US Inflation May Slow, But The Affordability Debate Is Likely to Keep Raging

Forex

Economic

Summary:

Even if overall inflation slows next year as the U.S. Federal Reserve anticipates, President Donald Trump will still face political headwinds over the cost of living with home mortgage rates expected to remain comparatively high, tariff-related price increases on goods seen persisting through the first part of the year, and cost pressures building around items like beef and electricity that can have an outsized influence on consumer perceptions.

Fed economic projections issued on Wednesday held good news for the administration, with policymakers expecting inflation to cool over the coming year, while economic growth accelerates.

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Across the broad array of services that account for most economic activity, "disinflation appears to be continuing," Fed Chair Jerome Powell said, while goods inflation should "come down in the back half" of 2026 as firms finish dividing tariff costs among consumers, their suppliers and their own operating margins.

But in a midterm election year Trump and Republicans face a problem all politicians share. Consumers - voters - focus far less on the macroeconomic generalities analyzed by economists, for whom inflation is a carefully weighted average rate of price changes across all goods and services, and more on what their local grocery charges for milk, how much the utility bill has risen, and what insurers charge to renew their homeowners policy.

Trump, whose administration has become concerned about low poll numbers particularly on the economy, with affordability a central issue, can rightfully note that overall inflation has been pretty modest on his watch so far. The Consumer Price Index from his inauguration through September is up about 1.6%, equivalent to a roughly 2.4% annual pace and not far off of the central bank's 2% target, though that is measured slightly differently. Food at home, the rough equivalent of grocery prices, is up even less at 1.4%.

But prices haven't fallen as Trump promised during his election campaign and early on in his administration, with consumers still struggling through what has now become a nearly five-year case of rolling sticker shock.Some prominent CPI line items have in fact spiked sharply in recent months, a fact that may turn hamburger into the same sort of political cudgel for Democrats that egg prices were for Trump last year.

In September, ground beef was 14% more expensive than when Trump resumed office; electricity prices were up over 4%, or around 6% on an annualized basis, and expected by many forecasters to go higher; and homeowners insurance was rising at a roughly 10% annual pace.

There were also cautionary notes in Powell's commentary to indicate the affordability fight will persist.

Powell singled out the housing market as one part of the economy that continues to struggle, with likely little respite coming from the Fed's recent rate cuts. While its benchmark interest rate does influence long-term mortgage rates, government debt and other securities, Powell said the housing problem is one of chronic undersupply.Mortgage rates have moderated since nearing 8% a little over two years ago, but they've remained around 6.2% since September, after investors began pricing in what became quarter-point Fed rate cuts in September, October and December. With the Fed on hold for now and other factors holding up longer-term interest rates, they may not move much further.

Real estate firm Redfin this week reported both sellers and buyers pulling back, with sales prices rising nonetheless and mortgage rates likely to "remain largely unchanged in the near term."

Mortgage rates remain far above the ultra-low rates seen in the roughly 15 years following the 2007-to-2009 financial crisis, when Fed policy aimed specifically at holding down long-term borrowing costs.

Absent a serious recession or financial swoon, sub-3% mortgages are unlikely to reappear. The collapse of the housing industry during that crisis still echoes through what Powell said was years of underbuilding.

"We just haven't built enough housing for a long time...We can raise and lower interest rates, but we don't really have the tools to address a secular housing shortage," he said.

Home affordability remains a key issue for younger workers and families who've delayed homebuying and the increase in household wealth that typically accompanies it.

The Census Bureau's latest homebuilding data is from August, with reports still delayed by the government shutdown, but at that point new building permits were down 11% from the year before while new housing starts were off 6% from a year earlier.

Construction jobs, which hit a new high in mid-2022 during the rebound from the COVID-19 pandemic and kept growing until this year, have mostly flatlined at around 8.3 million since January.

There's been a general stall, in fact, in the blue-collar jobs Trump said he would revive. The manufacturing sector lost about 50,000 jobs from January through September; the much smaller mining and logging sector shed about 15,000.

To the upside: Workers' average hourly earnings have been growing faster than inflation, and some important costs, like rent, are now increasing at rates more in line with pre-pandemic norms.

But that hasn't made the public happy.

