FirstFT: Johnson pulls out of Tory leadership contest

Boris Johnson has pulled out of the race to become Britain’s next prime minister after his campaign stalled and rivals claimed he did not have the backing of the 100 Tory MPs needed to enter today’s contest.

Despite frantic attempts by Johnson to bolster his support, he announced at 9pm yesterday that he was abandoning his bid to make a comeback as prime minister just weeks after he quit Number 10.

His withdrawal from the contest leaves former chancellor Rishi Sunak as the clear frontrunner to succeed Liz Truss. Sunak’s only declared rival for the job, leader of the House of Commons Penny Mordaunt, is backed by fewer than 30 Tory MPs. If she does not reach the threshold of 100 nominations by 2pm today, Sunak will become prime minister.

A spokesman for Mordaunt’s campaign insisted yesterday: “Penny is still running to be the leader of the Conservative party.”

Meanwhile, Sunak has won the backing of Jeremy Hunt, who is expected to remain as chancellor in a Sunak administration. Hunt is due to deliver a crucial debt-cutting plan on Sunday.

Thank you for reading FirstFT Europe/Africa. Here is the rest of today’s news — Gary

Five more stories in the news

1. Profit warnings soar as costs hit UK companies More FTSE-listed companies have been forced to issue profit warnings this quarter than at any time since the global financial crisis, according to an analysis by EY-Parthenon. Companies face a toxic combination of soaring inflation, slowing demand from worsening economic conditions and rising interest rates.

2. China’s GDP growth falls short of target Third-quarter gross domestic product rose 3.9 per cent year on year, impacted by property woes and a zero-Covid policy, and laying bare the scale of the economic challenges facing the country. The release of the data, delayed from last Tuesday, comes after President Xi Jinping extended his rule for an unprecedented third term at the Communist party’s 20th congress last week.

3. China’s YMTC asks core US staff to leave Chipmaker Yangtze Memory Technologies has asked American employees in core tech positions to leave, as it rushes to comply with new US export controls that are disrupting China’s chip industry. Semiconductor companies in China, the US and Europe are rushing to ensure compliance with the tough restrictions.

4. UK banks withdraw first-time buyer mortgages UK banks have withdrawn 60 per cent of mortgages for borrowers with small deposits since the start of the year, according to data from consumer site Moneyfacts. A number of lenders have either pulled home loans or have yet to return with their 95 per cent loan-to-value products following former chancellor Kwasi Kwarteng’s “mini” Budget.

5. European offshore wind companies push into Asia With South Korea, Taiwan and Japan having committed to boosting their share of renewables as part of net zero targets, European companies are pushing into east Asia’s offshore wind market, seeking to leverage their technological advantages over their Chinese competitors.

The day ahead

Bond Street on line The landmark station joins London’s cross-city express railway the Elizabeth Line.

Earnings Heidrick & Struggles, Hyundai Motor and Philips release third-quarter earnings. Pearson has a Q3 trading update, and Petrobras publishes its Q3 production and sales report.

Economic indicators S&P Global/Sips releases purchasing managers’ index data for the EU, France, Germany, Japan, the UK and the US.

Trump Organization trial begins The former US president’s family company has been charged with tax fraud by Manhattan’s district attorney. The Trumps face a penalty of at least $250mn in what the district attorney claims were ill-gotten proceeds.

What else we’re reading

Steven Pinker, the ‘oracle of optimism’ The Harvard psychology professor does not sign on to the pessimistic conclusion that humans are inherently irrational. His books The Better Angels of Our Nature and Enlightenment Now compile data that show humans are living longer and better, even if news headlines suggest the opposite.

How the markets broke ‘Trussonomics’ Follow along in a visual journey of the UK’s economic history and Liz Truss’s legacy — an ill-fated “mini” Budget, its devastating fallout and Truss’s swift departure after only 44 days in office.

How US chip export controls have turned the screws on China Joe Biden’s tough measures make it harder for China to manufacture advanced semiconductors, slowing the country’s military modernisation and its progress in artificial intelligence and supercomputers. But the controls could have a number of effects on China’s homegrown industry, American companies and other industries.

• Opinion: China’s economy will not overtake the US until 2060, if ever, writes Ruchir Sharma, the chair of Rockefeller International.

Harsh lessons learnt from corporate rebrands Up until last Thursday, Manchester-based travel business Intravelr went by the name Invasion. The group was motivated to rebrand after Russia’s invasion of Ukraine. While they had sensible reasoning, the decision to drop the second “e” in the spelling of their name makes less sense, writes Pilita Clark.

‘Big Brother’ managers should turn the lens on themselves The number of employers using data surveillance software to monitor employees has doubled since the start of the pandemic, writes Rana Foroohar, with the rise of workplace surveillance representing what Microsoft chief executive Satya Nadella has called a new “productivity paranoia” on the part of employers.

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