFT Americas and here is the rest of the day’s news — Gordon

Five more stories in the news

1. Federal Reserve officials warn entrenched inflation poses ‘significant risk’ The minutes of the US central bank’s June meeting, when the Fed delivered the first 0.75 percentage point rate rise since 1994, revealed that top officials believe entrenched inflation is a “significant risk” to the US economy. The minutes expose the alarm spreading through the highest ranks of the central bank over inflation, currently running at an annual pace of 8.6 per cent.

2. US and UK intelligence chiefs warn over activities of Chinese spies The heads of the FBI and MI5 have warned that China’s industrial espionage poses a growing threat to western groups, including through special purpose acquisition companies, in the first public event between the two agencies. FBI director Christopher Wray said Beijing was using “elaborate shell games” to disguise its spying and was even taking advantage of Spacs.

3. Judge holds real estate company in contempt in New York Trump probe
A New York judge has held Cushman & Wakefield in contempt of court for failing to respond to document requests in connection with an investigation into the financial practices of Donald Trump and the Trump Organization. Judge Arthur Engoron ordered Cushman to be fined $10,000 per day, beginning today, until it complies.

4. New Covid variants threaten China’s vaccine hopes China is making progress in efforts to develop a homegrown messenger RNA Covid-19 vaccine, widely seen as essential to any shift away from President Xi Jinping’s economically costly zero-Covid policy. But experts warn that China risks being outpaced by rapid mutations of the Omicron coronavirus variant.

5. Russia to mobilise economy for long war Proposed laws will give Moscow greater control over private business and workers in order to put the economy on a stronger war footing, signalling that the government is preparing for the long haul in its battle for control of Ukraine.

The day ahead

Monetary policy Federal Reserve board governor Christopher Waller will participate in a fireside chat at the National Association for Business Economics event on monetary policy and inflation. St Louis Fed president James Bullard will discuss the economy and monetary policy during an event hosted by the Little Rock Regional Chamber.

Economic data New applications for unemployment aid are estimated to have reached 230,000 in the week ended July 2. A week earlier, unemployment claims edged down to 231,000 but remained at historically low levels.

Company earnings Jeans retailer Levi Strauss & Co is expected to report revenues increased 12 per cent from the year-ago quarter to $1.43bn in the second quarter, according to analysts polled by Refinitiv. Higher prices are expected to boost revenue but earnings are expected to remain flat from the prior year at 23 cents a share.

Market outlook Wall Street is set to open modestly higher when trading begins today in New York. Equities in Asia and Europe are up today while the euro remains near a 20-year low against the dollar. In bond markets, the yield on the 10-year Treasury note, which moves inversely to the price of the benchmark bond, stood at 2.96 per cent, down from almost 3.5 per cent in mid-June.

G20 foreign ministers meet Russian foreign minister Sergei Lavrov and US secretary of state Antony Blinken are among the politicians attending a G20 meeting in Bali, Indonesia, which runs until Friday.

Morandi bridge collapse trial The court case begins in Genoa, Italy, over the incident in 2018 that killed 43 people.

Hajj begins After two years of pandemic restrictions, Saudi Arabia will welcome international pilgrims to perform the annual ritual. A million people are expected to attend.

How can business leaders adapt and prepare for unforeseen global events? Senior industry leaders share their insights in today’s event, Capitalising On Disruption To Create Business Opportunities. Attend for free here.

What else we’re reading

A coup for the right: Justice Thomas’s Supreme Court America’s highest court has lurched to the extreme right, a stunning transformation that has turned what the Founders called “the least dangerous branch” of government into anything but. Under Clarence Thomas, this brand of conservatism will shape the court for decades to come, writes Jill Abramson, author and former New York Times executive editor.

America’s unending horizon of mass shootings Guns do not kill people, insists the US gun lobby. It is people who do that. Picking holes in such reasoning is easier than shooting fish in a barrel, writes Edward Luce. But, he says, the right question is not when mass shootings will end but where will they lead?

How China’s BYD played catch-up with Tesla Before this week the Chinese carmaker had already overtaken some of the best-known marques in the auto industry including Volkswagen, Ford and General Motors. Industry insiders, executives and academics explain the secret of the company’s success as it becomes the biggest maker of electric cars.

Amazon pins hopes on influencers The $1tn ecommerce giant has stepped up plans to crack the QVC-style livestream shopping market, aiming to replicate the success of social media rivals and revive flagging online sales. Its strategy? To attract more influencers.

Fruit becomes a luxury under Erdoğan An old saying has become popular in Turkey again: “There is no government that cannot be brought down by an empty cooking pot.” Recep Tayyip Erdoğan might be expected to heed that warning as astronomical inflation pushes up the prices of essential food.

What can pension savers do in bleak markets? It’s natural for retirement savers to feel depressed, not just about the present but also about future prospects. And it’s particularly gloomy because the ballast traditionally provided by bonds when equities fall can no longer be taken for granted. There are ways to manage inflation and recession, says Don Ezra, but safety comes at a price.

Property

From a clifftop lodge on Oregon’s coast to a mansion on the shores of Lake Washington, here are five stunning homes for sale in the Pacific Northwest.