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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5:57
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%.”
Israeli troops in Gaza have received the remains of another hostage.
They have now been taken to the National Institute for Forensic Medicine to be examined.
If it is confirmed that they belong to a hostage, this would mean there are five bodies left to be returned under the terms of a ceasefire that began on 10 October.
Israel has also released the bodies of 285 Palestinians – but this identification process is harder because DNA labs are not allowed in Gaza.
Last night’s transfer is a sign of progress in the fragile truce, but some of the remains handed over in recent weeks have not belonged to any of the missing hostages.
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0:31
October: Heavy machinery enters Gaza to clear rubble
At times, Israel has accused Hamas of violating the agreement – however, US President Donald Trump has previously acknowledged conditions on the ground in Gaza are difficult.
Meanwhile, UN officials have warned the levels of humanitarian aid flowing into the territory fall well short of what Palestinians require.
Deputy spokesperson Farhan Haqq said more than 200,000 metric tons of aid is positioned to move in – but only 37,000 tons has arrived so far.
Earlier on Friday, hundreds of mourners attended the military funeral of an Israeli-American soldier whose body was returned on Sunday.
Image: Omer Neutra was an Israeli-American soldier. Pic: AP
Captain Omer Neutra was 21 when he was killed by Hamas militants who then took his body into Gaza following the October 7th attacks.
Admiral Brad Cooper, who heads up US Central Command, said during the service: “He is the son of two nations.
“He embodied the best of both the United States and Israel. Uniquely, he has firmly cemented his place in history as the hero of two countries.”
His mother Orna addressed her son’s coffin – and said: “We are all left with the vast space between who you were to us and to the world in your life and what you were yet to become. And with the mission to fill that gap with the light and goodness that you are.”
Image: IDF troops carry the coffin of hostage Omer Neutra. Pic: AP
In other developments, Turkish prosecutors have issued arrest warrants for Prime Minister Benjamin Netanyahu and 36 other Israeli officials on charges of carrying out “genocide” in Gaza.
They have been accused of crimes against humanity – but the move is highly symbolic since these officials were unlikely to enter Turkey.
Foreign minister Gideon Saar dismissed the warrants, and said: “Israel firmly rejects, with contempt, the latest PR stunt by the tyrant Erdogan.”
In Soviet times, Western observers would scrutinise video footage of state occasions, like military parades on Red Square, to try to learn more about Kremlin hierarchy.
Who was positioned closest to the leader? What did the body language say? Which officials were in and out of favour?
In some ways, not much has changed.
The footage present-day Kremlinologists are currently pouring over is from Wednesday’s landmark meeting of Russia’s Security Council, in which Vladimir Putin told his top officials to start drafting proposals for a possible nuclear weapons test.
It was an important moment. Not one you’d expect a trusted lieutenant to miss. But Sergei Lavrov, Russia’s veteran foreign minister, was conspicuously absent – the only permanent member of the Council not present.
According to the Russian business daily, Kommersant, his absence was “coordinated”.
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Image: US President Donald Trump meets with Russia’s President Vladimir Putin in Alaska. Pic: AP
Image: Sergey Lavrov and Marco Rubio in Alaska. Pic: AP
That episode alone would have been enough to raise eyebrows.
But coupled with the selection of a more junior official to lead the Russian delegation at the upcoming G20 summit (a role Lavrov has filled in recent years) – well, that’s when questions get asked, namely: Has Moscow’s top diplomat been sidelined?
The question has grown loud enough to force the Kremlin into a denial, but it’s done little to quell speculation that Lavrov has fallen out of favour.
Image: Russian foreign minister Sergei Lavrov. File pic: Reuters
Rumours of a rift have been mounting since Donald Trump called off a planned summit with Putin in Budapest last month, following a phone call between Lavrov and US secretary of state Marco Rubio.
According to the Financial Times, it was Lavrov’s uncompromising stance that prompted the White House to put the summit on ice.
Conversations I had with diplomatic sources here at the time revealed a belief that Lavrov had either dropped the ball or gone off-script. Whether it was by accident or by design, his diplomacy (or lack of it) torpedoed the summit and seemingly set back a US-Russia rapprochement.
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2:19
September: Anyone downing aircraft in Russian airspace will ‘regret it’
That would’ve angered Putin, who is keen to engage with Washington, not only on Ukraine but on other issues, like nuclear arms control.
More importantly, perhaps, it made the Russian president appear weak – unable to control his foreign minister. And Putin is not a man who likes to be undermined.
Football fans will be familiar with Sir Alex Ferguson’s golden rule of management: Never let a player grow bigger than the club. Putin operates in a similar fashion. Loyalty is valued extremely highly.
Image: Lavrov meets with his Iranian counterpart Mohammad Javad Zarif in 2015. Pic: Reuters
Image: North Korea’s Kim Jong Un and Lavrov meet in Pyongyang in 2023. Pic: AP
Image: Lavrov and Chinese counterpart Wang Yi meet in Indonesia in 2022. Pic: Reuters
If Lavrov has indeed been sidelined, it would be a very significant moment indeed. The 75-year-old has been the face of Russian diplomacy for more than two decades and effectively Putin’s right-hand man for most of the Kremlin leader’s rule.
Known for his abrasive style and acerbic putdowns, Lavrov has also been a vociferous cheerleader for Russia’s invasion of Ukraine.
And in the melee that immediately followed the presidents’ press statements at the summit, I remember racing over to Lavrov as he was leaving and yelling a question to him through the line of security guards.
He didn’t even turn. Instead, he just shouted back: “Who are you?”
It was typical of a diplomatic heavyweight, who’s known for not pulling his punches. But has that uncompromising approach finally taken its toll?
But as the tropical rain beat down on the tarpaulin roof of this temporary summit venue, it’s hard not to feel the air going out of the process.
Image: The Prince of Wales is passionate about fighting climate change. Pic: Reuters
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3:05
COP30: India’s climate refugees
Sir Keir and Prince William’s presence doesn’t make up for the geopolitical weight of the elephants not in the room.
The leaders of China, the US and India – the world’s three largest contributors to climate change – are no-shows.
Donald Trump’s highly-publicised decision to withdraw America from the UN climate talks is a blow.
Before Mr Trump, America – the world’s largest economy, largest oil and gas producer, and major market for renewable energy – had serious deal-making power here.
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Having formally withdrawn, there is no US delegation.
And, as far as I can tell, any US broadcasters either, so for Americans, this meeting may as well not be happening at all.
Image: Pic: Reuters
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26:13
Cop out: Is net zero dead?
Without the US, things will be harder.
But does that mean the process is doomed?
The leaders of China and India may be absent but they’ve sent high-level delegations.
China is represented by vice-premier Ding Xuexiang, the country’s most high-ranking politician after President Xi himself.
And, while China and India might not be big on eco-messaging, between them they are busy driving the most rapid shift away from fossil fuels towards wind, solar and nuclear power the world has ever seen.
What’s more, the real work at these summits isn’t done by heads of state, but experienced sherpas, some of whom have trodden the nylon carpeted corridors of COP for 30 years.
Image: The Prince of Wales with Prime Minister Keir Starmer. Pic: PA
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1:00
Prince takes a tumble on Brazil beach
It’s reasonable to ask what they’ve achieved in all that time.
The commitments of the Paris agreement of a decade ago have been missed by a wide margin.
The world is about to blow past 1.5 degrees of warming and almost certainly exceed two degrees as well.
But when the Paris deal was signed, the trajectory was for four degrees of warming.
There are good COPs and bad COPs, but the world is undoubtedly a safer place now than it would have been without them.