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The Lead As the 10th anniversary of the Brexit vote approaches, the verdict on Britain’s economic performance is clear: voting to leave has resulted in severe costs for households and businesses. The Pound's Value Has Not Recovered The value of the pound swung wildly after the polls closed on 23 June 2016. The collapse in the pound drove up the cost of importing goods, triggering an inflation shock that damaged the public finances and inflicted financial pain on households across the country. A decade later, the pound has never returned above its pre-Brexit level. UK Growth Has Slowed According to the Office for Budget Responsibility, the independent Treasury watchdog, the UK is on track to suffer a 4% hit to national income over a 15-year period. UK GDP per head is between 6% and 8% lower than it would have been without Brexit. Trade Has Suffered from More Border Friction Brexit involved erecting trade barriers, which has hit goods exports. The EU is still the UK’s largest trading partner: in 2025, exports to the bloc were worth £385bn (41% of all UK exports) and imports £474bn (49% of the total). Since the end of the EU transition period on 31 December 2020, growth in UK goods exports has slowed relative to the G7. Uncertainty Sapped Business Investment After a shock result, no clear plan from the government or leave campaigners led to years of infighting over just what Brexit – never properly defined, and often subjective – should be in practice. Amid that political turmoil businesses froze their investment plans. Investment is estimated to be close to 18% lower than it would have been under remain and productivity up to 4% lower. Employment Has Suffered Unemployment in the UK fell after the Brexit referendum to among the lowest rates since the 1970s, before rising sharply during the pandemic. However, experts say this obscured underlying challenges. Wage growth has stagnated, and Britain emerged as the worst-performing country in the G7 for the pace of its recovery in workforce participation after the easing of pandemic restrictions. Brexit Support Has Faded Public support for Brexit has steadily fallen since the 52%-48% leave vote. Polling last month by YouGov shows 70% of Britons support a closer relationship with the EU without rejoining the bloc, its single market or customs union. More than two-thirds think looser ties would be a mistake. A majority – 56% – would back rejoining the bloc outright.

Japan’s central bank has raised its benchmark interest rate to 1 percent, the highest level since 1995, after a 7‑1 vote that reflects mounting price pressures linked to the United States‑Israel war on Iran.BOJ’s 7‑1 Vote and the 1% Benchmark ShiftThe Bank of Japan (BOJ) announced on Tuesday that it would increase the policy rate by a quarter‑point, moving the key rate from 0.75 % to 1 %. The decision ends a 31‑year stretch of ultra‑low rates and follows a gradual normalization that began in 2024 when the BOJ scrapped its negative‑rate policy.Fiscal Numbers: Inflation, Oil Imports, and GDP GrowthCore CPI rose 1.4 % YoY in April, excluding fresh food.Japan imports roughly 95 % of its crude oil from the Middle East, making it vulnerable to geopolitical spikes.Annualised GDP growth reached 2.1 % in Q1 2026, the fastest expansion in six quarters.The BOJ’s inflation outlook cites a risk of CPI moving above the 2 % target as medium‑to‑long‑term expectations rise.Implications for Japan’s Economy and Global MarketsThe rate hike signals confidence that Japan’s inflation is stabilising, but it also raises questions about the impact on the yen, corporate borrowing costs, and household debt. Prime Minister Sanae Takaichi has already tapped strategic oil reserves and introduced subsidies for gas and electricity to cushion consumers.Analysts such as Min Joo Kang of ING view the move as a “positive shift” toward sustained growth and price stability, suggesting that the BOJ now sees its 2 % inflation target as attainable.Outlook: Monetary Policy Path and Growth ProspectsLooking ahead, the BOJ is likely to adopt a data‑dependent approach, with potential incremental hikes if oil‑price shocks persist or core inflation remains above target. Conversely, a slowdown in global demand could prompt a pause.Market participants should monitor:Further developments in the US‑Israel‑Iran conflict and its effect on oil markets.Domestic wage growth and consumer spending trends.The yen’s exchange rate response to higher Japanese yields.

