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

• Russia overspends on Putin’s war in Ukraine by $28bn

• Israel attacks Beirut in new wave of bombing

• EU wants crisis powers over chip supply

• The plan for a 1mn-person city near Cambridge

We begin with an exclusive story on how the Ukraine war is set to hit Russia’s budget this year.

What to know: Russia’s spending on Vladimir Putin’s war in Ukraine is on track to blow through its budget by Rbs2tn ($28bn) this year, forcing the Kremlin to contemplate deep spending cuts in the coming years, according to a letter seen by the FT.

Finance minister Anton Siluanov asked Russia’s cabinet in February to freeze planned spending elsewhere to cover the mounting cost of the war, the letter shows.

Why it matters: The request highlights Moscow’s struggles to finance the war despite budgeting Rbs16.84tn ($238bn), or almost 40 per cent of this year’s budget, to defence and security.

Since Siluanov made his plea, Russia’s budget has received a boost from the Iran war, which sent oil prices above $100 a barrel for the first time since 2022, when Putin ordered the full-scale invasion of Ukraine.

But the windfall from higher energy prices is unlikely to be sufficient to cover all of the Kremlin’s ballooning expenses on the war in Ukraine. Read the full report.

Here’s what else we’re keeping tabs on today and over the weekend:

• Economic data: France and Germany release provisional inflation data for May.

• Shangri-La Dialogue: Singapore hosts Asia’s premier defence summit, running until Sunday.

• Malta: The EU island state holds parliamentary elections tomorrow.

• Giro d’Italia: The men’s cycling race concludes with an 81-mile flat race in Rome on Sunday.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Israel’s military struck the southern outskirts of Beirut yesterday as it intensifies its attacks on Lebanon despite a nominal ceasefire with Hizbollah. The escalation came a day before Lebanon and Israel were set to hold “security talks” in Washington.

• ‘Squeezing Hamas’: Prime Minister Benjamin Netanyahu has directed the Israeli military to take control of at least 70 per cent of Gaza, defying the terms of a US-brokered truce.

2. Exclusive: The EU is preparing sweeping emergency powers to intervene in Europe’s semiconductor supply chains during shortages, including by forcing chipmakers to override existing contracts. Read more details of the draft law.

3. Exclusive: Several large BP shareholders have criticised Albert Manifold’s claim to be a “passionate advocate of shareholders’ rights”, alleging that the ousted chair was “challenging” and difficult to arrange a meeting with.

4. Investors are rushing to gain exposure to SpaceX ahead of the rocket maker’s eagerly awaited flotation next month. A net $14bn has flowed into three mutual funds and four exchange traded funds holding slices of SpaceX since Elon Musk confirmed the listing in December.

• More tech finance: Anthropic has raised $65bn in a funding round that will see it leapfrog arch-rival OpenAI as the most valuable AI lab.

5. Exclusive: The company that owns Iran International received £650mn of debt relief from its shareholders, strengthening the balance sheet of the UK-based broadcaster, a prominent platform for anti-regime voices.

The Big Read

It has been a decade since an estimated million people were swept up in China’s crackdown on Uyghurs in Xinjiang. Reports of “re-education” camps and forced labour led to international outcry. In late 2019 Beijing announced the closure of the camps. But FT analysis suggests that the campaign of oppression has just entered a new phase.

We’re also reading . . . 

• Forest City: A former journalist with no background in development has come up with an audacious plan for a 1mn-person city near Cambridge. Critics see it as implausible.

• Prediction markets: The booming industry may have virtues. But it also has its sins. Don’t bet Donald Trump will rein the sector in, writes Gillian Tett.

• Faded stars: British fintech darlings Curve, GoCardless, PrimaryBid and Railsr have all sold up since the start of last year. What happened?

Could you be the FT’s next stockpicking champion? Our new Stock Picking Game is a fast, fun way to test your trading instincts, sharpen your market expertise and compete for the chance to win £1,000. Terms and conditions apply. Find out more and register to play.

Chart of the day

Is AI to blame for the weak labour market for fresh graduates? UK researchers suggest that the increase of working from home may be responsible as rising related costs make entry-level hires a less attractive proposition.

Take a break from the news

Provincial cities such as Manchester, Liverpool, Barcelona and Milan once dominated European football. But tomorrow’s Champions League final between Paris Saint-Germain and Arsenal of north London shows how football’s old power centres have shifted, writes Simon Kuper.

Additional contributions from Benjamin Wilhelm and Gordon Smith