Monday 10/03/25

In Ukraine seeks to persuade US to resume aid in high-stakes talks (Financial Times, Fabrice Deprez, Henry Foy and Myles McCormick) we see that bilateral talks will be held this week between the US and Ukraine. In the short term, Ukraine is going to push for the resumption in military intelligence and aid potentially by making progress in ceasefire talks. Ukrainian negotiators will be travelling to Saudi Arabia today. Meanwhile, Trump is carving up Ukraine with Putin. Taiwan is terrified it could be next (Daily Telegraph, Melissa Lawford, James Titcomb and Allegra Mendelson) highlights increasing fear in Taiwan about the prospect of a China invasion given the way Trump is behaving towards Ukraine. Although there’s talk of Taiwan increasing its defence spending from 2.5% to 3% of its GDP and TSMC promising to invest $100bn to build up manufacturing capabilities in the US, there are no guarantees that the US will be there for the Taiwanese in their hour of need. China’s president Xi Jinping has previously ordered his army to be ready to invade Taiwan by 2027…

In the latest developments with Trump, ‘I hate to predict things’: Trump doesn’t rule out US recession amid trade tariffs (The Guardian) shows that Trump does not deny the possibility that the US will fall into recession this year and that inflation will increase but maintains that his policies will take time to bear fruit.

As for his billionaire BFF, Elon Musk seeks Italian presidential meeting to salvage Starlink deal (Financial Times, Amy Kazmin) shows that Musk is pushing for a chance to work his quirky charm on Italy’s president Sergio Mattarella as rumours circulate that Italy’s going to torpedo a potential $1.5bn with Starlink. The government has been in talks with Starlink for the last five years to provide secure military comms for diplomats, troops and other civil servants working abroad but given America’s recent political shift, there’s a very real possibility that Italy will push back. Ontario already pushed back about a month ago when Canada’s biggest province said it would cancel its £55m Starlink contract in protest at Trump’n Musk’s tariff-chasing. Eutelsat has now begun talks with the Italians…meanwhile, Elon Musk’s Starlink to keep rural NHS GPs connected to the internet (Daily Telegraph, James Warrington) shows that Starlink is faring better over here as the NHS has awarded a five year £85,000 contract to Starlink to provide internet services to GP practices and offices in the North East and North Cumbria. This is all part of a wider programme to improve connectivity in the health service. On the other hand, Second-hand Teslas flood the market as Elon Musk faces British backlash (Daily Telegraph, James Titcomb and Matt Oliver) cites figures from Auto Trader which show that the number of used Teslas coming to market has risen considerably. Some say that this is because consumers are rejecting his political leanings while others say this is a consequence of an aging model line-up and more competition. It is worth noting, though, that the increase in listings of used Teslas between December and January was the biggest month-on-month increase ever. * SO WHAT? * I personally think it’s too early to tell whether Musk’s political shenanigans are the main reason for people abandoning them but the longer he persists in his controversial actions, the more likely it is that this will become the case.

In an interesting twist, Chinese investors privately take stakes in Elon Musk’s companies (Financial Times, Sun Yu) shows how Chinese investors have been managing to put money into Musk’s companies (including xAI, Neuralink and SpaceX) via the back door. Chinese asset managers have been able to park their money in these companies via special purpose vehicles (aka SPVs) that hide investors’ identities. * SO WHAT? * Although the use of SPVs is not uncommon, this does raise the question about conflicts of interests, particularly given Musk’s proximity to Trump. Derek Scissors, a senior fellow at the American Enterprise Institute, made the cutting remark “How can someone in Musk’s position have so many connections to China but still be a good person to reform the US government?”.

There’s a new dawn for Canada in Mark Carney to replace Justin Trudeau as Canada’s prime minister (Financial Times, Ilya Gridneff) as the former governor of the Bank of England and the Bank of Canada won the ruling Liberal party’s election to replace Justin Trudeau as its leader, therefore becoming prime minister by default. Carney promised to pursue fiscal responsibility and social justice whilst building “a stronger Canada for everyone”. He suggested that he would call a swift election to secure a mandate from the Canadian people. This has to happen by October this year, but maybe he will call it sooner to take advantage of the anti-Trump momentum. Can Mark Carney win an election in Canada and a trade war with the US? (Financial Times, Ilya Gridneff) takes a look at whether Carney can win another election for the Liberal party and

whether he can get a trade tariff truce with Trump. The Conservatives had been on course to thrash the Liberals in an election but Trump’s aggressive actions and now Carney’s international reputation have helped to close the gap. Clearly, he knows about economics – but will he be able to get his political skills to match up?

