The heat wave searing western Europe is set to peak in the coming days, threatening power networks and triggering health alerts. A high-pressure system combined with a stream of super-hot air from North Africa and abnormally warm oceans is baking the region from Portugal to the UK.
Spain set a June heat record of 46C (114.8F) near El Granado in the south of the country, according to preliminary data. Amber health alerts have been issued for large parts of England, including London, where temperatures could reach 34C on Tuesday, according to the UK Met Office. Heat warnings are also in place for much of France, with peaks above 40C through Wednesday.
Power prices across Europe are surging as the heat drives up cooling demand, while forcing some nuclear reactors to curb generation. French day-ahead prices climbed to a three-month high in recent days, while UK day-ahead prices hit the highest since March. — Jennifer Duggan
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German inflation unexpectedly eased this month, matching the European Central Bank’s goal for the first time in almost a year. Consumer prices increased 2% from a year ago, down from 2.1% in May, Destatis said. Economists surveyed by Bloomberg had expected a slight acceleration to 2.2%. The data leave June as something of a mixed bag for the euro zone’s biggest economies. While inflation ticked higher in France and Spain, it held steady in Italy. The numbers are unlikely to persuade ECB officials to alter their view that the target will be met sustainably this year.
European stocks outperformed their US peers by the biggest margin on record in dollar terms during the first half, the most dramatic sign of how the region’s markets are staging a comeback. The rebound isn’t confined to stocks: the euro is up 13% against the dollar in the six months through June. Meanwhile, the chaotic rollout of US tariffs wiped some of the shine off Treasuries. Investors globally are slowing their purchases of US assets and shifting more money to Europe amid concern that tariffs and tax cuts will impact earnings.
US Republican party leaders are rushing to overcome lingering internal fights over President Donald Trump’s massive tax and spending package as Democrats launch attacks to exploit the divisions. Senate Republicans were still at odds today over how much to cut Medicaid and other social safety-net programs and how rapidly to end Biden-era clean energy tax breaks as Democrats gained the chance to force votes on amendments to the package. Democrats, locked out of power in Washington, are aiming to offer amendments to exploit the infighting and make the GOP goal of getting holdouts to back the bill more difficult.
Norway’s largest private pension fund has excluded two defense companies from its portfolio, citing their ties to the Israeli military and the war in Gaza. KLP Pension, which oversees about $114 billion, said today it won’t invest in Oshkosh or ThyssenKrupp because they sell weapons to the Israeli military. The fund said the decision followed a report from United Nations last June that identified companies supplying the Israel Defense Forces with weapons that ended up being deployed in Gaza.
Danish companies will get easier access to foreign labor under a plan presented by the government that seeks to balance its harsh anti-immigration stance with the demands of the Nordic nation’s economy. After years of wrangling in the parliament, the coalition government agreed to lower the income threshold for non-European Union workers and cut down on red tape. With unemployment hovering near post-pandemic lows — partly as demand for pharmaceutical giant Novo Nordisk has worsened labor shortages — Danish business have called for easier ways to attract foreign workers.
A temporary pause on US tariffs has brought little relief to Lesotho’s textile industry, which has suffered layoffs and shuttered factories after orders from America dried up. “It’s very, very dire,” Lesotho’s Trade Minister Mokhethi Shelile, said in an interview. “US buyers are not placing orders because they don’t understand what is going to happen and there is still no clarity.” Trump slapped 50% tariffs on Lesotho in early April — the highest in the world, which were subsequently delayed until July 9. The southern African mountain kingdom’s biggest industry is textiles and the US is its largest export market.
A worker folds completed jeans at a textile factory in Maseru, Lesotho. Photographer: Roberta Ciuccio/AFP/Getty Images
