Five Things You Need to Know to Start Your Day: Europe

Good morning. The UK’s Labour government may have oversold its negative message. AI fires up stock markets again. And a record interest-rate trade. Here’s what people are talking about.

A fresh round of UK economic indicators are bolstering arguments that the Labour government’s efforts to prepare the public for a tough budget next month have backfired on sentiment. Two surveys released Thursday underscored the concerns being felt by consumers and businesses about the prospect of tax hikes and spending cuts to close what Chancellor of the Exchequer Rachel Reeves has said is a “black hole” in the public finances. Prime Minister Keir Starmer tried to brighten the message in his speech to the Labour Party’s annual conference in Liverpool on Tuesday, promising “light at the end of the tunnel.” Reeves, meanwhile, pledged “no return to austerity” and real-terms spending increases over the Parliament term. Starmer is set to meet with US business executives including Blackstone President Jon Gray, JPMorgan Asset Management CEO Mary Callahan Erdoes and Bank of America CEO Brian Moynihan as he seeks to attract investment to boost Britain’s flagging economy.