After tending to stay steady or even fall during the years of increasing globalization, goods prices in general are now rising following the imposition of tariffs, and even if that does not persist much longer it has meant higher costs for consumers during the holiday shopping season.

Opinion surveys have responded.

Source: Kitco

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Samantha Luan

Political

Economic

Forex

We have a crowd of about 30 people coming to Thanksgiving dinner. Feeding all of them will require a lot of preparation, but that may not be our biggest challenge. Finding places for all of them to sit and making sure that certain people sit far away from certain other people is absorbing a great deal of attention. We've had a few food fights on the holiday in the past, and I'd like to spare my carpeting.

The inflated number of guests will contribute to significant inflation in the cost of the meal. Fortunately, the American Farm Bureau Federation estimates that prices for the items on this year's Thanksgiving buffet have declined by 5% since last year. Avian flu has afflicted turkey flocks in the last month, but the frozen birds used by most American cooks have been unaffected.

Moderation in the cost of the holiday meal is welcome, but food prices otherwise are on the rise. Tariffs are one of the main reasons why.

The United States is a country of abundance. Its agricultural production ranks third in the world, and it exports twice as much food as any other nation. Nonetheless, the U.S. had a trade deficit in food of almost $32 billion last year, and the shortfall is projected to be even larger this year.

There are several basic reasons for this. While the U.S. has immense surpluses of grains like corn and soybeans, it has deficits for fruits and vegetables. The growing season in the U.S. is limited by climate, so securing year-round availability requires bringing produce in from overseas. Americans also have appetites for foods that cannot easily be grown in the United States. Coffee and bananas are two leading examples.

This year's trade friction has hit the agricultural sector in a number of ways. Foods were not exempt from the across-the-board reciprocal tariffs announced in April; supplemental levies on particular countries followed. This raised the cost of inbound shipments, and prices to U.S. consumers. The Tax Foundation estimates that almost three-quarters of American food imports are being assessed higher import taxes than they were at the start of 2025.

In retaliation for U.S. tariffs, several countries struck back by sanctioning U.S. exports. China once again banned soybean imports in May, replacing them with supply from South America. Canada placed 25% tariffs on all U.S. imports in May, responding to charges imposed by Washington.

This year's trade battles have been particularly hard on agriculture.

These circumstances have produced the unwelcome combination of higher prices for consumers and poor results for farmers. The economic and political ramifications of this have led Washington to change course.

Recent negotiations with China and Canada have resulted in the removal of the most punitive restrictions on agricultural imports. The U.S. Department of Agriculture is considering increasing levels of relief to growers who have struggled to sell their crops.

To improve affordability, the Administration recently dropped tariffs against a range of foodstuffs, including coffee. While households can substitute away from many products when they become more expensive, coffee drinkers are a dedicated lot. The 19% increase in the cost of morning joe over the last year has created considerable discontent.

The policy retreat is a subtle admission that tariffs are, in the main, being paid by households. And while food prices aren't considered in measures of "core" inflation, they have an outsized influence in peoples' perceptions of inflation. Discomfort over the costs of living were a major factor in last year's U.S. elections, and may have contributed to Democratic victories in the handful of races contested early this month. The politics of the pocketbook remain very powerful.

Source: Northern Trust

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Adam

Economic

Futures linked to the main U.S. stock indices suggest a mixed open ahead of the final day of the trading week. Shares of Broadcom fall in extended hours trading, as an update from the chipmaker raises fresh worries over a spike in artificial intelligence investment. Costco’s financial results top forecasts, underlining strong demand for lower-priced items among economically wary Americans prior to the holiday shopping season. Lululemon Athletica announces the departure of its CEO, amid reports that its estranged founder is considering mounting a proxy fight. Crude prices advance, fueled by supply fears stemming from the potential U.S. interception of more Venezuelan oil tankers.

Futures mixed

U.S. stock futures hovered around both sides of the flatline on Friday, pointing to a muted end to a week that has featured key central bank interest rate decisions and crucial artificial intelligence sector earnings.

By 02:00 ET (07:00 GMT), the Dow futures contract had risen by 105 points, or 0.2%, S&P 500 futures were mostly unchanged, and Nasdaq 100 futures had dipped by 36 points, or 0.1%.

