Listen to this article
Sign up to receive FirstFT by email here
The most wide-ranging survey of British business activity since the vote to leave the EU showed its sharpest drop in at least 20 years, intensifying pressure on the Bank of England to take stronger action on Thursday to prevent a recession.
The survey of purchasing managers, which measures output in the manufacturing, construction and services sectors, fell to its lowest levels since the financial crisis because of what one former BoE rate-setter called “an unparalleled uncertainty shock”.
An alternative to cutting interest rates was put forward by a group of economists, who suggested that the most effective way of boosting the economy would be direct cash handouts. This so-called helicopter drop would be financed by the BoE but would need approval by the treasury.
Here are eight charts showing the state of the UK economy before the Bank of England rate decision. (FT, Guardian)
In the news
Tax reform in India Indian businessmen have welcomed the country’s biggest tax reform in decades. Parliament on Wednesday passed a new law unifying a patchwork of national, state and local taxes in a move that economists said could boost GDP by 1.5 to 2 percentage points annually. Narendra Modi’s government wants to roll out the new tax by April 2017, but there is still a considerable way to go until the bill becomes law, with half of India’s states still needing to ratify the new measure. (FT, Quartz)
Fly me to the moon The US government for the first time granted a private company — Moon Express — the right to land on the Earth's natural satellite. The ruling marks a milestone in commercial space exploration — a private company has never sought or received approval to do business beyond Earth’s orbit. (Quartz)
Trump hits turbulence A number of prominent Republicans have announced they are voting for Democrat Hillary Clinton, while CNBC reports that Donald Trump’s campaign chair is “mailing it in” and ABC says senior Republican officials are “exploring how to replace him on the ballot if he drops out”. Amid all this, Mr Trump announced he had generated a bumper $64m in donations in July. (FT, CNBC, ABC)
Not a ransom The Obama administration has insisted that $400m in cash paid to Iran soon after the release of five American hostages was not ransom money. The hostage deal coincided with the lifting of sanctions against Tehran and Republicans, many of whom were opposed to the nuclear agreement with Iran, say that the funds were a secret ransom payment linked to the nuclear negotiations. (Reuters)
China seeks tighter rein on renminbi-selling and capital flight Beijing is imposing new reporting requirements on currency transactions in an effort to curb capital outflows. (NAR)
It’s a big day for
Xiaomi The Chinese tech group will launch its Daydream VR headset. (Wearable)
Food for thought
WhatsApp: Let’s chat Cheaper than text messaging and using less data than other social apps, WhatsApp has attracted more than 1bn monthly active users in just over six years — most of them in emerging markets, where it often acts as an alternative internet hub. The app is now looking for ways to generate revenue. (FT)
Isis’s global killer network An investigation has uncovered that Isis has constructed a multilevel terrorist “secret service” with regional directorates around the world. The network is a core part of Isis operations and its trainees led the attacks in Paris and Brussels. (NYT)
How Europeans feel about Brexit The French are blasé while Swedes are more saddened than any others. Let’s not get started on the Russians. (FT)
Digital detox A new study has laid bare the UK’s obsession with the internet, showing that the amount of time we spend online is leading to lost sleep, neglected housework and less time spent with friends and family. UK adults say they spend an average of 25 hours a week online, and 59 per cent say they are “hooked” on the device they use to connect. More than a third said they were taking “detox” breaks from the web. (The Guardian)
Elon Musk’s comms masterclass The tech entrepreneur’s “master plan” for Tesla was greeted with dismay. Analysts complained about scant details. Investors harrumphed over his desire to branch out into solar energy. Yet, in one respect, Mr Musk retained his power to impress — giving a masterclass in jargon-free business communication. (FT)
Japan mourns the ‘Wolf’ of wrestling With a small but steely frame and a slyly handsome face, Chiyonofuji, who died on Sunday aged 61, dominated the sumo ring in the 1980s and charmed a generation of fans that remember him as the “Wolf”. (NAR)
Video of the day
Bitcoin hack explainedThe Hong Kong-based Bitfinex exchange has revealed nearly 120,000 bitcoins of customer funds were stolen. Alphaville’s Izabella Kaminska looks at what the hack reveals about the bitcoin financial system and why it is starting to resemble the established financial system. (FT)
Get alerts on World when a new story is published