We’ve summarised the key news stories from over the Christmas break into a briefing to get you up to date with everything that has happened. You can subscribe to receive the briefing in your inbox each week using the button below.

UK Economics 

1. The rate of inflation in the UK fell in November to 3.9%, down from 4.5%, but surprisingly rose slightly in December to 4%. 
2. With inflation falling and predicted to fall further, many economists are predicting that the Bank of England will adopt slightly looser monetary policy with cuts to interest rates which currently stand at 5.25%, a 14 year high. 
3. Chancellor Jeremy Hunt has continued to hint at the prospect of tax cuts in the upcoming Spring Budget. Speaking at the World Economic Forum in Davos, Mr Hunt said that ‘the plan is working’ and we need to stick to it’, which ‘means cutting taxes’.
4. Household energy bills are forecast to fall by 16 per cent or just over £300 a year from April. This is largely owing to American imports overtaking those from Qatar for the first time which has curbed supply disruption in the Red Sea’s shipping lanes. 
5. British retailers suffered a record fall in the quantity of goods sold over the Christmas period with official figures showing that retail volumes declined by 3.2% in December compared to the 1.4% increase in November. 

World Economics 

1. Central bankers and the Biden administration are concerned by the threat of a future rise in inflation. The reluctance of companies to lower price rises to pre-pandemic levels despite economic bounce-back risks undermining efforts to cool inflation in the US.
2. The American business fraternity seemed unfussed as to who would be occupying the White House by the end of the year. Jamie Dimon, the chief executive of JP Morgan, set the tone by praising Trump: he said that Trump ‘grew the economy quite well, tax reform worked and he was right about some of China’.
3. Google announced plans to build a $1 billion data centre in the UK, stating that the centre will power Google’s cloud and AI services for British customers. This marks the latest investment by a leading American technology company in Britain. 
4. Ngozi Okonjo-Inweala, director-general of the World Trade Organisation, stated at the World Economic Forum in Davos that the global economy was on course to perform better this year than in 2023, unless ‘a major war breaks out’.
5. The prospect of a recession in Germany has been reignited as latest figures from Germany’s statistic agency suggests that the nation’s gross domestic product dropped by 0.3% last year, having grown by 1.8% in 2022. Germany is expected to have been the only G7 economy to have contracted in 2023.
6. The international energy agency has raised its forecast for demand growth for the third consecutive month. It projecting a rise of 1.2 million barrels a day, low compared to 2.3 million last year. The easing of oil prices and a shift in monetary policy among central banks may have accounted for the support of oil demand.
7. China’s dept to GDP ratio soared to 83% in 2023, compared with 40% in 2014. Chinese leaders’ are aiming to restore 5% annual economic growth, but are restricted by restrictions on lending.
8. The international monetary fund expects the Japanese economy to slow in 2024, despite robust economic growth over during 2023, depending on how the Bank of Japan handles the transition away from its ultra-low interest-rate policy. 

UK Politics 

1. 320 MPs voted for Rishi Sunak’s Rwanda legislation; 276 voted against the bill and 49 abstained from voting therefore allowing the bill to pass with a majority of 44. 
2. Rishi Sunak’s flagship childcare pledge has come under jeopardy due to delays in allocating funding, staff shortages and issues with the IT system behind the scheme. The scheme is set to cost over £4 billion and is due to be up and running in less that three months. 
3. Reform UK are continuing to grow in popularity with the latest opinion polls suggesting that they sit at roughly 12%, with senior Reform members being even more optimistic, particularly with the prospect of Nigel Farage making a return to frontline politics. 
4. The leader of the Liberal Democrats, Sir Ed Davey, came under fire over his role in the post office scandal. He was postal affaires minister between 2010 and 2012 in the coalition government. Mr Davey refused ten times to apologise, citing it as a ‘conspiracy of lies’.
5. The Scottish First Minister, Humza Yousaf, has declared that he is ready to work with Keir Starmer should he win the general election. Yousaf stated that ‘I think there’s plenty that we can work on’ whilst acknowledging the likely disagreements on the constitution. 

World Politics 

1. Donald Trump won a landslide victory in the Iowa caucus claiming 51% of the vote. Ron DeSantis, the Florida governor, and Vivek Ramaswamy both pulled out of the Republican race and endorsed Donald Trump, leaving only Nikki Haley as a rival to Trump. 
2. US and UK forces launched airstrikes on Houthi targets following one of the largest Houthi attacks on shipping channels. President Biden confirmed that the actions taken by the US and UK had been supported by Australia, Bahrain, Canada and the Netherlands. 
3. Emmanuel Macron named Gabriel Attal as France’s new prime minister. Attal, 34, will be France’s youngest ever prime minister and is hugely popular with the French public.
4. Israeli prime minister, Binyamin Netanyahu, has rejected calls by the US to scale back its offensive in Gaza. Speaking in a news conference, Netanyahu accused the US of trying to ‘coerce’ Israel into moves that would ‘endanger’ the country. Netanyahu stated that ‘we will not settle for anything short of absolute victory’.
5. Indian prime minister, Narendra Modi, has promised that he would build a shrine on the site of the former Babri Masjid mosque. In the upcoming election, Mr Modi is hoping to repeat his crushing victory a decade ago during which he swept to power on a wave of Hindu support. Hindus make up just under 1 billion of India’s population. 
6. The leader of the Democratic Progressive Party (DPP), William Lai, emerged victorious in the Taiwan election. Lai promised to protect Taiwan from ‘threats and intimidation’ by China . Lai won 40% of the votes, leaving a 6.5 percentage point gap between his main rival Hou Yu-ih.
7. Kim Jong-un has stamped out the dream of Korean reunification as he declared the North Korea’s democratic neighbour should be treated as an enemy people just like any other. This new policy announcement overturns 50 years of established North Korean doctrine and practice, opening the way for new military conflicts. 

Written by Alex Duguid