Global markets may look serene, but beneath the surface, political risk is surging.
Bank of England Governor Andrew Bailey is warning that geopolitical shocks, from trade escalation to threats against Fed independence, could trigger abrupt repricing with global consequences.
Meanwhile, Germany’s ThyssenKrupp Marine Systems is upping the stakes in Canada’s submarine race with a sweeping industrial investment bundle.
In the UK, Starmer is weighing a tougher stance on children’s social media use, as Macron arrives in Davos, urging Europe to defend a rules-based order under siege.
BOE Governor Bailey sounds alarm on geopolitical spillovers
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Andrew Bailey is right to worry.
The Bank of England chief warned Parliament on Tuesday that simmering geopolitical tensions, Trump’s Greenland rhetoric, escalating trade disputes, and threats to Fed independence pose real financial stability risks, even if markets are staying oddly calm for now.
Bailey explicitly noted the BoE’s “considerable” concern about how suddenly markets could reprice if tensions flare.
His message is clear: complacency kills. The fact that central bankers felt compelled to publicly defend Fed Chair Powell is extraordinary.
Bailey stressed potential spillovers to the UK economy if Washington undermines the Fed’s autonomy, underscoring how dollar dominance means American political volatility has global teeth.
TKMS sweetens Canada submarine pitch
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Germany’s ThyssenKrupp Marine Systems is throwing a much bigger prize at Canada than just 12 submarines.
CEO Oliver Burkhard revealed this week the company’s bundling of the $12 billion sub contract with a sweeping investment package spanning rare earths, AI, battery tech, and mining, potentially worth multiples of the naval hardware itself.
The offsetting strategy is clever: Canada gets three decades of guaranteed industrial commitments locked into the deal structure.
TKMS is even partnering with Canadian AI startup Cohere to demonstrate advanced tech integration, underlining German seriousness here.
Competing South Korean firm Hanwha Ocean is likely scrambling to match this.
Ottawa expects both final bids by March 2026, and with geopolitical tensions fueling European defense spending, Germany is using economic leverage to lock down one of the decade’s biggest procurement wins.
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Britain is finally moving on social media, just not decisively.
PM Keir Starmer launched a three-month consultation on banning under-16s from social media, mirroring Australia’s December implementation.
The announcement includes tightening age verification tech, capping addictive features like infinite scroll, and hiking the digital age of consent from 13.
Crucially, government inspectors (Ofsted) will now police school phone bans.
But critics smell political theater: Opposition leader Kemi Badenoch blasted it as “dither and delay,” while 60+ Labour backbenchers and bereaved families, including Brianna Ghey’s mother, are demanding immediate action, not consultations.
Tech companies predictably support studying the issue; child safety groups worry bans simply push kids to darker corners.
Ministers visiting Australia signals seriousness, but Britain’s consultation summer timeline could frustrate momentum.
Macron’s Davos warning: A rules-based order under siege
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Emmanuel Macron arrived at Davos swinging.
The French president delivered a blistering indictment of the collapsing international order, warning of a shift toward “a world without rules” where imperial ambitions resurface and only raw power matters.
The shot across the bow was unmistakably aimed at Trump, who arrives Wednesday to speak, and his Greenland demands.
Macron framed it starkly: respect versus bullies, rule of law versus brutality, science versus conspiracies.
He pivoted to positioning Europe as the last keeper of predictability and sovereignty, pitching it as an investment destination precisely because chaos reigns elsewhere.
The irony stings: Davos itself exists to celebrate the rules-based global capitalism Macron now fears is crumbling.
His call for cooperation over coercion will be tested immediately by Trump’s tariff threats and territorial overreach.
