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Today’s top stories

• Foreign secretary James Cleverly rejected calls to designate Beijing a ‘threat’ while US commerce secretary Gina Raimondo warned that US companies are beginning to see China as “uninvestable”.

• Ukrainian drones destroyed several military cargo planes inside Russian territory in Kyiv’s most sweeping unmanned aerial attack since Moscow invaded last year.

• Hurricane Idalia is causing a “catastrophic storm surge” in Florida with wind speeds hitting 130mph.

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

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Good evening. The European Central Bank looks increasingly likely to raise interest rates next month as consumer prices rise in Spain and Germany, demonstrating that inflation continues to threaten the eurozone.

That’s according to investors after Spanish inflation hit a three-month high in August, accelerating to 2.4 per cent, up from 2.1 per cent in June.

Meanwhile, in Germany the harmonised index of consumer prices rose 6.4 per cent in the year to August, down from 6.5 per cent in the previous month. This was less than the slowdown of 6.2 per cent predicted by economists in a Reuters poll.

It comes after German wages rose at a record annual pace of 6.6 per cent in the second quarter, boosting consumer spending power.

Overall, inflation in the eurozone is expected to fall from 5.3 per cent in July to 5.1 per cent when August data is released tomorrow. Policymakers will continue to watch the core rate of inflation.

The German government has also rejected a proposal to subsidise power prices for energy-intensive industries in a setback for Green economy minister Robert Habeck, who had argued that high energy costs were damaging the competitiveness of German companies. Business groups have warned this could prompt an exodus of manufacturing to countries with lower energy costs.

While the rate of price increases is moderating in Europe, and has slowed sharply in the US, Federal Reserve chair Jay Powell and president of the European Central Bank Christine Lagarde were clear last week that it is far too early for central bankers to relax.

The FT’s economics editor Chris Giles dives into the five global economic shifts challenging central bankers and policymakers now, including variations in the labour market and the US budget deficit.

Meanwhile, Italy’s long-suffering economy has been given a sizeable cash injection by the EU-funded post-pandemic economic recovery plan. The £191.5bn from the EU is intended for rejuvenation plans including the construction of 206km of new green public transport infrastructure in 16 cities. But locals remain sceptical that the opportunity will be squandered.

Need to know: UK and Europe economy

UK mortgage approvals fell more than expected in July, dropping by almost 10 per cent from 54,6000 in June to 49,400, according to the Bank of England.

Drought, leaky pipes and poor policy are contributing to a European water crisis with a quarter of all drinking water lost during distribution. On a global basis, fresh water demand is set to outstrip supply by 56 per cent by 2030.

Renewable energy company Ørsted’s shares fell by 19 per cent after the Danish company announced large writedowns on US offshore wind projects due to supplier delays. Meanwhile, the wind power industry’s race for bigger turbines has prompted experts to urge growth slowdown and greater standardisation.

The EU is set to import record volumes of liquefied natural gas from Russia this year, despite aiming for the bloc to wean itself off Russian fossil fuels by 2027.

German media giant Bertelsmann has reported increased revenues despite an advertising slump at its broadcast network RTL. Revenues grew 4.5 per cent year-on-year to €9.7bn in the first six months of 2023.

Need to know: Global economy

Goldman Sachs has bought a series of UK and US companies using Chinese state funds. The $2.5bn private equity “partnership fund”, which was set up in 2017 with the sovereign wealth fund China Investment Corporation, provided cash for seven deals including a cyber security business serving the British government.

Russia displays many of the symptoms of a wartime economy, such as inflation, labour shortages, rising government expenditure and deficit financing. The FT’s European comment editor Tony Barber looks at what economic moves Russia might make next.

Military officers in Gabon say they have seized control in the oil-rich African country just hours after its long-serving president Ali Bongo had been declared the winner of Saturday’s election.

Need to know: business

UK motor insurer Direct Line has appointed Adam Winslow as chief executive, poaching him from rival Aviva, as it seeks to recover from a string of profit warnings amid spiralling inflation in claim costs.

China has tightened its rules on data provision in the money brokering industry, citing “national security” concerns. Five regulatory bodies urged brokers who provide data to companies to set up data security governance systems to protect “public interest”.

Danish toymaker Lego has suffered its worst fall in profits in almost two decades after its pandemic popularity ended abruptly. Operating profits dropped 19 per cent to DKr6.4bn, their biggest fall since at least 2004.

The World of Work

Can the morning routines of CEOs like Jamie Dimon set you up for success? These might include rising at 5am, meditating or taking an ice bath.

Why only study when young, and wait years before running a big company? In his new book, sociologist Mauro Guillén argues that a new group, the perennials, are pushing society to the brink of a postgenerational revolution in which age no longer dictates our activity.

Many workers are ditching their long-term careers to pursue counselling qualifications and retrain as therapists, with the president of the European Association for Psychotherapy Irena Bezic calling counselling “the profession of the century”.

In the latest episode of Working It podcast, the FT’s Isabel Berwick asks whether Fridays in the office are dead.

Some good news

Keepers at Marwell Zoo in Hampshire were delighted this week with the birth of one of the rarest mammals on the planet, a critically endangered African wild ass.