Also: America’s coming grocery-price shock
May 12th 2026 For subscribers
The World in Brief
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Today’s top stories
▸ Sir Keir Starmer insisted he would “get on with governing” despite more than eighty Labour MPs calling for him to quit as prime minister. Miatta Fahnbulleh, a minister, and four junior members of Sir Keir’s government resigned in the past day, after Labour was trounced in local elections last week. The crisis has rattled bond markets; thirty-year gilt yields hit their highest level since 1998.
▸ Donald Trump warned that the ceasefire with Iran was “on massive life support”. He called Iran’s response to America’s peace plan “garbage” and said he did not finish reading it. Earlier Iran defended its counter-proposal, which includes ending America’s blockade on its ports, and said discussions about its nuclear programme would happen “when the time is right”. Brent crude, the international oil benchmark, rose to around $105 a barrel.
▸ American business leaders including Elon Musk, Tesla’s boss, and Tim Cook, the head of Apple, will reportedly accompany Mr Trump on his trip to China this week. The president hopes his high-stakes summit with Xi Jinping, China’s leader, will result in new business deals following a stalemate in the countries’ bitter trade war.
▸ Scott Bessent , America’s treasury secretary, arrived in Tokyo for talks with Japanese officials. Katayama Satsuki, the country’s finance minister, said that her government was co-ordinating with America on “market moves, including exchange rates”. Japan is suspected to have recently spent nearly ¥10trn ($63.5bn) to prop up the yen, its limp currency. After visiting Japan, Mr Bessent is expected to join Mr Trump in China.
▸ Emmanuel Macron unveiled a €23bn ($27bn) investment package to create 250,000 jobs across Africa and France , targeting sectors such as AI, agriculture and the energy transition. France’s president made the announcement at a summit in Kenya, which has been widely read as a bid to renew his country’s ties with the continent. Its influence has waned in recent years, particularly in the Sahel, where several countries have expelled French military forces.
▸ The remaining crew and passengers aboard the _ MV Hondius_, a cruise ship hit by an outbreak of hantavirus , left the vessel. Health authorities confirmed three more positive cases linked to the ship. Seven positive cases of the rodent-borne virus have now been confirmed, with two others suspected. Three people have died so far.
▸ Wordle , a popular mobile puzzle game published by the _New York Times_ , will be turned into a television show for NBC, an American network. The series will be filmed in Britain and is expected to air next year. Millions of people are thought to play the game, which the _Times_ acquired for an undisclosed seven-figure sum in 2022.
Figure of the day
15%, the share of global tantalum supplied by Rubaya, a town northwest of Goma in the Democratic Republic of Congo. Read why M23, a Congolese militia, wants to sell critical minerals to Donald Trump.
Today’s markets
Topix | 3,872.9 | +0.83% ↑
STOXX 600 | 608.5 | -0.70% ↓
S&P; 500 futures | 7,412.3 | -0.33% ↓
Data at May 12th 2026, 09:37 GMT | % change on previous close | Source: LSEG
The day ahead
GETTY IMAGES
America’s coming grocery-price shock
How expensive could American groceries get? The first big clue will come on Tuesday, with the publication of consumer-price index data for April. Food prices are already a third higher than they were before the covid-19 pandemic.
The energy-price shock from the Iran war is reverberating through supply chains. Farmers face much steeper fertiliser and fuel costs. Donald Trump’s tariffs are also making imports pricier; tomatoes, which America mostly imports from Mexico, cost almost 25% more than they did a year ago.
But the greatest pressure on prices may come from the next two stages of the supply chain: packaging and transport, which rely on oil. The soaring cost of plastic, derived from fossil fuels, will mainly impact prices of the thickly wrapped products in the home-care and beauty aisles. Transport accounts for as much as half of the supply chain’s oil consumption. Americans may find the knock-on effects hard to stomach.
OFFICE OF THE SECRETARY OF WAR PUBLIC AFFAIRS
The global arms race
On Tuesday Pete Hegseth, America’s secretary of war, will appear before a Senate committee to defend the administration’s proposal to raise Pentagon spending by more than 40%, to around $1.5trn in 2027. The record request will face a difficult path through Congress, where Democrats and fiscal conservatives alike are sceptical. The war in Iran has further complicated matters. During a similar hearing in the House of Representatives last month, Democrats spent hours grilling Mr Hegseth over the conflict, which has so far cost America at least $25bn.
America is not the only country spending more on arms. In real terms, global military expenditure rose for the 11th straight year in 2025, according to our annual ranking , based on data from SIPRI, a think-tank. European countries, seeking to reduce their reliance on America, accounted for more than half the increase. Indeed, by one measure America’s principal allies collectively outspent it in 2025. If Mr Hegseth gets his way, America could soon reclaim the lead.
Samsung faces its unions
On Tuesday Samsung Electronics will aim to conclude negotiations with workers to avert a strike. Unions want the South Korean tech champion to remove caps on bonuses; they are also demanding that 15% of operating profits be paid to chip-division employees every year—worth around $34bn, based on projections for 2026. If no deal is reached, nearly 40,000 workers will begin an 18-day strike next week, hurting the firm’s growing semiconductor business.
A walkout on this scale would be sorely felt in South Korea’s wider economy. The company’s valuation soared past the $1trn mark earlier this month thanks to voracious demand for its artificial-intelligence memory chips. That sent the country’s benchmark index, the KOSPI , to a record high. South Korea’s stock market is now the world’s seventh largest. Given its giddy ascent, one wobble could bring it down.
America keeps an eye on the Bahamas
Philip Davis, the Bahamas’ prime minister and leader of the populist Progressive Liberal Party, is seeking re-election on Tuesday. The election will be closely watched by American officials, who are observing it after the opposition leader, Michael Pintard, voiced concerns over voter fraud.
America was already displeased with the Caribbean country, which lies about 50 miles from Florida. Its ambassador has publicly criticised the archipelago for borrowing $285m of Chinese money to build a state-of-the-art hospital. Chinese firms also operate two of its major ports. That irks Donald Trump, who is trying to reassert American influence in the region.
Mr Davis has tried to mollify the Trump administration. Last year, he promised to renegotiate a health-care agreement with Cuba that had drawn America’s ire. And ahead of the election he hired Roger Stone, a political adviser pardoned by Mr Trump, and C.J. Pearson, a MAGA influencer, to help “build stronger relations” with America. More such manoeuvres may be needed before long.
SANDRA NAVARRO
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