FirstFT: Today’s top stories | Financial Times

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Mitch McConnell blamed Donald Trump for the deadly siege on Capitol Hill, saying on the eve of Joe Biden’s inauguration that the mob was “fed lies” and “provoked by the president”.

“They tried to use fear and violence to stop a specific proceeding of the first branch of the federal government which they did not like,” Mr McConnell, the Senate’s most senior Republican, said in a speech.

Mr Trump, who is due to leave Washington on Wednesday morning, will not attend Mr Biden’s swearing-in or welcome the new president and first lady to the White House, a break with precedent.

In his final pre-recorded remarks posted before departing the US capital, Mr Trump touted his administration’s accomplishments and the personal role he played in everything from his trade war with China to Covid-19.

So what will Mr Biden’s presidency mean for the world? And which leaders stand to lose out?

The new president’s stimulus plan risk exacerbating inequality and low productivity growth, writes Ruchir Sharma. The FT View is that as long as Mr Biden prepares for an eventual return to fiscal normality, he can defend his plan as common sense.

A dozen members of the National Guard were pulled from the inauguration security mission over links to extremist content and rightwing militia ties. The grimmest thing about the show of strength is that it is probably warranted, writes Janan Ganesh. (FT, AP)

Coronavirus digest

  • The UK’s black and minority workers have been far harder hit by Covid-19 than their white peers, according to data analysis by the Trades Union Congress.

  • Chancellor Rishi Sunak has warned small businesses are “running out of cash”.

  • Lower-middle and low-income countries have secured vaccine orders for only 675m doses; high-income nations have secured 4.2bn.

  • Portugal has recorded the highest seven-day average of new infections in the world this week.

  • The BioNTech/Pfizer vaccine has been shown to work against one of the most concerning coronavirus mutations discovered in the UK and South Africa.

  • India’s drive to vaccinate millions of healthcare workers has been hit by an IT glitch and deepening suspicion of a homegrown vaccine.

  • The immune system remembers how to make antibodies that can fend off coronavirus for at least six months, the magazine Nature reported.

  • The US coronavirus death toll has passed 400,000, according to data from Johns Hopkins University. (FT, Reuters)

In the news

May: Johnson eroded Britain’s global standing Theresa May, the former UK prime minister, launched an extraordinary attack on Boris Johnson on Tuesday, accusing him in a Daily Mail article of moral failure and diminishing Britain’s standing in global affairs by breaking the Brexit withdrawal agreement and cutting overseas aid. (FT)

“The world does not owe us a prominent place on its stage . . . so, we should do nothing which signals a retreat from our global commitments.”

All five of Britain’s living past prime ministers — John Major, Tony Blair, Gordon Brown, David Cameron and Mrs May — have attacked the decision to cut overseas aid to 0.5 per cent
All five of Britain’s living past prime ministers — John Major, Tony Blair, Gordon Brown, David Cameron and Mrs May — have attacked the decision to cut overseas aid to 0.5% © Charlie Bibby/Financial Times

Pompeo says Xinjiang repression is ‘genocide’ The Trump administration has characterised the repression of ethnic minorities in China’s Xinjiang province as genocide, a last-minute move that will increase pressure on US president-elect Joe Biden to address the claims. (FT)

Yellen pledges hard line against currency manipulation Treasury secretary nominee Janet Yellen warned US trading partners against currency manipulation and touted the importance of market-based exchange rates in her Senate confirmation hearing on Tuesday. US stocks rose as Ms Yellen made the case for large-scale fiscal stimulus. (FT)

Janet Yellen: ‘With interest rates at historic lows, the smartest thing we can do is act big’
Janet Yellen: ‘With interest rates at historic lows, the smartest thing we can do is act big’ © FT montage

Italy’s PM survives confidence vote Giuseppe Conte has narrowly prevailed in a crunch vote of confidence in his fragile coalition government as the country grapples with twin health and economic crises. (FT)

BBC looks to slash output The British broadcaster is examining how to cut a fifth of output as it explores ways to better focus funds and cope with what the UK public spending watchdog has called “a significant financial challenge”. (FT)

Netflix signals stock buybacks Netflix will no longer raise debt to fund its spending spree on television shows and films and may begin returning money to shareholders through buybacks, a milestone in the company’s evolution as it reported it passed 200m subscribers in 2020. (FT)

Goldman chief: Spac boom unsustainable Speaking to analysts as Goldman announced a doubling of its fourth-quarter profits, David Solomon said he did not expect special purpose acquisition companies — Spacs — to continue to list at their current pace and raised questions about whether issuance had “gone too far”.

