FirstFT: Sunak to stand firm on taxes

Rishi Sunak will today attempt to fend off fierce attacks from his rivals for the Conservative leadership, insisting at an official campaign launch that he would cut taxes only when he has “gripped inflation”.

The former UK chancellor will repeat his commitment to fiscal discipline, warning his leadership rivals, some of whom want immediate big tax cuts, that voters deserved “honesty and responsibility”.

“I have a plan to steer our country through these headwinds. Once we have gripped inflation, I will get the tax burden down. It is a question of ‘when’, not ‘if’,” he will say.

Under rules agreed by the Tory backbench 1922 committee last night, 20 nominations are needed for a candidate to join the first ballot today — a threshold that will weed out weaker contenders.

Candidates will need 30 votes to reach the second round, which takes place on Thursday. The final two candidates will be decided early next week, possibly as early as Monday.

Business leaders have warned candidates over cuts to corporation tax without a longer-term plan for growth and support for investment.

Stephen Bush writes in Inside Politics that the leadership election is really two contests: one involves winning over Tory MPs, the other of gaining votes among party members. Sign up to receive the newsletter here.

• Opinion: How does a country get rid of a strongman leader? Independent institutions and voters who care about them are vital, says Gideon Rachman.

Thank you for reading FirstFT Europe/Africa. Here is the rest of the day’s news — Jennifer

Five more stories in the news

1. ‘Boris Johnson’s exit will not affect Ukraine arms’ Britain’s leading role in providing weapons to Kyiv will endure, whoever becomes the new prime minister, the UK’s Nato ambassador has said, amid concerns in Ukraine that a successor could fail to match Johnson’s focus on the war.

2. Klarna’s valuation crashes to under $7bn Once Europe’s most valuable private tech company, Klarna has had its price tag slashed from $46bn to $6.7bn at a difficult fundraising that highlights the crash in many valuations.

• Go deeper: As easy money dries up, fintechs are facing a reckoning. Premium subscribers can click here to receive our FintechFT newsletter.

• Alphaville: Blame fickle shareholders, says Klarna’s biggest shareholder.

3. Scuttling of Twitter deal ‘invalid and wrongful’ The social media company has hit back at Elon Musk’s attempt to walk away from his $44bn acquisition of the platform, accusing him of breaching the merger agreement, according to a letter sent to the billionaire’s lawyers.

4. UK train drivers vote to strike Rail travellers face more disruption after drivers at eight train companies voted yesterday in favour of industrial action over pay, clearing the way for the first national drivers’ strike in the country in a generation this summer.

5. Global population growth hits lowest rate since 1950 The global population grew by less than 1 per cent a year for the first time since the aftermath of the second world war in 2020 and 2021, with Europe’s total population falling during the coronavirus pandemic, according to the UN.

The day ahead

Croatia closer to the euro Ministers from 27 European Union member states are due to pass the final three legal acts required for the country to become the 20th member to take on the currency.

UK transport consultation Transport for London ends discussions on reshaping inner city bus services following the UK government’s requirement for significant cost savings.

Amazon’s Prime Day The two-day event, which runs today and tomorrow, is forecast to generate global sales of more than $12.5bn, up 17 per cent on last year, according to research group Insider Intelligence.

Economic data Germany publishes its ZEW economic sentiment survey while Opec releases its monthly oil market report. The British Retail Consortium and KPMG publish their retail sales report for June. In the US, the National Federation of Independent Business’s monthly survey that measures small business optimism is forecast to decline in June. (FT, WSJ)

Nasa scientific observations The US space agency and its partner, the European Space Agency, release four scientific observations from the $10bn James Webb Space Telescope. They come hot on the heels of the first image of infant galaxies formed 13bn years ago, which was unveiled yesterday.

What else we’re reading

Lipsticks, lattes and labradors: JAB’s bet on pets After spending more than $50bn on coffee chains, restaurants and cosmetic companies, the European group has found a cute solution to boosting its mixed returns: pets. But its investments in vets and insurance are under scrutiny from competition officials.

The rental bust-up that never came During the pandemic, the UK government put in place protections to stop landlords evicting commercial tenants, supposedly leading to a mountain of unpaid rental debt. No one knows how much of the rental shortfall has been left unaddressed. The answer is probably a lot less than anyone thought, writes Helen Thomas.

‘Supreme Court has weakened legal predictability’ One thing that the US has always had going for it has been the rule of law. A radical shift at the Supreme Court, which has overturned nearly 50 years of abortion rights, has now thrown the consistency of the legal system into question, writes our editorial board.

America’s new agricultural frontier After years of laboratory testing, companies are now racing to scale up their operations for the commercial production of plants, and hoping to beat competitors to a dominant share of what could be a vast market.

Abe killing shines spotlight on links with Moonies Close ties between the Moonies and powerful figures in the governing Liberal Democratic party have long been an open but little-discussed secret in Japan. Shinzo Abe’s killing and the suspect’s alleged family links with the group have shone a spotlight on the relationship, as the nation seeks answers to one of its worst incidents of political violence since the second world war.

Outdoor tech

Whether you’re relaxing alfresco at home this summer or heading out on an adventure, here’s our round-up of some of the best tech to capitalise on the good weather.