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$99 for your first yearFT newspaper delivered Monday-Saturday, plus FT Digital Edition delivered to your device Monday-Saturday.What’s included Weekday Print EditionFT WeekendFT Digital EditionGlobal news & analysisExpert opinionSpecial featuresExclusive FT analysis More

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.Some 700,000 British households face a jump in mortgage costs when their fixed-rate deals end in 2025, as upheaval in the UK financial markets over recent weeks threatens to drive borrowing costs higher. Mortgage rates had been projected to fall this year, easing the pain for homeowners. But the recent sell-off in the UK government debt markets, driven by worries over persistent inflation and heavy public borrowing, could keep borrowing costs higher for longer. That shift has also caused swap rates, which are closely tracked by lenders to price their mortgages, to rise sharply.Two-year sterling interest rate swaps, which anticipate the average interest rate over 24 months, have risen from just under 4 per cent in mid-September to more than 4.5 per cent. The mortgage shock awaiting families this year comes on top of the 2.4mn households that had to remortgage at higher rates in 2023 and 2024, according to analysis by property group Savills. Lucian Cook, head of residential research at Savills, said the “pressure on household finances” from rising mortgage costs “has the impact of continuing to suck money out of the economy”. The vast majority of UK homeowners fix their mortgage rate for two or five years, meaning the shock of the big rise in borrowing costs that started in 2022 — and ramped up after Liz Truss’s disastrous “mini-Budget” — has hit households over several years. Rising mortgage payments have been a key contributor to the cost of living crisis. Higher interest rates will add £1.27bn to the annual housing costs for property owners remortgaging in 2025, Savills projects.These estimates are based on forecasts that predict remortgage rates will fall to 4.0 per cent by the end of the year. But investors have grown increasingly concerned about government debt, sticky inflation and the prospects for the UK economy, which over the past few weeks has driven up government borrowing costs and swap rates. Simon Gammon, managing partner at Knight Frank Finance, said: “Swaps have moved materially so pricing pressure is already there for all lenders . . . if the current trend continues with swaps remaining high, we will probably see mortgage rates move higher across the board.” The Bank of England, which last year started to cut its benchmark interest rate from a 16-year high, has warned that the “full impact of higher interest rates has not yet passed through to all mortgagors”. The central bank said in November that the typical owner-occupier reaching the end of a fixed rate in the next two years would see their monthly payments increase 22 per cent, or £146. The share of households who are behind or heavily burdened by mortgage payments remains low by historical standards, the BoE added. The need to absorb higher costs has led many homeowners to put off moving house, with fewer people able to trade up to a more expensive home. Cook at Savills said that “only when this has fully washed through . . . will you see people think again about moving”. There should be some good news for borrowers remortgaging two-year fixed deals, however. They fixed at close to the recent peak of borrowing costs and will largely see their monthly costs fall. Of the just over 1mn fixed-rate deals ending in 2025, some 340,000 will be two-year fixes where borrowers will typically save money by remortgaging. The rest were longer fixes where remortgaging would be more expensive, Savills said. Additional reporting by Ian Smith More

