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.
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.
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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.
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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%.”
Iran says “indirect talks” over the country’s rapidly advancing nuclear programme have taken place with US officials, with more to come next week.
The discussions on Saturday took place in Muscat, Oman, with the host nation’s officials mediating between representatives of Iran and the US, who were seated in separate rooms, according to Esmail Baghaei, a spokesperson for Iran’s foreign ministry.
After the talks concluded, Oman and Iranian officials reported that Iran and the US had had agreed to hold more negotiations next week.
Oman’s foreign minister Sayyid Badr Albusaidi tweeted after the meeting, thanking Iran’s foreign minister Abbas Araghchi and US Middle East envoy Steve Witkoff for joining the negotiations aimed at “global peace, security and stability”.
“We will continue to work together and put further efforts to assist in arriving at this goal,” he added.
Image: (L-R) Iranian foreign minister Abbas Araghchi meets his Omani counterpart Sayyid Badr Albusaidi. Pic: Iranian foreign ministry/AP
Iranian state media claimed the US and Iranian officials “briefly spoke in the presence of the Omani foreign minister” at the end of the talks – a claim Mr Araghchi echoed in a statement on Telegram.
He added the talks took place in a “constructive atmosphere based on mutual respect” and that they would continue next week.
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American officials did not immediately acknowledge the reports from Iran.
Mr Araghchi said before the meeting on Saturday there was a “chance for initial understanding on further negotiations if the other party [US] enters the talks with an equal stance”.
He told Iran’s state TV: “Our intention is to reach a fair and honourable agreement – from an equal footing.
“And if the other side has also entered from the same position, God willing, there will be a chance for an initial agreement that can lead to a path of negotiations.”
Reuters news agency said an Omani source told it the talks were focused on de-escalating regional tensions, prisoner exchanges and limited agreements to ease sanctions in exchange for controlling Iran’s nuclear programme.
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Trump on Monday: ‘We’re in direct talks with Iran’
President Donald Trump has insisted Tehran cannot get nuclear weapons.
He said on Monday that the talks would be direct, but Tehran officials insisted it would be conducted through an intermediary.
Saturday’s meeting marked the first between the countries since Mr Trump’s second term in the White House began.
During his first term, he withdrew the US from a deal between Iran and world powers designed to curb Iran’s nuclear work in exchange for sanctions relief.
He also reimposed US sanctions.
Iran has since far surpassed that deal’s limits on uranium enrichment.
Tehran insists its nuclear programme is wholly for civilian energy purposes but Western powers accuse it of having a clandestine agenda.
Mr Witkoff came from talks with Russian president Vladimir Putin on Friday, as the US tries to broker an end to the war in Ukraine.
Poland’s outgoing President Andrzej Duda has kept few revelations for the final weeks of his presidency.
Ten years in office – a tenure spanning Donald Trump’s first and current term – his admiration for the incumbent leader of the free world remains undimmed. As is his conviction that Ukraine’s only chance of peace lies with the US leader.
In an interview with Sky News in the presidential palace in Warsaw, President Duda described Mr Trump‘s tariff policy as “shock therapy”, a negotiating tactic from a man “of huge business and commercial success” that he now brings to the arena of politics.
That may not be what European politicians are used to, Mr Duda says, but Donald Trump is answerable to the US taxpayer and not to his European counterparts, and allies must “stay calm” in the face of this new transatlantic modus operandi.
As for negotiations with Vladimir Putin, President Duda is sure that Donald Trump has the measure of the Russian leader, while refusing to be drawn on the competencies of his chief negotiator Steve Witkoff who landed on Friday in Moscow for further talks with Vladimir Putin – a man Mr Witkoff has described as “trustworthy” and “not a bad guy”.
Putting the kybosh on Nord Stream 2 in his first term and thwarting President Putin’s energy ambitions via his state-owned energy giant Gazprom are evidence enough that Mr Trump knows where to hit so it hurts, Mr Duda says.
Given the failures of Europe’s leaders to negotiate peace through the Minsk accords, he believes the onus now falls on Donald Trump.
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“If anyone is able to force the end of Russia’s war, it is most likely only the President of the United States,” he says.
