Nato’s European members discuss raising defence spending targets

Today’s agenda: Emerging-market currencies sell off; Nasdaq board diversity rules thrown out; FBI director steps down; weight-loss drugs’ potential uses; and a festive pie recipe

Good morning. We start with an exclusive story on Nato. People involved in early confidential talks have told the Financial Times that the alliance’s European members are weighing an increase of defence spending targets, from the current 2 per cent of GDP to 3 per cent by 2030. Here’s what we know.

Why this is under discussion: The talks, ahead of Nato’s annual summit next June, are partly in anticipation of Donald Trump’s return. In his first presidency, Trump used Nato’s 2018 summit to demand more spending or risk the US leaving the alliance. That, and a realisation that current spending levels are not enough to support Ukraine against Russia, has forced capitals to take on board the scale of under-investment.

The impact on European budgets: The steep rise would put intense pressure on countries with already strained national budgets, including in France, Germany and the UK, and has raised misgivings in many capitals. Seven European Nato members still fail to meet the current 2 per cent benchmark agreed a decade ago. Italy, which has already broken the EU’s public deficit rules, spends 1.49 per cent and has pledged to reach 2 per cent by 2028. Spain is at the bottom with 1.28 per cent and has sought to dilute the focus on the target. More details on the secret talks here.

• EU-UK ties: Prime Minister Sir Keir Starmer will today accept an invitation to hold talks on defence co-operation with the bloc, in the first such meeting since Brexit.

Here’s what else we’re keeping tabs on today:

• Economic data: The International Energy Agency publishes its monthly oil market report, while the US has its producer price index.

• EU: The bloc is set to formally approve the accession of Romania and Bulgaria to its Schengen free movement area, while the European Central Bank is expected to cut interest rates in its decision today.

• Mahmoud Abbas: The Palestinian president begins a two-day visit to Rome, where he will meet Italian Prime Minister Giorgia Meloni and Pope Francis.

Join industry leaders and policymakers in Brussels or online this morning for the FT’s Tech Leadership Forum with Connect Europe, as they discuss how to grow Europe’s digital economy. Register here.

Five more top stories

1. A surging US dollar and a “confluence of bad news” have sparked the biggest sell-off in emerging-market currencies since the early stages of the Federal Reserve’s aggressive rate-raising campaign two years ago. The decline has been broad, with at least 23 currencies tracked by Bloomberg falling against the dollar this quarter. Read the full story.

• US inflation: Consumer prices rose 2.7 per cent last month, matching Wall Street’s forecasts and clearing the way for an expected rate cut next week.

2. A US court has thrown out rules requiring Nasdaq-listed companies to have boards meet certain racial or gender diversity criteria or explain why they did not. The appeals court’s majority said the Securities and Exchange Commission should not have signed off on the rules. Here’s more on the latest blow to the diversity, equity and inclusion movement.

3. Christopher Wray will step down as FBI director before Donald Trump is sworn in next month. The announcement comes less than two weeks after the president-elect nominated Kash Patel to lead the agency. The controversial pick has pledged to stamp out the “deep state” and defended far-right conspiracy theories. More details here.

4. Iran has sought to put a brave face on the sudden overthrow of its Syrian ally Bashar al-Assad, even as it evacuated thousands of its citizens during the rebel takeover of Damascus. Ayatollah Ali Khamenei, Iran’s supreme leader, said yesterday that its allies would “grow stronger under pressure” and “extend [their] reach over the entire region”.

• Syrians in Europe: Amid growing calls to return to their homeland, refugees in Germany and elsewhere are in a “wait and see” mode.

5. One of Thailand’s richest families believes it overpaid in its $4bn acquisition of Selfridges and a handful of other luxury department stores in Europe in 2021. Tos Chirathivat, executive chair of family conglomerate Central Group, told the FT that given increased interest rates globally, the price was “high” in hindsight.

The Big Read

So-called GLP-1 drugs such as Ozempic and Wegovy have helped transform the waistlines of patients and the top lines of pharmaceutical groups. But beyond their original focus on obesity and diabetes, GLP-1 treatments could also potentially be used for addiction, heart disease and Alzheimer’s. Lower-priced orally administered drugs could help tackle the rising tide of chronic diseases and lower costs for public health systems.

We’re also reading . . . 

• Murdoch feud: A court ruling that rejected Rupert Murdoch’s attempt to overhaul the family trust has left him and his children in a bitter stalemate.

• UK farming: James Dyson’s newest project, which uses robots to pick strawberries, is bringing much-needed new thinking to the industry, writes John Gapper.

• Nigel Farage: Support for Reform UK is growing fast, but can he turn the rightwing populist party into a serious contender for government? 

• David Bonderman: The private equity pioneer who co-founded TPG and led the buyout of Continental Airlines has died at 82.

Chart of the day

Is the market economy and open trade in global retreat? Most countries apart from the US have chosen a model where even extensive state intervention is mainly kept behind the border, writes Alan Beattie.

Take a break from the news

This recipe for chicken and champagne pie comes from the menu of Bob Bob Ricard, the flamboyant London restaurant known for its “press for champagne” button at every table. A splash of bubbly transforms the dish from good to glamorous, writes Harriet Fitch Little.