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:

This week, as Liz Truss and Rishi Sunak continue to battle over who will replace Boris Johnson as prime minister next month, our Editorial Board bemoaned the distraction at a time of crisis. Far better, and more democratic, than a lengthy party member vote, would be a parliamentary poll.

"MPs are elected by constituents to take decisions on voters’ behalf. It is logical and consistent that they decide who should lead them — allowing the government quickly to get back to managing the crises of the day."

In the coming days we will opine further on the growing - and opportunistic - embrace of crypto assets by establishment fund managers. We are likely, too, to take aim at the concept of 50-year fixed rate mortgages.

Business leaders are braced for recession. In the US, central bank officials are intent on pressing ahead with tightening monetary policy to tackle inflation.

Minutes from the Federal Bank’s July meeting show central bankers are steeling themselves to increase rates further, and for some time. That was the meeting in which the Fed raised its benchmark policy rate 0.75 percentage points for the second month in a row.

Henry Kaufman, Wall Street’s “Dr Doom”, this week urged the Fed to toughen up. The veteran economist fears today’s regime under Jay Powell is failing in its resolve to curb inflation.

“I am still waiting for him to act boldly - ‘boldly’ means he has to shock the market,” Kaufman told the FT in an interview this week.

In the UK, workers’ pay has fallen 3 per cent in real terms (though not enough to bring down inflation to BoE targets, and not at PwC, where average pay for UK partners has topped £1mn for the first time).

Instead, inflation has hit 10.1 per cent - the first double-digit annual increase in 40 years. Intense selling of UK bonds reflected investors’ anticipation of more sharp rate rises to tame prices.

Many investors think the UK central bank is lagging in its efforts. They are not the only ones.

With inflation running at the highest rate of the G7 group of large companies, Chris Giles reports that politicians and economists are asking whether the UK’s officials in Threadneedle Street are up to the job.

In the words of Kwasi Kwarteng, favourite to be the next chancellor of the exchequer: “If your target for inflation is 2 per cent and you’re predicting 13.3 per cent, something’s gone wrong.”

In her column this week, Helen Thomas argues climate change is one supply-chain problem behind global inflation that cannot be ignored.

Toyota and Foxconn are among companies hit by a drought in China’s Yangtze River, which has interrupted hydropower supplies. In Europe, the heatwave has led to low water levels in the Danube, forcing eastern European countries to start dredging to keep barges moving. And the Rhine, Europe’s key commercial waterway, has fallen to levels that make it uneconomical for many vessels to operate, blighting German industry.

The Intergovernmental Panel on Climate Change warns that the extreme weather events that lead to drought and flooding will only become more common and more severe, with implications for the production, manufacture and distribution of food and goods around the world.

The Rhine snarl-ups come as Germany is battling inflation and a supply chain crises. If Russia cuts off gas supplies, a shortage could trigger a “severe recession” in the German economy, in the words of Commerzbank, one of Germany’s biggest corporate lenders.

In fact, rises in natural gas prices in Europe and the US this week threaten to push some of the world’s largest economies into recession.

To see how your country compares on rising prices, check the FT global inflation tracker tool.

In UK business news, the City of London’s top regulators could be pared back under a Liz Truss premiership. The frontrunner in the race to become the next UK prime minister has three watchdogs in her sights to reduce regulatory burdens and encourage growth.

Truss is eyeing an immediate review of roles and responsibilities if she wins, according to her campaign team. The Financial Conduct Authority, the Prudential Regulation Authority and the Payment Systems Regulator, could all merge into a new body.

Two stories on regulatory woes this week highlight how some UK businesses are running into problems with existing regulators.

Entain, owner of the Labdbrokes and Coral betting chains, was hit with a UK record £17mn penalty for “unacceptable” failures over anti-money laundering and safer gambling rules. Removal of their licences was “a very real possibility” if further breaches occurred, the gambling regulator says.

Helen Thomas argues the failures behind the Entain fine raise questions about the strength and efficacy of current regulation.

Meanwhile, Quintessentially, the luxury concierge company founded by Ben Elliot, the Tory party chair, is searching for its third auditor in three years after a breakdown in its brief relationship with its auditor BDO. Last year, Quintessentially disclosed that it had paid out unlawful dividends and made errors of more than £7mn.

One source told the FT that the company’s governance was “not up to scratch”.

And more chaos for business travellers looks likely after the summer break, as London Heathrow extended its passenger cap of 100,000 departures a day to the end of October. Ryanair boss Michael O’Leary labelled the UK’s biggest airport “Hopeless Heathrow”.

Other airports have introduced restrictions: Amsterdam Schiphol, Frankfurt and Gatwick among them. But in her column this week, Cat Rutter Pooley argues that Heathrow’s refusal to take responsibility for its own failings is what rankles.

UK audit and governance reforms: what boards should do now

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

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