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Cutting Foreign Aid Won't Fix Defence Spending Woes

Anneliese Dodds' resignation follows PM Starmer's slashing of foreign aid budget to boost defence spending. The UK's international development minister had criticized the move, stating it would harm British influence abroad and devastate those relying on aid. The cuts will now take effect, reducing Britain's overseas development budget from 0.5% to 0.3% of GDP.

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Chancellor Set to Cut Welfare Spending by Billions Δ1.82

The chancellor has earmarked several billion pounds in draft spending cuts to welfare and other government departments ahead of the Spring Statement. The Treasury will put the proposed cuts to the government's official forecaster, the Office for Budget Responsibility (OBR), on Wednesday amid expectations the chancellor's financial buffer has been wiped out. Sources said "the world has changed" since Rachel Reeves's Budget last October, when the OBR indicated she had £9.9bn available to spend against her self-imposed borrowing rules.

UK's Starmer Gets Poll Boost as He Steps up Ukraine Diplomacy Δ1.78

The number of Britons who think Prime Minister Keir Starmer is doing a good job has risen as he steps up his role in diplomacy over the war in Ukraine, an opinion poll showed. The recent diplomatic efforts have boosted Starmer's image, but concerns about government spending and debt remain. A majority of respondents also support increasing defence spending, even if it means higher taxes or reduced funding for other public services.

ECB To Cut Rates Again As Trade Wars, Defence Cloud The Outlook Δ1.77

The European Central Bank (ECB) is anticipated to lower interest rates by 25 basis points to 2.5% as it navigates a turbulent economic landscape marked by trade wars and increased defense spending. This decision represents a crucial moment for the ECB, as policymakers face growing divisions over future monetary support amid rapidly changing economic conditions. While the current cut may be seen as straightforward, the complexities of the geopolitical climate and internal disagreements suggest that the path ahead will be anything but simple.

Rachel Reeves' Plan for Economic Stability Faces Challenges Δ1.77

The UK Chancellor will unveil her Spring Statement on 26 March, presenting an update on economic forecasts and making key announcements about borrowing, spending, and taxation. The Office for Budget Responsibility's forecast is expected to confirm that the financial buffer set by the chancellor has been wiped out, leaving room for potential policy changes. The government is under pressure to address sluggish economic growth and rising inflation, with some reports suggesting possible tax rises or spending cuts.

NGO's Newspaper Ad Asks Americans for Donations After Trump's Drastic Aid Cuts Δ1.77

The International Rescue Committee (IRC) has launched a full-page advertisement in the New York Times, urging Americans to donate to support hundreds of millions of people in need following drastic cuts in U.S. foreign aid. The IRC claims that 46 government grants have received termination notices, which would deny critical services to at least 2 million people across multiple crisis zones. This move highlights the severe consequences of the Trump administration's "America First" policy on humanitarian aid.

Defence Surge Could Help Jumpstart Europe's Flat Economy Δ1.75

A defence spending surge could provide an initial boost to Europe's sluggish economy, but its long-term impact is uncertain and dependent on various factors. The surge in funding may stimulate the region's ailing industry and technological base, particularly if governments invest in domestic production and research and innovation. However, the benefits are likely to be limited by the complex nature of defence projects and the fragmentation of Europe's defence industries.

Poland May Redirect EU Funds Towards Defence, Minister Says Δ1.75

Poland will review its Recovery and Resilience Plan with a view to redirecting funds towards defence and economic resilience, according to Polish Funds Minister Katarzyna Pelczynska-Nalecz. The country has received nearly 60 billion euros in grants and cheap loans from the EU recovery facility, which could be reallocated to support national security efforts. Poland's government is also working on a bill to increase public investments in defence, with the aim of adopting it next week.

Some Malaria, HIV, TB Programme Cuts Reversed by US, Groups Say Δ1.75

Several lifesaving health projects that recently faced abrupt termination of U.S. funding contracts have received reversal letters, although actual funding has yet to resume. Aid organizations express cautious optimism regarding the reversals, yet the lack of financial clarity hampers their ability to effectively resume critical services. The ongoing confusion stems from the Trump administration's review process, which has halted operations and jeopardized vital health programs across the globe.

