UK Economics: 

1. Unemployment in the UK has risen to 5%, as stated in statistics published on the 11^th November, the highest levels seen since the Covid era. This, paired with wage growth rates also decreasing, is expected to lead to and boost an ongoing rally in gilt investments and ratings as expectations of lowered interest rates in the UK come begin to gain credibility.  

2. Recent updates in forecast UK economic growth by the EY Item club have restricted UK growth to less that 1% in the coming year due to looming tax rises and decreased direct investment into the economy. Business investment is set to go down to 0.8% in 2026, a large decrease from the health 3.7% figure seen in 2025. 

3. The UK Office for Budget Responsibility is said to be likely to reduce productivity growth percentage forecasts by 0.3%, likely indicating a loss of confidence in UK economic stability and a potential loss of economic momentum in the national economy. This reduction in productivity is expected to lead to a £20-30 billion hole in UK public finances in coming years and may push Chancelor Rachel Reeves to go back on previous statements about not raising tax rates in the UK to fill this new predicted gap in state finances.  

World Economics: 

1. On 11th November, the European Central Bank (ECB) signalled that the Eurozone’s economic outlook has improved significantly, meaning no rate cuts are expected until at least mid-2026 (markets now price only around a 40% chance of a cut by June 2026). Additionally, inflation is easing but is still close to the European Central Bank’s (ECB) 2% target. Higher rates keep borrowing costs high for households and businesses. They also influence growth as well as global trade and investment, especially as the Eurozone represents approximately 14% of global GDP. 

2. Over the last week, investors have become more cautious about major tech companies taking on large debt to fund AI expansion. Corporate bond spreads for major tech firms have widened significantly by 10-20 basis points, signalling higher perceived risk. Additionally, SoftBank sold a $5.8bn stake in NVIDIA which raised questions about whether AI valuations have reached their peak. If this is true and AI investments no longer deliver expected returns, financial stress could spread across markets due to the huge role of tech companies in global equities.  

3. Also on the 11th November, the People’s Bank of China confirmed that it will keep monetary policy “approximately loose” and will continue to supply extra money into the economy to support weak consumer demand and slowing exports. As the world’s second largest economy, China’s slow economic growth affects global supply chains as well as global demand for goods/services and commodity prices, especially for countries that rely on selling raw materials to China.  

UK Politics: 

1. On 27th October, Labour poll rating fell to an all-time low. Recent polling shows Labour’s support is at its lowest point since the last election, at a mere 17%, sparking concern among party leadership. Analysts suggest that a combination of economic pressures and controversial policy moves may be contributing to the decline. 

2. On 9th November, Donald Trump threatened to sue the BBC over Panorama edit. The former US President has threatened legal action against the BBC following a controversial programme that incorrectly edited his speech. The broadcaster has admitted an “error of judgment,” but Trump insists on pursuing the matter in court, by suing the BBC for $1 billion. 

3. On 10th November, Rachel Reeves signaled the full abolition of the two child benefit cap. The Labour Chancellor has indicated that the government will move to completely remove the two-child benefit cap, arguing that children in larger families should not be penalised. The announcement marks a significant policy shift ahead of the next budget update. 

World Politics: 

1. At the APEC (Asia-Pacific Economic Co-operation) summit in Busan, Donald Trump and Xi Jinping had a meeting which they both described positively. They announced agreements on tariffs, mineral export controls and agricultural purchases. However, issues like their technological rivalry and continued high tariffs, even with the 20% reduction, may be problems moving forward. 

2. Viktor Orban, Hungary’s prime minister, met Donald Trump, where Trump granted Hungary an exemption from sanctions on Russian oil and gas, largely since it is near impossible for them to get oil and gas from other regions. Hungary claims that the waiver is indefinite, while the White House says it is valid for a year. This marks a key step in relations between the countries, as Orban predicts a ‘golden age’ between the two countries.  

3. In response to a series of drone incursions over Belgian protected airspace, the UK has deployed specialist anti-drone forces. These incidents could be related to the dispute over frozen Russian assets held in Belgium. Hybrid warfare tactics are becoming an increasingly concerning topic, requiring ‘collective resolve to defend,’ according to the UK’s defense secretary.