Good morning and welcome to FirstFT. In today’s newsletter:

• Sir Keir Starmer clings to power

• Hormuz closure disrupts construction projects

• Top-performing AI stocks in Europe

• Is this the end of budget air travel?

You can listen to today’s top news stories with the FT News Briefing podcast.

We begin in the UK, where Prime Minister Sir Keir Starmer is clinging to power after he laid down the gauntlet to his rivals by challenging them to mount a Labour leadership bid amid ministerial resignations and escalating calls for him to quit.

What we know: Starmer came out fighting at a cabinet meeting yesterday, telling colleagues that “the Labour Party has a process for challenging a leader and that has not happened”.

Opposition contained: Allies believe the prime minister has headed off a possible challenge by Wes Streeting and that the health secretary has not got the support of 81 Labour MPs needed to launch a bid. Those hoping to oust him will have to overcome decades of precedent.

Starmer told his cabinet to get on with their jobs ahead of today’s state opening of parliament, when King Charles will unveil dozens of pieces of legislation intended to show that the prime minister still has a plan for the UK.

Market alarm: Rattled by the crisis, 30-year gilt yields reached as high as 5.81 per cent before falling back to 5.77 per cent. Benchmark 10-year gilt yields hit their highest level since 2008 before dropping to 5.1 per cent. Gilt traders are now being forced to consider where a leadership contest might take the country.

Read more about the UK’s political turmoil.

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

• US-China ties: Donald Trump is due to arrive in Beijing ahead of tomorrow’s summit with Chinese President Xi Jinping.

• Economic data: The EU releases preliminary first-quarter GDP forecasts and employment figures. France posts its April CPI inflation rate, while the US reports on April PPI inflation.

• Oil outlook: Opec and the IEA issue market reports.

• Results: Allianz, Deutsche Telekom, Eon, RWE and Siemens report earnings. Read the Week Ahead for the full list.

Five more top stories

1. Construction projects are stalling around the world as the closure of the Strait of Hormuz disrupts the supply of crucial materials and drives up prices for oil-derived products such as paint and insulation. Read more on how the war is affecting the industry.

2. A small number of European AI stocks have posted huge gains this year, as investors hunt for ways to ride a global spending boom in a continent often derided for its lack of large and successful technology companies. Read the full story.

3. Euroclear plans to accept mainland Chinese bonds traded in Hong Kong as collateral, helping Beijing’s drive to internationalise its currency. Read the interview with Valérie Urbain, chief executive of the central securities depository.

4. The Scottish Mortgage Investment Trust has defended its $1.25tn valuation of SpaceX, even though it is far lower than the $1.75tn reportedly sought by Elon Musk’s company in what is expected to be the biggest initial public offering in history. The trust said its valuation put its own holding in the rocket and AI group at almost £3bn.

• Blue Origin: Jeff Bezos’s rocket venture is weighing its first external fundraising as part of a push to hit ambitious launch targets and tap investor appetite.

5. Russia and Ukraine believe there is little prospect of reviving US-brokered peace talks even after the war in the Middle East ends, according to people briefed on the two nations’ positions. Read more on why both have lost faith in the process.

How have you been affected by Brexit? Ten years on from the UK’s vote to leave the EU, the FT would like to hear how Brexit has made an impact on you or your work. Fill out our short form.

The Big Read

Low-cost air travel may be a thing of the past as rising fuel prices tip carriers into another crisis that could bring a wave of consolidation, bankruptcies and faster retirement of old aircraft. All this will strengthen the industry but weaken the competitive forces that keep fares affordable.

We’re also reading . . . 

• Global imbalances: Disparities lie at the intersection of almost everything that matters in geoeconomics and geopolitics, writes Martin Wolf.

• JPMorgan: The US lender is preparing to launch a long-awaited push into European retail banking as its digital brand Chase debuts in Berlin.

• ‘Star Homes’: Carefully designed houses in Tanzania have been shown to lower disease rates among children, writes Anjana Ahuja.

Chart of the day

With the stand-off in the Strait of Hormuz in its third month, governments are struggling with a shared dilemma: how to minimise the economic pain caused by hoarding, while ensuring that poorer households and countries can access essentials.

Take a break from the news . . .

Copenhagen’s new wave of artisan bakeries gave the traditional BMO (bolle med ost, or bun with cheese) a glow-up. Now it is a viral sensation. FT Globetrotter’s Stephanie Gavan carb-loads her way around the capital to find out what the craze reveals about the city.

Additional contributions from Benjamin Wilhelm and Gordon Smith