US-Iran Talks Send New Signals; Bank of England Raises Rates for the First Time in Three Years

Daily News

Summary:

Iran is reviewing specific proposals on the nuclear issue, signaling progress in US-Iran negotiations; the Bank of England raises interest rates by 25 basis points for the first time in three years...

Headlines

1. Iranian Security Official Delivers Supreme Leader’s Message to Putin

2. Iran Reviews Specific Nuclear Proposals as US-Iran Talks Make Progress

3. US Initial Jobless Claims Fall to Their Lowest Level in 57 Years

4. Fed Hawks Advocate a Gradual Approach to Rate Hikes

5. Bank of England Raises Rates by 25 Basis Points for the First Time in Three Years

6. Trump Says Major Russia-Ukraine Deal Is Within Reach

Detailed

Iranian Security Official Delivers Supreme Leader’s Message to Putin

Iran’s Islamic Republic News Agency (IRNA) reported on November 5 that Mohsen Rezaei, secretary of Iran’s Supreme National Security Council, delivered a message from Iran’s Supreme Leader Mojtaba Khamenei during a meeting with Russian President Vladimir Putin in Moscow. Rezaei was visiting Russia at the time. The two sides also discussed bilateral relations and the latest regional developments, although the report provided no further details.

Iran’s Tasnim News Agency said Putin and Rezaei spoke by phone on November 2, exchanging views on the latest regional developments, particularly in West Asia, and stressing the need to continue strengthening strategic cooperation between Russia and Iran.

In a statement on November 5, Iran’s Foreign Ministry said Foreign Minister Abbas Araghchi had held separate phone calls that day with the foreign ministers of Oman, Jordan, Qatar, Saudi Arabia, Türkiye and Kuwait to discuss the regional situation.

Iran Reviews Specific Nuclear Proposals as US-Iran Talks Make Progress

Five people familiar with the matter said Iran is reviewing a series of specific proposals on the nuclear issue put forward by mediators, signaling progress in Qatar-led diplomatic efforts between the United States and Iran.

Over the past week, Qatar held two rounds of talks in Tehran, hosted a third round in Doha, and engaged with Iranian officials in Armenia. US Vice President JD Vance has also been actively pushing for negotiations. Both sides are reviewing the latest proposals in an effort to bridge their differences.

Iran’s Supreme National Security Council Secretary Rezaei publicly said that Tehran would not negotiate on the nuclear issue until the United States met Iran’s conditions. However, people familiar with the matter said he had privately shown greater openness to discussing the nuclear issue.

Iran’s main demands include the unfreezing of its assets, the lifting of oil sanctions, and an end to the US naval blockade of Iranian ports. The main nuclear dispute concerns the fate of Iran’s stockpile of highly enriched uranium. Trump has demanded that Iran hand over the stockpile, while Tehran has refused to ship the enriched uranium out of the country. The two sides had previously discussed diluting it inside Iran under the supervision of international nuclear inspectors.

Meanwhile, the US and Israeli militaries have drawn up a list of targets in Iran, including energy and critical economic infrastructure. Iran has warned that it would broaden the scope of its retaliation if attacked again, while Iranian leaders are also discussing a possible withdrawal from the Treaty on the Non-Proliferation of Nuclear Weapons (NPT).

Gulf countries fear that a renewed conflict could damage their economies. Anwar Gargash, diplomatic adviser to the UAE president, has called for the crisis to be resolved through diplomacy.

US Initial Jobless Claims Fall to Their Lowest Level in 57 Years

US initial jobless claims fell to a 57-year low last week, indicating that the labor market remains resilient. However, uncertainty stemming from the prolonged conflict in the Middle East is weighing on hiring activity.

The US Department of Labor said seasonally adjusted initial claims for state unemployment benefits fell by 6,000 to 189,000 in the week ended October 31. This was the lowest level since 1969.

A separate report from the US Bureau of Labor Statistics (BLS) showed that nonfarm business productivity, which measures output per hour worked, rose at an annualized rate of 3.6% in the third quarter. The second-quarter increase was revised upward to 2.1%.

Fed Hawks Advocate a Gradual Approach to Rate Hikes

Two Federal Reserve officials on Thursday publicly advocated small, steady rate hikes to address inflation that remains above the central bank’s target.

Their remarks marked the first public comments from central bank officials following the midterm elections, in which Democrats won control of Congress and expanded their representation at the state level—potentially altering the economic trajectory of price pressures.