Both the benchmark S&P 500 and blue-chip Dow Jones Industrial Average notched fresh record closing highs on Thursday, buoyed by a Fed policy update which many interpreted as more balanced and less hawkish than initially anticipated. Analysts at Vital Knowledge suggested that Fed Chair Jerome Powell had shone a "green light" for a year-end equity market rally through the decision.

Still, sentiment was dented by a downbeat financial forecast from cloud-computing giant Oracle, which threatened to exacerbate already percolating worries around the sustainability -- and eventual profitability -- of the AI boom. Along with a more than 10% slide in Oracle’s stock price, the firm’s bonds were dumped and credit default swaps offering a hedge against a potential default were picked up, reflecting fears over its debt-powered AI ambitions.

Oracle’s dour outlook dragged down the tech-heavy Nasdaq Composite by 60.30 points, or 0.25%.

Broadcom flags impact from AI revenue on margins

Meanwhile, Broadcom shares slipped in extended hours trading, with the semiconductor titan and Nvidia rival flagging that its margins would fall because of the dilutive impact of its AI revenue.

Keen to chip away at Nvidia’s longstanding dominance in the race to build-out the processors underpinning the AI surge, Broadcom has thrust itself into the nascent technology. CEO Hock Tan told analysts in a post-earnings call that Broadcom’s backlog of business now stands at $73 billion, and expects to ship these items over the next year and a half.

But, in an increasingly familiar tech industry refrain, the push into AI has come with a massive price tag. These huge investments could squeeze profit margins at Broadcom, a fact that CFO Kirsten Spears acknowledged, saying that the company’s first-quarter consolidated gross margin will be down approximately 100 basis points sequentially.

Large U.S. cloud providers overall are anticipated to shell out more than $400 billion on AI this year, particularly on constructing the cutting-edge data centers needed to support AI models like OpenAI’s ChatGPT and Google’s Gemini.

Yet minimal evidence so far that the spending binge is leading to tangible gains in either productivity or earnings, along with frothy tech stock valuations and a series of circular dealmaking, has sparked warnings of a possible AI bubble.

Broadcom’s fiscal fourth-quarter results, which topped expectations, were one of the last major events on the AI calendar in 2025. Traders are now looking ahead to returns from Apple-supplier Jabil and semiconductor group Micron later this month.

Costco results top estimates

Elsewhere, shares of Costco ticked down marginally in after-hours trading, despite the budget warehouse retail chain posting fiscal first-quarter revenue and profit that topped estimates.

Same-store sales, excluding gas, also edged up by 6.4% in the quarter ended November 23, versus analysts’ expectations for an increase of 5.82%, according to LSEG data cited by Reuters.

Strength was derived as well from Costco’s partnership for same-day delivery with Instacart in the U.S. and UberEats and DoorDash in overseas markets.

Results from Costco, the retailer known for its large members-only locations and deals on bulk items, echo similarly robust numbers from peers like Walmart, Dollar Tree and Dollar General -- a trend that has highlighted how many consumers, especially in the U.S., are hunting for deals during a time of widespread economic uncertainty marked by a weakening jobs market and stubbornly elevated inflation.

Lululemon CEO to depart

Lululemon Athletica shares popped by more than 10% after-hours, following the athleisure group’s announcement of the departure of CEO Calvin McDonald and a heightened full-year profit forecast.

McDonald is set to leave in January without an immediate replacement, ending a seven-year term at the helm of the company known for its up-market athleisure clothing and leggings. He will remain on as a senior adviser through March, although he will let go of a board seat.

According to the Wall Street Journal, McDonald’s exit comes as the firm’s founder Chip Wilson has been taking steps in private to mount a proxy fight, meeting with potential investors and speaking with advisers.

Driving Wilson has partially been a frustration with Lululemon’s marketing strategy, the WSJ reported, adding it was not yet clear if McDonald’s departure will affect Wilson’s possible proxy battle.

Oil gains amid Venezuelan supply concerns

Oil prices rose Friday as the prospect of the U.S. intercepting more Venezuelan oil tankers deepened supply concerns.

Brent futures climbed 0.5% to $61.56 a barrel, and U.S. West Texas Intermediate crude futures rose 0.5% to $57.90 a barrel.