Back home, UK to impose new targets on regulators to spur innovation (Financial Times, Peter Foster) shows that government ministers are going to give regulators new performance targets in order to spur tech development and attract overseas investors. The targets are being put together by the new Regulatory Innovation Office that is to oversee underperforming regulators. * SO WHAT? * This sounds interesting, but I’m more sceptical about what the targets are actually going to be, how well-enforced they will be and whether they are actually going to stick or be quietly abandoned. Having targets is often a good thing but I’m not so sure about this in the case of regulators because having them could potentially force them to make decisions that they wouldn’t normally make for the sake of fulfilling quotas.

Then in New UK planning rules aim to halve approval time for major projects (Financial Times, Jim Pickard and Gill Plimmer) we see that the UK’s housing minister, Matthew Pennycook, said that the rules in the new Planning and Infrastructure Bill will cut the time it takes to get planning permission for major projects in half. Currently, the process takes about four years. The rules aim to cut red tape for Nationally Significant Infrastructure Projects – or NSIPs. The government wants 150 NSIPs to be approved over the course of this parliament. * SO WHAT? * This sounds like great news for all concerned but obviously the key will be in the execution! Clearly this will be particularly good for developers, raw materials suppliers and probably local governments who will be able to benefit from new infrastructure.

Then in crypto news, Crypto prices fall as US strategic reserve plan disappoints traders (Financial Times, Nikou Asgari) we see that crypto prices fell on Friday after the executive order signed by Trump to establish a US strategic bitcoin reserve fell short of investor expectations. It said that the reserve would only hold assets that had been given over to US law enforcement authorities. Traders had been expecting the government to buy bitcoin and other currencies, hence the disappointment. Don’t worry, though, Trump won’t be skint as Donald Trump’s crypto project netted $350mn from presidential memecoin (Financial Times, Oliver Hawkins, Eade Hemingway and Nikou Asgari) shows that he managed to make a tidy $350m at least from his $TRUMP memecoin. Conflicts of interest don’t seem to be concerning people too much at this stage but if the wheels ever start to fall off Trump’s administration I have no doubt that things like this will be brought up!

Donald Trump is giving the euro a chance to dethrone the dollar (Daily Telegraph, Samuel Montgomery and Tim Wallace) takes a look at something that I’ve been wondering myself recently – whether Trump’s shenanigans could actually dethrone the dollar as the world’s reserve currency and boost use of the euro. 80 years ago, the pound was dethroned as the world’s reserve currency and since then the dollar has reigned supreme. Investors are getting touchy about the dollar and the emergence of what looks like European unity has given cause for some to wonder whether the euro could take its place, particularly if Europe starts to issue joint debt on a massive scale to fund defence and economic restructuring. * SO WHAT? * The dollar has been and is the biggest and most liquid currency – and to illustrate this point, the Federal Reserve estimates that between 1999 and 2019, the dollar was involved in 96% of international transactions in the Americas, 74% in Asia and about 96% for the rest of the world. The problem is that if Trump insists on pursuing his high tariff strategy, this is likely to result in lower trading volumes worldwide, economic slowdown and fewer opportunities for global investors to make any money in America. This will dent the dollar’s status. It is worth noting that the world has already started to try to wean itself dollar-dependency when America imposed sanctions against Russia in 2022. At that point, the Brics nations (Brazil, Russia, India, China, South Africa, Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates) made conscious efforts to wean themselves off dollar dependency. Nowadays, Putin said that almost 95% of trade between Russia and China now takes place using local currencies. It seems now that there’s a lot more impetus to find an alternative reserve currency to the dollar – and the euro might just be it!

Two-thirds of arms imports to Nato countries in Europe come from US (Financial Times, Sylvia Pfeifer, Jana Tauschinski and Charles Clover) highlights the sheer amount of US-manufactured arms European members of NATO have imported over the last five years, according to the Stockholm International Peace Research Institute (Sipri). Arms imports by European nations more than doubled between 2020 and 2024 and 64% of these arms came from the US, up from 52% between 2015 and 2019. This just goes to show the massive challenge being faced by European leaders who need to increase defence spending pronto whilst being mindful of the US potentially falling outside the countries that we can trust. Clearly, the way forward here is to reduce reliance on US-made product, particularly in this sphere.

