Macroeconomics and politics, explained
The news, and the mechanics behind it
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External shock → Link 1Cause
Oil hits a six-month high as the Strait of Hormuz stays blocked
Brent settled at $116.72, a third weekly gain and up about 76% on a year ago, as fears of a wider Middle East conflict grow.
Brent crude closed at $116.72 a barrel on Friday, up about 17% in a month. The rise is already feeding into inflation across oil-importing economies.
24 Oct 2026 · Global
External shock → trade & yenEffect
Japan’s oil bill pushes its trade balance into deficit for a fifth month
The April–September deficit reached ¥2.81tn ($17.8bn). Imports rose 20%, and the yen is near 157 to the dollar.
Japan imports almost all its oil, and pays for it in dollars. A blocked shipping route and a weak yen are a costly combination.
24 Oct 2026 · Japan
Link 3 · Expected ratesIn the chain
The Fed is expected to hold rates on 28 October, despite oil
Futures put the chance of a hike at about 5%, down from 37% at the end of September, as a tech sell-off and the oil shock cloud the outlook.
A month ago, markets saw a good chance of another US rate rise. Now they see almost none. Here is what changed.
24 Oct 2026 · United States
Link 5 · Real economyEffect
Dow falls 650 points as oil costs hit airlines
The Dow lost 1.2% on 23 October. Airline shares fell as fuel costs rose, and worries about AI spending added to the selling.
US shares fell on Friday, with airlines among the biggest losers. It is the oil shock reaching company profits.
24 Oct 2026 · United States
Link 4 · YieldsIn the chain
Investors rush into government bonds after an AI-led tech sell-off
The US 10-year yield had its biggest one-day fall in over two years on 22 October. German, French and UK yields also dropped.
Bond yields fell sharply twice this month, even with oil pushing inflation up. When investors get scared, safety beats everything else.
24 Oct 2026 · United States · Europe · Euro area · United Kingdom
Link 1 · InflationCause
UK inflation jumps to 3.5%, and the rise is spreading
Up from 3.1% in August and above forecasts. Core inflation also rose, a sign the pressure is spreading beyond fuel.
Prices rose faster than expected in September, and core inflation climbed too. That makes a Bank of England rate rise in November more likely.
24 Oct 2026 · Europe · United Kingdom
Link 3 · Expected ratesIn the chain
Markets expect the Bank of England to raise rates on 5 November
Investors expect a 25 bp rise to 4.00%. Three of nine policymakers already voted for one in September.
After a higher-than-expected inflation reading, investors are betting on the first UK rate rise since 2023. Fixed mortgage rates have already moved.
24 Oct 2026 · Europe · United Kingdom
Government finances → Link 4Cause
UK borrowing overshoots ahead of the 28 October Budget
Borrowing from April to September was £97.8bn, £6bn above forecast. The 10-year gilt sits near 5.4%.
The government borrowed £6bn more than forecast in the first half of the financial year, while the 10-year gilt yield sits close to its highest since 2008.
24 Oct 2026 · Europe · United Kingdom
Politics → Link 4Cause
France’s borrowing premium hits its highest since the euro debt crisis
The 10-year spread over Germany reached about 147 bp on 5 October. Political deadlock and a 5.4% deficit have unsettled investors.
Investors now demand about 1.4 percentage points more to lend to France than to Germany for ten years. Politics, not interest rates, explains the gap.
24 Oct 2026 · Europe · France
Link 4 · YieldsIn the chain
US 10-year yield reaches its highest since 2002
The 10-year reached about 5.3% in early October, up a full point since February, while the Fed has raised rates by just 0.25 points.
The benchmark yield rose above 5.3% in early October. The Fed has raised rates once, but bond investors have priced in much more than that.
24 Oct 2026 · United States
Link 5 · Real economyEffect
UK fixed mortgage rates climb towards 6%
The average two-year fix rose to 5.97% from 5.68% a month earlier, though Bank Rate hasn’t moved since December.
Lenders are pricing in a Bank of England rate rise before it happens. This is where the chain reaches household budgets.
24 Oct 2026 · Europe · United Kingdom
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Mechanics
The mechanics behind the news
Evergreen explainers. Each one shows the key terms, how one thing moves another, and the latest numbers.
01How inflation, interest rates and bond yields fit togetherWhy central banks raise rates when prices rise, and why bond markets usually move first.10 stories in the news02Why some governments pay more to borrowHow markets price the risk of lending to a government, and why France now pays far more than Germany.2 stories in the news03How an oil shock travels through the economyWhy a jump in oil prices raises inflation, slows growth, moves currencies and splits winners from losers.4 stories in the news
Concepts
The terms behind the news
Plain-language definitions, each with a real example.