STOCKHOLM (Reuters) – Elon Musk’s expected hosting of Alice Weidel, leader of the far-right Alternative for Germany (AfD) party, for a discussion on his X platform on Thursday was being watched by the European Commission to check for any spreading of misinformation before next month’s German election.The European Union’s Digital Services Act (DSA) is intended to address illegal content such as hate speech and intentional manipulation to influence elections.X has been under investigation under the DSA since 2023 over suspected dissemination of illegal content and the effectiveness of its measures to combat information manipulation.HOW IS MUSK INVOLVED IN EUROPEAN POLITICS?Since publicly supporting Donald Trump to become U.S. president last year, Musk has endorsed Britain’s right-wing Reform party as well as the AfD on X.”The traditional political parties in Germany have utterly failed the people. AfD is the only hope for Germany,” he posted on X last month.Musk’s endorsement of the AfD, an anti-immigration, anti-Islamic party designated as right-wing-extremist by German security services, has caused consternation in Berlin, where all other parties rule out working with a party they regard as dangerous and undemocratic.After a Saudi doctor killed five people in a Christmas market last month in the German city of Magdeburg, Musk called German Chancellor Olaf Scholz an “incompetent fool” on X and urged him to resign.WHAT IS THE EU’S DIGITAL SERVICES ACT?The DSA regulates big online platforms such as X and Meta (NASDAQ:META) with more than 45 million users per month in the European Union, as well as the app stores of companies such as Apple (NASDAQ:AAPL) and Alphabet (NASDAQ:GOOGL). Its main goal is to prevent illegal and harmful online activities and the spread of misinformation. Musk’s X was the first company to be investigated under DSA for illegal content, in December 2023.A company can be fined up to 6% of its global annual turnover for breaching the DSA, and up to 5% of daily worldwide turnover for each day of delay in complying with remedies.If the infringement persists and causes serious harm to users, the Commission can request suspension of the service. The Commission has also opened proceedings against Meta and China’s AliExpress, Temu and TikTok. All the cases including that against X are still open except for one against TikTok, closed after the video sharing platform addressed EU concerns. WHAT WILL REGULATORS DO ON THURSDAY?About 150 EU staff are responsible for enforcing the DSA, both at the Commission’s DG CONNECT department in Brussels and the European Centre for Algorithmic Transparency in Spain. Former EU industry commissioner Thierry Breton reminded Weidel on X about DSA rules intended to protect democracy around elections.Senior EU officials acknowledge the challenge presented by Musk but insist the DSA is up to the job.”Mr Musk is free to express his opinions in the EU online and offline, within legal boundaries,” said Michael McGrath, European commissioner for democracy, justice, the rule of law and consumer protection.HOW HAS MUSK CLASHED WITH THE EU?The EU and Musk have clashed several times since he took over his social media platform, then called Twitter.Before Musk interviewed Trump last August, Breton urged him to comply with EU law as the livestream would be accessible in the EU. X CEO Linda Yaccarino called the letter an “unprecedented attempt to stretch a law intended to apply in Europe to political activities in the US”. The EU has accused X of deceiving users with its blue checkmark, which previously indicated that an account had been verified as belonging to a public figure but was changed to designate a paid subscriber.Musk threatened litigation, and accused the Commission, without providing evidence, of offering X an illegal secret deal to censor speech. Breton denied this.The commission has also accused X of failing to provide easy access to searchable and reliable information about advertisements, and blocking researchers from accessing its public data. More

NEW YORK (Reuters) – Bank of America’s bonus pool for investment bankers will probably rise 10% for last year, a source familiar with the matter told Reuters.While the average increase will be 10%, some investment bankers will get smaller payouts in the mid-to-high single digits, while other top performers would exceed the 10% range, two other sources told Reuters. The bonuses will be paid out in February after the bank announces its fourth-quarter earnings on Jan. 16, one of the sources said. Global banks have benefited from an increase in dealmaking last year led by mergers, acquisitions, and a surge of underwriting for bonds and equities.Bloomberg earlier reported on the BofA increases.BofA Securities ranked third on the global deals for investment banking fees in the fourth quarter, earning $1.4 billion in revenue, up sharply from $958 million in same period in 2023, according to Dealogic data. Compensation consultancy Johnson Associates said in November that Wall Street firms are expected to pay heftier bonuses for 2024, the first increase since a bumper year in 2021.Payouts will probably rise after financiers benefited from several factors in recent months: a recovery in transactions, the Federal Reserve cutting interest rates and equity markets surging to record highs, said the consultancy’s founder, Alan Johnson. More

