FirstFT: Tories suffer two defeats but hold on to Boris Johnson’s seat

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Rishi Sunak’s Conservatives lost two seats but averted a “3-0” wipeout in the UK parliamentary by-elections after unexpectedly clinging on to the seat vacated by former premier Boris Johnson.

In results announced early this morning, the Conservatives narrowly retained Johnson’s old Uxbridge and South Ruislip seat by fewer than 500 votes. But the ruling party still suffered two crushing defeats, highlighting the grave problems facing the British prime minister in the run-up to the national elections next year.

The opposition Labour party secured its biggest-ever by-election win in the once-safe Tory seat of Selby and Ainsty in Yorkshire. Earlier the centrist Liberal Democrats demolished a massive Tory majority to win the seat of Somerton and Frome, opening up a dangerous new front for Sunak in the Tory heartlands of England’s South West.

Sunak’s party is trailing Labour by 20 points in opinion polls, and is dogged by high inflation, failing public services and the recent chaos of the Johnson and Liz Truss premierships.

Sir Keir Starmer, Labour leader, said his party’s victory in Yorkshire showed “just how powerful the demand for change is”. Labour has been out of power since Gordon Brown was ejected from Downing Street in 2010.

Want the inside track on British politics? Sign up for our Inside Politics newsletter to get the latest breakdown of UK politics and policy from the FT’s award-winning Stephen Bush.

Here’s what else I’m keeping tabs on today and over the weekend:

• Economic data: The UK publishes last month’s public sector borrowing and retail sales figures today, while Russia’s central bank issues its interest rate decision.

• Belgian National Day: Businesses and public institutions in Belgium, including the EU, are closed today.

• Spanish elections: The Vox party is expected to notch wins on Sunday, potentially bringing the hard right into central government for the first time since Spain’s return to democracy.

• Results: American Express, Danske Bank, Norsk Hydro, Schlumberger, Skanska and Thales Group report. Glencore has its first-half production report.

Five more top stories

1. Exclusive: An MEP identified last year as a key suspect in the Qatargate probe has yet to be questioned by prosecutors, according to leaked documents from the case. Maria Arena’s house was raided on Wednesday, more than a year after the Socialist politician was named by Belgian intelligence as part of a “criminal organisation” taking bribes for political favours.

2. Exclusive: A mansion in London’s Regent’s Park linked to Russian investor Andrey Goncharenko has been sold for £113mn to Indian billionaire Ravi Ruia in an off-market deal that underlines the continuing secrecy around the sales of Britain’s most expensive homes. Here’s more on the private sale of Hanover Lodge.

3. Exclusive: The Asian Infrastructure Investment Bank has secured a $1bn deal with the World Bank to issue credit guarantees against sovereign-backed loans made by the latter’s lending arm. The agreement is one of the Beijing-backed group’s highest-profile partnerships and comes just weeks after it was accused of being infiltrated by China’s Communist party. Read the full story.

4. The Nasdaq Composite fell 2.1 per cent yesterday in its biggest one-day drop in more than four months as investor disappointment with results from Netflix and Tesla called into question the strong, months-long rally in the tech sector. Read more in our markets briefing.

5. A shortage of Nvidia’s latest chips has provided start-ups with an opening to challenge the dominance of the world’s most valuable semiconductor company. Surging demand for the specialist chips that power artificial intelligence is expected to outstrip supplies well into next year. Here are the fledgling companies hoping to get a slice of the pie.

• More chips: Taiwan Semiconductor Manufacturing Company expects revenue to drop by 10 per cent this year, with the world’s biggest contract chipmaker warning of a deepening semiconductor slump.

How well did you keep up with the news this week? Take our quiz.

News in-depth

Nearly a year and a half into Vladimir Putin’s war on Ukraine, less than 300 of the more than 3,350 large foreign companies with assets in Russia have managed to leave. The situation for those that remain has taken a turn for the worse, with a dearth of buyers and hardening Kremlin attitudes. “This is like Venezuela,” a senior Moscow businessman said. “They’re giving the best to their cronies.”

We’re also reading and watching . . . 

Chart of the day

UK consumer confidence plummeted in July as the rising cost of borrowing and high prices hit people’s morale, according to data that recorded the largest drop in sentiment for more than a year.

Take a break from the news

Some cinemagoers are planning “Barbenheimer” double features this weekend to watch Greta Gerwig’s Barbie and Christopher Nolan’s Oppenheimer. But don’t miss these other films, including They Cloned Tyrone, a kooky comic sci-fi starring John Boyega, Jamie Foxx and a show-stealing Teyonah Parris.

Additional contributions by Benjamin Wilhelm and David Hindley