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US will no longer have safe haven in region, warns Iran's Khamenei after strikes
Iran's supreme leader Ayatollah Mojtaba Khamenei said on Tuesday that regional countries would "no longer serve as shields for American bases", in a written statement carried by state television. The remarks came after US forces struck missile sites and vessels allegedly laying naval mines in southern Iran, even as Tehran ​and Washington ​continue exchanges aimed at ending the war. France 24, May 26

Netanyahu says Israel will intensify strikes against Hezbollah
The Israeli military says it has begun a wave of strikes across Lebanon following an announcement by Prime Minister Benjamin Netanyahu that his country will intensify its attacks on Hezbollah. The Israel Defense Forces said it had launched strikes against Hezbollah in the Bekaa Valley in the east of Lebanon and other parts of the country. Hezbollah, a Shia Muslim armed group in Lebanon that is backed by Iran, said it had retaliated by carrying out 22 drone and rocket attacks and that its targets included Israeli soldiers, tanks, barracks and buildings. Earlier this month, Lebanon and Israel agreed to extend a 45-day ceasefire, though some fighting has continued. In a video statement on Monday evening, Netanyahu said Israel was "at war with Hezbollah" and the military has been told to "deal them a crushing blow". Netanyahu said Israel's military offensive against Hezbollah had "eliminated … over 600 terrorists". He continued: "But what this requires of us now is to increase the strikes, to increase the intensity." BBC news, May 26

Real wages start to shrink in developed countries
Workers’ pay packets are shrinking in relation to prices in a growing number of rich countries as the energy shock unleashed by the Iran war chokes off a nascent recovery in real wages. The squeeze on consumers in the UK, US and elsewhere comes as they face sharp increases in prices for petrol and airfares triggered by the closure of the Strait of Hormuz. US inflation jumped to an annual 3.8 per cent in April, while average hourly earnings increased 3.6 per cent over the year, meaning prices were rising faster than earnings for the first time in two years. “The war is roiling supply chains and will push prices higher [than] before, even if the strait were to open tomorrow,” said Diane Swonk, chief economist at KPMG US. UK workers face a similar squeeze. Average earnings grew at an annual pace of just 0.1 per cent in real terms in the three months to March, excluding bonuses, and are set to fall outright as inflation rises over the coming months against a backdrop of very weak hiring. Financial Times, May 26

Live news: UK bond yields lowest since mid-April
British government borrowing costs are falling sharply this morning on hopes that US and Iranian negotiators will make progress reopening the strait of Hormuz. UK bond prices are rallying in early trading, pushing down the yield (or interest rate) on the debt. Investors will be calculating that a peace deal would lead to a recovery in oil and gas flows from the Middle East. That would push down inflation and remove some pressures to raise interest rates. The UK bond market was closed yesterday, so traders are now able to respond to the news that Tehran and Washington are discussing a framework to end their three-month-old war. Ten-year gilt yields fell as low as 4.824 per cent at the start of trading, a drop of seven basis points (0.07 of a percentage point). That’s the lowest level since 21 April, before UK yields began rising in early May amid uncertainty over prime minister Keir Starmer’s future. Longer-dated 30-year bond yields have dropped too - down as much as six basis points to 5.49 per cent, the lowest since 17 April. The Guardian, May 26

Reeves urges ministers to ‘buy British’ in critical sectors
Rachel Reeves has urged cabinet ministers to award more government contracts to British companies in critical areas of the UK economy, as she steps up her campaign to remain chancellor amid challenges to Sir Keir Starmer’s ailing premiership. In a letter to her colleagues, the chancellor advised them to “buy British” wherever possible, saying that doing so was “in the wider national interest”. Reeves said this would help “more businesses grow and prosper and create good, skilled jobs and apprenticeships here in Britain”, according to the Guardian, which first reported the letter. The chancellor added that it was “disappointing” that “too many” contracts were going to overseas companies. A government spokesperson told the FT that they would “issue new guidance prioritising contracts for British business where necessary” when procuring suppliers for artificial intelligence, energy infrastructure, shipbuilding and steel. Financial Times, May 25

