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Each day FT Leader writers on the Editorial Board meet to discuss the topics to be considered for Leader columns. Here are the issues that dominated this week:

It might seem a niche focus for debate as the gung-ho Tory leadership election intensifies, but the Solvency II rules are a politically hot topic.

Relaxing them, as our leader pointed out this week, could release tens of billions of pounds of infrastructure investment. We welcomed the ongoing reappraisal, but our conclusion was cautious: "At stake are pensioners’ and policyholders’ life savings, which, if they are improperly invested, could lead to invidious choices between policyholder haircuts and taxpayer bailouts that a government may have to make long after this one, whoever leads it, has finished."

Earlier, we took a swipe at the reactionary turn of the US Supreme Court, in the wake of regrettable decisions over Roe v Wade abortion rights and the powers of the Environmental Protection Agency. "There are big worries within the business and investment community about how this court’s rulings are dismantling the federal administrative state," our editorial concluded.

We also opined on the surprise downward lurch in commodity prices. As inflationary pressures build, and central bankers harden their language about the interest rate rises that will be needed to stem higher prices, the fall in many commodity prices - from oil and metals to wheat - complicates the picture.

Our conclusion: "At the very least, the recent market movements muddle an already complicated picture [making] it even harder [for central bankers] to know whether the extent and pace of their tightening have been well judged."
A “once-in-a-generation opportunity to ensure corporate Britain upholds the highest standards of governance,” is how the UK’s audit regulation chief described it.

UK boards face big changes. They will be more responsible than before for fraud, their company's finances and bad behaviour when the Financial Reporting Council overhauls its corporate governance code . That means new guidance on fraud reporting by directors, with provisions to recommend minimum clawback conditions on pay be included in remuneration arrangements in the event of corporate failure.

Some changes will require legislation, and the government has indicated that work will begin imminently on a draft bill for the next parliament.

Meanwhile, UK business leaders’ immediate concern is thefantasy economics ” of hopefuls vying to become the next Conservative leader. As the race narrows, all the candidates are competing for soundbites.

Some - including Penny Mordaunt, one of two frontrunners - are putting low taxation at the centre of their pitches. But the UK business lobby sees the pledges as aimed at winning the leadership race, rather than protecting the economy from recession, and with no regard for inflationary pressure.

“Businesses are not interested in headlines,” complained a senior director at the British Chamber of Commerce.

According to the Federation of Small Businesses, a tax cut is not even among the top-five demands from smaller companies and start-ups.

Mordaunt’s main rival, former chancellor Rishi Sunak, has insisted tax cuts cannot be implemented until inflation is under control.

A YouGov poll of Conservative party members put Mordaunt far ahead of other candidates. Members will ultimately choose the next leader.

Philip Stephens argues that Tory leadership hopefuls’ ideological obsession with low taxation means the party has lost its instinctive pragmatism - just at the moment it needs to show competence.

Keep up with the increasingly bad-tempered Tory leadership race with the FT’s tracker.

Whoever wins will contend with the political challenge of rising inflation, as price rises damage voters’ incomes.

Another week of strain in global economies. In the US, the inflation rate in June ran well above that forecast , piling more pressure on the Fed to raise interest rates aggressively. In markets, the yield on the two-year Treasury note, a closely watched signal of recession, hit its most extreme level in more than 20 years.

The euro fell to parity with the dollar for the first time since 2002, pointing to a risk of recession in the eurozone. The weak currency is partly a reflection of the effects of war in Ukraine, with fears that Russia may choke off its supply of natural gas to Europe.

And the IMF is expected to make fresh downgrades to its global growth predictions , citing rising inflation and commodity price shocks.

Activist investors see opportunities in weakening economies. In Europe, activists waged a record number of campaigns in the first half of the year - up 67 per cent from the previous year, and UK companies represented a third of all targets.

Shell is one example: it has contended with pressure from Odey Asset Management over its climate strategy, and from US hedge fund Third Point, which wants to split the business between legacy oil and a green-focused future. HSBC is also facing demands to break up its business.

In a twist of irony, even US activist Nelson Peltz is facing pressure from Global Value , an activist seeking to replace most of the board at Trian 1, his UK feeder fund.

What is driving all this? “Activist investors love value stories and Europe has been operating at relatively lower values,” says Mary Ann Deigan of investment bank Lazard.

Meanwhile, Elon Musk’s increasingly rancorous offer for Twitter looks set to escalate. Last week, the Tesla chief said he was backing out of the $44bn deal, with his lawyers suggesting he may try to avoid a $1bn withdrawal penalty. But Twitter’s chair, Bret Taylor, said it would pursue legal action to enforce the agreement.

“I think we are finally going to see if Elon Musk is above the law,” said one commentator.

Finally, more turbulence for airlines - and travellers. The capacity crunch is causing chaotic scenes at airports, and more disruption is on the way. Heathrow this week told airlines to stop selling tickets and set limits on its daily passenger numbers, blaming staff shortages.

Here’s a financial travel checklist to help minimise disruption, from the FT’s personal finance expert.
UK directors face tougher rules on accountability

This article is brought to you by FT Specialist’s Agenda, a publication that focuses on corporate boards.

How will the risk of recession affect M&A trends? How prepared are dealmakers for global economic volatility? Join senior industry leaders and the FT’s Ortenca Aliaj, the FT’s M&A correspondent, for insights in this webinar from FT Live on Tuesday 26 July at 2pm BST. Learn more here.
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