Can the US switch off Europe’s weapons? (Financial Times, Charles Clover, Sylvia Pfeifer, Lucy Fisher and Richard Milne) asks a very pertinent question that needs to be taken into consideration, bearing in mind what I’ve just said! What happened in Afghanistan in 2021 was a great example of what can happen if the Americans decide that they don’t like you any more. When the US withdrew, although the Black Hawk helicopters themselves remained, spare parts and software updates disappeared, rendering the aircraft largely useless within a few weeks.

* SO WHAT? * Given how much Europe has relied on American weapons and defence equipment over the years and given how hostile the current leadership now is, I think it would be wise for European nations to become much more cautious about buying American and put much more effort into growing local capabilities. That’s not going to be an overnight job, but longer term this is going to have to happen – and European companies are going to have to step up. One particularly pertinent example of why reliance on the US for defence equipment could be dangerous is Trump’s sabre-rattling about taking over Greenland. Denmark has said it could defend it by using US-bought F-35s but because the fighters depend on continuous updates and spare parts, it is possible that they won’t work if America doesn’t want them to work, hence rendering their defensive capabilities useless. Updates and maintenance are provided via the Autonomic Logistics Information System, which will be replaced by a system called Odin (the Operational Data Integrated Network). At the moment, more than 50% of Europe’s most advanced combat aircraft are bought from the US. There are also vulnerabilities in our nuclear deterrent, data and intelligence. This is not good news for the US defence industry because their exports will be dented – and this is probably why leading US defence companies’ share prices have lagged their European rivals recently.

China’s consumer prices fall for first time in more than a year (Financial Times, Eleanor Olcott) signals welcome news for Chinese consumers as an official release from the National Bureau of Statistics said on Sunday that consumer prices fell in February for the first time in 13 months. * SO WHAT? * Although this is welcome, at least some of this may be due to the lunar new year holiday being earlier than usual. Prices tend to rise during the holiday as consumers spend more of their money on travel and food. Clearly, all eyes will be on what the next reading will be!

UK house prices level off as rush to beat stamp duty fades (The Times, Tom Howard) highlights some potential relief for UK home buyers as the latest stats from Halifax show that house prices in February went sideways from the historic highs they reached in January. The annual rate of price inflation was unchanged versus this time last year. * SO WHAT? * At the moment, some are mooting the possibility that concerns about the broader economy are starting to burst the real estate bubble somewhat but I have to say that this is just one month. I suspect that momentum will start to pick up again as we get closer to the stamp duty deadline.

In employment news, US law firms’ London expansion drives record number of job moves (Financial Times, Suzi Ring) highlights a lot of job-hopping among senior lawyers as US law firms continue to be keen to splash the cash according to legal recruiter Edwards Gibson. They believe that partner hires could reach new heights in 2025 and there has been a lot of activity so far as January and February are usually very busy. The companies hiring most aggressively have been Kirkland & Ellis and White & Case in addition to Clifford Chance.

Elsewhere, though, Firms hold back on hiring amid ‘significant cost rises’, surveys say (The Guardian, Joanna Partridge) cites the latest KPMG/REC report which shows that companies are reining in their hiring plans due to an uncertain economic outlook and rising wage costs. The gloom continues!

In a quick scoot around some of today’s other interesting stories, John Lewis £120m profit forecast ignites bonus debate (The Times, Emma Taggart) shows that the retail partnership is staging a bit of a turnaround. It is believed to have outperformed market forecasts significantly but underperformed internal forecasts – and that means that it’s unlikely that its employees will be getting a fat bonus. All eyes will be on what the new chairman Jason Tarry will say regarding the future strategy.

Elsewhere, Just two buyers left in race to buy WH Smith high street division – report (The Guardian, Joanna Partridge) shows that restructuring firms Alteri and Modella Capital are the last remaining interested parties left in the running to buy WH Smith’s high street stores. It is

hoped that a deal could be completed in April. If I was working at WH Smith right now, I’d be job hunting as I would put a large amount of money on the buyer axing a LOT of stores. I think it will be brutal.

Then in Meta accelerates voice-powered AI push (Financial Times, Hannah Murphy and Cristina Criddle) we see that Zuck is bolstering the voice capabilities of its LLM Llama 4 in ongoing efforts to build something that generates revenues. The improvements are expected in the coming weeks and are aimed at making the conversation between humans and machine more natural.

This little girl is hilarious! She sounds like an old soul, pondering important issues on the walk to school…