Defence teams set to rake in report money as navy spending soars

Good morning. We begin the week with updates on hostilities within the Center East and Ukraine, together with a visible deep dive into Ukraine’s Kursk incursion.

The conflicts have led to a surge in money for the defence trade, which is benefiting from a pointy enhance in authorities orders for brand spanking new weapons, our prime story exhibits.

The world’s main 15 defence contractors are forecast to log free money circulate of $52bn in 2026, in response to evaluation by Vertical Analysis Companions for the Monetary Occasions — nearly double their mixed money circulate on the finish of 2021. 

In Europe, nationwide champions BAE Methods, Rheinmetall and Sweden’s Saab, which have benefited from new contracts for ammunition and missiles, are anticipated to see mixed money circulate soar by greater than 40 per cent. Right here’s how the trade might spend its report ranges of money.

• Defence start-ups: Y Combinator, the San Francisco incubator that launched Airbnb, Reddit and Stripe, is backing a weapons firm for the primary time.

Right here’s what else I’m holding tabs on right this moment:

• Financial information: Ifo publishes its enterprise local weather index for Germany, whereas Spain releases its July producer value index.

• Markets closed: England, Wales and Northern Eire observe the summer time financial institution vacation.

Thanks for studying. Do you’ve questions on right this moment’s information on the defence trade, or about FirstFT? E mail us at firstft@ft.com or hit “reply” and bear in mind to incorporate your identify and the place you’re writing from. We’ll reply as many as potential in a particular weekend version of the e-newsletter.

5 extra prime tales

1. Israel’s navy launched a wave of air strikes in southern Lebanon yesterday in what it mentioned was an try to foil an “extensive attack” by the Hizbollah. The sharp escalation of hostilities between Israel and the Iran-backed militant group was their greatest alternate of fireside since they fought a 34-day warfare in 2006.

2. Telegram says its chief govt Pavel Durov “has nothing to hide” after he was arrested in France, prompting criticism from Russian lawmakers. The Russia-born billionaire, a twin French-Emirati citizen, was arrested on the Paris-Le Bourget airport after French authorities started a preliminary probe into whether or not a lack of moderation on his platform had facilitated felony exercise.

• Warfare in Ukraine: A member of a Reuters information workforce was killed and two others have been injured after a Russian missile assault on their resort within the jap Ukrainian metropolis of Kramatorsk.

• Russian finance: A fancy scheme to swap Russian and western buyers’ frozen belongings has met lower than 10 per cent of the Kremlin’s authentic goal.

3. Central bankers left their Jackson Gap gathering cautiously hopeful a few smooth touchdown for the economic system as they now flip their consideration to reducing borrowing prices. The heads of each the Federal Reserve and the Financial institution of England signalled they have been nonetheless heading in the right direction to keep away from a world recession. However right here’s why challenges stay to appropriately pacing fee cuts.

4. Unique: Ikea has launched a peer-to-peer market for secondhand furnishings to tackle the likes of Ebay, Craigslist and Gumtree. The platform will likely be examined in Madrid and Oslo till the tip of the yr with the purpose of rolling out the shopping for and promoting platform globally. Right here’s what Ikea Preowned means for the Swedish retailer.

5. China’s tech giants have doubled capital spending this yr as they splurge on AI infrastructure regardless of US sanctions. Alibaba, Tencent and Baidu mentioned the main target was on shopping for processors and {hardware} associated to powering the coaching of huge language fashions for synthetic intelligence. Learn the complete story.

• US-China relations: After a Chinese language spy balloon flew over the US final yr and despatched ties to a low level, a secret backchannel stabilised relations. The Monetary Occasions reveals how this channel happened and the particulars of the way it operated.

Visible story

For months, Ukrainian forces had been dropping floor to Russia and morale was low. Then on August 6, they blasted by the border to grow to be the primary international military to grab Russian territory for the reason that second world warfare. In 10 days Kyiv’s forces turned the tables, remodeling the Kursk area right into a warfare zone. Our newest visible story explores how they pulled off a spectacular counterpunch towards Moscow.

We’re additionally studying . . . 

• Rise of ‘the rest’: An rising market revival has begun, writes Ruchir Sharma, however buyers have but to take heed of the dramatic international implications.

• Nuclear arms race: The world’s nuclear non-proliferation regime is underneath better stress than at any time for the reason that finish of the chilly warfare, the pinnacle of the UN’s watchdog advised the FT.

• Société Générale: Shares have fallen 19 per cent since chief govt Slawomir Krupa introduced his technique of specializing in capital slightly than development.

• Nigerian scams: The nation is eager to assist international regulation enforcement crack down on on-line “sextortion” after greater than 63,000 faux Instagram and Fb accounts have been eliminated.

Chart of the day

Mining bosses have warned towards plunging into the M&A market and repeating errors of the previous as forecasts mount that the trade is on the verge of a dealmaking growth. “I have no fomo,” Rio Tinto’s chief advised the FT, referring to the concern of lacking out on offers.

Take a break from the information

What occurred to having a “brat” summer time, the temper set by Charli XCX’s chartreuse-coloured album of the identical identify? Now everybody’s speaking about being “very demure, very mindful”. TikTok memes could also be foolish, writes Jo Ellison, however they’re the nice social emollient of our instances.

Further contributions from Benjamin Wilhelm