How would a President Harris make her mark on the US economy?

Today’s top stories

• France suspended high-speed rail services across much of the country after the network was hit by sabotage attacks hours before the Olympic Games opening ceremony. Brasseries, shops and other small businesses in Paris are suffering a sharp drop in sales as footfall dwindles before the Games get under way.

• US inflation fell to 2.5 per cent in the year to June, according to the Federal Reserve’s preferred measure of inflation, keeping the central bank on course for at least one interest rate cut this year. 

• UK chancellor Rachel Reeves is expected on Monday to reveal a £20bn hole in the public finances thanks to what she says is a failure of the previous administration to properly run the government finances. 

For up-to-the-minute news updates, visit our live blog

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Good evening.

It’s been another momentous week in US politics. 

It began with Democrats downcast as President Joe Biden quit his bid for re-election while his rival Donald Trump rode high in the polls after surviving an assassination attempt. It ended with Biden’s replacement Kamala Harris re-energising the party and getting a bump in the polls to boot. But what would a Harris presidency mean for the economy and business?

As Biden’s vice-president, Harris has been a strong supporter of his efforts to bring down inflation and has said bringing down the price of petrol and other daily costs was a “top priority”.

She has also championed Biden’s efforts to boost infrastructure investment and speed up the transition to greener energy. She has focused particularly on the care economy, pushing access to affordable childcare and a better deal for the elderly. She also backed tax credits for people on lower incomes and higher taxes on the wealthy.

On trade Harris has insisted she’s “not a protectionist Democrat” but has come out against deals such as the Trans-Pacific Partnership because of a lack of environmental protections. She is however strongly opposed to Trump’s plans to impose across-the-board tariffs, arguing that the levies would hurt consumers.

Among her senior economic advisers are Mike Pyle, formerly of BlackRock and a key player in industrial policy, and Deanne Millison from Ford, an advocate for small business. (You can read more in our Who’s Who on Team Kamala).

Harris has plenty of backers on Wall Street, including veteran dealmaker Blair Effron and Blackstone president Jonathan Gray, while tech allies include Microsoft’s Brad Smith and Sheryl Sandberg, formerly of Meta. She also has plenty of support in Hollywood (as well as being a California native, her husband Doug Emhoff is a well-regarded entertainment lawyer).

Dealmakers meanwhile have been adjusting their bets since JD Vance was confirmed as Republican vice-president candidate and Harris as the Democrat nominee. 

As well as being the continuity candidate, many prefer Harris for her considered approach over the anti-corporate, populist and isolationist rhetoric voiced by Vance. Some even think she may replace Lina Khan as Federal Trade Commission chief for someone more deal-friendly, particularly when it comes to antitrust issues.

Harris’s confident start has given her a boost in the polls, and while she continues to collect endorsements, including today’s belated backing from the Obamas, she still faces an uphill struggle to defeat Donald Trump, according to new analysis from the FT’s John Burn-Murdoch.

“Harris is a much stronger candidate than Biden was, but in an election held today, she would still lose,” he writes. “To win in November she must walk the tightrope to win over the remaining undecideds without alienating others along the way.”

Harris’s next big move is her pick for running mate. The favourites are a trio of governors: Pennsylvania’s Josh Shapiro, Michigan’s Gretchen Whitmer and Kentucky’s Andy Beshear. US national editor Edward Luce in today’s Swamp Notes newsletter (for Premium subscribers) argues however that the wise choice would be Pete Buttigieg, Biden’s transportation secretary.

Need to know: UK and Europe economy

The new UK government unveiled a partnership between the state-owned GB Energy and the Crown Estate, which manages the monarch’s legacy portfolio of land and seabed, to accelerate the building of offshore wind turbines.

Our latest Big Read examines Russia’s booming consumer economy. Heavy state spending and labour shortages have led to soaring real wages but economists think the party could soon be over.

Separate surveys in France and Germany suggested business confidence has fallen sharply, raising fears that the Eurozone’s two largest economies are heading for a downturn.

Need to know: Global economy

The US economy grew at a much better than expected 2.8 per cent in the second quarter, a significant jump from the 1.4 per cent in the previous three months.

China’s young are seething at a proposal to raise the retirement age.

Bangladesh’s garments industry is in chaos after authorities imposed a curfew and communications blackout as part of a crackdown on student protesters, forcing factories to shut and disrupting shipments from the world’s second-largest clothing exporter.

Indonesia is trying to reduce Chinese investment in new nickel projects to help its industry qualify for tax breaks in the US. The country has become the world’s biggest supplier thanks to a huge influx of Chinese capital.

Do Taylor Swift’s concert tours really add hundreds of millions to a country’s economy? The misconception highlights our tendency to value what we see, over what is hidden, writes FT leader writer Tej Parikh.

Need to know: Business

The EU’s drug regulator rejected a breakthrough Alzheimer’s treatment by drugmakers Eisai and Biogen, warning about rare brain swelling side-effects.

OpenAI launched SearchGPT in a challenge to Google’s $175bn a year search business. It was developed with feedback from publishers that OpenAI has recently signed deals with, including News Corp and the Financial Times.

The European Central Bank found “shortcomings” in banks’ ability to withstand cyber attacks in its first review of their resilience.

Falls in profits at Stellantis and Nissan, two of the biggest car manufacturers, fuelled fears that the global industry was heading for a downturn. Both blamed increasingly cut-throat competition in the US and slowing sales of electric vehicles.

A bitter legal war has broken out among the Murdochs after media baron Rupert Murdoch moved to hand control of his family trust to his eldest son, Lachlan.

American and Southwest Airlines became the latest carriers to slash profit forecasts. Across the industry, ticket price falls driven by surplus capacity have added to fears that the “revenge travel” era is drawing to a close.

Science round-up

The number of workers suffering from the “silent killer” of extreme heat in Europe and central Asia has increased by almost a fifth since 2000, the UN said as the world this week experienced its hottest days. The global average surface temperature hit 17.16C on Monday.

The world’s oceans have absorbed 90 per cent of excess heat and a quarter of human-caused carbon dioxide emitted during the industrial era. A Big Read discusses whether they could be reaching their limits in their vital role of protecting the planet.

Ocean floor metals coveted by mining companies can electrically produce “dark oxygen”, according to new research that will stoke debate over the impact of seabed commercialisation.

Artificial intelligence has helped deliver a breakthrough in accurate long-range weather and climate predictions. A model led by Google called NeuralGCM successfully harnesses AI to conventional atmospheric physics models to track decades-long climate trends and extreme weather events.

AI breakthroughs are also creating new “brains” for advanced robots that could transform healthcare and manufacturing.

In more discouraging AI news, new research highlights how the use of computer-made “synthetic data” to train AI models could lead to nonsensical results.

GSK’s Shingrix vaccine for shingles is the latest drug to show potential for targeting previously untreatable brain disorders such as dementia.

Some good news

A child who had to have her eye removed as the result of a rare cancer has been fitted with a specially designed prosthetic using the latest 3D technology by hospital specialists in Liverpool.