UK Economics

1. On 14 May the Office for National Statistics announced that UK wage growth stood at 5.7% in the three months to March. This came in above analysts’ expectations of 5.5%, indicating persistent inflationary pressures in the UK labour market.
2. Despite this, mortgage brokers continued to lower mortgage rates this week, as markets increasingly bet that the Bank of England will cut its base rate next month. UK lenders including Barclays, HSBC, TSB and Skipton Building Society have all lowered the cost of taking out a loan to buy a house. 
3. On 17 May Thames Water’s biggest investor, an Ontario-based pension fund, announced that it will be writing-off its stake in the UK’s largest water company. The move is expected to raise the likelihood that the government will have to renationalise the struggling utility firm.
4. The Office for Students released a new report this week, suggesting that 40% of England’s universities will fall into deficit over the 2023-2024 academic year. The news has come after the government removed the right of overseas graduate students to bring family members, leading to a sharp drop-off in lucrative international applications.

World Economics

1. Rising share prices and dropping borrowing premiums are making it cheaper for US businesses to get new capital, as an index of US financial conditions returns to levels reached before the Federal Reserve started raising interest rates more than two years ago.
2. China has indicated that it will fight against trade restrictions imposed by the US and EU, as it launches a dumping probe into chemical imports. The Ministry of Commerce declared that it is looking into imports of polyoxymethylene copolymer, a thermoplastic commonly used in the consumer electronics and automotive industries, from the EU, US, Japan and Taiwan.
3. The European Central Bank has cautioned that European countries are “vulnerable to adverse shocks” from geopolitical tensions and persistently high interest rates as a result of their failure to reduce public debt. The ECB stated that many European governments had not fully reversed the support measures put in place to protect consumers and companies from the effects of Covid-19 and the Ukraine war.
4. A senior executive at one of China’s largest privately owned carmakers has stated that overcapacity in the Chinese automobile sector is a “fake concept,” joining an increasing number of officials and state media condemning Western criticism of Beijing’s industrial policy.

UK Politics

1. On 15 May ex-business secretary Jacob Rees-Mogg called on Rishi Sunak to make Nigel Farage a government minister, and to allow other Reform Party candidates to stand as Conservatives, which he described as the “only chance of climbing the electoral mountain” faced by the Tories.
2. On 16 May Keir Starmer unveiled a new pledge card listing the six “first steps” for a Labour government. The card promises to “deliver economic stability, cut NHS waiting times, launch a new Border Security Command, set up Great British Energy, crack down on antisocial behaviour, and recruit 6500 new teachers”.
3. Also on 16 May, the Russian government announced that it would expel the UK’s defence attaché in Moscow. The move comes in retaliation for Britain’s expulsion of Russian diplomats for spying last week.
4. On 20 May the final report of a 7-year inquiry into the UK’s contaminated blood scandal was published. Chancellor Jeremy Hunt is expected to unveil a compensation scheme that could see up to £10bn given to victims and their families.

World Politics

1. On 16 May, Russian President Vladimir Putin met with Chinese Paramount Leader Xi Jinping in Beijing. Mr Putin outlined that foreign policy, including Russia’s war in Ukraine as well as the Middle Eastern conflict, was the main focus point on the agenda for the summit. 
2. On 15 May, Slovakia’s Prime Minister Robert Fico was shot numerous times at close range in the town of Handlova. Mr Fico, who is currently in a serious but stable condition, has drawn worldwide criticism in the past for his promises to end military aid to Ukraine and veto Ukraine’s NATO ambitions.
3. Jake Sullivan, a key US national security adviser, met with Israeli Prime Minister Benjamin Nethanyu on 19 May to discuss a potential withdrawal from Rafah. Mr Sullivan’s visit comes after Israeli forces ordered hundreds of thousands of inhabitants to swiftly evacuate the city. It is speculated that Mr Sullivan has urged the Prime Minister to avoid undertaking a major ground offensive assault in the city.
4. The army of the Democratic Republic of Congo reportedly thwarted an attempted coup on 19 May. The attempted coup commenced with a group of about 20 armed men attacking the house of former chief of staff Vital Kamerhe.

Written by Edgar Brown, Shreyas Veturi and Keshav Hajarnavis