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British pound coins are seen in front of displayed stock graph.

Reuters

What We’re Watching: Bank of England intervenes, Pyongyang provocations, Israel-Lebanon gas deal

Bank of England to the rescue?

The Bank of England stepped in Wednesday to try and calm markets that had gone haywire after the Conservative British government, led by new PM Liz Truss, introduced £45 billion ($49 billion) worth of tax cuts despite sky-high inflation. The bank will fork out £65 billion ($70 billion) to buy government bonds “at an urgent pace” to try to revive investor confidence and boost the pound, which recently fell to a record low against the US dollar. This development comes after the International Monetary Fund issued an unusual rebuke this week of British fiscal policy, warning that the tax cuts would exacerbate inequality. There are also concerns that some pension funds, which invest in government bonds, could be made insolvent following the collapse of UK government bond prices in recent weeks. Though the bank’s intervention is significant, there’s no indication that the Truss government is willing to reverse course (i.e. limit borrowing) to regain market trust. Meanwhile, in a keynote speech Wednesday, Labour leader Keir Starmer said Tories had “crashed the pound,” noting that “this is a Labour moment.” Indeed, Labour is currently trouncing the Conservatives in the polls, but Starmer would need to maintain this momentum until the next general election, which must be held by January 2025.

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Putin Believes He Can Escalate Out Of This Situation. Experts Don’t. | Europe In :60 | GZERO Media

Russia struggles in Ukraine, Putin escalates

Carl Bildt, former prime minister of Sweden, shares his perspective on European politics from Seoul, South Korea.

What's the European reaction to what Mr. Putin has just announced?

Well, it's fairly obvious that Mr. Putin is under substantial pressure, from his military failures on the front line with Ukraine, and from his diplomatic failures on the global political front. And he believes that he can escalate himself out of this situation. I mean, experts don't really believe that's possible, certainly not on the diplomatic front and most probably not on the military front either. So what's happening is that he's is in a hole and he is digging. And it is not going to end well, this particular story. The European reaction, is to increase support for Ukraine.

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GZERO Media

What We're Watching: K-pop in China, US ends Remain in Mexico, China vs. porcupine

South Korea’s top diplomat visits China

South Korea's Foreign Minister Park Jin traveled to China this week for meetings with his Chinese counterpart, Wang Yi – the first such high-level visit since Yoon Suk-yeol became South Korea’s new president earlier this year. They had plenty to discuss. China wants Yoon to keep his predecessor’s promises not to expand the use of a US missile defense system, not to join a US-led global missile shield, and not to create a trilateral military alliance that includes Japan. China also wants South Korea to stay out of a computer chip alliance involving Taiwan and Japan. South Korea, meanwhile, wants China to understand that it values Beijing as a top trade partner and wants to build stronger commercial ties. Yoon notably refused to meet US House Speaker Nancy Pelosi during her uber-controversial trip through Asia last week. But he’s also made clear that his predecessor’s commitments to Beijing are not binding on his government. The long-term economic and security stakes are high, but we will also be watching to see if South Korea has persuaded China to relax restrictions on the access of Chinese citizens to K-Pop, the South Korean pop music phenomenon. Seoul needs durable commercial relations with Beijing, and millions of Chinese music lovers need their South Korean boy bands.

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A South Korean soldier walks past a TV in Seoul broadcasting a news report on North Korea firing a missile.

REUTERS/Kim Hong-Ji

What We're Watching: South Korea dangles Kill Chain, frozen Afghan funds thawing

South Korea dusts off "Kill Chain" vs. North

We think a potential nuclear war on the Korean Peninsula would be sparked by a first strike from the North. But what if the South launched a preemptive strike instead? Since Yoon Suk-Yeol was elected South Korea’s president in March, Seoul has been paying more attention to its decade-old “Kill Chain” program, which calls for a series of rapid strikes against key North Korean targets when South Korean intelligence believes Pyongyang is about to attack — possibly also taking out the supreme leader and top generals. Why is Yoon considering this? It’s likely in response to Kim Jong Un developing hypersonic missiles that would give the South less time to respond. Also, Yoon may want a plan B in case the US waivers on its long-term security commitment to South Korea — former US President Donald Trump, for instance, threatened to force Seoul to pay a bigger bill. But it’s a catch-22: knowing that the South Koreans have “Kill Chain” in place could deter Kim from attacking, or it could prompt him to do something drastic while he still thinks he has the upper hand over Seoul.

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NATO Summit: Most Important Summit Since the Wall Came Down | World In :60 | GZERO Media

NATO Summit most important post-Berlin Wall

Ian Bremmer shares his insights on global politics this week on World In :60:

First, what is the significance of Japan and South Korea's presence at the NATO summit?

First of all, this is by far the most important NATO summit we've seen since the Wall has come down. Japan and South Korea, a very big deal. Trilateral meeting with President Biden, the two American allies most important that have a dysfunctional relationship, fundamentally dysfunctional on the global stage, and increasingly they are trying to align Kishida, the Prime Minister, and Yoon, the President of South Korea, trying to make that happen. Also, we're increasingly seeing a transformation of NATO to not just being a North Atlantic Alliance, but increasingly taking on global security issues. China's more of a focus. Asian allies, more of a focus. Keep in mind, New Zealand and Australia also there.

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North Korea's Kim Jong Un walks away from what state media report is a "new type" of ICBM.

KCNA via REUTERS

Will standing up to North Korea work?

North Korea has engaged in an aggressive spate of missile testing this year. In response, the US and South Korea are changing tack and pushing back against Pyongyang with a more muscular show of force. Washington and Seoul’s robust replies are designed to push Kim Jong Un back to the negotiating table, furthering their quest to denuclearize the Korean peninsula.

But it’s a risky gamble. The fresh approach could convince an isolated and broke North Korea to talk shop, or Kim could double down and conduct his first nuclear test since 2017.

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A Russian-flagged bulk carrier transits the Bosphorus near Istanbul.

REUTERS/Yoruk Isik

What We're Watching: Black Sea wheat pirates, Kazakh referendum, Korean missile tit-for-tat

Donbas battle rages as stolen wheat hits high seas

Ukrainian and Russian forces are locked in a fierce battle for control of the strategic eastern city of Sievierodonetsk. Taking it would help Russian forces occupy a broader swath of the Donbas. Ukrainian President Volodymyr Zelensky, visiting frontline troops in nearby Zaporizhzhia, said his men had “a chance” to hold the city despite being outnumbered. The question remains — at what point should Ukraine consider negotiating? Meanwhile, US officials have warned as many as 14 countries that Russian grain ships may arrive with cargos pilfered illegally from Ukraine. Still, amid a growing global food crisis that’s been made worse by the war, are governments really prepared to turn away huge shipments of wheat?

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Joe Biden speaks during a joint news conference with South Korean President Yoon Suk-youl in Seoul.

REUTERS/Jonathan Ernst

In Asia to fix imbalance, Biden talks both guns and butter

In his first presidential trip to Asia, where he is visiting South Korea and Japan as well as huddling with Quad partners, Joe Biden isn’t expected to sign any major trade deals or defense agreements. But America’s commander-in-chief is going to be in China’s neighborhood, shoring up new and old alliances in the region, reminding Beijing that checking the PRC is very much on Washington’s agenda, despite the administration’s attention being taken up by domestic politics and the war in Ukraine.

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