Cleveland Fed President Beth Hammack said in a speech ahead of an event in Zurich that monetary policy would likely need to move into restrictive territory to bring inflation back to 2% in a timely manner.

One of the Fed’s strongest advocates for rate hikes argued that, where possible, the central bank should achieve this stance through more frequent, smaller adjustments. Such an approach would cause less disruption to households, businesses and financial markets.

She also said gradual rate hikes could help prevent inflationary psychology from becoming entrenched among the public.

Richmond Fed President Thomas Barkin echoed Hammack’s assessment of the policy path in remarks in Charlotte. He said inflation was too high and was remaining elevated rather than moving lower.

Bank of England Raises Rates by 25 Basis Points for the First Time in Three Years

The Bank of England announced that it had raised its benchmark interest rate from 3.75% to 4%, in line with market expectations. It was the Bank’s first rate hike in more than three years.

The Monetary Policy Committee voted 8-1 to raise the benchmark rate to 4%. Committee member Catherine Mann dissented, favoring a 50-basis-point increase to 4.25%.

Bank of England Governor Andrew Bailey said this was unlikely to be the final rate hike unless the US-Iran conflict came to an end.

The Bank’s central projections show inflation peaking at 4.9% in the second quarter of next year, its highest level since September 2023, before falling below the 2% target in 2029.

Bailey said progress toward a peace process would be welcome and could also help lower energy prices. He hoped that by December, the Bank would have more information about the outcome of the conflict.

He rejected the view that the Bank had raised rates too late and said he would not subscribe to the idea that two rate moves would necessarily be enough. Further increases in the benchmark rate could be needed unless there was progress toward resolving the conflict.

Bailey said market pricing already reflected further policy tightening next year, but that this primarily represented a risk premium rather than the market’s expectations for interest rates. To some extent, he said, this reasonably reflected energy risks.

He added that the recent decline in oil prices was positive news. If the Iran conflict made progress toward a resolution, the risk of a further rise in inflation would diminish, potentially keeping the CPI peak slightly below 5%.

Trump Says Major Russia-Ukraine Deal Is Within Reach

US President Donald Trump told reporters at the White House on November 5 that a major deal on the Russia-Ukraine issue would be reached, adding that he believed a resolution was very close.

The agreement would not be limited to Ukraine and could even cover Europe as a whole, Trump said.

Trump also said he had met with Russian presidential envoy Kirill Dmitriev at the White House but had not met with any Ukrainian representatives. He declined to disclose details of the talks.

Trump’s wife, Melania Trump, met with Russian and Ukrainian officials at the White House on November 5 regarding the implementation of an Oleshky ceasefire. Those attending included Dmitriev, David Arakhamia, parliamentary faction leader of Ukraine’s ruling Servant of the People party, and Dmytro Lubinets, the Ukrainian Parliament’s human rights commissioner.

Trump’s son-in-law Jared Kushner wrote on social media that day that the United States had held productive and substantive discussions with Ukraine, NATO and European partners in Brussels on November 5. The discussions covered security guarantees for Ukraine and the broader European security architecture.

US Special Envoy Steve Witkoff said in a social media post on November 2 that the United States would mediate working-level talks between Ukraine and Russia in Abu Dhabi, the capital of the UAE, on November 10-11, in an effort to end the Russia-Ukraine conflict.

Economic Calendar

16:00 (UTC+8) Switzerland October Consumer Confidence Index

17:30 (UTC+8) New York Fed President John Williams and ECB Chief Economist Philip Lane participate in a panel discussion at the 2026 ECB Money Market Conference

18:00 (UTC+8) Eurozone September Retail Sales, MoM

20:15 (UTC+8) Bank of England Chief Economist Huw Pill speaks

21:30 (UTC+8) US October Nonfarm Payrolls

22:10 (UTC+8) St. Louis Fed President Alberto Musalem speaks

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US-Iran Talks Send New Signals; Bank of England Raises Rates for the First Time in Three Years

Headlines

Detailed

Iranian Security Official Delivers Supreme Leader’s Message to Putin

Iran Reviews Specific Nuclear Proposals as US-Iran Talks Make Progress

US Initial Jobless Claims Fall to Their Lowest Level in 57 Years

Fed Hawks Advocate a Gradual Approach to Rate Hikes

Bank of England Raises Rates by 25 Basis Points for the First Time in Three Years

Trump Says Major Russia-Ukraine Deal Is Within Reach

Economic Calendar

Risk Disclosure