And Donald Trump and Vladimir Putin expected to speak this week.
Ata mārie and welcome to your Monday recap of the key international business and political stories making headlines.
First up, US Treasury Secretary Scott Bessent said the Trump administration was focused on preventing a financial crisis that could be the result of an uptick in government spending in recent years, CNBC reported.
“We are resetting and we are putting things on a sustainable path,” he said.
President Donald Trump’s priority since returning to the White House had been to trim wasteful government spending by creating the Department of Government Efficiency, led by billionaire businessman Elon Musk.
CNBC noted that US debt and the deficit worsened during Trump’s first month in office, as the budget shortfall for February exceeded US$1 trillion.
Bessent said there were “no guarantees” that there won’t be a recession following a wave of sharemarket uncertainty and declines. “I’m not worried about the markets. Over the long term, if we put good tax policy in place, deregulation and energy security, the markets will do great,” he said.
Meanwhile, a recession was now expected in the first half of 2025 in the US, setting the stage for the most significant economic disruption since the global financial crisis in 2008.
Advisory and asset management firm deVere Group said the economic cracks were deepening, with Trump’s on-off tariffs creating heightened uncertainty for businesses and investors.
Chief executive Nigel Green said consumer spending was showing clear signs of fatigue. “Retail sales data suggests households are prioritising necessities over discretionary purchases, a classic precursor to economic contraction. Business investment, meanwhile, is cooling, with firms pulling back on expansion plans in anticipation of weaker demand.
“Corporate earnings reports already hint at squeezed margins, and labour market strength now appears more fragile than headline figures suggest.”
Russian President Vladimir Putin.
Staying with US politics, Trump may speak with Russian President Vladimir Putin this week, according to special envoy Steve Witkoff, as the US attempted to broker a ceasefire to end the Ukraine conflict, Bloomberg reported. “I expect that there’ll be a call with both presidents this week. And we’re also continuing to engage and have conversation with the Ukrainians.”
Witkoff met with Putin last week, but the Russian leader resisted an immediate ceasefire because issues still needed to be resolved. Witkoff said his conversation with Putin “was positive, it was a solution-based discussion”.
He said Trump “really expects” there to be a deal in the coming weeks. “I believe that’s the case.”
In other news, US military officials claimed that Russia and China were testing new offensive space capabilities, pointing to a series of satellite training missions in recent months, CNN reported.
US officials watched multiple Russian satellites work together to surround and isolate another satellite that was positioned in low-Earth orbit. In addition, recent Russian satellite movements also suggested they were “actively preparing” for a potential armed conflict in space, a US official said. “Russia wants to take away our advantages in space and they don’t care about collateral damage.”
UN experts accused Israel of sexual and gender-based violence against Palestinians and carrying out "genocidal acts" through the destruction of healthcare facilities, the BBC reported.
A report commissioned by the UN Human Rights Council alleged violations, including rape, in Gaza and the occupied West Bank since 2023. It also said the destruction of maternity wards could indicate a strategy to prevent births.
Israel said it "categorically rejects” the allegations.
Canary Wharf London.
Finally, the UK economy surprisingly contracted 0.1% in January, despite economist predictions of slight growth at the start of the year, the Guardian reported.
The data showed the services sector failed to offset a decline in the industrial sector and maintain growth from the previous month.
Manufacturing fell by 1.1% in January, compared with 0.7% growth in December. Construction was also weaker after bad winter weather delayed building activity. The services sector expanded only 0.1%.
