French left and centrist candidates pulled from run-off vote to fend off far right

Good morning. We begin with France, where leftist and centrist parties have pulled hundreds of candidates from Sunday’s high-stakes election in a co-ordinated attempt to keep the far-right Rassemblement National out of power.

By yesterday evening’s deadline, more than 200 third-placed candidates from the left and centre had dropped out as their parties sought to avoid splitting the anti-RN vote and decrease the likelihood of it achieving an absolute majority.

The figure, based on Le Monde data, represents more than two-thirds of the three-way races produced by last weekend’s first-round vote.

“An absolute majority seems very unlikely, though we’ll need to conduct a poll to be sure,” said Mathieu Gallard at Ipsos, the pollster. But he added that it remained “very, very likely” that the RN would win the greatest number of seats. Read more on the RN’s prospects following the move.

Here’s what else I’m keeping tabs on today:

• Economic data: S&P Global releases the composite purchasing managers’ index for the Eurozone and services PMI for Italy, France, Russia, Germany, the UK and US.

• Central banks: ECB president Christine Lagarde gives closing remarks at a central banking forum in Portugal. The Federal Open Market Committee releases minutes from its June meeting.

• Shanghai Cooperation Organisation: Members of the regional security group meet in Kazakhstan, with Xi Jinping and Vladimir Putin attending the summit.

Don’t miss our Europe Express newsletter, which will be free to read for the next few weekends as we break down the French elections and what it means for the region (also available en français).

Five more top stories

1. Exclusive: Brussels is drawing up plans to impose customs duties on cheap goods bought from Chinese online retailers including Temu and Shein in an effort to stem a surge in what the EU says are substandard items coming from China. The European Commission will suggest scrapping a current €150 threshold under which items can be bought duty free. Other measures are also under consideration.

2. Joe Biden is facing renewed pressure from within his party to end his re-election bid after Texas congressman Lloyd Doggett called on him to drop out of the US presidential race. The lawmaker’s statement comes ahead of a Democratic state governors’ meeting today at the White House, where they are expected to discuss Biden’s candidacy.

3. Blackstone has become one of the biggest buyers of a type of bank loan that has become a lifeline for private equity, exposing the company to risks generated by its own business. The world’s largest buyout group, which manages more than $1tn in assets, has in the past year emerged as a big investor in risk transfer products that are underpinned by short-term loans used by private equity fund managers to close deals.

4. China is demanding acts of loyalty from its young professionals living and working in the US, sometimes putting them at odds with local law and immigration requirements, as it seeks more control over expatriates. The demands are increasingly being placed on Chinese nationals who joined the Communist party as students or young professionals. Read more on Beijing’s directives.

5. Exclusive: Some rich individuals in the UK are selling assets such as shares and property in preparation for an incoming Labour government that they fear would increase capital gains tax, according to several wealth managers. Shadow chancellor Rachel Reeves has said her party has no plans to raise CGT, but she has refused to rule out increasing the levy during a Labour government’s full term.

• Labour’s ‘data nerd’: Morgan McSweeney has been driving the party’s ruthless election campaign and is already laying the ground for a potential second term.

• Prison overcrowding: A likely Labour government would have to grapple with jails nearing “breaking point” within days of the general election, the head of the prison governors’ union has warned.

The Big Read

From oranges in Brazil to coffee in Vietnam, permanently shifting weather patterns as a result of climate change are reducing crop yields, squeezing supplies and driving up prices. Food price rises once considered temporary are becoming a source of persistent inflationary pressure, worrying central banks.

We’re also reading . . . 

• Misallocation of capital: Central banks still don’t seem to understand that financial bubbles are sources of future real asset inflation, writes Richard Bernstein.

• The biggest externality: Market forces are not enough to halt climate change, writes Martin Wolf, as people just do not want to pay the price of decarbonising the economy.

• Downgrading expertise: The US Supreme Court’s overturning of the Chevron doctrine means the opinion of experts will count for less, writes Anjana Ahuja.

Chart of the day

Polls agree that the Conservatives are heading towards an electoral defeat, but the scale of the potential rout remains unclear. There are now about 120 seats where the margin of victory is expected to be fewer than 5 percentage points, the Financial Times’ projection model shows. Depending on how these knife-edge seats vote, the Tories could win as many as 146 seats in parliament — or as few as 44.

Take a break from the news

US tech entrepreneur Bryan Johnson celebrates his birthday every 19 months, claiming he only ages 7.6 months in a calendar year. A proponent of a new Silicon Valley cult of wellness, Johnson has put this down to numerous health and diet regimes, including at one point using blood plasma taken from his son. Here Rhymer Rigby asks, can you buy good health?

Additional contributions from Benjamin Wilhelm and Harvey Nriapia