Diplomats hold urgent talks to quell possibility of regional Mideast war

Good morning. Today we’re covering:

• Infosys’s $3.9bn tax bill

• Claims that Opus Dei recruited children

• How Kamala Harris is polling

But first we go to the Middle East, where US and EU diplomats are holding urgent discussions as they race to head off the threat of a full-blown regional war after Israel targeted Hizbollah and Hamas leaders in Beirut and Tehran.

Enrique Mora, one of the EU’s most senior diplomats, was holding critical talks with officials in Iran’s capital on Wednesday after the killing of Hamas’s political leader Ismail Haniyeh in Tehran, which was blamed on Israel, as Brett McGurk, the White House’s top official in the Middle East, held discussions in Saudi Arabia.

The western diplomatic pressure comes as fears over a broader regional conflict soared as Iran and Hizbollah separately vowed to avenge the attacks. Here’s what we know about how the talks are progressing.

• Instant insight: The killing of Haniyeh, shortly after he attended the swearing-in of Iran’s new president, has raised the stakes “at a highly sensitive moment”, writes Middle East editor Andrew England.

• Go deeper: Our reporters explain the different roles Haniyeh and Shukr played in the Jewish state’s long conflict with its neighbours — and the impact assassinations will have on the region.

What’s coming up today:

• China Army Day: The holiday marks the 1927 founding of the Chinese People’s Liberation Army. President Xi Jinping called for stronger borders ahead of the anniversary. (Reuters)

• US-China tariff increases: President Biden’s increased tariffs on an array of Chinese imports will go into effect. Affected products include electric vehicles and their batteries, computer chips and medical products.

• Bank of England rate decision: Investors are coming around to the view that the Bank of England is likely to cut interest rates today.

• Results: Mitsui, Mitsubishi Corp, Toyota, Tata Motors and Amazon.com are among the companies reporting today.

Five more top stories

1. The Bank of Japan has lifted its benchmark interest rate to 0.25 per cent and outlined plans to halve its monthly bond purchases, in a decisive move to tighten monetary policy.

2. Indian authorities have hit IT outsourcer Infosys with a $3.9bn tax bill, making it one of the latest of the country’s corporate champions to run afoul of government revenue collectors. Many large Indian and overseas corporations are being stung by backdated tax claims from officials in the world’s fastest-growing major economy. Read the full story.

3. China’s powerful data watchdog has proposed tighter controls over users’ online information. If enacted, the draft regulations could drastically extend authorities’ oversight over online behaviour, potentially covering everything from internet shopping history to travel itineraries.

4. Meta’s solid quarterly revenue and earnings growth and upbeat guidance sent shares up as much as 8 per cent, as the strength of its core advertising business offset Wall Street concerns over its heavy spending on artificial intelligence.

5. China’s manufacturing activity fell for a third consecutive month in July, according to an official survey yesterday, increasing pressure on policymakers to speed up stimulus measures to boost the world’s second-biggest economy.

Investigation

Dozens of former Opus Dei members have accused the Catholic group of recruiting children in recent years, challenging the organisation’s claims that it does not target minors. The group has 95,000 members worldwide, about a quarter of whom are celibate. Some former members told Antonia Cundy about how the alleged targeting impacted their lives.

We’re also reading . . . 

• China’s pragmatic AI plan: While the US ecosystem has the edge in groundbreaking innovations, China excels in execution, writes Jen Zhu Scott.

• North Korean refugees: New revelations have crystallised unease about contractual relationships people fleeing North Korea are sometimes asked to enter into with their rescuers.

• Cyber attack: After a three-year investigation, Germany has blamed China for a “serious” attack on its government agency for precision mapping in 2021.

• Races resume: Paris Olympic triathletes swam in the Seine after the water finally tested as safe for competition, following days of delays and fierce criticism of the event organisers.

Chart of the day

Ever since Joe Biden withdrew from the presidential race and endorsed Kamala Harris as the Democratic candidate, she has almost wiped out her party’s national polling deficit against her rival, according to an FT analysis of the latest data. See how she is polling in the battleground states.

Take a break from the news

For centuries, travellers have been captivated by the Dolomites and their uniquely jagged peaks. The south of Tyrol has long been a place of physical exertion, spiritual restoration and an escape from the stifling Italian summer heat. Jo Ellison reveals the other reasons why the region has gripped her heart.

Additional contributions from Georgina Quach and Irwin Cruz