July 11 update

Jake Sullivan, America’s national security adviser, said that Joe Biden’s administration will send F-16 fighter jets to Turkey “in consultation with Congress”. The decision was announced just hours after Turkey’s president, Recep Tayyip Erdogan, agreed to lift his veto on Sweden’s bid to join NATO. A summit for the alliance begins on Tuesday in Vilnius, Lithuania, with Ukraine at the top of the agenda.

Ukraine’s president, Volodymyr Zelensky, condemned the lack of a timeframe for Ukraine to join NATO as “unprecedented and absurd”. In a tweet, he said: “It seems there is no readiness neither to invite Ukraine to NATO nor to make it a member of the alliance”. Just hours before the NATO summit began, Russia launched air attacks on Odessa, Ukraine’s largest port, and Kyiv, its capital. Ukraine’s air force said it shot down 26 Russian drones.

German inflation rose in June, bucking its steady downward trend so far this year. When harmonised to compare with other EU countries, consumer prices increased by 6.8% from June 2022, according to the federal statistics agency. The rebound is mainly the consequence of rising transport costs, and the German government’s inflation-suppressing attempts to combat rising fuel prices last year.

Israel’s parliament gave preliminary approval to a bill limiting the power of the Supreme Court. Binyamin Netanyahu, the prime minister, wants to overhaul the justice system. That has sparked protests across Israel, which continued on Tuesday morning. The new bill would restrict the court’s power to void decisions made by the government. It needs to pass two further votes to be written into law.

Foxconn, a Taiwanese electronics manufacturer, withdrew from a $19.5bn joint venture with Vedanta, an Indian firm, to build a semiconductor factory in Gujarat, India. Foxconn was worried about the Indian government delaying approval for incentives, Reuters reported. The deal’s collapse is a blow to the ambitions of Narendra Modi, India’s prime minister, to make more chips in his country.

Floods and landslides caused by heavy monsoon rains killed at least 42 people in northern India. New Delhi recorded 15cm of rain on Sunday, making it the wettest July day in four decades. Parts of the Himalayan state of Himachal Pradesh received a month’s rainfall in a day at the weekend. Residents were advised to stay at home and schools were closed in several areas. Rescue efforts continue.

The first week of July was the hottest ever recorded on the planet, according to the World Meteorological Organisation. The world had already experienced the hottest June on record, said the UN body. It also reported that more than 61,000 people died last summer from Europe’s record-breaking heat. António Guterres, the UN’s boss, said that climate change is “out of control”.

Figure of the day: One-fifth, how much the average bonus pool has shrunk by in New York. This is the biggest drop since the 2007-09 financial crisis. Read the full story here.

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PHOTO: AP

Joe Biden’s dilemmas at the NATO summit

America is an indispensable supporter of Ukraine’s fight to repel Russia’s invasion. Yet it is also an insurmountable obstacle to Ukraine’s hope of rapidly joining NATO. Before departing for the alliance’s summit on Tuesday in Vilnius, Lithuania’s capital, President Joe Biden said bluntly: “I don’t think it’s ready for membership”.

Yet Mr Biden must tread carefully; he cannot be too obstructionist. The American president must help NATO grapple with its central dilemma: how to refuse Ukraine’s membership while it is at war, without giving Russia a reason to keep waging it. Ukraine will be told that it is getting closer, even if it is not invited in. NATO will probably waive its formal “membership action plan” (the old antechamber to NATO) but ensure conditions on democratic and military reforms are not more onerous. Countries will want to offer credible long-term security guarantees without offering troops.

The summit starts well, with news that Turkey will belatedly allow Sweden to join. But on the question of Ukraine’s bid, the allies have to work hard to preserve unity.

PHOTO: GETTY IMAGES

Germany’s mixed economic bag

Tuesday saw the release of Germany’s latest inflation figure, covering the year to June. At 6.8%, the harmonised index of consumer prices was higher than expected, and a jump from May. Core inflation, excluding volatile items such as food and energy, came in at 5.8%, up from 5.4% in May, reflecting a rise in transport prices. The data show that inflation is proving sticky in Germany, as elsewhere. It is one reason for Germany entering a technical recession in the first quarter of the year. Higher food prices are dampening household consumption; the higher cost of raw materials and energy are affecting industrial orders.

Other economic data do not seem encouraging. Numbers published last week showed a bigger-than-expected fall of 0.2% in industrial production in May (compared with April), though they also revealed a surprise rise of 6.4% in industrial orders. That suggests Germany’s recovery will be sluggish, and slower than some hoped earlier this year.

PHOTO: GETTY IMAGES

Clouds hover over Amazon’s Prime Day

Amazon’s annual shopping bonanza, Prime Day, begins on Tuesday (and, confusingly, will last two days). The tech giant will be hoping for a boost. Sales growth, excluding Amazon’s cloud division, was a meagre 8% in the most recent quarter, far below the pre-pandemic pace. That partly reflects a decelerating economy, but also stiffer competition.

Shein, a fast-growing Chinese e-commerce rival beloved by youngsters, is expanding beyond fashion into categories like electronics and stationery. It has added a third-party seller option akin to Amazon’s Marketplace. Meanwhile, Walmart, America’s biggest retailer, has been outgrowing Amazon in e-commerce, just as Amazon’s move into physical retailing (Walmart’s home turf) has stuttered.

Amazon is also facing antitrust scrutiny. Last month the Federal Trade Commission initiated a complaint into tactics allegedly used by the firm that trick consumers into enrolling in its Prime membership programme and then make it difficult to unsubscribe. That would hardly be consistent with the firm’s ambition to be “Earth’s most customer-centric company”.

PHOTO: GETTY IMAGES

Britain’s hot labour market

Statistics for the British labour market in the three months to May were published on Tuesday. They showed wages rising by a worryingly hot 7.3%, matching the record set by the previous set of figures (covering the three months to the end of April). The latest data confirm that private-sector wages are growing faster than ever on the current measure, excluding the distortions caused by the coronavirus pandemic.

The Bank of England worries that the overheated labour market is helping inflation boil over. In recent months prices have kept rising faster than expected, particularly for services. The central bank believes that this reflects the impact of domestic factors like employment rather than the effect of imported food and energy, which have more sway over inflation’s headline figure. Investors now anticipate that the BoE will raise interest rates to 6.5% by next March, from 5% at present. That will spell yet more misery for mortgage-holders and, consequently, the governing Conservative Party—a general election is due before February 2025.

PHOTO: GETTY IMAGES

A celebration of Mongolian culture

To keep his marauding warriors entertained and in shape between battles, Genghis Khan, the fearsome Mongol conqueror, held tournaments of wrestling, archery and horse-racing. Eight centuries later, these sports are at the heart of Mongolia’s most important festival, Naadam, which begins on Tuesday. In Ulaanbaatar, the capital, crowds will flock to the central stadium to watch competitions of the “Three Manly Games”, as well as displays of knucklebone shooting (a game of manual dexterity involving small marble tablets) and singing.

For those in the stands, the galloping hooves and twang of bowstrings hark back to a time when all Mongolians herded livestock, their daily rhythms dictated by the changing seasons. These days, nomadism is less common. People are quitting the steppe for the city, in search of jobs and shelter from increasingly harsh winters. Still, for five days each year, Mongolians proudly celebrate their patrimony, while Tengri, the sky god, gazes down at the colourfully-dressed competitors.