However, both benchmarks were on course for weekly declines, after dropping around 1.5% on Thursday, as a possible peace agreement between Russia and Ukraine would likely increase the supply of Russian oil into the global market.

Source: investing

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Adam

Stocks

Economic

MARKET WRAPS

Stocks:

European shares rose on the last day of the trading week following a rally in U.S. stocks on Thursday.

Stocks were boosted after the Federal Reserve cut interest rates by 25 basis points Wednesday and signaled further cuts.

Meanwhile, delayed data showed an unexpectedly sharp drop in the U.S. trade deficit for September, while weekly jobless claims picked up after a Thanksgiving lull.

Investors are bracing for a busy week next week, which will include a European Central Bank rate announcement and U.S. inflation data.

In contrast to the Fed, the ECB is expected to keep rates steady .

"ECB President Christine Lagarde will present a new forecast, which should be the first test of the current pricing of no further rate cuts, in line with our view," ING said.

Economic Insight

The U.K. economy unexpectedly contracted in October , with GDP falling 0.1% month-on-month, further boosting the prospect of another interest-rate cut next week. The Bank of England's decision is on December 18.

"Without a material upturn in momentum towards the end of the year , the economy will post a quarterly contraction in the fourth quarter for the first time in two years," Investec said.

The U.K. is expected to struggle for growth in the coming months after the budget measures announced in November offered little support, Quilter said. "This is in stark contrast to Europe where growth expectations are being raised at the same time as U.K. ones are lowered."

Shares on the Move

London's precious metal miners jumped as gold and silver prices continued to rally.

Hochschild Mining climbed over 8%, while Fresnillo rose 5.8%. Endeavour Mining was up 3.6%, while Pan African Resources gained 4%.

U.S. Markets:

Stock futures were mixed on Friday after the Dow and the S&P 500 ended at record highs the previous session supported by investors' optimism on the economy.

Shares of Nasdaq-100 component Broadcom skidded in offhours trading. The Nvidia rival reported fast growth in artificial-intelligence chip sales, but a disappointing outlook for higher-margin product lines.

Forex:

The euro traded close to a two-month high against the dollar, lifted by a divergence in Fed and ECB policy.

The dollar remained weak after reaching a nearly eight-week low in the previous session , dented by expectations for further interest rate cuts.

Sterling edged lower after weak U.K. GDP data .

Bonds:

Yields on eurozone government bonds rose, tracking moves in their U.S. counterparts. Treasury yields turned higher , reversing some of their falls the previous day following the Fed's interest rate cut decision.

There is a significant focus on the extent of eurozone government bond supply frontloading in 2026, according to Citi. The usual supply pattern is expected to persist in 2026 as well, whereby a significant volume of the annual bond issuance is completed in the first quarter.

Long-dated Treasury yields traded higher before European opening, with some Fed speakers lining up , including the dissenters of this week's interest-rate decision.

Barclays continues to be long in two-year U.S. Treasurys-- anticipating a fall in yields in this maturity .

Steeper Treasury curves should be cyclically driven by the Fed in the near term , Natixis said.

Energy:

Oil prices rose, but were poised for a significant weekly loss amid diplomatic efforts to end the war in Ukraine and overall bearish fundamentals pointing to an oversupplied market next year.

"This is a sharp reversal from outlooks earlier this year which pointed to tighter markets," ANZ said.

Metals:

Gold prices were on track for a weekly gain after the Federal Reserve delivered a much-anticipated quarter-point interest-rate cut this week and as investors hope for further easing next year.

"We expect gold to continue behaving as the more grounded barometer of macro sentiment , with upside likely capped in the near term unless the dollar weakens much further," Sucden Financial said.

Gold Chart

Comex gold futures' bullish momentum was growing stronger, based on the daily chart, RHB Retail Research said. The commodity now has a stronger position after clearing its consolidation range.

Copper

Copper prices were lower, weighed down by subdued demand. In the near term, supportive macro sentiment is colliding with bearish industry fundamentals , Baocheng Futures said.

Iron

Iron ore fell in early trade. Prices may be driven by macro sentiment in the short term, Nanhua Futures said.

EMEA HEADLINES

U.K. Economy Contracts Again, Likely Cementing BOE Rate Cut

The U.K. economy contracted for a second straight month in October, cementing expectations that the Bank of England will lower its key interest rate next week.

