Thanks for joining me. Rishi Sunak has been handed a blow ahead of a televised debate tonight after official figures showed the economy flatlined in April.
Gross domestic product (GDP) stagnated with 0pc growth, according to the Office for National Statistics.
5 things to start your day
1) Worklessness a ‘threat to growth’ after hitting 13-year high | Economic inactivity rises to 9.4m as long-term sickness hammers workforce
2) Trump ally urges Jeremy Hunt to investigate Shein’s ‘slave labour and sweatshops’ | Chinese fast-fashion company faces growing scrutiny ahead of potential London listing
3) Neil Woodford’s former stock picking team disbanded as demand for British shares slumps | Money in the Invesco UK Equity Income and High Income funds has shrunk since Neil Woodford left
4) Stop hosting work socials at pubs to include Muslim staff, law firms told | Cookery and pottery classes could replace events centred on alcohol, report finds
5) Matthew Lynn: Germany is descending into chaos – and it will take the rest of the eurozone down with it | A decade of catastrophic mistakes are coming back to haunt Europe’s former economic powerhouse
What happened overnight
Shares were mostly lower in Asia ahead of a decision by the Federal Reserve on interest rates.
In Japan, higher inflation and falling wages raised questions about how the central bank can navigate away from near-zero interest rates.
The Bank of Japan will issue a policy decision on Friday. In March, it raised its benchmark rate from minus 0.1pc to a range of zero to 0.1pc, the first such increase in 17 years.
The government reported that producer prices rose 2.4pc in May, as the yen’s weakness against the US dollar raises costs for imports of fuel and manufacturing components. At the same time, the latest data show real wages fell in April for the 25th straight month.
The worry is that the Bank of Japan will be constrained from raising interest rates out of concern that higher prices will depress consumer spending, hurting the overall economy.
Tokyo’s Nikkei 225 index lost 0.6pc to 38,899.44.
Chinese shares also fell, as the latest inflation data suggested persisting weakness in demand.
The Hang Seng index in Hong Kong sank 1.5pc to 17,913.10 while the Shanghai Composite index was down less than one point to 3,027.41.
Australia’s S&P/ASX 200 shed 0.6pc to 7,710.90. In Bangkok the SET edged 0.1pc lower.
Gains in technology shares pushed prices higher in South Korea, where the Kospi rose 0.5pc to 2,718.86, and in Taiwan, whose Taiex jumped 1.2pc.
Trading was subdued on Tuesday on Wall Street ahead of a key inflation report and the Federal Reserve’s policy decision.
The S&P 500 rose 0.3pc, closing at 5,375.32, driven largely by gains in tech stocks, even though more stocks fell than rose within the index.
The tech-heavy Nasdaq Composite rose 0.9pc, to 17,343.55. Both indexes set record highs for the second day in a row. Apple did the heavy lifting, surging 7.3pc after highlighting its push into artificial intelligence technology.
The Dow Jones Industrial Average, of 30 leading US companies, slipped 0.3pc, closing at 38,747.42.
The yield on benchmark 10-year US Treasury bonds dropped to 4.40pc from 4.47pc late on Monday.