FirstFT: Starmer to talk post-Brexit EU relations at Davos

UK opposition leader Sir Keir Starmer will today tell the world’s financial elite in Davos that he wants to improve Britain’s relations with the EU, declaring the post-Brexit trade deal is damaging the UK economy “as every day passes”.

Starmer and Rachel Reeves, shadow finance minister, told the Financial Times they would rebuild the UK economy “on the rock of fiscal and financial responsibility” and through closer trade with the EU.

The Labour party leader has ruled out taking Britain back into the EU or the single market but said the Brexit deal negotiated by former prime minister Boris Johnson in 2019 was deeply flawed. “It isn’t half baked. It isn’t baked. It didn’t work.”

Starmer will travel with Reeves as “ambassadors for the UK” to the World Economic Forum in Switzerland, in an example of Labour’s embrace of global capitalism. They also want to present a more optimistic vision for a country hit by strikes and sluggish growth.

Other news out of Davos:

• Brazil reforms: Finance minister Fernando Haddad tells Financial Times editor Roula Khalaf and Anne-Sylvaine Chassany that Brazil’s president will recalibrate the pace of reforms after the nation’s government offices were stormed this month.

• Taiwan tensions: Philippine president Ferdinand Marcos Jr talks to Gideon Rachman about his concerns on the rise in US-China tensions over Taiwan.

• Capitalism is not dead: Rumours of the demise of international business and trade have been exaggerated, writes Martin Wolf.

Tune in to the Davos Daily Show, hosted by the FT’s Andrew Hill, from 12pm GMT January 17-19. Register here for free.

Five more stories in the news

1. Ardern to stand down Jacinda Ardern, New Zealand’s prime minister since 2017, will not seek re-election this year, saying she no longer has the energy to continue in the role. A new premier is expected to be in place by February 7, with the Labour caucus set to vote this weekend on a new party leader.

2. Dollar touches 7-month low The US dollar touched a seven-month low against a basket of currencies yesterday, as lower expectations of sharp Federal Reserve rate rises eased pressure on global markets. The fall, one of the steepest since the aftermath of the global financial crisis, came as US retail sales showed a bigger than expected drop last month.

3. Xi warns of Covid ahead of lunar new year Xi Jinping has expressed concern about the spread of Covid-19 to rural China, in the president’s most direct acknowledgment of the worsening health crisis since abandoning his zero-Covid strategy last month. Experts have warned that upcoming trips for lunar new year, considered the world’s biggest annual human migration, could become a superspreader event.

4. Thiel’s fund wound down bitcoin bet before market crash Founders Fund, the venture capital firm co-founded by billionaire Peter Thiel, closed almost all of its eight-year bet on cryptocurrencies shortly before the market began to crash last year, generating about $1.8bn in returns.

• Opinion: The clowns of cryptoland haven’t given up, writes Jemima Kelly. As a new venture raises funds to allow customers to trade crypto bankruptcy claims, Kelly reflects on the business’s moral bankruptcy.

5. With support cut, UK SME confidence plummets About one-third of small to medium-sized enterprises feel less confident in their ability to grow this year. According to a recent survey by the Association of Chartered Certified Accountants and the Corporate Finance Network, the number of SMEs planning to expand has also halved from last summer, in a sign of spreading pessimism.

The day ahead

Economic data The UK releases labour productivity numbers, and RICS publishes its house price survey for the country. The US has initial jobless claims, and Brazil reveals its unemployment rate.

Ukrainian billionaire in court Kostyantyn Zhevago, who controls London-listed iron pellet producer Ferrexpo, is due to appear at the court of appeals in Chambéry, in south-east France, following Ukraine’s request to extradite him. The businessman is wanted on suspicion of embezzlement and money laundering.

US debt ceiling The US is expected to hit its $31.4tn borrowing limit today, with the Treasury pledging to take “extraordinary measures” to avoid a default. Here’s what you need to know.

ECB minutes The European Central Bank publishes the minutes from its December meeting.

UK strikes Nurses stage a second day of walkouts, while unions warn that industrial action by ambulance workers could continue until Easter.

Corporate results British online fashion retailer Boohoo, gold miner Centamin, food delivery company Deliveroo, Netflix and Procter & Gamble report. Other companies with results include Kier, Northern Trust, Premier Foods, Sage and Workspace Group.

What else we’re reading

Can Britain realise its nuclear ambitions? The energy crisis from Russia’s war on Ukraine has shown the spotlight on a power source that has fallen in and out of public and political favour. New investment in nuclear energy would allow the UK to reduce its reliance on dirty gas-fired power plants, but financing remains uncertain.

No way back on N Ireland There is no path back to a pre-Brexit Northern Ireland, writes Robert Shrimsley, and only when the ultras and unionists have accepted this will there be hope for a deal everyone can swallow. The EU must help UK prime minister Rishi Sunak face down hardliners to break the logjam.

Russia’s oil woes Russia last year weathered the impact of energy sanctions and gas export cuts to Europe. But 2023 will be a lot tougher, with lower energy prices and bigger discounts on Russian crude — underpinned by the $60-a-barrel G7 price cap. Kremlin economists now worry about the risk to Russia’s financial health.

Backers plan $3.3mn spend on White House hopeful An outside group supporting Ron DeSantis is planning to spend $3.3mn over the next six months to boost his national profile, adding to expectations that the Florida governor will challenge Donald Trump for the Republican presidential nomination next year.

Financial advice should be simpler and cheaper In the UK, 20mn people — or 39 per cent of adults — feel they would benefit from free advice but are unaware of or are unable to access free services. With millions needing financial advice, the Financial Conduct Authority has done little to address this issue, writes Emma Dunkley.

Take a break from the news

Beef is a serious business in South Korea: local butchers typically identify 120 different cuts (as opposed to the western 20 or 30) that run from the tenderloin to obscure parts of the tail. Hanwoo beef is considered the most luxurious of its offerings, but although renowned in South Korea it is less known abroad. Does Hanwoo stand to be the next Wagyu steak?