Economic activity dipped 0.1% on month in October, the Office for National Statistics said Friday, after a 0.1% fall in September. Economists polled by The Wall Street Journal expected a 0.1% increase.

Australia Pledges Deal to Keep Giant Rio Tinto Aluminum Smelter Open

Australian federal and state governments will work with Rio Tinto's Tomago Aluminium to keep the country's largest aluminum smelter open after its current electricity contract ends in 2028, Prime Minister Anthony Albanese said.

Tomago Aluminium, in which Rio Tinto holds a roughly 52% stake, said in October that it might need to shut the 42-year-old smelter once its power-supply contract with Australian utility AGL Energy ends. It said it had been searching since 2022 for "an economically viable energy solution" beyond then, but hadn't found an option that would allow the operation to continue.

BNP Paribas in Talks to Sell Its Stake in Moroccan Bank BMCI

BNP Paribas said it has begun exclusive talks with Holmarcom Group to potentially sell its stake in Moroccan subsidiary BMCI.

The French financial services group said Friday that it was in discussions to sell its 67% stake in BMCI to Holmarcom, which already is a shareholder in the Moroccan bank.

Rheinmetall to Supply Air Defence Systems to the Netherlands

The Dutch Defense department has tapped Rheinmetall to supply air defense systems for its armed forces, for an order in the three-digit million euro range, the company said Friday.

Rheinmetall said the ministry commissioned a two-digit number of its Skyranger 30 air defense systems, to be delivered between the end of 2028 and 2029.

The Big Fight Over a 'Fish Disco' at a British Power Plant

LONDON-The aim at first was simple: prevent murder on the seafloor.

Over a decade ago, Britain's environmental regulator approved a new coastal nuclear power station on the proviso its cooling system wouldn't suck in millions of fish from the Bristol Channel.

GLOBAL NEWS

Global Markets Rise on Renewed U.S Confidence

Global markets rose on the back of a broad rally in U.S. stocks Thursday, with major indexes climbing in Asia and Europe. The Federal Reserve's interest rate cuts Wednesday, and language suggesting a more dovish approach than expected going into 2026, sparked gains for the S&P 500 and Dow Jones Industrial Index which fed through into global markets. A wobble in U.S. tech stocks wasn't enough to throw off the gains, though the tech-heavy Nasdaq traded down premarket.

-The Dow Jones Industrial Average and S&P 500 look set to extend their Thursday rally, with the indexes climbing 0.3% and 0.05% premarket respectively after hitting new highs Thursday. Futures for the Nasdaq trade down 0.14%, extending its fall from Thursday.

Hope for More Rate Cuts Is Tempting Buyers Back to Bonds

Investors are warming to bonds again, underscoring how hopes for further interest-rate cuts have boosted Wall Street's outlook.

Signs this week that the Federal Reserve remains open to reducing rates in 2026 have been welcomed by investors, who had been prepared for the central bank to deliver a "hawkish cut"-lowering its benchmark federal-funds rate but signaling strong reluctance to make further adjustments. Stocks have rallied alongside bonds, with the Dow Jones Industrial Average on Thursday climbing almost 650 points, or 1.3%, to a new record.

How the Stock Market's Rally Can Keep Going in 2026-and Where to Invest

The big debate for 2026 is whether artificial intelligence will keep the markets happy. We can't settle that question, but we do see bargains below the AI surface and building blocks for another good year for stocks and bonds.

Adding to 2025's market performance might seem like a tall order. The S&P 500 index is on track to gain more than 17%, following up on two years of returns above 20%. International markets like Europe and China are cruising, up 30%. Even more dazzling have been gold and silver, up 60% and 100%, respectively.

Trump Says Ukraine Is Losing the War. Officers on the Front Line Disagree.

KYIV, Ukraine-President Trump says Ukraine is losing the war against Russia. That's not what it looks like to Ukrainian Army Maj. Oleh Hlushko, a battalion commander whose men repelled another assault on their part of the southeastern front this week.

"Occasionally, they manage to raise their flags and claim that a position has been taken, but we then conduct clearing operations, remove the symbols, and the position remains under our control," said Hlushko, of the Separate Presidential Brigade.