SINGAPORE (Reuters) – The dollar looked set to extend its longest weekly winning streak in over a year on Friday, underpinned by rising bond yields and expectations of another strong set of U.S. jobs numbers.The dollar has gained 0.5% on the yen this week to buy 158.03 yen and added more than 1% on an ailing British pound, which was battered to a 14-month low in tandem with a selloff in gilts and concern about British finances.The dollar is set for a broadly steady week on the euro, which buys $1.0926 and it has notched small gains on the Australian and New Zealand dollars. [AUD/]The dollar index is set for a sixth consecutive weekly gain, its longest run since an 11-week streak in 2023 as the U.S. economy continues to seem strong in contrast with weaknesses elsewhere.The index was steady in the Asia morning on Friday for a 0.25% weekly rise to 109.18.”We doubt the dollar needs to hand back much of its recent gains,” said Chris Turner, global head of markets at ING, noting a shakeout in sterling long positions and risks to the upside for the dollar from U.S. jobs data due later in the day.”Despite the risk of profit-taking, (the dollar index) found good support under 108 earlier this week.”Sterling was last a fraction weaker at $1.2295, having touched a 14-month low of $1.2239 earlier in the week. The Australian and New Zealand dollars are huddled near multi-year lows, with the Aussie – last at $0.6190 – having come within a whisker of breaking a 2022 low of $0.6170.The New Zealand dollar is also testing its 2022 low of $0.5512 and was last at $0.5594.PAYROLLSU.S. non-farm payrolls data is expected to show 150,000 jobs were added in December, with unemployment holding at 4.2%.A hint of anything much stronger would add to the case for fewer Federal Reserve rate cuts and may set off another round of selling in jittery bond markets.Overnight Philadelphia Fed President Patrick Harker said he expects the U.S. central bank to cut interest rates, but added that an imminent move down isn’t needed.Markets have already scaled back expectations to around 40 basis points of U.S. rate cuts for 2025, while concerns about President-elect Donald Trump’s potentially inflationary agenda have helped drive up longer-term yields.Ten-year Treasury yields have climbed nearly 9 basis points this week to 4.68% and are up 96 bps since mid September. [US/]Ten-year gilt yields are up 22 bps this week to 4.805%. [GB/]Unusually, the ructions in the bond market seem to have been felt by cryptocurrencies, with bitcoin down 5.7% on the dollar through the week to $92,600.”I’m not sure how many in the crypto scene would have been aware of … the dynamics shaping up in U.S. rates/Treasuries, and many will be questioning the factors behind the move in crypto,” said Pepperstone’s head of research, Chris Weston. More

Aircraft manufacturers and suppliers have struggled to keep up with a post-pandemic recovery in travel due to rising costs, labour and parts shortages, issues that have been exacerbated by safety woes at Boeing (NYSE:BA) and a strike by its staff last year.Avolon’s annual outlook report predicted that airlines’ net profit would rise by 16% to over $36 billion in 2025, driven by low fuel prices, strong revenue and the fact that plane shortages have allowed them to prioritise the most profitable routes.”That production shortfall underpins the supply and demand balance, not just for the next three or four years, but for at least another decade,” Avolon Chief Executive Andy Cronin told Reuters.Cronin said Avolon’s view that the supply and demand balance would be “firmly in our favour” over that time period spurred it to order 200 aircraft in 2023. It added 118 more aircraft last year through the acquisition of smaller rival Castlelake Aviation Limited, bringing its total fleet to 1,129 aircraft.The Dublin-based lessor said Boeing and main rival Airbus will continue to struggle to hit their targets to ramp up production despite increasing their deliveries.Avolon, which is a subsidiary of China’s Bohai Leasing Co Ltd, also predicted that orders from Chinese firms will rise sharply to 800 aircraft in 2025, citing growth in travel demand and a need to replace an aging fleet.While Avolon’s report described the aviation outlook for 2025 as robust, it also noted that economic cycles usually last four to six years and that the current cycle is already in its fourth or fifth year, with growth in Europe slowing.”We characterize it as a low visibility environment at the moment. I think there’s uncertainty around foreign policy and trade policy, and consequential impacts as it pertains to the aviation industry,” Cronin added. More