FirstFT: Liz Truss looks for allies

Liz Truss will attempt today to rally Conservative MPs behind her faltering leadership at a party conference that has descended into acrimony, cabinet infighting and confusion.

Truss, who has been prime minister for less than a month, will urge her party in a 30-minute speech to unite behind her tax-cutting economic policy, which has spooked markets and sent Tory polling into freefall.

“We cannot have any more drift and delay at this vital time” — Liz Truss

The prime minister was forced on Monday to axe a plan to scrap the 45p top rate of tax by rebel Tory MPs, prompting home secretary Suella Braverman to accuse her colleagues of staging “a coup”.

Dissent broke out again yesterday after Truss refused to commit to uprating benefits in line with inflation next year, reversing a promise by her predecessor Boris Johnson.

Chancellor Kwasi Kwarteng’s “mini” Budget sparked a run on the pound and has sent borrowing costs spiralling. The £39bn Pension Protection Fund was forced to provide £1.6bn as additional security for derivative-linked investment strategies during last week’s market turmoil.

Helen Thomas argues that the hidden risks revealed by the pensions implosion may prompt “buyout” deals that shrink the world of defined benefit schemes.

Five more stories in the news

1. Elon Musk’s U-turn on Twitter The Tesla chief executive has offered to go ahead with his deal to buy Twitter for the initially agreed price of $44bn, potentially putting an end to one of the highest-profile corporate legal battles in decades less than two weeks before a scheduled trial. Catch up on the saga here.

Should Twitter go ahead with the deal? Vote in our poll or share your thoughts with me at firstft@ft.com — Jennifer

2. Ukraine faces critical battle in south before winter US officials and lawmakers have warned that Ukraine must capitalise on its momentum in the east to push back Russian forces in strategic southern regions before winter brings treacherous conditions if it is to deny Russia a chance to solidify its hold.

3. UK plans for more short-term overseas workers Liz Truss is drafting plans to make it easier for multinationals to transfer talented overseas staff to the UK for short-term placements as employers complain about post-Brexit labour shortages.

4. Global accounting firms warned over local affiliates The biggest accounting firms have been told to expect tougher scrutiny from US regulators of their use of overseas affiliates, as concerns grow about substandard audit work in China and elsewhere.

5. Ray Dalio hands over reins at Bridgewater The 73-year-old billionaire has given up control of the hedge fund he founded, Bridgewater Associates, ending a drawn-out transition of power that had come to define the industry’s succession problems. Dalio will remain on the board as founder and CIO mentor.

The day ahead

Opec+ output cuts Riyadh, Moscow and other oil producers are set to announce deep production cuts as the Opec+ cartel meets in Vienna, according to people with knowledge of the discussions, in a move that is likely to draw US countermeasures to keep prices down.

German-Spanish summit Chancellor Olaf Scholz and Prime Minister Pedro Sánchez will hold a summit to strengthen bilateral relations in the Galician harbour of A Coruña.

UK rail strikes Aslef union drivers at 12 train operating companies are to stage another co-ordinated 24-hour walkout in a dispute over pay and working conditions, bringing disruption across the country’s rail network.

Economic data S&P Global/IHS Markit services purchasing managers’ indices are out for France, Germany, Italy, the UK and the US. Poland’s central bank is expected to raise its main interest rate 25 basis points to 7 per cent. The US Commerce Department reports the August trade deficit, after it shrank 12.6 per cent in July from the month before. (FT, Reuters, WSJ)

Nobel Prize in chemistry The award will be announced in Stockholm, Sweden. Yesterday, three scientists won the prize in Physics for translating the predictions of quantum theory into the foundations of a practical discipline in information and communications technology.

What else we’re reading

Germany’s ‘double ka-boom’ on energy When Berlin announced a bazooka-sized €200bn energy support package for households and businesses last week, it did not intend to start a volley of intra-EU friendly fire. But that is what ensued. Now, Berlin risks undermining the bloc’s unity, writes our editorial board.

Five ways Kwasi Kwarteng can reduce UK debt Getting the government’s books to add up and reduce debt over the medium term will be difficult. FT economics editor Chris Giles outlines the routes to fiscal discipline Chancellor Kwasi Kwarteng could take, from reversing more tax cuts to reducing public spending.

Airports vs airlines No one loves airports. Passengers begrudge waiting for check-in, baggage drop and security. And investors are aggrieved because their stakes seem less stable and low risk than a few years ago. Increasing costs and environmental restrictions demand a different perspective, writes Peggy Hollinger.

French left’s #MeToo moment The admission from far-left MP Adrien Quatennens that he hit his wife during their break-up has drawn scrutiny to the opposition alliance’s handling of misconduct allegations and triggered a round of infighting just as it was gunning to challenge President Emmanuel Macron.

Can China rebuild its growth model? China is facing diminishing returns after relying for years on growth being propelled by a debt-fuelled real estate investment boom. Can leader Xi Jinping revive the economy by encouraging more consumer spending, while ceding some political control? This is the second part in a series about China’s property market crash.

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