The economic slowdown in the UK and Europe was highlighted by survey data

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Today’s top stories

• China’s leaders have pledged to stimulate consumer spending, tackle unemployment and provide more support to the ailing property sector as the world’s second-largest economy makes a „brutal” recovery from the pandemic. However, more encouraging promises for the second half of the year were light on details.

• Spain has been plunged into political uncertainty after Sunday’s general election after the right and left failed to win enough votes to form a government. Conservative mistakes helped current Prime Minister Pedro Sánchez, who warned that conservatives and right-wing nationalists would drag the country backwards. The FT editorial board said the hard-right Vox’s poor result was positive for the country’s democracy.

• Twitter boss Elon Musk rebranded the social media platform as X and dispensed with its famous bird logo. Renaming in the FT Lex column has generally annoyed and confused customers, but as new names go, X was better than most.

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As central banks mull the next move on interest rates to curb inflation, new data highlight growing strains in the global economy today.

A flash assessment for the eurozone indicated that the economic downturn deepened at the start of the third quarter, prompting calls for the European Central Bank to end its interest rate hike plan later this week.

The Purchasing Managers’ Index score of 48.9, where 50 marks the division between expanding and contracting business activity, was the lowest in eight months, worse than a forecast decline in both manufacturing and services, which posted the first drop in new orders in seven months. Business confidence also fell but inflationary pressures eased. The euro fell following the data release.

The country-level data is reported The German economy is shrinking As the manufacturing outlook darkened, there was a slowdown in services activity. France experienced it A sharp contraction in business activities From November 2020.

In the UK, PMI data showed a firm slowdown in business growth as rising interest rates hit consumer spending and manufacturing woes deepened. The headline PMI score fell to 50.7 in July from 52.8 in June, while services output hit a six-month low of 51.3 and manufacturing shrank to 46.5. The data pushed the pound to a two-week low against the dollar.

Chris Williamson, chief business economist at S&P Global Market Intelligence, which publishes the index with Chartered Procurement and Supply, said the data showed the UK economy was „close to a standstill”. As rising interest rates and higher living costs „appear to be taking a toll on households,” manufacturers have cut production in response to a „worryingly sharp drop in orders” in domestic and export markets, Williamson said.

The PMI reading complicates the task of Bank of England officials contemplating the next move on interest rates next week after the latest official data suggested a stronger-than-expected economic slowdown.

In the US, the headline PMI score of 52.0 showed business activity still rising, but fell to 53.2 last month. The service sector continued to grow At a slower rate. Business confidence about the coming year also fell.

Williamson said: „The gloomier picture adds to downside risks to manufacturing growth in the coming months, which could slow the pace of expansion in July and keep alive fears that the US economy could be headed for another downturn before the end of the year.”

The Federal Reserve is expected to raise interest rates by another quarter of a percentage point on Wednesday, but investors will be watching for clues from Chairman Jay Powell on whether the hike will be the last of its 16-month monetary policy tightening campaign.

Need to know: UK and Europe economy

Prime Minister of England Rishi Sunak He indicated that he was prepared to soften his Tory party’s Green policies to create a dividing line with the opposition Labor Party. An FT Big Read examines how warming temperatures are reshaping global economies.

Airlines and travel operators operate special flights for tourists forest fire The fire also spread to the Greek island of Rhodes and Corfu. Tourism executives, however, played down the long-term impact of fires and extreme weather in Europe this summer. Workers at London Gatwick Airport have called off some of their strikes.

Germany It has become Europe’s ground zero for gangs who blow up cash machines. Dutch-dominated groups have a fragmented banking system and decentralized police force – and Germans prefer cash to cards or digital payments.

UK care home operators Rising food and fuel prices and rising mortgage rates on top of fiscal deficits are under severe pressure.

Need to Know: World Economy

China It is stepping up efforts to assuage foreign investors’ concerns about slow growth and business uncertainty. Its financial regulator is trying to woo some of the world’s biggest private equity groups, while its commerce ministry has pledged to reduce business disruptions. Work is drying up for US consultancies in the country after recent national security crackdowns.

Lack of detailed explanations of amendments Chinese economic data This disappoints global investors at a time when the country’s revival is seen as vital to global economic growth.

IsraelThe benchmark stock index sold off and the shekel fell against the US dollar after the country’s parliament enacted a measure to limit the power of the Supreme Court. Some of Israel’s biggest businesses have said they will go on strike in protest.

Argentina It is set to introduce tax and monetary measures to weaken the peso as part of an agreement with the IMF to release delayed tranches of a $44bn loan plan. The government hopes the long-awaited opening of a gas pipeline from Patagonia to Buenos Aires will herald a lucrative future for international energy sales.

Rich Americans A rebound in consumer spending, particularly on hotels and airfares, is driving the rebound, but inflation is starting to take its toll on the previously resilient group.

Need to Know: Business

Barbie And Oppenheimer Delivered a strong opening weekend at to us Cinema Box Office This year fans rushed to experience the „Barbenheimer” event. Columnist Rana Furuher says the Barbie brand is a rare winner in the country’s corporate culture wars.

RyanairIts profit almost quadrupled to €663mn in the second quarter, boosted by higher ticket prices and growing demand. However, Boeing delivery delays and an uncertain winter ahead have forced the low-cost airline to lower passenger forecasts.

Group 14A US battery start-up is aiming to start silicon production in Germany, as the motor industry’s demand is less dependent on China.

British Berry farmers It accused supermarkets of pocketing profits from higher soft fruit prices and failing to properly compensate producers hit by increased business costs.

UK Banks They are beating global rivals in offering interest rate benefits to savers. Ministers are set to introduce new rules to stop companies „de-banking” after a row over free speech.

The world of work

There are Tattoos Now so thoroughly mainstream that even the most buttoned-up bosses don’t protect them anymore? According to columnist Philita Clark, a turning point in the work is clear.

Some good news

Sydney, once at the center of the Australian AIDS epidemic, has virtually eliminated HIV transmission, raising hopes of defeating a disease that has killed more than 40 million people worldwide. The drop in diagnoses is at an all-time high in the former hotspot and adds to evidence that prevention strategies are working.