WeekDay AM: 10 Things you need to know this morning
A falling pound, Lebanon's new president, and how Norway became an EV pioneer

 
today's economy story

Pound falls to lowest level in more than a year

What happened
The pound dipped to its lowest level since late 2023 yesterday, while the government's borrowing costs rose to their highest in more than 16 years.

Sterling was last down 0.42% at $1.2310, having fallen by as much as 1.6% earlier to its lowest point since November 2023.

Who said what
There is "no need for an emergency intervention" and markets "continue to function in an orderly way", said Treasury minister Darren Jones yesterday in response to an urgent question in the House of Commons.

But Shadow Chancellor Mel Stride said: "Higher debt and lower growth are understandably now causing real concerns among the public, among businesses and in the markets."

The falling pound has "reignited concern about Britain's finances", said Reuters. However, rising borrowing costs are not just a problem for the UK and "have also been going up in the US, Japan, Germany and France, for instance", said the BBC. This is partially because there is "a great deal of uncertainty around what will happen when president-elect Donald Trump returns to the White House this month", but in the UK "there are also concerns about the economy underperforming". This, in turn, has piled "pressure on Rachel Reeves", said The Guardian.

What next?
Lord O'Neill, who served as Treasury minister under David Cameron, said the current panic was overblown, but urged the government to focus on growth. Speaking to BBC Radio 4, he said: "If you boost growth the revenues will grow and the underlying fiscal position will improve further."

 
 
today's international story

Lebanese army chief becomes president

What happened
Lebanon has appointed army commander Joseph Aoun as its president, filling a vacuum that has existed for more than two years. Aoun, 60, assumed the role after winning 99 of 128 votes in a parliamentary election, the 13th attempt to appoint a president since 2022.

Who said what
In his inaugural address Aoun (pictured above) told parliament he would pump money into the nation's military, uphold Lebanon's sovereignty and "prevent Israeli aggression on its territory". He also hinted at trying to end the country's conflict with Israel, for which a 60-day ceasefire is in effect until 26 January. "Notably, Israel has welcomed Aoun's appointment," said Al Jazeera.

What next?
Aoun's election comes at a "pivotal moment" for Lebanon, said The Times. The collapse of President Bashar Al-Assad's regime in Syria has "opened up the possibility for economic growth on Lebanon's eastern border" and "increased international support for both countries".

 
 
Today's energy story

High power costs hinder UK's heat pump revolution

What happened
The UK has the highest electricity prices in Europe compared with gas prices, stymying the government's push to get households to replace boilers with heat pumps. The pumps typically cost £2,500 more than gas boilers even after a government grant to help pay for them, partly explaining why UK uptake is the lowest in Europe per capita, said the European Heat Pump Association.

Who said what
"Without a major increase in government investment aimed at bringing down the upfront costs; more wind and solar energy in our grid to bring down the cost of electricity; and the delivery of a nationwide heat pump rollout scheme, the government's target of 600,000 installations a year by 2028 will be difficult to meet," Doug Parr, Greenpeace UK's policy director, told The i Paper.

What next?
The government will remove planning constraints to make heat pumps easier to install and is expected to announce a ban on gas boilers in new homes from 2027.

 
 

It's not all bad

An invasive plant in Africa is being turned into biodegradable shopping bags and plant pots. The water hyacinth, a destructive aquatic plant in Kenya's Lake Naivasha, has devastated native species and damaged livelihoods. In order to combat it, a company called HyaPak Ecotech has begun employing locals to harvest the hyacinth, transforming it into eco-friendly alternatives to single-use plastics. This innovation, which both supports conservation and creates jobs, will soon expand to India and El Salvador, two countries that are also struggling with the water hyacinth.

 
 
under the radar

How Norway became an electric vehicle pioneer

Norway has cemented its reign as the leader of electric vehicle purchases, with nine out of every 10 new cars sold in Norway last year being powered by electricity.

The Scandinavian nation is "leagues ahead" in the “electric car race", said Quartz, and has "become the poster child" for the transition to EVs, said DW.

As far back as the 1990s Norway set out to manufacture EVs and, although "early attempts" had "limited commercial success", they "fostered public awareness and acceptance of electromobility", said the German outlet.

Norway's "remarkable commitment" to fighting climate change has been "driven by strong government policies, robust infrastructure and a supportive public". Its "size and wealth" have both played a part in its "EV success" – it has a population of just 5.5 million and is one of the world's richest nations, ironically thanks to substantial oil and gas reserves.

Offering incentives, rather than banning petrol and diesel cars, has also helped, said Reuters, and another advantage is that Norway "does not have an automaker lobby".

Norway has set a target for all cars sold to be zero-emission vehicles by the end of this year, a milestone that would put it a decade ahead of the European Union, of which it is not a member. 

But "reaching that ambitious goal" will "likely be a difficult task", added Quartz. Øyvind Solberg Thorsen, from the Norwegian Road Federation, said "the figures and the increase in share show that the last few percentages" to meet the 2025 target may be "difficult to achieve".

 
 
on this day

10 January 1984

The Vatican established diplomatic relations with the US after a 117-year hiatus. Those relations could become strained now that president-elect Donald Trump has chosen a critic of Pope Francis to be the ambassador to the Holy See. Brian Burch, head of a right-wing Catholic advocacy group, "loves his Church", wrote Trump.

 
 
Today's newspapers

Wildfires in California dominate the front pages today. Around 100,000 homes have been "reduced to smouldering ruins" as "swathes of the City of Angels were consumed block by block", says Metro. World temperatures rose above the internationally agreed limit for the first time last year, says The Guardian. Chancellor Rachel Reeves is being criticised for being "missing in action", says The Telegraph, as she flies to China in an "attempt to revive closer ties and boost Britain's economy".

See the newspaper front pages

 
 
tall tale

Pine dining off the table

Belgium’s Federal Food Agency has ruled that Christmas trees should be strictly off the menu after the city of Ghent suggested using their needles in cooking. The town’s website proposed recycling the conifers in flavoured butter or other recipes, "raising eyebrows" across the country, said The Guardian. The federal agency issued an emphatic "no", stating that Christmas trees are not meant for the food chain. "There is no way to ensure that eating Christmas trees is safe – either for people or animals," it said.

 
 

Morning Report was written and edited by Arion McNicoll, Harriet Marsden, Jamie Timson, Ross Couzens and Chas Newkey-Burden, with illustrations by Julia Wytrazek.

Image credits, from top: Tek image / Science photo library / Getty Images; Fadel Itani / AFP / Getty Images; Andrew Aitchison / In pictures / Getty Images; Illustration by Julia Wytrazek / Getty Images.