UK Economics

1. On 3 October Andrew Bailey, Governor of the Bank of England, announced that the Bank may start being a “bit more aggressive” in cutting interest rates moving forward. This has come after the Bank held its base rate at 5.0% in September.
2. Bailey’s announcement has prompted a rise in hot money flows exiting the UK. On 3 October the Pound fell 1% against the Dollar to $1.317, as international savers anticipate a lower rate of return on UK assets for the foreseeable future.
3. Chancellor Rachel Reeves has announced the government’s intention to invest almost £22bn over the next 25 years in two carbon capture projects in Merseyside and Teesside. This comes ahead of the government’s full budget due on 30 October. 
4. On 6 October a report published by the influential Institute for Fiscal Studies urged the government to make a “serious reform” to capital gains tax in this months budget. The IFS argued that CGT rates should ultimately be increased to align them with current income tax rates.

World Economics

1. European households are saving at higher rates than before the pandemic, unlike US consumers who are driving economic growth through spending. The Eurozone’s household saving ratio rose to 15.7%, while the US savings rate fell to 5.2%, fuelling stronger growth in the US.
2. Turkey’s inflation rate has dropped below 50% for the first time in over a year, reflecting the success of President Erdoğan’s economic policies aimed at controlling runaway price growth.
3. EU member states have agreed to impose tariffs of up to 45% on imports of Chinese EVs in a significant trade dispute, despite opposition from Germany and Hungary. Following a year-long investigation into Chinese subsidies, the new tariffs include a 35.3% anti-subsidy tariff on certain imports, alongside an existing 10% levy, and will last for up to 5 years.
4. Indian companies are poised to fill the void left by reduced Chinese exports in the US solar industry as Washington imposes stricter tariffs on Chinese manufacturers. With rising demand for solar components, Indian firms such as ReNew are considering exports to the US, anticipating that India can diversify the green tech supply chain.

UK Politics

1. On 2 October, the House of Lords standards committee opened an investigation into Labour peer Lord Alli. This has come after Lord Alli allegedly failed to register his interests in line with parliamentary codes of conduct.
2. Prime Minister Keir Starmer agreed to pay back more than £6,000 of donations on 2 October, in the wake of public backlash. This will include the cost of six Taylor Swift tickets and four tickets to the Doncaster Races. 
3. On 3 October, the government announced that it would hand over sovereignty of the Chagos archipelago to Mauritius after a decades-long dispute. The islands, located in the Indian Oceans, house a major US air base on the Diego Garcia atoll.
4. On 6 October, Sue Gray stepped down as Keir Starmer’s chief of staff. The former civil servant had reportedly clashed with other key figures in the Labour government, while also attracting controversy when it emerged that her annual salary was £3,000 more than that paid to the Prime Minister himself. 

World Politics

1. On 1 October, American vice presidential candidates JD Vance and Tim Walz squared off in the first and possibly only debate between the two. Most analysts have characterised the debate as a starkly more civil discussion than the presidential debate held in September. 
2. The Austrian far-right Freedom Party secured their first parliamentary election victory since 1945 on 29 September. The party campaigned on a platform of stemming immigration and inflation, citing in its election program that it calls for the “remigration of uninvited foreigners.” The result marks yet another ultra-conservative party being elected into government across Europe in recent years.
3. On 5 October, French President Emmanuel Macron publicly called for a halt on weapons deliveries to Israel. In an interview, Mr Macron declared that the French government would not be delivering any arms to Israel, which has recently launched a military operation against Lebanon. The war in Gaza will mark its one-year anniversary on 7 October.
4. Ukrainian President Volodymyr Zelenskyy announced on 5 October that his government will unveil its “victory plan” at an upcoming meeting with allies on 12 October. Earlier this week, NATO’s new Secretary-General Mark Rutte backed Ukraine’s right to use advanced weapons for military strikes in Russia.

Written by Shreyas Veturi, Edgar Brown, Keshav Hajarnavis