Tensions Rise Following Hezbollah Attack

Macro Monday

It is estimated that there will be 15 million visitors during the Paris Olympics, including two million from abroad.

Tensions Rise Following Hezbollah Attack

Israeli defence minister, Yoav Gallant, pledged to “hit the enemy hard” following an attack from Hezbollah which killed 12 children over the weekend.

On Sunday, rockets fired from Hezbollah fell on a football field in the Israeli-occupied Golan Heights which claimed the lives of 12 people, 10 of whom were between the ages of 10 and 16.

Since the 7 October massacre, Hezbollah and Israeli forces have continued to exchange fire as tensions rise across the region. According to Israeli authorities, such attacks have killed 23 civilians and 17 soldiers while it’s estimated that around 100 civilians have been killed in Lebanon.

With the incident over the weekend marking the most significant escalation in recent tensions between Israel and Hezbollah, attention now turns towards how Israel will respond to the Iranian-backed militia. Thus far, Israel conducted limited airstrikes over the course of last night as the country’s security cabinet meets this morning to discuss options. It’s understood that the cabinet has authorised Netanyahu to decide on the manner and timing of the response.

According to the BBC’s Mark Lowen “Hezbollah is the strongest non-state actor in the region, with an estimated 150,000 rockets and missiles in its arsenal”. Hence many remain concerned that a further escalation between Israel and Hezbollah could destabilise the region further.

While leaders from around the world condemned the attack, politicians from Western allies including David Lammy and Emmanuel Macron urged restraint as Antony Blinken warned that “We don’t want to see the conflict escalate. We don’t want to see it spread.”

Kamala Harris also condemned Hezbollah’s attack while promising “ironclad” support for Israel.

?

Reeves to Deliver Speech on Public Sector Shortfall

This afternoon, Rachel Reeves is set to deliver a speech to Parliament which will focus on a “black hole” in the nation’s finances.

According to the Chancellor, the previous Conservative government “[covered] up the true state of the public finances” overseeing a shortfall of some ￡20bn.

While it’s expected that Reeves will say that “it is time to level with the public and tell them the truth”, Conservative MPs have warned that Reeves is merely laying the foundations for further tax rises and public spending reductions.

Given the shortfall, Reeves is expected to axe some road and rail projects (including the tunnel around Stonehenge) in addition to cutting expenditure on external consultants in the public sector.

It’s also expected that Reeves will pledge to announce just one major fiscal budgetary statement each year, as opposed to the two that has taken place over the last few parliaments.

Public sector pay rises for teachers, members of the armed forces and prison staff are also expected to be announced.

?

Harris Closes Gap in Polls

According to recent polling data, Harris’s approval rating has gained around a four-point lead on Trump with voting intention putting the two front runners head-to-head.

According to the FT: Harris’ rise in support “is not coming from previously decided voters switching their allegiance, but from winning over previously undecided and third-party voters, particularly the young, Black and Latino electorates that Biden had been struggling to persuade.”

These polls, cited in the FT also say that voters channel their blame over high inflation more towards Biden than Harris, giving the Vice President a fresh opportunity to make ground for the Democrats.