News in Review
| Trump “won’t use force” to seize Greenland – which came as a relief to global leaders and markets, after a challenging period | With geopolitical risk dominating, WEF President cautioned that tensions could have a detrimental effect on global growth | Price pressures are set to ease noticeably this year, particularly as the impact of last year’s energy and utility price hikes fades away |
“Europe needs to adjust to the new security architecture and realities that we are now facing”
Last week, global leaders met in Davos for the World Economic Forum Annual Meeting 2026. Talks were focused on rising geopolitical and economic tensions, including the Russia-Ukraine conflict and the fast-moving situation in Greenland.
On Wednesday 21 January, President Trump delivered a special address, touching on US economic growth, immigration and Greenland. He stated that he is “seeking immediate negotiations to… discuss the acquisition of Greenland by the United States.” Trump had previously threatened to use military force to take control of the island, however he said that he “won’t use force,” which came as a relief to global leaders and markets, after a challenging few days.
Trump also launched his ‘Board of Peace’ initiative, to oversee peace efforts in Gaza. The Board now appears to have a broader goal of resolving conflict across the globe. Israel, Argentina and Hungary are among the countries who have signed up, while several countries have declined their invitations, including France, Norway and the UK.
European leaders emphasised the importance of unity in response to US policy shifts. French President Emmanuel Macron expressed concern over the rise of unilateralism. Meanwhile, Ursula von der Leyen, President of the European Commission said, “I believe Europe needs to adjust to the new security architecture and realities that we are now facing.” She added, “Europe must speed up its push for independence – from security to economy, from defence to democracy.”
President Zelenskyy criticised European leaders, urging them to act boldly instead of relying on US leadership. With geopolitical risk dominating discussions, World Economic Forum President Børge Brende cautioned that these tensions could have a detrimental effect on global growth. Meanwhile, AI was another key theme, with BlackRock CEO Larry Fink warning about the impact of technological advancements on the global workforce.
Inflation ticks higher
According to the Office for National Statistics (ONS), inflation rose annually by 3.4% in December 2025, up from 3.2% in November. The increase was largely driven by a sharp rise in airfares, which climbed by 28.6%. However, the ONS noted that this was mainly due to the timing of the festive period. Food prices were also an upward driver, rising by 4.5% in the 12 months to December 2025.
Lead Economist at CBI, Martin Sartorious, commented, “Inflation edged up slightly in December, broadly in line with consensus expectations. However, we anticipate that this increase will prove to be temporary. Price pressures are set to ease noticeably this year, particularly as the impact of last year’s energy and utility price hikes fades away.”
This is the final inflation figure before the Monetary Policy Committee’s next meeting on 5 February.
Gold reaches record highs
This week gold surged above $5,000 an ounce for the first time, extending a historic rally after rising over 60% last year. The latest gains come amid heightened geopolitical uncertainty, including tensions between Nato and the US. Precious metals are often viewed as safe-haven assets during periods of instability. Strong demand has been driven by persistent inflation, a weaker US dollar, increased buying by central banks and expectations that the US Federal Reserve will cut interest rates again later this year.
Consumer confidence update
According to GfK’s index, consumer confidence rose by one point in January to -16. Attitudes about personal finances over the last 12 months rose by three points to -3 (seven points higher than January 2025). Meanwhile, the measure for the country’s economic situation over the last year decreased by five points to -45 (one point higher than January 2025).
Consumer Insights Director at GfK, Neil Bellamy, said, “January 2026 brings an unwanted anniversary, marking 10 years since consumer confidence was last in positive territory. Even with a one-point increase in headline confidence this month to -16, we remain a long way from consumers feeling that better days are around the corner.”
Government borrowing falls
ONS data shows that UK government borrowing decreased in December. Public spending was estimated to be 3.5% higher than in December 2024, but this was offset by the government receiving 8.9% more in taxes. Borrowing therefore totalled £11.6bn last month, which is lower than expected and down 7.1% on the previous year.
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All details are correct at time of writing (28 January 2026)