  • In other blank-cheque news, Singapore’s stock exchange is accelerating plans to become the first major bourse in Asia to list Spacs. (FT)

Margrethe Vestager: Big Tech must work with EU The EU’s competition chief and head of digital policy has warned that Big Tech companies will face countries passing laws to curb their power if they do not support the bloc’s approach to regulation. (FT)

Margrethe Vestager: ‘[EU legislation] may be strict, it may put a lot of obligations and a number of restrictions on what they can do, but at least it has pan-European scale’
Margrethe Vestager: ‘[EU legislation] may be strict, it may put a lot of obligations and a number of restrictions on what they can do, but at least it has pan-European scale’ © AFP via Getty Images

The day ahead

UK inflation December rates are expected to edge up slightly after slowing more than forecast in November as prices of clothing, food and recreation fell while the country battled a second Covid-19 wave. (FT)

Central bank meetings Policymakers in China, Malaysia, Canada and Brazil will meet on Wednesday. Of those, a rate change is only expected in Malaysia, where a 25 basis point rate cut is forecast. (FT)

Earnings Among the companies reporting results on Wednesday are Antofagasta, BHP, Burberry Group, WHSmith, CMC Markets, Pearson, JD Wetherspoon, Dixons Carphone, Cairn Energy, Morgan Stanley, US Bancorp, Bank of New York Mellon and Procter & Gamble.

Kyrgyzstan extradition case The European Court of Human Rights holds a hearing by videoconference in a case where applicants have alleged that they risked ill-treatment if extradited from Russia to Kyrgyzstan. (FENS)

What else we’re reading

America’s near-death experience The Republican party is rotten through with sedition, writes Martin Wolf. I know people will complain about the violence and socialists on the left. But no equivalent to Donald Trump is to be found among leading Democrats. Those pre-fascists are on the right. (FT)

Martin Wolf: ‘So long as the politics of the right remain as they are, the danger revealed since the election will not evaporate’
Martin Wolf: ‘So long as the politics of the right remain as they are, the danger revealed since the election will not evaporate’ © James Ferguson

Frontex: immigration boon or bane? To its supporters, Frontex — the EU’s first uniformed armed force — has become crucial to the bloc’s control of entry to its territory. Critics, however, see the once-obscure, Warsaw-based agency as the spearhead of a militaristic strategy that has been plagued by allegations of abuses and lacks sufficient accountability. (FT)

Escaping Whitehall’s civil service bubble The UK Treasury’s proximity to power is supreme — Downing Street on one side, parliament on the other. But its connection to the outside world can be tangential. Redeploying government staff from London to large northern cities would be the best practically, if not politically, writes Sebastian Payne. (FT)

Can QuantumScape live up to the hype? QuantumScape sped to a near-$50bn valuation last month after reporting a battery breakthrough that would help make electric vehicles “the world’s dominant form of transportation”. But its subsequent share plunge has highlighted the perils of joining the rush into tech stocks, particularly those involved in battery-powered vehicles. (FT)

Line chart of Market cap ($bn) showing QunatumScape's rising valuation

Higher inflation will hit bondholders The historic increase in monetary supply to fight the Covid-19 crisis will lead to higher consumer prices, writes Jeremy Siegel. And it is inevitable that bond rates will rise far more than now envisioned by the Fed and most forecasters. (FT)

Museveni’s grip on Uganda Initially lauded as one of a new generation of African leaders, Yoweri Museveni is increasingly compared with aged autocrats such as the late Robert Mugabe in Zimbabwe. With no succession plan in place, Uganda’s president may have convinced himself that he is indispensable to his country’s future. (FT)

Supporters of Uganda’s National Resistance Movement celebrate in Kampala, Uganda, after President Yoweri Museveni wins general election
Supporters of Uganda’s National Resistance Movement celebrate in Kampala after President Yoweri Museveni won a sixth term in office © AFP via Getty Images

Video of the day

US Capitol on lockdown ahead of Joe Biden’s inauguration Following the assault on the US Capitol, 25,000 National Guard troops have been called to provide security for inauguration day. Katrina Manson met some of the armed forces protecting Washington DC. (FT)

Video: US Capitol on lockdown ahead of Joe Biden’s inauguration

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