FirstFT: Turkey backs Sweden’s Nato bid

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Turkey’s Recep Tayyip Erdoğan has agreed to support Sweden’s membership of Nato ahead of the military alliance’s annual summit today in Vilnius, Lithuania.

The move ends more than a year of opposition from Ankara and opens the way for Turkey’s parliament to approve the Nordic country’s entry into the military alliance, a step seen as critical to increasing the defence of eastern Europe in response to Russia’s invasion of Ukraine.

Erdoğan’s decision to lift his veto, after a last-ditch meeting with the leaders of Sweden and Nato yesterday evening, came after Turkey’s president linked his support for Stockholm’s accession to Turkey’s long-stalled EU bid.

Sweden had agreed as part of the pact to help Turkey “reinvigorate” its negotiations to join the political and economic bloc, said Nato secretary-general Jens Stoltenberg after hours of negotiations.

• Analysis: The unity of Nato’s 31 members will be put to its biggest test since the beginning of the Ukraine war at this week’s summit, writes Gideon Rachman.

Here’s what else I’m keeping tabs on today:

• Economic data: The UK reports labour market figures, while Germany has its June consumer price index and ZEW’s economic sentiment survey.

• OECD meeting: Representatives of more than 130 countries are in Paris to discuss a landmark tax deal targeting multinationals. The meeting ends tomorrow.

Five more top stories

1. Hedge funds have slashed their bets on a rising US stock market to the lowest level in at least a decade while raising their bets on European stocks to the highest-ever level, according to prime brokerage data from Goldman Sachs. Here’s why some managers believe the market’s narrow rally could soon reverse.

2. Andrew Bailey joined forces with UK chancellor Jeremy Hunt to call for wage restraint, with the Bank of England governor telling a City of London audience that the “unexpected resilience” of Britain’s economy had exacerbated pressures contributing to “sticky” high inflation. We have more details from yesterday’s annual Mansion House dinner.

• Related: Hunt unveiled his “Mansion House reforms” that seek to unlock pension savings for investment and reinvigorate Britain’s economy.

• The FT View: Hunt’s plan makes small inroads into Britain’s broad growth problem and is pragmatic but not bold, writes the FT’s editorial board.

3. The UK financial watchdog has been urged to ringfence assets at Odey Asset Management by a lawyer representing two alleged victims of sexual assault by the firm’s founder. The lawyer, Jill Greenfield, said her intention was to ensure enough funds were available to cover potential damages. Read the full story.

4. Spain’s Socialist prime minister Pedro Sánchez and his electoral rival Alberto Núñez Feijóo accused each other of failing to protect women, making pacts with disreputable allies and lying about the economy in a testy election debate. Here’s more from their heated exchange yesterday evening.

5. UK homeowners are rushing to refinance their mortgages, with brokers reporting a jump in the value and number of remortgages. Borrowers who had been waiting for the cost of debt to ease are locking in deals over fears that interest rates will rise further.

The Big Read

When Rishi Sunak became prime minister last October, he promised his party and Britain a fresh start. Some Tory MPs even held out distant hope of recovering to win the Conservatives a fifth successive term in office. Instead, Sunak has failed to escape his party’s recent chaotic past. New economic clouds are gathering over his premiership and plunging his party into renewed gloom.

We’re also reading and watching . . .

Chart of the day

Central banks made record gold purchases last year and into the first quarter of this year. Concerned by the freeze on Russian assets by the US and others, the banks opted to buy physical gold rather than derivatives or exchange traded funds that track the metal’s price, with more also holding supply in their own country.

Take a break from the news

Feeling worn out? Take a nap. Employers are waking up to the advantages of snoozing on the job, as groups from law firms to banks seek help for the overworked.

Additional contributions by Benjamin Wilhelm and Gordon Smith