US Commerce Secretary Wants to Remove Government Spending From GDP Δ1.75

U.S. Commerce Secretary Howard Lutnick's plan to strip out government spending from the gross domestic product (GDP) report would significantly alter the economic landscape, leading to increased volatility in data and potential distortions in measuring economic performance. The move is likely to have far-reaching implications for policymakers, economists, and businesses, as it would require adjustments to various financial metrics and indicators. Critics argue that such a change would undermine the accuracy of GDP calculations, making it difficult to compare economic growth across different regions and time periods.

Gaza Reconstruction Plan Gets Global Backing Despite Israeli Rejection Δ1.75

The foreign ministers of France, Germany, Italy, and the UK have expressed support for an Arab-backed plan to reconstruct Gaza, which would cost $53 billion and prioritize Palestinian self-governance. The plan aims to create a more sustainable and realistic path for Gaza's reconstruction, promising swift and significant improvements in living conditions. However, Israel and the US have rejected the proposal, with the latter presenting its own vision for transforming the Gaza Strip into a "Middle East Riviera".

Euro Rebounds From 2-1/2-Week Low, Ukraine and Defence Spending in Focus Δ1.74

The euro rebounded as EU leaders drew up a Ukraine peace plan, which may boost future growth and support the currency. A likely increase in fiscal spending by euro zone countries could provide some boost to future growth, supporting the currency. The renewed push for peace in Ukraine and possible increase in defence spending are monitoring closely by investors.

US Commerce Secretary Wants to Remove Government Spending From GDP Δ1.74

U.S. Commerce Secretary Howard Lutnick's plan to strip out government spending from the gross domestic product (GDP) report could have significant implications for how the economy is measured and understood, potentially leading to a more accurate representation of private sector growth. This move aligns with Lutnick's stated goal of making GDP more transparent and free from what he sees as "wasted money" on government programs. The potential impact of this change on economic analysis and comparison with global peers is still uncertain.

Germany Eyes Swift Moves on Defence, Investors Sniff Bonanza Δ1.74

Germany's likely next chancellor, Friedrich Merz, is considering setting up special funds worth nearly a trillion euros to finance urgent defence and infrastructure spending, prompting double-digit percentage rises in shares in defence contractors. The proposed funds would amount to 20% of German GDP, with economists proposing sums of 400 billion euros and 500 billion euros respectively. This fiscal sea change would be unprecedented since the Cold War, sending Europe's defence stocks soaring.

UK PM Starmer Dismisses Calls for Trump's State Visit to Be Cancelled Δ1.74

British Prime Minister Keir Starmer has rejected calls to cancel U.S. President Donald Trump's upcoming state visit, despite political pressure following Trump's recent remarks about Ukrainian President Volodymyr Zelenskiy. Starmer emphasized the importance of maintaining strong ties with Washington during a precarious period for European security, advocating for diplomatic engagement over divisive rhetoric. The invitation, which would mark Trump's unprecedented second state visit, reflects Starmer's strategic approach to securing U.S. support for Ukraine amid ongoing conflict with Russia.

Supreme Court Rejects Trump Bid to Withhold $2bn in Foreign Aid Δ1.74

The US Supreme Court has rejected a request by the Trump administration to withhold nearly $2bn in payments to foreign aid organisations for work they have already performed for the government. The court upheld a lower court ruling ordering the administration to release the funds to contractors and grant recipients of the US Agency for International Development and the State Department. This decision marks a significant victory for President Barack Obama's aid programmes, which were previously targeted by Trump's cost-cutting initiatives.

US Job Cuts Surge 245% in February Due to Federal Government Layoffs Δ1.74

Layoffs announced by US-employers jumped to levels not seen since the last two recessions amid mass federal government job cuts, canceled contracts, and fears of trade wars. The Department of Government Efficiency (DOGE) is wielding the axe on public spending, an exercise that has resulted in funding freezes, deep spending cuts, and the purging of thousands of federal government workers. The resulting job losses are having a ripple effect across the economy.

Humanitarian Aid Enters Crisis as Israel Halts Gaza Entry Δ1.73

The decision by Israeli Prime Minister Benjamin Netanyahu to cease the entry of all humanitarian aid into Gaza marks a critical turning point in the region's humanitarian crisis. As phase one of the hostage deal comes to an end, the lack of essential supplies and medical care threatens the lives of thousands of Palestinians in need. The move is seen as a drastic measure by many, sparking concerns about the severity of Israel's stance on the situation.