“The question is whether he will be determined enough to do that in a way – because it is also very important here in Europe being a neighbour of Russian aggression against Ukraine – that the peace is fair and lasting.”
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2:21
The Polish NATO base on the frontline with Russia
President Duda has just weeks left in office before the country votes for a new president in May.
Originally from Poland’s conservative Law and Justice party, one of the few points of alignment with the liberal and euro-centric prime minister Donald Tusk is the emphasis both place on security.
Hopes for ‘Fort Trump’ base
So did the announcement this week that the US would be withdrawing from the Jasionka air base near Rzeszow, which is the key logistics hub for allied support into Ukraine, come as a shock to the president, as it did to many Poles?
Not at all, Mr Duda says.
“We were warned that the change was planned. I have not received any information from [the US] about decreasing the number of American soldiers. Quite the opposite.”
Image: US defence secretary Hegseth and President Duda met in February. Pic: Reuters
He referred back to talks with US defence secretary Pete Hegseth in February, saying: “We discussed strengthening the American presence in Poland, and I mentioned the idea of creating a huge base of US troops. Then, we called it Fort Trump. I do still hope that this idea will be implemented.”
Andrzej Duda has staked his legacy on close ties with Donald Trump at a time when many NATO allies are considering a form of de-Americanisation, as they consider new trading realities and build up their own defence capabilities.
Poland has proven itself a model in terms of defence spending, investing more than any other NATO member – a massive 4.7% of GDP for 2025. But as the case of Canada shows, even the best of friendships can turn sour.
The Canadian conservative party, once dubbed a maple MAGA, was flying high in the polls before Donald Trump decided to savage links with his closest trading partner.
Now in the space of just a few months they are floundering behind the ruling liberal party. Is this a cautionary tale for Poland’s conservative Law and Justice party?
“For Canadian conservatives it is a kind of side effect of President Trump’s very tough economic policy,” Mr Duda says.
“In Poland, this does not have such an impact. The security issues are the most important. That’s the most important issue in Poland.”
Police in Greece are investigating after a bomb exploded outside the offices of the country’s main railway company.
There were no reports of injuries after the blast next to Hellenic Train’s offices in central Athens on Friday evening.
An anonymous phone warning was reportedly made to a newspaper and a news website, saying a bomb had been left outside the railway company offices and would go off within about 40 minutes.
Police forensics experts wearing white coveralls were pictured collecting evidence at the scene following the blast on Syngrou Avenue, a major road in the Greek capital.
Image: A police officer at the scene. Pic: Reuters
Image: The bomb caused limited damage but no injuries to Hellenic Trains’ offices. Pic: AP
The male caller gave a timeframe of 35 to 40 minutes and insisted it was not a joke, local media outlet efsyn said.
Police cordoned off the site, keeping people away from the building in an area with several bars and restaurants.
A bag, described in local media as a rucksack, containing an explosive device had been placed near the Hellenic Train building.
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The explosion comes amid widespread public anger over the Tempe railway disaster in which 57 people, mostly university students, were killed in northern Greece.
The government has been widely criticised for its handling of the aftermath of the country’s deadliest rail disaster when a freight train and a passenger train heading in opposite directions were accidentally put on the same track on 28 February 2023.
Unhappiness has grown over the last few weeks in the wake of the second anniversary of the tragedy.
Image: Pic: Reuters
Image: A worker cleans the area after the bomb. Pic: AP
Safety deficiencies exposed
The crash, which exposed severe deficiencies in Greece’s railway system, including in safety systems, has triggered mass protests, led by the relatives of those killed, which have targeted the country’s conservative government.
Critics accuse authorities of failing to take political responsibility for the disaster or hold senior officials accountable.
Earlier on Friday, a heated debate on the accident in the Greek parliament saw a former cabinet minister referred to investigators for alleged failures in his handling of the immediate aftermath of the crash.
Hellenic Train said it “unreservedly condemns every form of violence and tension which are triggering a climate of toxicity that is undermining all progress”.
Greece has a long history of politically motivated violence, with domestic extremist groups carrying out small-scale bombings which usually cause damage but rarely lead to injuries.