The World Economic Forum in Davos dominated international attention with a tense backdrop of US-Europe friction. President Trump launched a new Board of Peace initiative aimed at Middle East conflict resolution but did so without major allied support, raising questions about diplomatic credibility and alliance cohesion.
Tension over Greenland has continued to roil relations. Trump reaffirmed demands tied to US strategic interests, prompting European military posturing and market volatility as tariffs threats rattled investors and softened the euro.
At Davos and on the global stage, UK government pressed for de‑escalation on US tariff threats and reaffirmed confidence that the UK‑US economic deal will hold, signalling a pragmatic trade stance amid geopolitical tension.
UK inflation rose in December, climbing further above the Bank of England’s 2% target, though policymakers still expect a decline through the year. That keeps rate decision pressure alive for BoE strategists.
Currys CEO Alex Baldock criticised Chancellor Rachel Reeves’s economic policies, warning they’re “hitting hiring in Britain” and forcing the company to move roles overseas. He cited rising employer costs and regulatory pressure as key drivers. The comments reflect broader retail sector concerns about the impact of Reeves’s tax strategy on jobs, investment and competitiveness.
In Parliament, Labour MP Andrew Gwynne resigned, triggering a by-election and refocusing debates within Labour between Sir Keir Starmer and Andy Burnham aligned factions.
Separately, Conservative MPs continued defecting to Reform UK, highlighting fragmentation within the centre‑right and pressure on party leadership.
The NHS is under continued winter strain, with rising norovirus cases and another cold snap pushing bed occupancy and pressure on hospitals. Ambulance and A&E performance shows improvement, but winter demands remain acute.
In the US Congress this week, the House defeated a war powers resolution intended to restrict executive authority to deploy troops to Venezuela, underscoring ongoing domestic disputes over foreign policy and separation of powers.
The FTSE markets ended a turbulent week steady, pound around $1.35, but volatility persists amid global headwinds including China trade data.
US economic data showed jobless claims inching up but remaining at historically low levels, signaling continued labour market resilience amid talk of slowing growth.
This Newsletter was sponsored by The Proposition.