USAID Official Warns of Unnecessary Deaths From Trump's Foreign Aid Block, Then Says He's Been Put on Administrative Leave Δ1.73

Enrich warns of preventable deaths due to USAID dismantling as Trump's aid freeze affects Ebola, malaria, and tuberculosis efforts; DOGE blocks USAID payments despite waiver for lifesaving aid. The Trump administration's dismantling of the U.S. Agency for International Development will result in unnecessary deaths from withheld aid, according to a senior official. As a result, millions of people worldwide are at risk of suffering from preventable illnesses.

Kosovo Businesses Under Threat From Trump's Usaid Freeze Δ1.73

Kosovo's economy heavily reliant on international aid, including USAID funding, is facing a significant blow as the Trump administration freezes US Agency for International Development (USAID) funding and seeks to drastically scale down the agency and all US foreign aid under its "America First" agenda. The halt in funding affects projects on democracy, energy, and inclusion, which are crucial for Kosovo's development and stability. The impact of this decision will be felt across various sectors, including healthcare, education, and infrastructure.

Norway Should Raise Ukraine Aid, Defence Spending, Says PM Δ1.73

Norway aims to boost financial aid to Ukraine significantly and also raise its own defence spending at a time of heightened global uncertainty, Prime Minister Jonas Gahr Stoere of the ruling Labour Party told parliament on Thursday. The country has seen soaring income from gas sales to Europe as a result of Russia's 2022 Ukraine invasion, and faces pressure at home and abroad to boost its aid. Norway has already agreed to spend 35 billion crowns ($3.22 billion) on military and civilian support for Ukraine in 2025.

The UK Government Proposes Changes to Immigration System Δ1.73

The UK government has proposed significant changes to its immigration system, including the removal of a "skinny visa" that allowed individuals with a bachelor's degree from outside the EU to work in the UK on a short-term basis. The new proposals also aim to introduce a "points-based" system for skilled workers, which would require them to meet specific criteria such as language proficiency and relevant work experience. However, critics argue that these changes could exacerbate existing labour shortages and negatively impact British businesses.

US Dollar Sags After Weaker-than-Expected Jobs Data, Fed's Powell Comments Δ1.73

The US dollar declined to multi-month lows against major currencies following weaker-than-expected job growth in February, as the Federal Reserve is likely to cut interest rates multiple times this year. The decline was accompanied by a boost for the euro, which is poised for its best weekly gain in 16 years. Fed Chair Jerome Powell repeated comments that the central bank will be cautious in responding to economic changes.

EU Leaders to Back Defence Surge, Support Zelenskiy After US Aid Freeze Δ1.73

European leaders are set to endorse significant increases in defence spending and express unwavering support for Ukraine at an upcoming summit, following concerns over U.S. military aid under Donald Trump's administration. The meeting will feature Ukrainian President Volodymyr Zelenskiy, although Hungary's potential veto could complicate the endorsement of a joint statement supporting Kyiv. This shift in European defence strategy is driven by heightened fears of Russian aggression and a desire for greater autonomy in security matters amid uncertainty about U.S. commitments.

Defence Stocks Surge as Investors Anticipate Europe's Spending Spree Δ1.73

Defence stocks have surged as investors expect governments across Europe to ramp up spending following recent developments in geopolitical tensions. The rally in UK defence stocks on Monday helped propel the FTSE 100 to a record high close of 8,904 points, as European leaders agreed to boost defence spending and announce plans to increase their military aid to Ukraine. Investors are betting that Europe will shoulder more responsibility for its own security following the US decision to pause military aid to Ukraine.

Rising Defense Spending Sparks Global Bond Market Selloff Δ1.73

(Bloomberg) -- Bond yields jumped on Monday as investors prepared for a surge in government borrowing to fund defense following weekend talks among European leaders on how to support Ukraine. The prospect of more European defense spending has been growing in recent weeks, and gained new urgency following a contentious meeting between US President Donald Trump and Ukraine’s Volodymyr Zelenskiy on Friday. Over the weekend, leaders from across the continent gathered in London to hammer out new pledges for military investment and recommit to Ukraine’s.