FirstFT: Keir Starmer pledges closer trade ties with EU

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We bring to you today an exclusive interview with Sir Keir Starmer, who has promised to seek a major rewrite of Britain’s Brexit deal in 2025 if his Labour party wins the next general election.

Starmer told the Financial Times that he would put a closer trading relationship with Brussels and a new partnership with business at the heart of his efforts to bolster Britain’s economic growth.

Britain’s Trade and Cooperation Agreement with the EU, negotiated by former premier Boris Johnson, is due for review in 2025 and Starmer said he saw this as an “important” moment to reset relations.

“Almost everyone recognises the deal Johnson struck is not a good deal — it’s far too thin,” he said. “As we go into 2025 we will attempt to get a much better deal for the UK.”

Starmer was speaking at a conference of centre-left leaders in Montreal. The trip was part of an effort by the Labour leader, whose party currently enjoys typical poll leads of 15-20 per cent over the ruling Conservatives, to present himself as a prime minister-in-waiting. Here’s more from his interview with FT political editor George Parker.

• Go deeper: The Global Progress Action conference, described in the UK media as a “lefty conclave”, is seen as a rite of passage for Starmer.

• UK taxes: British politicians need to be more honest about taxes as the country faces multiple challenges with weak public finances, writes Martin Wolf.

Here’s what else I’m keeping tabs on today:

• Economic data: Rightmove publishes its house price index for the UK.

• UK politics: Today marks the ninth anniversary of Scotland’s independence referendum. Elsewhere, former prime minister Liz Truss speaks on the state of the British economy at an Institute for Government online event.

• UK strikes: Hundreds of journalists who work for regional newspaper publisher National World are to strike over pay.

Five more top stories

1. Exclusive: Western companies have been blocked by Russia from accessing $18bn in profits generated in the country last year as the Kremlin looks to pressure “unfriendly” nations including the US, UK and EU members. Foreign companies trying to sell their Russian businesses need Moscow’s approval and face steep price discounts. Read the full story.

2. UBS is sounding out investors over issuing additional tier 1 bonds, a class of debt wiped out as part of its rescue of Credit Suisse six months ago. Some investors remain wary after bondholders lost billions of dollars during the takeover, damaging confidence in the market and triggering lawsuits. Here’s how the bank is trying to make future AT1 securities more palatable.

3. Germany is seeking to exempt thousands of smaller companies from EU green reporting rules, pushing Brussels to raise the threshold for defining small and medium-sized enterprises from 250 to 500 employees. The proposal would spare up to 8,000 Mittelstand companies from the recently adopted rules. Here’s why officials worry the move risks “gutting” the bloc’s environmental efforts.

4. The Bank of England is expected to raise interest rates by another quarter-point to 5.5 per cent this week, the highest level since early 2008, following a similar move by the European Central Bank last week. Although several rate-setters have come out to signal doubt over further rises, markets and economists are forecasting otherwise. Here’s why.

5. US national security adviser Jake Sullivan met Chinese foreign minister Wang Yi in Malta over the weekend, in an effort to stabilise bilateral relations ahead of a possible summit between the countries’ leaders. The two officials last met secretly in Vienna four months ago. Here’s what they discussed over the weekend.

The Big Read

US drug pricing reforms unveiled last month are poised to ease the financial burden for millions of Americans who struggle to pay for the drugs they need to stay alive. But the Biden administration’s reforms, which allow the government to negotiate lower prices for commonly used drugs, are bitterly opposed by the pharmaceutical industry, which says the changes are politically motivated and will cripple innovation.

We’re also reading . . . 

Chart of the day

Share buybacks in the US stock market have dropped to the slowest pace since the early stages of the Covid-19 pandemic as rising interest rates undermine the incentive for companies to purchase their own shares. Analysts say the slowdown is likely to mark the beginning of a longer-term trend that could put downward pressure on stock markets.

Take a break from the news

Monet gave us Impressionism and transformed the art world forever. But what about his personal life? Biographer Jackie Wullschläger reflects on the revolutionary painter’s inner life in this fascinating Weekend Essay.

Additional contributions from Benjamin Wilhelm.