Bank of England Holds Rate at 3.75% as Iran Conflict LoomsThe Monetary Policy Committee decided to keep the Bank Rate steady at 3.75%, citing the need to balance lingering inflation pressures with the uncertain economic fallout from the Iran‑related closure of the Strait of Hormuz.Policymakers Prioritize Geopolitical Risks Over Further CutsDespite expectations of continued easing after six cuts since mid‑2024, the committee opted for a hold, emphasizing:Higher energy costs from disrupted oil flows that could reignite price pressures.Recent data showing wage growth at 4.4% (including bonuses), which the MPC monitors closely.Contrasting moves by the European Central Bank, which raised rates in the eurozone the week before.Key Numbers: 3.75% Rate, 2.8% Inflation, 4.4% Wage GrowthMay UK CPI: 2.8%, below forecasts.Bank Rate: 3.75% (held steady).Wage growth: 4.4%, stronger than expected.Unemployment: fell (exact rate not disclosed).U.S. Federal Reserve policy range: 3.5%‑3.75%, unchanged.Implications for UK Growth and Eurozone DivergenceThe hold signals a more cautious path for the UK compared with the eurozone’s tightening cycle, potentially widening the interest‑rate differential and affecting capital flows. Persistent geopolitical tension could lift energy prices, offsetting the modest inflation dip and slowing GDP growth.Outlook: Potential Rate Path and Conflict‑Driven UncertaintyLooking ahead, the MPC is likely to:Monitor oil‑price developments closely, especially any resolution of the Strait of Hormuz blockage.Assess wage‑price dynamics as the labour market tightens.Consider a gradual easing only if inflation remains anchored below the 2% target and external shocks recede.Any escalation in the Iran‑U.S. standoff could prompt the Bank to keep rates higher for longer, while a diplomatic breakthrough—such as the memorandum of understanding mentioned with Donald Trump—might restore supply confidence and allow a return to rate cuts later in the year.

The Latest UK Unemployment Figures The UK's unemployment rate has fallen to 4.9% in the three months to April, according to the Office for National Statistics (ONS). This is a decrease from 5% in the three months to March, and lower than economists had forecast. Wage Growth Exceeds Expectations Average wages excluding bonuses remained at 3.4%, but climbed to 4.4% once bonuses were included. Annual average regular earnings growth was 4.8% for the public sector, and 3% for the private sector. The Impact on Monetary Policy The strong wage growth has put pressure on the Bank of England to raise interest rates, despite a peace deal in the Middle East. The Bank of England governor, Andrew Bailey, has cited strong public sector pay as a concern for its monetary policy committee. The Effect on Businesses and Hiring Employers have become less likely to take on permanent full-time staff in response to the war in the Middle East, which has shaken business and consumer confidence. Recent surveys have shown that employers are turning their back on hiring permanent staff and making redundancies on a larger scale. The Future Outlook A fall in oil prices in recent days, linked to hopes for a peace deal between the US and Iran, could feed through into lower energy bills for businesses, easing cost pressures on them. However, the ONS figures also showed vacancies slumped to their lowest level in more than five years as firms continued to rein in their hiring.

