A ceasefire deal has been approved by Israel’s high-level security cabinet, paving the way for a pause in fighting in Gaza. The six-week truce deal, which would exchange Israeli hostages for Palestinian prisoners, will now be brought to a full cabinet meeting. It is expected to be agreed despite opposition from the right of the Israeli government, who argue that the war should continue until Hamas – designated as a terrorist organization by the US and many other countries – is entirely destroyed. The deal looked as if it might collapse yesterday after Israeli Prime Minister Benjamin Netanyahu said Hamas was reneging on promises. But in a sign that the plans to start the ceasefire on Sunday are progressing, the Israeli justice ministry published a list of prisoners due to be released in exchange for hostages. The ceasefire may put a pin in fighting for now, but there is little agreement on what should happen next. Israel wants Hamas to play no part in the future running of Gaza, yet it’s not clear if there is another group willing or able to take control. The deal will be welcome news in the Middle East and across the world, including to both incoming US President Donald Trump and current President Joe Biden, who wanted a resolution before they hand over power on Monday. –Helen Chandler-Wilde

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Russia and Iran signed a strategic cooperation pact to deepen cooperation between the two countries as they deal with sanctions imposed by the US and her allies, and brace for the return of Donald Trump to the White House on Monday. The treaty includes formal commitments to closer defense ties, though short of a mutual-defense agreement like the one Russia has with North Korea. Iran and Russia have deepened their relationship since President Vladimir Putin’s full-scale invasion of Ukraine in 2022 led Moscow to seek trade elsewhere as sweeping sanctions from the West bit. 

Officials in Washington have been frustrated by a European Union debate over whether to drop a trade investigation into alleged coercive activity against Lithuania by China. After Lithuania opened a representative office for Taiwan – which China considers part of its territory – Beijing imposed trade restrictions on the Baltic country. This led the EU to file a complaint against China at the World Trade Organization in 2022, with the claim that it was using economic coercion. In 2023, Lithuania said that the customs restrictions had been lifted, and in January last year the EU suspended the proceedings – a controversial decision that has led to a year of Brussels being lobbied, for fear it sets a bad precedent. If the EU fails to resume the complaint by the end of next week, it will lapse.

Virgin Atlantic is trying to lure customers from British Airways – after complaints about the latter’s recent stingy changes to its loyalty points scheme which make it more expensive to earn or keep top-tier status. At the end of last year, BA announced that its status tiers would be linked to spending. With each £1 spent gaining one tier point, access to top gold status would need £20,000 of spending in a year – equivalent to four round-trips from London to New York in business class. The changes come after the existing system ended in overcrowded airport lounges and long priority boarding queues. Virgin has promised to match the BA gold and silver status to members who swap to them, with an extra incentive of five chances to win 1 million points to clients who swap before mid-February.

The Upper Class cabin inside a Virgin Atlantic plane Photographer: Hollie Adams/Bloomberg

Two Italian billionaire families are emerging as key players in a major reshaping of the country’s banking industry. Together, the Del Vecchios and the family of Francesco Gaetano Caltagirone control €15 billion of financial services investments in Italy — and plan to make their voices heard as M&A accelerates. Both clans have built big stakes in Banca Monte dei Paschi di Siena SpA, a once-troubled bank set to play a critical part in a wave of consolidation.

Chancellor of the Exchequer Rachel Reeves has urged a group of major watchdogs to “tear down regulatory barriers” and allow the UK economy to grow. “We are not going to be able to grow the economy if the regulators keep doing what they’re doing,” Reeves told the BBC in an interview today. This comes after a market slide as traders questioned her economic plans, which pushed UK borrowing costs to a 17-year high. Further bad news came today, with a surprise fall in retail sales over Christmas, a vital trading period. She must now convince investors that she can and will grow the economy – especially after Bloomberg calculations today showed she would be left with a £30 billion ($36.7 billion) black hole in her budget if the UK grew at current City forecasts rather than official projected rates.

Tax, defense, energy and other issues are emerging as key policy areas in the campaign for Germany’s snap election, with an electorate looking for a government to improve living standards. The Feb. 23 election was called after Chancellor Olaf Scholz’s coalition was ended prematurely by infighting between the parties – with the result likely to set the direction not just of Germany but also of the European Union’s integration project. Polls currently suggest the Christian Democratic Union – which was the party of former Chancellor Angela Merkel – could return to power with its Bavarian counterpart.

Nigel Farage, the leader of Reform UK, has given an interview to Bloomberg News in which he said that his party’s economic policies came with a “big initial cost.” Farage – a former leader of UKIP and one of the architects of Brexit – also reiterated his offer to help Prime Minister Keir Starmer manage the UK’s relationship with Trump. He added that Reform was ready to challenge Starmer’s Labour for power, as the party surges in the polls.

Nigel Farage in Bloomberg’s London office yesterday Photographer: Jose Sarmento Matos/Bloomberg

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