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There has been a positive market reaction to the resignation of Liz Truss after just 44 days in office, following the fierce backlash against her economic plan and humiliating climbdown.

News that the prime minister was to make a Downing Street statement sparked a rally for sterling versus the dollar – leaving the UK currency almost a cent up on the day at one stage at almost $1.13 before settling at $1.12 in the late afternoon.

It originally rose half a cent following confirmation she was to leave office.

Truss resignation – live updates

Shares also moved upwards initially on the FTSE 100 before closing higher than opening trading while government borrowing costs fell.

The 30-year gilt yield fell back to 3.8% – continuing its recovery since the post mini-budget highs of around 5% that sparked Bank of England intervention. As the afternoon progressed the figure rose to the 3.9% of Thursday morning.

It took a series of U-turns on the tax-cutting growth plan, demanded by new Chancellor Jeremy Hunt after the sacking of Kwasi Kwarteng, for market damage to ease.

More on Liz Truss

The reaction to the departure of Ms Truss signalled a measure of relief that the architect of the Growth Plan – outlined during her campaign for the Tory leadership – was on her way out.

Nevertheless, there was also a measure of uncertainty at play for values, given the complete lack of vision on who would replace the prime minister in Number 10.

It will not be Mr Hunt, who has ruled himself out, leaving him free to continue preparations for the Halloween statement that is to set out the government’s new medium-term fiscal plan.

There will be some jitters over whether its direction is likely to change – or even be delayed to allow the new Tory leader to get their feet under the desk.

There has been no indication that the statement will be delayed as it is expected that the successor will be in place before 31 October.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said of the market moves: “Sterling is highly sensitive to economic policy uncertainty and even though the ship Britannia will still be left largely rudderless, with a successor still to be chosen, as far as investors are concerned, the future is marginally brighter without her in charge.

“Ten-year gilt yields eased further today, as speculation soared about her resignation, a sign of tacit approval from the bond vigilantes who punished the UK by deserting its government’s debt as worries raced up about fiscal responsibility.”

Business appealed for a more stable period ahead.

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Hunt rules out leadership challenge

Tony Danker, the director-general of the CBI, said: “The politics of recent weeks have undermined the confidence of people, businesses, markets and global investors in Britain.

“That must now come to an end if we are to avoid yet more harm to households and firms.

“Stability is key. The next prime minister will need to act to restore confidence from day one.

“They will need to deliver a credible fiscal plan for the medium term as soon as possible, and a plan for the long-term growth of our economy.”

Pantheon Macroeconomics, the economic research consultancy, said in its October UK economic chartbook: “The economy is heading for a prolonged recession … the MPC [the interest rate setting Monetary Policy Committee] will hike Bank Rate further, but will relent at about 4%.”

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Ten explosions near international airport in India-administered part of Kashmir, officials say

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Ten explosions near international airport in India-administered part of Kashmir, officials say

Ten explosions have been heard near Srinagar International Airport in India-administered parts of Kashmir, officials have told Reuters news agency.

The blasts followed blackouts caused by multiple projectiles, which were seen in the sky above the city of Jammu earlier on Friday.

Explosions were also heard in the Sikh holy city of Amritsar, in the neighbouring Punjab state, according to Reuters.

An Indian military official told the agency that “drones have been sighted” and “they are being engaged”.

It comes as tensions between India and Pakistan across the line of control around the region of Kashmir have boiled over this week, leading to fears of a wider conflict.

Map of where explosions were reported in Kashmir and from where

On Wednesday morning, India carried out missile strikes in Pakistan and Pakistan-administered parts of the disputed region.

The retaliation came weeks after 26 people, mainly Indian tourists, were shot dead by gunmen in an India-administered part of Kashmir last month.

The government in India said it hit nine “terrorist infrastructure” sites, while Pakistan said it was not involved in the April attack and the sites were not militant bases.

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Explained: India-Pakistan conflict

Around 48 people have been killed since Wednesday, according to casualty estimates on both sides – which have not been independently verified.

India also suspended its top cricket tournament, the Indian Premier League, as a result of rising tensions, while the Pakistan Super League moved the remainder of its season to the United Arab Emirates.

Meanwhile, White House press secretary Karoline Leavitt said at a conference on Friday that the US is in constant contact with both India and Pakistan.

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Pope Leo: How voting for new pontiff unfolded behind closed doors of the conclave

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Pope Leo: How voting for new pontiff unfolded behind closed doors of the conclave

Conclaves are famously unpredictable affairs – and once again the election of Cardinal Robert Francis Prevost as the new pope caught many by surprise.

