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The EU has hardened its stance against Brexit concessions, dashing hopes the UK will be able to soften its exit from the EU. In their first summit without the presence of the UK, EU leaders rebuffed a plea by UK Prime Minister David Cameron over migration and warned that if businesses want access to Europe’s single market, their country must also accept European workers.
Global markets continued to rebound on Wednesday, with the FTSE 100 recovering all losses since the shock of the EU referendum result and sterling briefly rallying above the $1.35 level against the dollar. The UK-focused FTSE 250 continued a gradual recovery but remained well below its pre-referendum level.
Post-Brexit political turmoil continued in the UK, with conservatives lining up for party leadership ahead of a deadline on Thursday. Michael Gove announced a surprise bid, after a leaked email by his columnist wife laid bare doubts about would-be prime minister Boris Johnson.
Meanwhile, the opposition Labour party’s civil war deepened, with its leader Jeremy Corbyn under even more pressure to step down. A formal leadership challenge is expected from Angela Eagle, a former shadow business secretary, today.
The US has urged EU leaders to “ease off austerity” in response to the Brexit fallout and focus on economic growth to contain the populism that prompted Britain to leave the EU. The Obama administration also encouraged the UK to “raise its game” in Nato through higher defence spending in order to maintain international influence. (FT, Guardian)
In the news
Asian banks’ caution on London property Singapore’s United Overseas Bank has suspended loan applications for London properties due to uncertainty caused by Brexit, and other banks are advising caution. One worry is that increases in property values could be eroded by the depreciation of sterling. (FT)
Japan-UK trade Fumio Kishida, Japan’s foreign minister, says Tokyo will consider a bilateral trade deal with the UK if it goes ahead with Brexit. (NAR)
China’s megadeals slow M&A activity has fallen in the US and Europe amid political instability as confidence that China’s corporations can drive further dealmaking has waned. (FT)
EgyptAir crash investigation Preliminary investigations from the doomed airliner’s black box suggest there was a fire on board, although it remains unclear whether it was caused by a technical fault or terrorism. (Reuters)
Clinton, Trump divergence While Hillary Clinton has positioned herself as guardian of the west’s post-second world war geopolitical and economic order, Donald Trump has cast himself as an advocate of a return to the pre-globalisation era, with an “America first” mentality both in economics and foreign affairs. (FT)
It’s a big day for
Mongolia’s opposition The Mongolian People’s party has swept back into power with a sizeable majority in the country’s parliamentary elections. The MPP has criticised its rival Democratic party for borrowing billions of dollars in sovereign debt since 2012, leading rating agency Moody’s to give the country a negative outlook. (FT)
Food for thought
Citizenship for the wealthy There is a new and fast-growing class of “economic citizens” who are buying citizenship or residency rights to allow them to live and work in any part of the EU. Maltese citizenship can be yours for a mere €650,000, plus additional investments in property bonds and further contributions for spouses and dependants. (FT)
Isis remains a threat The attack on Istanbul airport showed the jihadis can still launch devastating attacks, despite losing ground in Iraq and Syria. Turkey, which has suffered a series of bombings in recent months, will need assistance if it is to defeat the group, writes David Gardner. (CSM, FT)
Social prioritising Facebook is altering its news feed algorithm to prioritise posts from friends and family over publishers and corporations. The social network has warned content providers it could cause a decline in how many people see and click posts. (FT)
Barriers in the Middle East Israel has become the world’s biggest builder of walls as it surrounds itself with security fences and high-tech barriers, attracting notice from politicians such as Donald Trump. (FT)
China’s internet tsar steps down The man behind the country’s aggressive crackdown on social media and blocking of Google is being replaced by a former minister of propaganda. The choice of successor suggests there will not be a loosening of controls. (FT)
Ants solve gridlock Bottom-up communication lets ants gather en masse without slowing down. Their behaviour provides lessons for easing congestion. (NAR)
Puerto Rico’s exodus The US territory’s population has shrunk by more than 9 per cent in the past decade to less than 3.5m, adding to the difficulty of paying off $70bn in debt even after Congressional passage of a rescue plan on Wednesday. (WSJ)
Video of the day
Perspective on the post-Brexit rebound The FT’s John Authers explains that while fears of a major crisis have subsided, UK stocks and sterling remain far weaker. (FT)