FirstFT: US and UK launch strikes against Houthi rebels

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The US and the UK have carried out military strikes against Iran-backed Houthi rebels, raising fears of a broader escalation of the conflict in the region.

US President Joe Biden said he ordered the strikes following “unprecedented” attacks by the Yemen-based militants on commercial ships in the Red Sea. Australia, Bahrain, Canada and the Netherlands also supported the operation.

UK Prime Minister Rishi Sunak said the rebels’ attacks continued despite “repeated warnings from the international community” and were disrupting trade, driving up commodity prices and exacerbating the humanitarian crisis in Yemen. The British navy would continue to patrol the Red Sea as part of a multinational operation, he added.

Here’s what we know about the military action, as well as a few other articles on the conflict in the Middle East:

• Related: Iranian forces seized an oil tanker off the coast of Oman yesterday, raising fears that Tehran could step up its own attacks.

• Global trade: The boss of shipping giant AP Møller-Maersk has warned it could take months to reopen the crucial Red Sea trading route, risking an economic and inflationary hit to the global economy, companies and consumers.

• 🎧 Listen: In this week’s Rachman Review podcast, Gideon Rachman discusses how a peaceful outcome in the Middle East looks increasingly remote as more regional actors are drawn in.

• Explainer: Who are the Houthis, the Iran-backed Yemeni “military entrepreneurs” that are threatening global trade through the Red Sea?

And here’s what I’m keeping tabs on today and over the weekend:

• Results: Several large US banks are expected to log a sharp rise in bad loans when they report fourth-quarter figures today, including Citigroup, JPMorgan Chase, Wells Fargo and Bank of America. BlackRock will also report results today after the world’s largest asset manager announced plans to lay off 3 per cent of its staff earlier this week.

• Economic data: France and Russia have their consumer price indices for December today, while the US reports its producer price index for the same month. The UK releases its gross domestic product estimate for November.

• Apple: US Customs and Border Protection is due to announce its decision on whether to lift a ban on sales of the company’s Series 9 and Ultra 2 watches today.

• Taiwan elections: Relations with China and national identity have become even more dominant in this year’s pivotal presidential and parliamentary elections, which take place tomorrow.

How well did you keep up with the news this week? Take our quiz.

Five more top stories

1. Exclusive: The European Commission is willing to bow to some of Hungary’s demands in order to secure a €50bn support package for Ukraine, according to senior officials. Brussels has been working to find a solution since Hungary’s Viktor Orbán vetoed the EU package last month. Here are the concessions the commission could offer.

2. Bitcoin trading volumes surged yesterday after the first 10 US exchange traded funds offering direct exposure to the world’s largest cryptocurrency made a long-awaited debut on stock exchanges. Trading in the nine new ETFs and Grayscale Investments’ converted $28bn bitcoin trust exceeded $4bn across the New York Stock Exchange, Nasdaq and Cboe exchanges, a day after they received approvals from the Securities and Exchange Commission.

For more on the risks and opportunities presented by digital assets, premium subscribers can sign up for our Cryptofinance newsletter. Or upgrade your subscription here.

3. Exclusive: The UK government is set to publish a series of tests for passing new laws on artificial intelligence. These include whether systems put in place by the new AI Safety Institute manage to identify risks around the technology, or if AI companies fail to uphold voluntary commitments to avoid harm. Cristina Criddle and Anna Gross have more details from London.

4. The mass exoneration of sub-postmasters in the UK Post Office scandal has raised concerns among judges as senior lawyers warned the move should not be repeated. Despite general acceptance that Prime Minister Rishi Sunak’s move was the only way to speedily resolve a great miscarriage of justice, here’s why it has created unease within the judiciary.

5. Donald Trump said he had been victimised by a politically motivated case and that he should be paid damages for his suffering during a surprise courtroom speech yesterday. In the final day of a civil fraud trial that threatens to level his business empire, the former US president told a New York judge: “They want to make sure I don’t win again.”

• More on Trump: His potential election is “clearly a threat” to Europe judging by the policies in his first term in office, European Central Bank president Christine Lagarde has said.

• Presidential race: Chris Christie’s exit from the race for the Republican presidential nomination has boosted Nikki Haley in some early voting states.

The Big Read

Online disinformation has been a factor in elections for many years. But recent, rapid advances in artificial intelligence mean that it is cheaper and easier than ever to manipulate media, thanks to a brisk new market of powerful tools such as OpenAI’s ChatGPT. At the same time, manipulated or synthetic media is becoming increasingly hard to spot. With an estimated 2bn people headed to the polls, could 2024 be the year when a viral, undetectable deepfake catastrophically impacts an election?

We’re also reading . . . 

Chart of the day

Microsoft briefly usurped Apple to become the world’s biggest company by market value yesterday, as the artificial intelligence boom brought a new twist to the decades-long rivalry between the two Big Tech groups. By midday in New York, Apple had retaken the top spot.

Take a break from the news

From a Soho House spin-off in Manchester to a floating villa in the Maldives — these are the big hotel openings to look out for in 2024.

Additional contributions from Benjamin Wilhelm and Gordon Smith