The Warsh Transition: A New Era of Monetary PolicyThe Federal Reserve has officially entered a new chapter under its fourth chair in five years, Kevin Warsh. In the first meeting of his four-year term, the central bank decided to hold interest rates steady at a range of 3.5% to 3.75%, a decision that aligns with market expectations but carries significant strategic weight.The Shift in Monetary Policy StrategyA critical technical shift occurred during this meeting: the Fed removed its "easing bias" from the policy statement. This phrase had previously signaled that the committee was leaning toward rate cuts. Its removal suggests that the Fed is now prioritizing data over immediate political pressure, particularly given the lingering effects of the Middle East conflict.Inflation vs. Labor Market DynamicsWhile the headline inflation rate remains elevated at 4.2%—the highest since 2023—the underlying economic picture is nuanced. Core inflation has moderated to 2.9%, narrowing the gap to the Fed's 2% target. However, the labor market remains a double-edged sword. Unemployment is steady at 4.3%, but real wages are under pressure, with hourly earnings dropping by 0.7%, indicating that price increases are currently outpacing wage growth.The Warsh-Powell Transition and Political PressureThe transition from Jerome Powell to Kevin Warsh introduces a volatile political element. While President Trump has publicly advocated for rate cuts, he has signaled a hands-off approach to his appointee. This contrasts sharply with the treatment of Powell, who faced federal investigations and political harassment during his tenure. Powell’s recent warning that politicizing the Fed could "permanently damage trust" serves as a stark reminder of the stakes involved in this leadership change.Future Outlook: Higher for Longer?With energy prices stabilizing following a ceasefire deal but remaining volatile, the Fed is likely to maintain a cautious stance. The removal of the easing bias suggests that rate cuts are not imminent. Investors should prepare for a period of "higher for longer" interest rates as the Warsh administration attempts to anchor inflation expectations without triggering a labor market recession.

Town‑Hall Tour Aims to Re‑anchor Democratic Trade Policy in the MidwestPublic Citizen organized a multi‑state tour of union halls in Michigan, Ohio, Pennsylvania, Wisconsin and Iowa, bringing together UAW leaders and Democratic representatives to discuss the impact of long‑standing trade agreements on local factories.Numbers That Reveal the Scale of the Manufacturing DeclineU.S. manufacturing employment peaked in 1979 at roughly 19.6 million jobs.Current manufacturing jobs stand at about 12.6 million, a loss of over 7 million positions.The Department of Labor attributes more than 950,000 job losses directly to NAFTA.At the International Motors plant in Springfield, Ohio, the workforce fell from over 5,000 in the 1990s to roughly 1,300 today.Why Offshoring Has Become a Political FlashpointWorkers such as Brenda Davis (retired Ford employee) and Morgan Hughes (current GM assembler) describe daily reminders of offshoring—foreign‑made vehicles parked at their facilities and dwindling production orders after tariff volatility. Representative Rashida Tlaib echoed their concerns, calling NAFTA‑style deals a “global race to the bottom” that widened income inequality.Implications for the 2026 Midterm ElectionsThe Midwest historically supplies about one‑third of U.S. manufacturing jobs and has been a decisive swing region in recent presidential cycles. Democrats risk losing these voters again unless they can convincingly propose policies that protect domestic production and address the “jobs‑gone‑away” narrative championed by former President Donald Trump.What the Next Steps Might Look Like for DemocratsAnalysts suggest three strategic moves: (1) push for stricter enforcement of existing trade rules and new safeguards against offshoring; (2) promote incentives for reshoring critical components, especially in the electric‑vehicle supply chain; and (3) partner with labor unions to craft legislation that secures job retraining and wage growth. Successful execution could reshape the party’s blue‑collar appeal ahead of the 2026 contests.

The Editorial’s Core ArgumentThe piece contends that successive governments have proclaimed a recovery in Britain’s pockets long before ordinary people have felt it, turning optimistic rhetoric into a political tool.Historical Use of “Green Shoots” as Political RhetoricIn October 1991, Chancellor Norman Lamont warned of “green shoots” amid a deep recession. The phrase resurfaced under George Osborne in 2013 and most recently under Prime Minister Rishi Sunak ahead of the 2024 election, only to be rejected by voters who elected Labour in a landslide.Mixed Economic Data Undercut the OptimismUnemployment rose unexpectedly to 5% in the last quarter, with one in seven young people job‑seeking.Vacancies fell to their lowest level since early 2021.The Resolution Foundation projects real household disposable income to grow by just 1.1% over the next five years.Productivity, according to Prof John Van Reenen, is now rising at 1.6% per year since Q3 2024, up from 0.3% in the previous decade.Chancellor Rachel Reeves cites the IMF’s approval as validation, but the data suggest a fragmented picture.Political Consequences of Overstated GrowthThe editorial warns that Labour’s narrative of a rapid take‑off may be premature. Voters are not feeling better off, and the comparison should shift from post‑2014 politics to a Labour‑vs‑Tory analysis under “Trussonomics”, where fiscal rules and private‑investment reliance dominate.What the Next Year May Hold for the UK Economic NarrativeIf productivity gains prove sustainable, they could eventually translate into broader prosperity, but without stronger wage growth and job creation the political narrative will likely falter. The coming months will test whether Labour can convert early signs into tangible improvements for households or whether “green shoots” will remain a rhetorical flourish.

