FirstFT: Rachel Reeves vows to break down EU trade barriers and hold investment summit

Good morning. To start the week, we have an exclusive interview with Rachel Reeves, who could become Britain’s first female chancellor on July 5.

Reeves told the Financial Times she would seek to break down EU trade barriers and secure billions of pounds through an early international investment summit if Labour wins the general election.

The shadow chancellor signalled an ambitious push to revisit parts of Boris Johnson’s Brexit deal, including seeking closer alignment with EU rules in areas such as the chemicals sector and a better deal for workers in the City of London.

“We would look to improve our trading relationship with Europe, and do trade deals around the world,” she said, as she vowed that an incoming Labour government would “reset” the UK’s global image.

Read her interview with Sam Fleming and George Parker in London. We have more on the opposition party’s plans below.

• Carbon tax: Labour is exploring how to realign the UK’s carbon regime with the EU if it wins the general election next month, senior party figures have said.

• North Sea tax: Oil and gas executives have warned that the party’s pledge to end allowances could kill investment in the basin.

• Doctors’ pay: Shadow health secretary Wes Streeting has promised to meet junior doctors “on day one”, urging them to call off a five-day strike due to take place just before the July 4 polls.

Reeves will host breakfast with her “shadow” British Infrastructure Council today. Business leaders from Santander, Lloyds, M&G and BlackRock are expected to attend. Here’s what else I’m watching today:

• Economic data: Rightmove publishes its house price index for the UK, the EU releases first-quarter wage and labour data and Italy has its May consumer price index.

• EU: Leaders from the bloc’s 27 member states will use a private dinner in Brussels to back Ursula von der Leyen for a second five-year term as president of the European Commission.

• Cannes Lions: The annual advertising awards in the south of France start with a new category that celebrates humour in ad campaigns, belying the industry’s unease over AI.

• French election: Campaigning officially begins with the left looking to shore up an alliance rocked by a purge of moderates in the far-left France Insoumise party.

Europe editor Ben Hall discussed the high stakes of Emmanuel Macron’s gamble with snap polls in Saturday’s Europe Express. The newsletter will focus on the French elections for the next few weekends, with free-to-read online editions in English and en français. Don’t miss it!

Five more top stories

1. Exclusive: Global defence groups are recruiting workers at the fastest rate since the end of the cold war as the industry seeks to deliver on order books that are near record highs. A Financial Times survey of the hiring plans of 20 large and medium-sized US and European defence and aerospace companies has found that they are looking to recruit tens of thousands of people this year.

2. Exclusive: Apple supplier TDK has claimed a breakthrough in producing solid-state batteries, predicting that its new material will create significant performance increases for devices. The new material can squeeze about 100 times more energy into the same space than the Japanese group’s current battery in mass production. David Keohane and Harry Dempsey have more details.

3. Deutsche Bank is counting on an aggressive hiring spree to start powering revenues and cut its reliance on bond trading. Since the start of 2023, Germany’s largest lender has recruited 125 investment bankers, including from Credit Suisse, with 75 joining at managing director or director level. Deutsche’s purchase of UK broker Numis, completed in October, brought in a further 300 staff. Here’s more on Deutsche’s strategy.

4. Ukraine has won the support of a peace summit for its territorial integrity and part of its vision for ending Russia’s invasion, but major nations declined to sign up. Eighty out of the 92 countries attending the event in Switzerland yesterday signed a statement that endorsed three points from Ukraine’s previously published 10-point peace plan. Here are the countries that abstained.

• Russian gas: Europe’s gas imports from Russia overtook supplies from the US for the first time in almost two years last month, despite the region’s efforts to wean itself off Russian fossil fuels.

5. Benjamin Netanyahu has denounced the Israeli military’s plan for a “tactical pause” near a crossing into Gaza that was intended to help aid distribution. The prime minister called the proposal “unacceptable” yesterday, as domestic criticism of his handling of the nine-month war against Hamas grew after eight Israeli soldiers were killed in Rafah. Read the full story.

The Big Read

Joe Biden came to office threatening to make Saudi Arabia a pariah state. In 2022, the US president was furious, threatening “consequences” after the kingdom’s deep oil production cuts blindsided American officials ahead of midterm elections. But in the months since then, relations between both countries have blossomed amid a volatile Middle East. Officials now describe Riyadh as one of Washington’s most important global partners. The dramatic shift in tone is a reflection of how Biden’s foreign policy has been driven by events rather than ideology.

We’re also reading . . . 

• Polls and markets: Neither strong majorities nor political labels matter much to economies and financial markets, writes Ruchir Sharma, just new faces.

• Wall Street: As discontent in the junior ranks simmers, senior bankers are also facing increasing pressure from rising workloads and intense competition, writes Sujeet Indap.

• Olympics go green: Organisers of the Paris event have pledged to halve greenhouse gas emissions by cutting meat from athletes’ menus and building fewer new venues.

• French election: Who is Jean-Luc Mélenchon, the far-left firebrand who ruthlessly purged senior colleagues on the day the country’s leftwing parties formally launched their alliance?

Chart of the day

Salaries for graduates of leading masters in finance programmes have grown much faster for those working in financial services compared with other sectors, according to the latest FT ranking. The average salary of female graduates working in finance jumped to $91,000, slightly narrowing the gap to men’s pay to 8 per cent, highlighting the still considerable disparity in what is traditionally a male-dominated career.

Take a break from the news

This week, Naomi Campbell becomes the first model ever honoured with a retrospective at the Victoria and Albert Museum — Naomi: In Fashion. Ahead of the event, Campbell speaks to the FT about a career and life that have all the ingredients for a blockbuster exhibition, namely longevity, drama and genuine struggle.

Additional contributions from Sophie Spiegelberger and Benjamin Wilhelm