US corporate profits surged to a record annualised $4.8tn in the second quarter, reaching 18 per cent of national income — the highest share since the aftermath of the second world war — while employees' share of wages and benefits fell to 60 per cent, the lowest level since the 1950s, according to Bureau of Economic Analysis data. The earnings boom, driven by the AI rally lifting Big Tech and higher oil margins linked to Donald Trump's war in Iran, has propelled US equities to peaks but deepened inequality. Richer Americans benefit disproportionately from investment returns, while middle- and lower-income households rely on pay cheques, fuelling political discontent and a shift toward populist politics.

Elsewhere, the US rebuked European allies over military capability gaps described as a "sea of red" in NATO assessments, with Pentagon policy chief Elbridge Colby urging faster procurement of conventional weapons. Saudi Arabia replaced the CEO of its $50bn New Murabba real estate mega-project, installing Public Investment Fund veteran Sabah Barakat as acting chief. Alphabet agreed to pay £260mn to settle a UK class-action over Google Play store charges. Novo Nordisk and Eli Lilly are combating counterfeit weight-loss drugs in Britain.

Economic focus turns to Germany's August labour data, UK immigration statistics, and Federal Reserve chair Kevin Warsh's speech at Jackson Hole, Wyoming. Iceland holds a Saturday referendum on resuming EU accession talks.