UK Wind Auction: A High-Stakes Bet on Clean Energy

Source: Theguardian

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Source: investinglive

Israeli Prime Minister Benjamin Netanyahu faces a critical election year defined by security failures, domestic crises, and legal challenges.

Israeli Prime Minister Benjamin Netanyahu is heading into an election year facing the most significant political challenge of his career. For the first time since the devastating Hamas attack in 2023, voters will deliver their verdict on his leadership. With polls consistently showing him on track to lose an election slated for October, analysts suggest that the escalating crisis in Iran may be his last, best chance to salvage a legacy built on national security.

As Israel's longest-serving prime minister, Netanyahu is navigating a perfect storm of political and personal crises. He is currently on trial for corruption, his right-wing coalition is fracturing over a contentious military draft law, and he bears the political weight of the security failures that led to the October 7 attack—the deadliest single day in Israel's history.

The Iran Crisis: A Path to Political Redemption?

Amid domestic turmoil, events in Iran have emerged as a potential focal point for Netanyahu's administration. With U.S. President Donald Trump threatening strikes against Tehran, the Israeli government is closely monitoring the situation. According to one Israeli official, Netanyahu's security cabinet was briefed on the possibility of the Iranian government collapsing and the prospect of American intervention. Another official noted the assessment is that Trump has already decided to act, though the timing and scale remain uncertain.

For Netanyahu, who has long positioned himself as the guardian of Israel's security, a regime change in Iran could be a legacy-defining achievement. Udi Sommer, a political scientist at Tel Aviv University, noted that ensuring the current Iranian regime is gone could be Netanyahu's top priority. "For somebody who thinks of himself as the person who is going to be remembered in history as the one who secured the country, then you might want another one just to make sure that this is really set in stone," he said.

While warning Iran of "horrible consequences" if it strikes Israel, Netanyahu has expressed support for protestors in the country. "Israel supports their struggle for freedom and strongly condemns the mass killings of innocent civilians," he stated. "We all hope that the Persian nation will soon be liberated from the yoke of tyranny."

Post-October 7 Fallout Shatters Security Image

The surprise attack by Hamas on October 7, which killed 1,200 people, dealt a severe blow to Netanyahu’s reputation as a security hawk. The subsequent war in Gaza resulted in tens of thousands of Palestinian deaths and devastated the enclave.

Netanyahu has so far rejected personal responsibility for the security lapses. Instead, he has pointed to Israel's military gains against Iran's proxies, including Hamas in Gaza and Hezbollah in Lebanon, as well as the ousting of their ally Bashar al-Assad in Syria.

However, public mistrust is growing. The prime minister's push to establish a government-empowered inquiry into the attack has drawn criticism from the families of victims and the public, who overwhelmingly support an independent investigation.

Domestic Crises Threaten to Topple Government

On the home front, Netanyahu's governing coalition is showing signs of strain, primarily over a new military conscription law. His ultra-Orthodox coalition partners are demanding exemptions for their community from Israel's mandatory military service.

Crafting a law that satisfies these demands is likely to alienate mainstream Israelis, especially after the Gaza war produced the highest Israeli military death toll in decades. Without the support of the ultra-Orthodox parties, which already quit the government once last year over this issue, Netanyahu’s coalition could collapse, triggering an early election.

The government faces a critical deadline to pass the state budget by the end of March. If it fails to secure enough votes in the 120-member parliament, a snap election will automatically be held about 90 days later. With his coalition weakened, many Israeli political commentators believe an early election in June is a strong possibility. "We're working under the assumption that the elections will be before October," confirmed one official familiar with the matter.

A Leader Entangled in Legal Battles

Adding to the political pressure is a web of legal challenges that continue to loom over the prime minister.

• Corruption Trial: Netanyahu's trial on charges of fraud, bribery, and breach of trust is ongoing. He denies all charges and in November appealed to President Isaac Herzog for a pardon, a request publicly backed by U.S. President Donald Trump.

• Submarine Probe: He is also dealing with a state investigation into suspected wrongdoing related to government purchases of submarines and missile boats from Germany, though he denies any involvement.

• Aide Investigations: Scrutiny has intensified over his aides' alleged security leaks and dealings with Qatar during the war. While Netanyahu has not been named as a suspect, these probes have cast a shadow over his wartime conduct.

These legal issues, combined with a renewed push for a contentious judicial overhaul, have fueled ongoing protests against his government, further complicating his path to re-election.

Minneapolis Federal Reserve President Neel Kashkari is pushing back on the idea of imminent interest rate cuts, citing a resilient labor market and inflation that remains above the central bank's target.

In a recent interview with the New York Times, Kashkari revealed he did not support the rate reduction last month and sees no compelling reason for another cut in the near future. "I don't see any impetus to cut in January," he stated, adding that it was "way too soon" for such a move.

Inflation Remains a Top Concern

Kashkari, who holds a vote on the Fed's rate-setting panel this year, expressed significant worry over persistent inflation. He noted that inflation has run above the Fed's 2% target for years and could remain there for another two or three years, a prospect he called "very concerning."

This view is supported by a recent government report showing consumer prices rose 2.7% last month from a year earlier.

The Conditions for a Policy Shift

While Kashkari is against a rate cut now, he indicated he could support one later this year if economic conditions change. A primary trigger would be a jump in the unemployment rate, which was 4.4% in December. A policy pivot would become more likely if a weakening labor market coincided with easing inflation.

The Federal Reserve is widely expected to leave its policy rate in the current 3.50%-3.75% range when it meets in two weeks. This follows 75 basis points of cuts in 2025, which included a quarter-percentage-point reduction approved by a 9-3 vote at its December meeting.

