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 business, which is benefiting from a pointy improve in authorities orders for brand 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 line with evaluation by Vertical Analysis Companions for the Monetary Occasions — virtually double their mixed money circulate on the finish of 2021. 

In Europe, nationwide champions BAE Programs, Rheinmetall and Sweden’s Saab, which have benefited from new contracts for ammunition and missiles, are anticipated to see mixed money circulate leap by greater than 40 per cent. Right here’s how the business may 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 conserving tabs on at this time:

• 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 at this time’s information on the defence business, or about FirstFT? Electronic 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 attainable 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 and 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 battle in 2006.

2. Telegram says its chief government 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.

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

• Russian finance: A posh scheme to swap Russian and western traders’ frozen property has met lower than 10 per cent of the Kremlin’s unique goal.

3. Central bankers left their Jackson Gap gathering cautiously hopeful a few delicate touchdown for the economic system as they now flip their consideration to decreasing borrowing prices. The heads of each the Federal Reserve and the Financial institution of England signalled they have been nonetheless on the right track to keep away from a world recession. However right here’s why challenges stay to accurately 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 shall be examined in Madrid and Oslo till the top of the yr with the intention 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 enormous 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 took place and the particulars of the way it operated.

Visible story

For months, Ukrainian forces had been shedding floor to Russia and morale was low. Then on August 6, they blasted by means of the border to grow to be the primary international military to grab Russian territory for the reason that second world battle. In 10 days Kyiv’s forces turned the tables, reworking the Kursk area right into a battle 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 traders have but to take heed of the dramatic world implications.

• Nuclear arms race: The world’s nuclear non-proliferation regime is beneath better strain than at any time for the reason that finish of the chilly battle, the top of the UN’s watchdog instructed the FT.

• Société Générale: Shares have fallen 19 per cent since chief government Slawomir Krupa introduced his technique of specializing in capital moderately than progress.

• Nigerian scams: The nation is eager to assist world legislation enforcement crack down on on-line “sextortion” after greater than 63,000 pretend 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 business is on the verge of a dealmaking growth. “I have no fomo,” Rio Tinto’s chief instructed the FT, referring to the worry 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