Pound slides against the dollar, VW arrest, profiting from Isis

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The British pound has slid to its lowest level against the dollar since last October after Prime Minister Theresa May said in a weekend interview that there was no prospect of Britain keeping “bits of” EU membership. Her comments were the first on Brexit this year and renew fears of many that the UK could be heading for a hard Brexit in which control of immigration ranked higher than maintaining access to Europe’s single market.

During the interview Mrs May also defended herself against charges that her government’s approach to Brexit is muddled. The UK’s ambassador to the EU, Sir Ivan Rogers, last week resigned citing the government’s “ill-founded arguments on Brexit”. There was also of British officials from a senior Canadian diplomat for ignoring the advice of its own trade experts. (FT, Guardian, Independent)

In the news

Cyber attacks put EU on edge Brussels has seen a sharp rise in “more and more dangerous” cyber attacks on EU servers in the past year, as anxiety increases about potential Russian meddling in European politics. News of the attacks comes after a US intelligence report said Russian president Vladimir Putin personally approved cyber attacks aimed at interfering with last year’s presidential election. While Republicans and Democrats alike have expressed alarm, Mr Trump and his supporters don’t seem very concerned. (FT, USAToday, NYT)

VW executive arrest The FBI has arrested Oliver Schmidt, who led Volkswagen’s US regulatory compliance office from 2014 to March 2015, on charges of conspiracy to defraud the US. The charges stem from the company’s diesel emissions cheating scandal. Meanwhile, in the UK British drivers are launching a lawsuit against VW based on allegations that the affected cars should not have been certified as fit for sale because they produced levels of NOx emissions that exceeded legal limits. (NYT, FT)

Assad unrepentant Syrian president Bashar al-Assad has told journalists that the bombing of East Aleppo, which the UN has said may constitute a war crime, was justified. He vowed that his army will retake the entire country, including rebel-held area near Damascus where a vital water supply had been bombed out of service. (BBC) 

iPhone turns 10  Apple’s smartphone radically changed the way we thought about photography and a range of other activities we now do on the move. The FT writes that “even a decade after the iPhone launched, anyone declaring Apple a ‘mature’ enterprise risks looking foolish”. But some maintain that the iPhone was never as good as the Nokia N95 which preceded it. (BBC, FT, The Conversation)

Rafsanjani dies Akbar Hashemi Rafsanjani, the former Iranian president and one of the pillars of the Islamic republic since the 1979 revolution, has died of heart attack, state media said. Despite his advanced age (he was 82), his death has shocked Iranians and is likely further intensify the power struggle between reformers who argue that pro-democracy changes are essential for the regime’s survival and hardliners who are resistant to opening up the country. (FT)

It’s a big day for

Cyprus A week of talks to try to end the conflict on the divided island begin in Geneva begin today. They are widely seen as the best chance in decades to reunify the country. (Reuters) 

London commuters Millions of commuters grapple with transport misery as the UK capital is hit by a 24-hour strike on the Underground. (FT) 

Keep up with the important business, economic and political stories in the coming days with the FT’s WeekAhead.

Food for thought

Policing the robots Markets dominated by “robo-sellers”, or automated pricing bots, will not respond to the same incentives or operate according to the same rules as those managed by people. The rise of artificial intelligence and powerful algorithms may instead create more durable cartels that are able to maintain higher prices at consumers’ expense and in defiance of traditional enforcement regimes. (FT)

Lucy’s jargon awards FT columnist Lucy Kellaway hands out the gongs for the worst use of language in business last year. “With a heavy heart, I award eBay my overall Golden Flannel Award for 2016.” Falke’s renaming of its new line of socks as “Life Performance Solutions” and Indian help centre emails signed off with “unfeigned regards” also made the cut. (FT)

Pity the bankers It may be hard for some to sympathise, but many bankers are facing a stark beginning to 2017. Their bonuses may be cut by 10 per cent in the next few weeks, while some will get no rewards at all in this year’s pay round. Many investment banks are expected to clamp down on pay amid anxiety about eurozone economies, Brexit and possible fallout from the trade policies of America’s president-elect Donald Trump. (The Times) 

Profiting from Isis Rebels in Syria have a new way to make money: trafficking in captured or defecting Isis fighters. The most lucrative opportunity is to capture a foreign Isis fighter whose government wants him back and is willing to pay. Rebels say Gulf states are often the most keen, sometimes paying millions of dollars. (FT)

Falcons, Drones, Data: A winery battles climate change Jackson Family Wines is among California winemakers employing both high-tech and old-school techniques to adapt to hotter, drier conditions. The adaptations might help winemakers keep making fine wines for many years to come. (NYT)

Video of the day

A look at the week ahead Daniel Garrahan highlights what the FT is watching in the week ahead, including US bank earnings season, German industrial production figures and Shinzo Abe’s trip to the Philippines to meet Rodrigo Duterte. (FT)

This article has been amended to reflect the fact that bankers had a stark beginning to 2017, not 2016.