Seizure of Venezuelan Oil Strikes at the Heart of Maduro's Grip on Power

The Trump administration's seizure of a tanker full of Venezuelan crude hits Nicolás Maduro much harder than airstrikes on alleged drug boats. It raises an existential crisis for a regime that runs on oil revenue.

Source: morningstar

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Glendon

Political

China said on Friday it had driven away a Philippine aircraft and multiple vessels near disputed atolls in South China Sea, in the latest in a series of confrontations in the strategic waterway in recent years.

The Chinese military said it issued strong warnings and "expelled" a Philippine aircraft that "invaded" airspace above the Scarborough Shoal, without giving a date for the incident.

China claims almost the entire South China Sea, overlapping the exclusive economic zones of Brunei, Indonesia, Malaysia, the Philippines and Vietnam. Unresolved disputes have festered for years over ownership of various islands and features.

In a separate statement, the Chinese Coast Guard said multiple Philippine vessels entered waters near Sabina Shoal to "cause trouble and provoke incidents".

The CCG said it took control measures against the vessels, including verbal warnings and forced expulsion.

The Embassy of the Philippines in Beijing, and the country's foreign ministry and maritime council did not immediately respond to requests for comment.

In 2016, the Permanent Court of Arbitration in The Hague ruled that China's sweeping claims in the region were not supported by international law, a decision that Beijing rejects.

Scarborough Shoal is one of Asia's most contested maritime features and a flashpoint for diplomatic flare-ups over sovereignty and fishing rights.

China in September approved the creation of a national nature reserve at the disputed atoll, drawing a strong reaction from Manila.

Sabina Shoal, which China refers to as Xianbin Reef and the Philippines as the Escoda Shoal, lies 150 km (93 miles) west of the Philippine province of Palawan, well within the country's exclusive economic zone.

Source: Reuters

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Winkelmann

Political

Economic

Four U.S. lawmakers on Thursday said there has been no accountability for an October 2023 attack by the Israeli military that struck a group of journalists in Lebanon, killing a Reuters correspondent and wounding others.

U.S. Senator Peter Welch from Vermont, the home state of one of the journalists wounded in the attack, accused Israel of not conducting a serious investigation into the incident, saying he had seen no proof of that.

He did not specify what details he had requested from the Israeli government, or what, if anything, he had been given.

Reuters was unable to independently confirm what specific efforts Israel has made to investigate the attack, which it has pledged publicly to review.

On October 13, 2023, an Israeli tank fired two shells in quick succession from Israel as journalists were filming cross-border shelling. The attack killed Reuters visuals journalist Issam Abdallah and severely wounded Agence France-Presse (AFP) photographer Christina Assi.

The Israeli military (IDF) has said it does not target journalists but has not offered an explanation for why that Israeli tank unit fired at the group of journalists.

In a news conference organized by two advocacy groups, Welch, a Democrat, said he had been given no written proof of an Israeli investigation into the attack, nor any evidence that Israeli officials have spoken with victims, witnesses, shooters or any of the independent investigators.

In June 2025, Senator Welch's office was told by the Embassy that the IDF had conducted an investigation into the incident and the conclusion was that none of the soldiers acted outside of the IDF's rules of engagement.

Standing next to AFP journalist Dylan Collins, an American citizen who was also wounded in the attack, Welch said the Israeli authorities have "stonewalled" him on his pleas for an investigation and gave him conflicting answers. Welch did not give further details about the interactions.

"The IDF has made no effort, none, to seriously investigate this incident," Welch said. "The IDF claimed they conducted an investigation but there's absolutely no evidence that there was any investigation," he added.

Welch said the Israeli government told his office the investigation was closed but separately told the AFP that the investigation was active and the findings have not been concluded.

"So which is it? Both can't be true," Welch said.

Asked by Reuters about Welch's comments and whether its investigation is concluded, an IDF spokesperson said: "The event is still being examined." The spokesperson did not provide further details.

AFP Regional Director for North America Marc Lavine said they had been seeking full accountability for what happened for more than two years.

"AFP calls on the Israeli authorities to reveal the results of any investigation and to hold those responsible to account," Lavine said.

Since 2023, Reuters has asked the Israeli military to carry out a swift, thorough and transparent probe into the strike that killed Abdallah. It has still received no explanation from the IDF on the reasons for that strike, according to the news agency.