Navigating Fed Independence

Kashkari also touched on the political climate, saying he was comforted by lawmakers from both parties who have expressed support for an independent Fed and for Chair Jerome Powell.

His comments follow a move by the Trump administration to subpoena Powell over remarks he made to Congress. Powell described the subpoena as an attempt to intimidate the central bank into cutting interest rates.

U.S. retail sales increased more than expected in November as motor vehicle purchases rebounded and households increased spending elsewhere, pointing to solid economic growth in the fourth ​quarter.

Retail sales rose 0.6% after a downwardly revised 0.1% drop in October, the ‌Commerce Department's Census Bureau on Wednesday. Economists polled by Reuters had forecast retail sales, which are mostly goods and are not adjusted for inflation, advancing 0.4% after being unchanged as previously reported. The Census Bureau is catching up on data releases after delays caused by ‌the 43-day government shutdown.

Spending is largely driven by higher-income households, with lower-income ​consumers struggling to cope with the rise in the cost of living. The government reported on Tuesday that food prices increased by the most in over three years in ‍December, even as overall inflation was moderate.

Bank of America Securities said its Consumer Prism showed "the gap between higher- and lower-income spending growth was substantial and persistent through the fourth quarter." It noted that ⁠the divergence between the two income cohorts started in late 2024 and widened over ‍the course of last year, adding that the "K-shape" in spending "is more evident in discretionary than non-discretionary spending."

President ‌Donald ‌Trump, whose aggressive trade policy has been blamed by economists for higher prices, has made a flurry of proposals to lower the cost of living, including buying $200 billion in mortgage bonds and a 10% cap on credit card interest rates for a year. ⁠Banks and financial institutions warned ⁠the proposal would limit ​access to credit.

Economists and policymakers argued that lack of supply was making housing unaffordable.

Retail sales excluding automobiles, gasoline, building materials and food services increased 0.4% in November after a downwardly revised 0.6% gain ‍in October. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have shot up 0.8% in October.

Consumer spending increased at a ​brisk pace in the third quarter, driving much of ‍the economy's 4.3% annualized growth pace during that period. The Atlanta Federal Reserve is currently forecasting GDP increased ​at a 5.1% rate in the fourth quarter.

Source: Reuters

China's imports from Canada fell in 2025 for the first time since the pandemic began, with official data released just as Canadian Prime Minister Mark Carney landed in Beijing for a critical diplomatic visit. The figures highlight the economic pressure points framing the high-stakes talks.

According to China's customs authority, Chinese purchases of Canadian goods dropped 10.4% in 2025, settling at $41.7 billion. This marks a notable decline from the all-time high of $46.6 billion recorded a year earlier in 2024. The last time imports fell was in 2020, when they contracted by 22.3%.

Canadian Prime Minister Mark Carney arrives in Beijing, marking the first visit by a Canadian leader since 2017.

Mending Fences After Years of Tension

Prime Minister Carney's arrival in Beijing on Wednesday is the first visit to China by a Canadian head of government since 2017. The trip is widely seen as an effort to repair a bilateral relationship that soured significantly in 2024 after former Prime Minister Justin Trudeau’s government imposed 100% tariffs on Chinese electric vehicles, following a similar move by the Biden administration.

"China is our second-largest trading partner, and the world's second largest economy," Carney stated on social media. "A pragmatic and constructive relationship between our nations will create greater stability, security, and prosperity on both sides of the Pacific."

This visit builds on a positive meeting between Carney and Chinese leader Xi Jinping in South Korea last October. While that encounter did not produce immediate breakthroughs, both sides agreed to move forward with improving bilateral ties.

Navigating Complex Trade Issues

A key point of friction remains Chinese tariffs that have effectively shut Canadian canola out of its largest market. Canadian Foreign Minister Anita Anand confirmed that discussions on the canola issue have been "productive" and are ongoing, though a solution has not yet been reached.

"We will be exploring several opportunities for collaboration between the broader populations, in addition to examining the trade and economic relationship," Anand told reporters in Beijing, describing the bilateral ties as "complex."

An honor guard receives the Canadian delegation, highlighting the formal and high-stakes nature of the diplomatic visit.

The Push for "Strategic Autonomy"

Canada's renewed engagement with China is partly driven by a strategic desire to diversify its export markets. This follows U.S. President Donald Trump's decision to impose tariffs on Canada last year, coupled with remarks suggesting the country could become the 51st U.S. state.

Ahead of Carney's visit, Chinese state media emphasized the importance of Canada's independence from the United States. An editorial in the state-run China Daily advised that Ottawa should reflect on past policies. "If the Canadian side reflects on the root causes of the setbacks in bilateral relations over the past few years—the previous Justin Trudeau government's policies to contain China in lock step with the United States—it will realise that it can avoid the same outcome by upholding its strategic autonomy in handling China-related issues," the paper wrote.

Under Trudeau, Ottawa frequently voiced concerns over human rights and accused Beijing of interfering in Canadian domestic affairs, charges China has consistently denied.

Balancing Economic Needs and Human Rights

Foreign Minister Anand affirmed that Canada would not shy away from difficult conversations, including those centered on human rights. However, she balanced this by underscoring the economic imperative of engaging with Beijing.

"We will continue to have difficult conversations and discuss human rights issues," Anand said. "At the same time, we need to continue to build the Canadian economy and to do that, we will be at the table here."

The drop in imports from Canada occurred alongside a similar trend with the United States. Chinese customs data showed that imports from the U.S. also slumped in 2025, falling 14.6% from the previous year.