Social media is the new smoking, medical leaders say
Social media is the new smoking, medical leaders have declared, putting the prime minister under increasing pressure to commit himself to a ban for under-16s. A report by the Academy of Medical Royal Colleges warns of an epidemic of harm to children “continuously exposed to hateful, addictive and grossly distressing content”. The report, submitted to the government consultation on the matter, which closes on Tuesday, said social media and smartphone use “ranks alongside smoking and wearing seatbelts in cars as a unifying force for the medical profession”. Doctors are seeing a “wave of radicalised children”, the report says, highlighting cases in which children have joined suicide pacts or killed family pets after watching content online. On Tuesday, Sir Keir Starmer is due to meet people who have lost children or siblings to harm linked to online platforms. The Times, May 26

Donald Trump says US will not ‘rush into a deal’ with Iran as talks continue
Donald Trump has told US negotiators “not to rush into a deal” with Iran that would lead to the reopening of the Strait of Hormuz, saying “both sides must take their time and get it right”. The US president’s remarks, in a post to his Truth Social platform, came a day after he suggested that an agreement was close, claiming it had “largely been negotiated”. On Saturday afternoon, Trump said “final aspects and details” of a deal that would open the Strait of Hormuz were “currently being discussed” and would “be announced shortly”. Oil prices dropped on Monday during Asian trading. Brent crude, the international oil benchmark, fell 5.2 per cent to $98.15 a barrel. US oil prices dropped 5.5 per cent to $91.28 a barrel. Asian stock markets rose and US and European stock futures also advanced. Trump tempered that optimism by posting on Sunday that the deal “isn’t even fully negotiated yet”. On Monday, US secretary of state Marco Rubio said that Washington is “going to give diplomacy every chance to succeed before we explore the alternatives”. “We’re either going to have a good agreement or we’re going to have to deal with it another way,” he added. Financial Times, May 25

Pope Leo XIV set to release manifesto on AI's ethical risks and global impact
Pope Leo XIV will release on Monday his long-awaited manifesto on artificial intelligence, a bid to address ethical and social challenges as the technology rapidly develops worldwide. The US pope will attend the presentation of the "Magnifica Humanitas" (Magnificent Humanity) encyclical at the Vatican in person - a first for the Catholic Church. He will be joined not only by officials from the Holy See but experts including the co-founder of the American startup Anthropic, a key player in the booming AI landscape. Anthropic is in a legal battle with the US military after refusing to change its internal policy prohibiting the use of its Claude model for lethal autonomous warfare or mass surveillance. France 24, May 25

First Hong Kong astronaut launches into space onboard Chinese mission
A Hong Kong astronaut has been launched into space for the first time, aboard China's Shenzhou-23 spacecraft. Li Jiaying, a 43-year-old police officer and mother of three, serves as the payload scientist in the three-member crew who made their way to China's Tiangong space station on Sunday night. At least one member of the crew will spend a full year in orbit as part of a key experiment. Authorities will determine who that will be at a later date. The mission is the latest in China's ambitious space program to send humans to the moon by 2030. It comes amid an accelerating race with the US, which is looking to achieve a crewed lunar landing by 2028. The Shenzhou-23 is tasked with studying the effects of microgravity on the human body, among many experiments. Apart from Li, the two other astronauts on the mission are Zhu Yangzhu, a 39-year-old space engineer and Zhang Zhiyuan, a 39-year-old former air force pilot. BBC news, May 25

UK universities cut jobs, research and teaching amid squeeze in overseas students
Rising numbers of UK universities are laying off staff and cutting research and teaching, according to a survey that points to the impact of falling international student numbers on the sector. Universities are warning that Britain’s future economic innovation is at risk as institutions increasingly cut back on academics’ research time and PhD funding to help balance the books. The Office for Students, which regulates the sector, found this month that 43 per cent of universities were likely to have ended 2025-26 in deficit after “over-optimistic” attempts to boost student recruitment. Lucrative overseas students, who have helped universities subsidise UK students, fell by 10 per cent in 2025-26. This was the second successive annual decline as ministers tighten visa rules and economic turmoil in countries such as Nigeria reduces demand. Financial Times, May 25

Parents on benefits could be paid to let teenagers be apprentices
Families on benefits could be paid hundreds of pounds a month to stop them discouraging their teenage children from taking apprenticeships. Ministers are considering grants in cases where those aged 16 and 17 can cause their parents to lose money by leaving education. Alan Milburn, the government’s work tsar, is expected to warn this week that the benefits system is creating perverse incentives that hold teenagers back from finding jobs. “For every £25 that we spend keeping young people on benefits, we spend only £1 helping them get into work through employment support,” he said on Sunday. Almost one million young people are not in education, employment or training, and Milburn said a “system reset” on welfare was “absolutely essential and needs to be done well”. The Times, May 24