Democratic U.S. Senator Chris Van Hollen said at the news conference that more needs to be done.

"We have not seen accountability or justice in this case," Van Hollen said. "It is part of a broader pattern of impunity, of attacks on Americans and on journalists by the government of Israel," he said.

U.S. Representative Becca Balint and independent U.S. Senator Bernie Sanders, both of whom are also from Vermont, said their efforts to seek justice for the journalists would continue.

In August this year, Israeli forces struck Nasser hospital in the south of the Gaza Strip, killing at least 20 people including journalists who worked for Reuters, the Associated Press, Al Jazeera and other outlets.

An Israeli military official told Reuters at the time that the two journalists for Reuters and the Associated Press who were killed in the Israeli attack were not "a target of the strike".

Source: Reuters

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Warren Takunda

Economic

Britain’s economy shrank unexpectedly in October as consumers held back on spending before Rachel Reeves’s budget, and car manufacturing struggled to recover from the cyber-attack on Jaguar Land Rover.

Figures from the Office for National Statistics (ONS) showed gross domestic product fell by 0.1%, after a 0.1% drop in output in September. City economists had predicted a 0.1% rise in October.

After a fourth consecutive month without growth, economists said the latest snapshot would probably cement a Bank of England interest rate cut next week amid fading inflationary pressures, fears over the sluggish outlook, and rising unemployment.

“The UK economy has faltered more dramatically than we expected,” said Andrew Wishart, a senior UK economist at Berenberg. “This loss of momentum will bring inflation down more swiftly than we previously anticipated, allowing the BoE to act.”

Highlighting caution among businesses and households in the run-up to the chancellor’s tax-raising budget, the ONS said a sharp 0.3% decline in output in Britain’s dominant service sector contributed most to the fall.

Much of the decline was driven by a weakness in car sales and broader retail spending, alongside a slump in computer programming and consultancy activities. Construction output fell by 0.6%, while the production sector – which includes manufacturing – rose by 1.1% amid a recovery from the JLR attack that was weaker than hoped for.

The ONS said businesses across all three main sectors of the economy – services, manufacturing and production – reported that they, or their customers, were “waiting for the outcomes of the budget”. The biggest impact was felt by manufacturers, construction companies, wholesalers, computer programmers, real estate firms and employment agencies.

Scott Gardner, an investment strategist at JP Morgan Personal Investing, said the chancellor’s budget had a “numbing effect” on the economy. He said: “Budget speculation and uncertainty around potential tax changes dampened the mood among businesses and consumers, leading some to delay key decisions until the budget had been delivered.

“With growth now firmly in the slow lane, there is a clear feeling that the economy this year has taken two steps forward and one step back.”

Financial markets widely expect the Bank to cut interest rates for a sixth time since last summer at its next policy meeting on Thursday. Threadneedle Street has said Reeves’s policies – including relief on energy bills, prescription charges and fuel duty – could cut headline inflation by as much as half a percentage point next year.

Mel Stride, the shadow chancellor, said the government’s “economic mismanagement” had directly contributed to the weakness in economic growth.

A Treasury spokesperson said: “We are determined to defy the forecasts on growth and create good jobs, so everyone is better off, while also helping us invest in better public services.”

Over the three months to the end of October, GDP also fell by 0.1%, below City estimates for zero growth over the period.

Economic output fell in September after hackers breaching JLR’s systems resulted in the country’s second-largest carmaker halting its UK production lines for several weeks.

In an incident estimated to have cost the economy at large up to £1.9bn, the halt crippled hundreds of smaller companies in the manufacturer’s supply chain, causing monthly output in the car industry to collapse by a third.

However, the ONS warned there had only been a “small recovery” in output in October as activity rebounded by 9.5%, leaving the industry still 21.8% below the levels seen in August. Overall manufacturing output rose by 0.5%, falling short of City estimates for a 1% recovery from the JLR attack.

Sanjay Raja, the chief UK economist at Deutsche Bank, said the latest monthly fall in overall GDP increased the chances of a drop in fourth-quarter output. “The road to the new year will be bumpy,” he said. “Budget uncertainty combined with weak hiring and rising unemployment fear will likely see spending and investment more subdued to end the year.”