The Lead: A New Economic Reality Since the events of October 7, 2023, Israel's labor market has experienced unprecedented changes that have reshaped the nation's economic landscape. The transformation has affected employment sectors, workforce demographics, and labor policies, creating a new economic reality that continues to evolve as the country adapts to the post-October 7 environment. The Event Details: Structural Shifts in Employment The most significant changes have occurred in three key areas: the security sector's expansion, the technology industry's adaptation, and the service sector's realignment. The security industry has seen a dramatic increase in hiring, with defense-related positions growing by approximately 35% since October 2023. Meanwhile, Israel's renowned tech sector has undergone a strategic pivot, with many companies shifting focus to defense-related technologies and cybersecurity solutions. The Data Analysis: Economic Impact and Labor Statistics Unemployment rate decreased from 3.8% pre-October 7 to 3.2% in 2026 Participation rate among women aged 25-44 increased by 7.3 percentage points Wage growth in security and defense sectors reached 22%, significantly outpacing other industries Foreign worker population decreased by approximately 18%, with replacement by domestic workers GDP growth remained resilient at 3.1% in 2025, despite regional instability The Impact Analysis: Regional and Sectoral Transformation The labor transformation has had profound effects across Israel's economic regions. Southern Israel, once peripheral, has become a hub for security and technology development, reversing decades of economic disparity. The traditional manufacturing sector has contracted by 12%, while the digital economy has expanded by 28%. These shifts have created new economic disparities even as they've generated opportunities in previously underserved communities. The Prediction: Future Trajectories of Israel's Workforce Economists project that Israel's labor market will continue to evolve through 2030, with three key trends emerging: further integration of security and civilian sectors, increased automation in manufacturing, and a growing emphasis on vocational training to meet specialized industry needs. The transformation has positioned Israel as a global leader in security technology while creating challenges for workforce development and economic diversification in the coming decade.

The latest S&P; Global purchasing managers' index shows UK services activity slipping to a 48.5 reading in May, marking the steepest drop in a decade and signalling a broader economic slowdown.Sharp Drop in UK Services PMI Marks Decade‑Worst DeclineIndex fell to 48.5 in May, down from 52.6 in April.Lowest reading since January 2021 and the lowest since July 2016 when Covid data are excluded.Services sector accounts for roughly 80% of UK GDP.PMI Numbers Reveal Contraction Below Growth ThresholdThe composite output index, which blends manufacturing and services data, dropped below the critical 50‑point mark, indicating contraction. Economists had forecast a reading of 51.6, making the actual figure notably worse.Payrolls fell for the 20th consecutive month, echoing ONS data that showed a loss of 100,000 payrolled employees in April.Manufacturing showed a modest rebound, hitting a three‑month high as firms front‑loaded orders.Broader Economic Implications for GDP and Monetary PolicyAndrew Wishart of Berenberg warned that a sustained PMI slump could push quarterly GDP growth from 0.6% in Q1 to -0.2% in Q2. Meanwhile, the Bank of England may keep its policy rate at 3.75% after recent inflation data showed a slowdown to 2.8% in April and wage growth easing to 3.4%.Outlook: Potential Further Slowdown Amid Geopolitical TensionsAnalysts attribute the downturn primarily to the ongoing Iran war and heightened uncertainty around Keir Starmer's leadership. If these pressures persist, the services sector could see continued job cuts and reduced spending, while manufacturers may face tighter order books, as noted by the CBI.Overall, the flash PMI suggests a cautious near‑term outlook for the UK economy, with policymakers likely to adopt a wait‑and‑see stance on interest‑rate adjustments.