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The Bank of England, alongside Germany's Bundesbank and the Bank for International Settlements, is researching ways to combat market volatility caused by AI trading bots. Deputy Governor Sarah Breeden said officials are exploring mitigants, such as circuit breakers or kill switches, to prevent widespread meltdowns if faulty AI models engage in synchronised herding behaviour during periods of financial stress. Breeden said: “As AI capabilities increase, we must keep asking whether existing, technology-agnostic regulatory frameworks remain sufficient.”

 

The Daily Telegraph

Opening the European Central Bank’s annual Sintra conference, ECB president Christine Lagarde indicated that the bank can once again rely on interest rates as its main tool to keep inflation under control after more than a decade of bond buying, emergency lending and forward guidance. "Monetary policy has gone back to basics," Lagarde said, adding however that returning to conventional tools "does not mean a return to the same idealised past." Lagarde also rejected suggestions that the ECB's decision to raise interest rates in June was simply an "insurance hike," saying "Our rate increase was justified under every scenario considered . . . Nothing we have observed since then has called this assessment into question." Lagarde also said that the bank had become more resilient to shocks and that tools including its Transmission Protection Instrument allow it to guard against unexpected spikes in borrowing costs in individual eurozone countries.

 

Euronews

Financial Times

Wall Street Journal

Markus Steilemann, the chief executive of German chemicals group Covestro, has said the EU must decide which industries to prioritise or face an exodus of energy-intensive sectors.

 

Financial Times

Alice Weidel, co-leader of the Alternative for Germany (AfD), has called for an end to the boycott of Russian oil and gas to revive Germany's struggling economy. Weidel told Reuters: "Cheap energy ‌from Russia was the secret of the success ‌of 'Made in Germany'. We need it back . . . The loss of this energy has set us back years. Hundreds of thousands of jobs have been lost. It has made us dependent ⁠on the United States, ⁠which sells us energy at far higher prices." She believes that winning upcoming elections in Saxony-Anhalt and Mecklenburg-Vorpommern could pave the way for the AfD to secure the chancellorship by 2029.

 

U.S. News

Bloomberg reports that Europe is crossing a cascade of smaller climate thresholds all at once, including the temperatures at which power grids falter, farm soils dry out and rivers become too warm to cool nuclear reactors. Scientists say Europe will need to redesign for hotter nights, warmer waters, and drier soils. “We are going to need to make some very significant changes in the way we live,” says Ed Hawkins, a climate scientist at the University of Reading in the UK. “Our society and the infrastructure on which it’s based is built for the climate of the past . . . It’s not built for the climate of now, and certainly not built for the climate of the future.”

 

Bloomberg

Volkswagen's works council and the IG Metall union say they haven’t been informed of plans to cut as many as 100,000 positions in Germany to boost competitiveness. Top labour representative Daniela Cavallo has been part of the German car maker’s attempts to cut costs, but talks didn’t detail specific job reduction targets. Manager Magazin reported last week that Volkswagen CEO Oliver Blume aims to cut up ​to 100,000 jobs and discontinue production at four of the group's German plants, as he seeks to reduce investment ​by around 15% to just over €130bn ($148bn) over the next ​five years. "The entire group, including its brands and subsidiaries, must undergo far-reaching change," a Volkswagen spokesperson said at the time. Bloomberg notes the difficulty that Blume can expect when pushing ahead with his plans: labour leaders are powerful and VW law gives the state a veto over key decisions while making it harder to close major German plants.

 

Bloomberg

A UK Court of Appeal ruling has opened the door for mass lawsuits against lenders involved in the motor finance mis-selling scandal. The court dismissed an appeal from eight lenders, including Lloyds' Black Horse and BMW, which sought to overturn a High Court decision allowing "omnibus" claims for thousands of consumers. The ruling allows thousands of motorists to pursue compensation outside the Financial Conduct Authority's (FCA) redress scheme, which estimates payouts of £7.5bn for over 12m loans from 2007 to 2024.

 

Financial Times

The Times

France has become the first European country to specifically target ultrafast fashion after parliament approved legislation imposing fines on companies such as Shein and Temu for high-volume, low-cost clothing production. The law allows penalties of up to €6 per item initially, rising to €10 by 2030, for retailers deemed to produce excessive numbers of low-priced products, while also banning advertising and influencer promotions by companies classified as ultrafast fashion. The legislation is aimed at reducing the environmental impact of disposable clothing and supporting France's domestic textile industry, while drawing a distinction between ultrafast fashion retailers and traditional fast-fashion brands such as Zara, H&M, and Mango. Shein said it is reviewing the legislation and reiterated that its production model helps reduce waste, while concerns have also been raised by the European Commission over how the law defines ultrafast fashion and applies to online marketplaces.

 

France 24

Reuters

Wall Street Journal

Nearly 1,700 UK investors are suing Binance and its co-founder, Zhao Changpeng, for at least £150m. They allege the exchange sold complex derivative products without regulatory approval, violating the Financial Services and Markets Act.

 

Financial Times

South China Morning Post

Apple has changed its software release strategy by making security updates available earlier than planned in response to growing concerns that artificial intelligence is enabling hackers to develop and exploit cyber threats more quickly. Rather than waiting to bundle security patches into its next major iOS release, the company is releasing fixes ahead of schedule to shorten the window between vulnerabilities being disclosed and protections reaching users. The move marks a significant shift from Apple's longstanding practice of delivering most security updates alongside broader iOS upgrades. Although the company said there is no evidence that the latest vulnerabilities have been actively exploited, it believes the rapid pace of AI-assisted cyberattacks requires faster deployment of security fixes to better protect customers.

 

Reuters

The US Supreme Court has given President Trump the power to fire the heads of independent agencies, such as the Federal Trade Commission, the Securities and Exchange Commission, and the National Labor Relations Board. The court's decision, which overturns a 91-year-old precedent that said the agencies must be independent of the president, creates a limited carve-out to preserve Federal Reserve independence. Justice Sonia Sotomayor, in a dissent with fellow Democratic appointees Elena Kagan and Ketanji Brown Jackson, observed: “Dozens of independent commissions are now likely to become purely executive agencies, shifting tremendous power over broad swaths of American life into the president’s hands.” The Competitive Enterprise Institute said the opinion “continues the healing process as we dismantle an unchecked regulatory state.”

 

The Hill

Bloomberg