Israel grapples with scarcity of air defence missiles

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Today’s agenda: UK chancellor signals tax rise; Nvidia hits new record; Martin Wolf examines UK economy; Silicon Valley’s sperm donors; and the rise of home-schooling

Good morning. We start today in Israel, where the military faces a looming shortage of interceptor missiles, according to industry executives, former military officials and analysts.

How bad is it? “Israel’s munitions issue is serious,” said Dana Stroul, a former senior US defence official with responsibility for the Middle East. “If Iran responds to an Israel attack [with a massive air strike campaign], and Hizbollah joins in too, Israel air defences will be stretched,” she said, adding that US stockpiles were not limitless. “The US can’t continue supplying Ukraine and Israel at the same pace.”

Why it matters: With more than 20,000 rockets and missiles fired at Israel over the past year from Gaza and Lebanon alone, according to official Israeli figures, analysts say defence planners and Israel’s artificial intelligence-powered air defences are having to choose which areas to protect over others.

The US is racing to help close gaps in Israel’s protective shield, announcing on Sunday the deployment of an advanced antimissile battery, ahead of an expected retaliatory strike from Israel on Iran that risks further regional escalation. Here’s the full story.

‘Generals’ Plan’: Human rights groups have warned that Israel appears to be starting to implement a plan to force Hamas into submission by laying siege to the north of Gaza and starving those who remain.
Lebanon: An air strike on a Christian-majority village in northern Lebanon has left 18 people dead as Israeli forces widen their attacks on the country.

Here’s what else I’m keeping tabs on today:

Economic data: The UK issues labour market statistics for October, Germany has the ZEW economic sentiment survey and the International Energy Agency publishes its monthly oil market report.
Companies: Bank of America, Citigroup, Goldman Sachs and Johnson & Johnson release third-quarter results.
World Trade Organization: The international body’s General Council meeting begins in Geneva.

Five more top stories

1. UK chancellor Rachel Reeves yesterday gave her clearest signal yet that business taxes would rise in this month’s Budget, even as the government urged the world’s financial elite to unleash a “shock and awe” wave of investment in Britain. Read more on how Reeves plans to “get the balance right”.

Labour’s investment summit: There was praise and doubt at the event, with many global business leaders saying they would wait to pass judgment.
National Wealth Fund: Reeves will put only £5.8bn of new money into what was previously the UK Infrastructure Bank, falling short of the £7.3bn promised in its manifesto.

2. Canada and India have engaged in tit-for-tat diplomatic expulsions after Canadian police alleged the Indian high commissioner and other staff had been involved in “clandestine activities” over the murder of a Sikh separatist in a Vancouver suburb in June 2023. Here’s more on the diplomatic dispute that marks a new low for India-Canada relations.

3. Shares in Nvidia closed at a fresh record yesterday, passing the previous peak they had hit in July. Renewed confidence about a soft landing for the US economy has driven a rebound in big technology stocks, with the US chipmaker’s gain bringing its market capitalisation to $3.39tn.

4. Google has ordered six to seven small modular nuclear reactors from Kairos Power, becoming the first tech company to commission new nuclear power plants to provide low-carbon electricity for its energy-hungry data centres. Read more on the group’s shift from leaning “heavily” on renewable energy.

5. Almost two-thirds of EU water bodies are in bad condition, with countries including Sweden, Germany and Poland among the worst affected, according to the biggest survey yet of the state of the bloc’s water. Here’s the full story, with graphics presenting the data released by the European Environment Agency.

The Big Read

Some students at London Park Schools, which also have a hybrid offering, spend four days studying at home and one day a week on-site © Charlie Bibby/FT

Ambreen Baig, director of hybrid schools at Dukes Education, pupil Reginald Lakeland, 15 and Jamie Whiteside, co-director of Dukes Education, sit at a table looking at a laptop — Some students at London Park Schools, which also have a hybrid offering, spend four days studying at home and one day a week on-site © Charlie Bibby/FT

Parents and children unhappy with traditional education are turning to online alternatives after the pandemic opened the door to new ways of learning. But the rising popularity of home-schooling has caught the attention of education experts, who warn of concerns about safety, inequality and the human rights implications it raises.

We’re also reading and listening to . . .

Political Fix 🎧: Lucy Fisher sits down with Financial Times chief economics commentator Martin Wolf to examine how the UK can escape its low-growth trap.
Sperm donation: Genetic largesse from some of Silicon Valley’s elite appears to be a mix of narcissism, altruism and dreams of immortality, writes Elaine Moore.
DeWu: The reselling app, estimated to be worth $10bn in 2023, has dominated China’s luxury goods grey market as consumers hunt for lower prices.
Can you run the UK economy? Step into the UK chancellor’s shoes and devise your plan in the FT’s new Budget game.

Chart of the day

Millions of dollars in new wagers are being placed on the US presidential race — narrowly favouring Donald Trump — as fledgling platforms chase bets following the lifting of a domestic betting ban last week. One such platform, Kalshi, is offering institutional investors the opportunity to put as much as $100mn on either candidate ahead of the November election.

Take a break from the news

While there is no precedent for what a female president of the US wears, Kamala Harris has refined her own style, as seen on the digital cover of US Vogue, blending the authority of a suit with a touch of femininity — a clever take on power dressing.