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Today’s agenda: Sterling’s rally; AI start-up revenues surge; Reeves’s “non-dom” rethink; Ukraine’s new recruits “freeze”; and more young adults on benefits
Good morning. We’re looking ahead to Benjamin Netanyahu’s address at the UN General Assembly today, a speech the US hopes will help secure a temporary truce between Israel and Hizbollah.
A 21-day ceasefire was proposed by the US and France yesterday, which saw more Israeli air strikes that killed another Hizbollah commander and dozens of people across Lebanon. Israel also expanded its bombing campaign to the border with Syria.
What to expect from the speech: People familiar with the situation said Washington hoped Israel’s prime minister would announce that its war in Gaza was moving into a new phase, which might persuade Hizbollah — which has insisted it will not stop firing at Israel until the offensive against Hamas is over — to agree a temporary truce in Lebanon.
What are the chances of a truce? Upon arriving in New York yesterday, Netanyahu cast doubt on ceasefire efforts by vowing to continue strikes on Hizbollah “with all [our] strength”. The proposal has also been heavily criticised by far-right members of his governing coalition, on whom Netanyahu depends for political survival. Members of his Likud party have also railed against a truce.
Nevertheless, the US National Security Council has said it would “keep trying” for a diplomatic solution, and stressed the proposal would not have been released publicly if Israel had not indicated support for the plan. Here’s more on what to expect.
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Northern Israel: Even as rockets land around them, many of Haifa’s Jewish majority continue to support the offensive on the Lebanon border.
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Iran soothes Hizbollah: Tehran has dispatched envoys to Beirut to allay fears that it has deserted the militant group amid Israel’s escalation.
Here’s what else I’m keeping tabs on today:
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Economic data: France has its preliminary September consumer price index and Germany releases August labour market figures, while the University of Michigan publishes its monthly US consumer sentiment survey.
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Zelenskyy in New York: Ukraine’s president is set to meet Donald Trump despite Republican backlash to his lobbying efforts in the US this week.
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Commerzbank: The German lender will “exchange views” with UniCredit in their first meeting after the Italian bank’s aggressive stakebuilding.
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Five more top stories
1. Investment banks forecast more gains for sterling even after a blistering recent run thanks to a buoyant UK economy and the Bank of England’s caution on cutting interest rates. Goldman Sachs, Bank of America and Barclays all expect the pound, currently trading at about $1.34, to rise over the coming months. Here are their estimates.
2. Exclusive: Artificial intelligence start-ups are making revenues more quickly than previous waves of software companies, according to new data that suggests the transformative technology is also generating strong businesses at an unprecedented rate. Madhumita Murgia has the full analysis.
3. Exclusive: KKR will give $75mn of the proceeds from its sale of GeoStabilization International to its blue-collar workers, with each of the engineering group’s 900 employees set to receive between $10,000 and $325,000. The move is part of a growing, industry-wide effort to help private equity soften its image as a bastion of elite privilege.
4. Exclusive: The UK taxpayer-funded company in charge of the High Speed 2 rail link could be brought under direct state control as a result of a new government-commissioned review, according to Whitehall and industry figures. The review will also examine if it is possible to claw back money from contractors working on the project. More details here.
5. UK chancellor Rachel Reeves is ready to water down a planned tax raid on “non-doms” in her Budget amid Treasury fears that some of the measures may fail to raise any money, with one official saying: “We will be pragmatic, not ideological.”
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UK Budget: Investors have urged caution, with markets on edge ahead of a fiscal rules overhaul that could result in tens of billions of pounds of extra borrowing capacity.
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FCA: Reeves will issue a formal edict next month to the UK’s financial watchdog to prove it is serious about its duty to support growth.
How well did you keep up with the news this week? Take our quiz.
News in-depth
Outmanned and outgunned, Ukraine’s troops have valiantly defended their territory from Russia for more than two years and proved they were still capable of seizing the initiative with the Kursk incursion. Despite these achievements, Ukrainian commanders are growing concerned. Inadequate training, burnout and the rising age of soldiers mean new recruits are being wounded or killed in combat at an alarming rate.
We’re also reading . . .
Chart of the day
Data suggests the deterioration of mental health among young adults is very real and increasingly acting as an economic drag as more turn to welfare benefits, writes John Burn-Murdoch.
Take a break from the news
Imagine a nurse changing a dressing on a wound or a care worker helping someone with dementia through daily tasks. The “Baumol effect” explains why it seems wrong to demand that they work harder or faster for higher wages, writes Tim Harford: perhaps they can’t, or shouldn’t. But it would be unwise to assume nothing can be done to raise productivity.
Additional contributions from Gordon Smith and Benjamin Wilhelm
