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FirstFT: UK blocks ‘non-essential’ overseas aid payments

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Britain’s overseas aid programme has been thrown into confusion after the Treasury blocked “non-essential” new payments for the summer over concerns that the cost of relief work in Ukraine will breach a spending cap.

Last year, Boris Johnson’s government cut the overseas aid budget after the Covid-19 pandemic, “temporarily” ditching a manifesto commitment to spend 0.7 per cent of GDP in favour of a 0.5 per cent limit.

Treasury chief secretary Simon Clarke last week told the Foreign Office and other departments to suspend aid payments until Johnson’s replacement as prime minister was in post because the lower limit was about to be breached.

The move stunned officials working on development projects, who said programmes would be halted, dealing a blow to Britain’s claim to be an “aid superpower”.

Andrew Mitchell, a former Tory international development secretary, said it would “undoubtedly cost lives” in the world’s poorest countries. Labour said the suspension of aid payments was “extraordinary”.

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1. UK and France to get board seats in Eutelsat-OneWeb tie-up The governments will each have a seat on the board of the combined satellite operator under the terms of a planned merger between Eutelsat and OneWeb that aims to challenge billionaire space entrepreneurs Elon Musk and Jeff Bezos.

2. WHO declares monkeypox a global health emergency The World Health Organization has used the highest possible designation for the worldwide outbreak of 16,000 monkeypox cases, which was previously deployed over two years ago for Covid-19. The risk from monkeypox is “high” in Europe but remains low elsewhere.

3. Strong dollar wipes billions off US corporate earnings The greenback’s surge this month to its highest level in 20 years has wiped billions of dollars off the second-quarter sales of US companies, prompting many to cut guidance for the remainder of 2022. Tech companies are acutely exposed to a strong dollar because of their overseas footprint.

Line chart of DXY dollar index showing US dollar surges to its highest level in 20 years

4. Fed to implement second 0.75 point rate rise The US Federal Reserve is poised this week to take the dramatic step to curb inflation for a second consecutive month, but the central bank’s strategy beyond that point is less certain as it weighs a peak in consumer price growth against recession risks.

5. Insolvency Service uses new powers to ban Covid loan fraudsters The Insolvency Service has for the first time used powers to investigate and sanction directors that dissolve businesses to avoid debts as it ramps up action against fraud in UK state-backed emergency Covid-19 loan schemes.

The day ahead

UK leadership race The BBC hosts a live head-to-head TV debate between Rishi Sunak and Liz Truss, the final candidates in the running to replace Boris Johnson as prime minister. Find out who their cabinet favourites are.

  • Across the despatch boxes: Sir Keir Starmer will use a speech in Liverpool to urge Labour to focus as much on boosting growth as on wealth redistribution as he seeks to wrest the mantle of economic competence from the Conservatives.

World meetings EU ambassadors convene ahead of an emergency meeting of energy ministers tomorrow to discuss watering down the bloc’s proposal to slash gas demand. The World Trade Organization’s general council gathers in Geneva for a special meeting.

Liverpool dockworkers vote to strike The Unite union will ballot hundreds of workers for industrial action in one of Britain’s largest container ports, in the latest show of discontent over pay.

Tunisia referendum The country votes in a national referendum on a new constitution that would greatly increase the powers of the president.

What else we’re reading

Syria: what is Turkey’s grand plan? At least 9mn Syrians now fall under Ankara’s responsibility after border incursions to push back Kurdish militants of the YPG, which the Turkish government considers a terrorist organisation. It represents Turkey’s largest footprint in an Arab state since the collapse of the Ottoman Empire in 1918 — and reflects its deepening role in shaping northern Syria’s future.

Investors, tread warily in emerging markets After eye-popping price drops in the first half of the year, more analysts are recommending higher across-the-board exposure to emerging market assets. But historically cheap pricing may not be enough given macroeconomic headwinds, writes Mohamed El-Erian.

Rethinking insurance: how prevention is better than a claim The insurance sector is evolving, with technologies such as wearable devices making it easier to collect real-time data on customers. This has become instrumental in developing schemes focused on preventing claims, such as offering consumers incentives for physical activity.

A photo collage of a woman running alongside various fitness tracking icons
By working with consumers and businesses to change behaviour and reduce risks, insurers hope to limit the likelihood and severity of payouts © FT montage: Dreamstime

How to stop feeling lonely at the top While going it alone can be extremely rewarding, it can also be challenging. Two long years of Covid have shown how easily solitude can tip over into isolation. Founders and entrepreneurs can find support, networks and help — they just need to make time, writes Shola Asante, co-founder of Sante + Wade footwear.

Imposter syndrome is actually the human condition A bit of self-doubt is part of a healthy professional life, so why do we label it as a disease? Women, in particular, are fed up with being told how to change to operate better in a given environment, writes Viv Groskop, because it ignores the reality of an imperfect world.

Food

A new generation of fine-dining chefs is offering innovative, out-there ice cream flavours such as roasted potato skin, Douglas fir . . . and second-hand books.

Rippled dark chocolate ice cream with frosted pistachios and candied kumquats at Noci in Islington, London
Rippled dark chocolate ice cream with frosted pistachios and candied kumquats at Noci in Islington, London © Laura Jalbert

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