The newly elected Pope Leo XIV won the consensus of the 133 cardinal electors after only four ballots – a fast process for a diverse college of cardinals.

Though his name had circulated among some Vatican watchers, other cardinals had emerged as clear front-runners, including Pietro Parolin – the Vatican’s number two who would have been the first Italian in almost 50 years to become pontiff – or Luis Tagle, a Filipino cardinal looking to become the first Asian pope.

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What are the conclave’s secrecy measures?

Instead, it was the first North American to win the highly secretive process.

So, what went on behind the closed doors of the Sistine Chapel?

Until Thursday lunchtime, Cardinal Parolin was ahead, gathering between 45 and 55 votes, sources say.

A substantial number, but well short of the 89 votes he needed for a two-thirds majority.

At this point, Cardinal Prevost had between 34 and 44 votes.

But as the Italian struggled to grow his support during the first three rounds of voting, he stepped down from the race, endorsing Prevost instead, Sky News understands.

Read more:
Who is Pope Leo XIV?
List of demands in new pope’s in-tray
How does new pope compare to his predecessors?

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Who is Pope Leo?

An internal battle between Luis Tagle and Pablo Virgilio David – both cardinals hailing from Asia – cancelled out both of their chances.

And a contender from Africa – the most conservative sector of the church – was never likely for a conclave where the overwhelming majority of cardinals had been appointed by Francis, a progressive pontiff, sources say.

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Moment new pope emerges on balcony

An American pope has long been seen as highly improbable, given the geopolitical power of the US.

But Cardinal Prevost was able to draw from across the groups making up the electors: moderate US cardinals, South American cardinals and many European cardinals all coalesced around him.

Italian newspaper La Repubblica said Prevost “certainly attracted cross-party preferences, both ideologically and geographically”.

“In the conclave he was the least American of Americans: Born in Chicago, he lived 20 years in Peru,” the newspaper said.

It added: “As a man used to teamwork, Prevost appeared to many as the right man to make the papacy evolve into a more collegial form.”

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Russia’s Victory Day parade felt more like a celebration of war than peace

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Russia's Victory Day parade felt more like a celebration of war than peace

Standing on Red Square, this was an intimidating sight, which felt much more like a celebration of war rather than peace.

I could feel the ground shake as the tanks rolled past, their caterpillar tracks on the ancient cobbles providing a deafening clatter.

The hairs on the back of my neck stood up in fear as the phalanxes of troops roared “Hurrah” in response to their commander in chief.

And the sight of combat drones being paraded on their launchers was actually quite sickening. Weapons that have been at the forefront of Russia’s invasion of Ukraine were paraded in a show of pomp and patriotism.

Russian President Vladimir Putin and his Chinese counterpart Xi Jinping
Image:
Xi Jinping and Vladimir Putin watch the procession. Pic: Reuters

Ukraine war latest: Putin welcomes Xi at Victory Day parade

For the rest of Europe, the 80th anniversary of the end of the Second World War has been a celebration of peace, but this felt much more like a celebration of war.

And it wasn’t just military hardware on display here, but the very identity of modern Russia.

A general view shows Red Square during a military parade on Victory Day, marking the 80th anniversary of the victory over Nazi Germany in World War Two, in central Moscow, Russia, May 9, 2025. Vladimir Astapkovich/Host agency RIA Novosti/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.
Image:
Pic: Reuters

For this is a country that is now defined by its military and its memory. The glory and sacrifice of 1945 have been weaponised to give credence to Russia’s current course and to make people believe that victory is their right.

For Russians, it served as a rallying cry and there was applause when the troops who have fought against Ukraine marched past.

But for those watching in Kyiv and other European capitals, it was an overt warning that Moscow has no intention of backing down.

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Putin hails sacrifice of Russian troops

The parade was considerably larger in scale than in recent years, when units and hardware have been needed on the battlefield. I think it was a deliberate attempt to project an image of confidence, and so was Vladimir Putin‘s positioning of his guests.

China’s Xi Jinping was given a prime position on the Kremlin leader’s right-hand side. It was no surprise given the economic lifeline Beijing has provided, but it felt like a particularly pointed gesture to the West – that they were looking at a new world order.

Despite that appearance of confidence, there were signs of Moscow’s unease that the parade could be disrupted.

There were snipers on every rooftop. Security was extremely tight. And the mobile internet signal across the city centre was completely shut down for fear of Ukrainian drone attacks, meaning none of the international media that had gathered could broadcast any live transmissions.

After the parade finished, Putin saluted the crowds as they spontaneously erupted into rhythmic shouts of “Rus-si-ya” at the sight of him.

Another PR coup complete without interruption, he will have departed as a very happy man.

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