FirstFT: Boeing to plead guilty to fraud charge

Good morning. Boeing is to plead guilty to conspiracy to defraud the US government, according to a court filing, after it violated a deal struck with the Department of Justice in the wake of two deadly crashes involving its 737 Max aircraft.

The US aerospace group faces a fine of $487.2mn, the maximum by law, a justice official said. Boeing is expected to pay half that sum, subject to court approval, given it has already paid $243.6mn over the matter.

A lawyer for the families of the 346 people who were killed in the 737 Max crashes — off the coast of Indonesia in 2018 and in Ethiopia in 2019 — called the agreement a “sweetheart deal” that failed to hold Boeing accountable. Read more on the proposed agreement.

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

• Hurricane Beryl: Beryl made landfall on the Texas coast near Houston earlier today, the National Weather Service reported. The largest ports in Texas closed operations and vessel traffic yesterday as the storm approached.

• Economic data: Brazil’s central bank releases results of a weekly economic survey with more than 100 financial institutions. This will include forecasts for GDP, interest rates and inflation rates. Chile’s statistics agency INE publishes inflation data for June and Chile’s central bank publishes trade figures for last month.

• UK: New chancellor Rachel Reeves will set out far-reaching planning reforms to “fix the foundations of Britain’s economy” after a landslide victory in last week’s election.

• India-Russia relations: Narendra Modi begins a two-day visit to Moscow for talks with Vladimir Putin.

Five more top stories

1. Calls for President Joe Biden to drop out of the election race grew louder over the weekend. Seven Democratic lawmakers called on the president to withdraw during a virtual meeting arranged by Hakeem Jeffries, the top Democrat in the House of Representatives, according to one representative. “This week is key,” said one House Democrat as lawmakers prepared to return to Washington today after a short recess.

2. France is heading towards a hung parliament and rocky talks to form a government after an unexpected leftwing victory thwarted Marine Le Pen’s efforts to bring the far right to power. The result will leave the Eurozone’s second-largest economy in limbo. Here’s how investors reacted.

3. Nato leaders are expected to make a one-year, €40bn pledge of support for Ukraine at a summit starting in Washington tomorrow. But domestic political turmoil is undermining Nato’s efforts to show unwavering support for Ukrainian President Volodymyr Zelenskyy. The proposal is far below the initial planned $100bn support package.

• War latest: A barrage of Russian missiles hit central Kyiv this morning, severely damaging Ukraine’s main children’s cancer hospital, according to authorities.

4. Shari Redstone has agreed to sell Hollywood group Paramount to independent film studio Skydance in a deal that ends her family’s involvement in the company founded by her grandfather in 1936. The merger, which values the new company at $28bn, marks the close of a tumultuous eight-month process.

• More deal news: Danish brewer Carlsberg has agreed to buy UK soft-drinks maker Britvic for £3.3bn.

5. Former BP chief executive Bernard Looney is seeking a comeback after a scandal last year over his past relationships with colleagues. According to three people with knowledge of the matter, he has met senior figures in the United Arab Emirates, including Sultan al-Jaber of the Abu Dhabi National Oil Company and national security adviser Sheikh Tahnoon bin Zayed al-Nahyan.

Big Read

Russia’s war in Ukraine has taken drone warfare to new heights of intensity and frequency, with Kyiv saying it has gone from having just six drone makers before the invasion to more than 200, capable of churning out a million drones a year. This rapid proliferation of technology designed by smaller players is challenging the dominance of sluggish defence industry giants.

We’re also reading and listening to . . . 

• US immigration: Not only can immigration keep growth high and inflation low but it can boost the wages of native born workers, argues Rana Foroohar.

• Iran: A former heart surgeon won Iran’s presidential election at the weekend and he wants to end Tehran’s nuclear stand-off with the west.

• The new normal of office life: As working from home persists, companies are rethinking the role of office space, writes Pilita Clark.

Chart of the day

The early stages of a long-awaited recovery in investment banking fees is set to boost Wall Street lenders when they report second-quarter earnings starting this week. Analysts expect second-quarter investment banking revenues at JPMorgan Chase, Goldman Sachs, Morgan Stanley, Bank of America and Citigroup will on average rise more than 30 per cent from a year earlier.

Take a break from the news

From Pag to Ventotene, five FT contributors reveal their lesser-known Mediterranean hideaways.

Additional contributions from Camille De Guzman and Benjamin Wilhelm