…December 2025

So, 2025 is drawing to a close and with it also the first quarter of this century. It’s already clear that the triumph of liberal democracy that shaped the second half of the last century – at least in the West – is already fading away, and that the 21st century will be much more divisive.

The major trends so far this century have been war, repression, inequality, mass migration, unpredictable weather, crop failures and famine. Luckily we still have mass consumerism 🙂 All this has been driven by a handful of middle aged men, which suggests that although the planet’s population is increasing steadily, the collective talent pool has shrunk.

December has been more of the same. The Chinese government through the medium of a court in Hong Kong has convicted the media tycoon Jimmy Lai, who holds British citizenship, for the appalling crime…of running a newspaper. Lai, who is 78, has been held for the last five years in a maximum-security prison, mostly in solitary confinement with limited access to daylight and exercise. 

A leaked video from China apparently shows the court martial of a People’s Liberation Army leader General Xu Qinxian who refused an order to crush the 1989 Tiananmen Square uprising and impose martial law. He appears to have regarded the uprising as a political rather than a military issue, suggesting confusion as to whether to prioritise the Chinese people or the Chinese Communist Party. The CCP has since tightened its grip on power, requiring absolute allegiance from officials and soldiers.

This is how all authoritarian regimes operate but we are also seeing something similar in the West. The US president, Donald Trump, has already deployed military forces in several American cities, and threatened opposition politicians who reminded military leaders that they have a legal duty to refuse all illegal orders. 

And there has been some disquiet in America over the orders to the military following an attack by US forces on a Venezuelan boat, which the US alleges without proof, to have been carrying drugs. The US has so far killed over 80 people in such strikes. But it has now emerged that one of these strikes, on 2 September, involved a double-tap – a second strike – to kill two people who had survived the first attack. The US has justified using military force saying that it is conducting a war on drugs, but that’s not the same as an actual war, though killing survivors at sea is usually seen as a war crime. 

Trump’s usual rudeness has taken a darker, more misogynistic turn as he now openly insults female journalists. Democracies require those who hold power to be answerable to their electorate, and taking legitimate questions from reporters is a good way to satisfy that. Yet Trump told Catherine Lucey of Bloomberg to be “quiet, piggy” when she asked him about the Epstein files; he called Mary Bruce of ABC News a “terrible person and a terrible reporter” when she asked Mohammed Bin Salman about the murder of the journalist Jamal Khashoggi; and he wrote that Kaitlan Collins of CNN was “stupid and nasty” after she had asked about his plans to strike Venezuela. 

The US has continued to build up its military forces off the coast of Venezuala with telling the Venezualan leader Nicolas Madura to leave the country. Madura, who is widely believed to have lost the last election and stolen the presidency, has been accused of committing human rights violations. So far the US has seized three oil tankers. But Trump cannot keep face if he allows Maduro to stay in power. 

Trump has continued to hold talks with both Vladimir Putin of Russia and Volodymyr Zelensky, president of Ukraine, ostensibly about ending the war in Ukraine. In reality the talks are really about giving the impression of Trump as a peacemaker, and it’s already clear any kind of peace will be on his terms, even though the US is not actually involved in the war. There is still an impression that his motivation is to win a Nobel peace prize, though it’s hard to see how given all the disruption that he has caused around the world. It’s far more likely that he is after the commercial opportunities that will come with peace, through the rebuilding of Ukraine and the renewed trading with Russia once sanctions are lifted. 

Zelensky has reportedly made concessions, under pressure from Trump. In return Trump appears to have offered him some kind of security guarantee though it’s not clear if this involves US troops and would only be for 15 years. Nonetheless, the European nations are continuing to rearm out of fear of a future war with Russia and those 15 years would buy them enough time to build a credible defence that’s not reliant on the US. 

But even this plan is in doubt with the Russians claiming that Ukraine has attacked a presidential residence. There’s no evidence to support this claim, which appears designed to torpedo the latest peace initiative. Naturally, Trump appears to have fallen for it, suggesting that US intelligence is more artificial than intelligent these days. And of course the Russians have continued to attack civilian infrastructure across Ukraine throughout the peace talks.

The Europeans, as ever, are split. An earlier plan to use frozen Russian assets to help arm Ukraine has collapsed partly because Belgium, which actually holds the frozen Russian funds, refused to go along with it out of fear of Russian retaliation. To complicate the issue, while the Europeans want to use the funds to help the Ukrainians re-arm, the US wants the money to be paid to US contractors rebuilding the country.

The Russians have continued to probe European borders, with drones and military aircraft as well as naval vessels surveying underwater cables. The latest threat is to move a nuclear-capable mobile missile system into Belarus. All of this might just be a not-so-subtle message to leave Ukraine to the Russians. But it is stoking fear and tension right across Europe so that there is no real questioning of the increase in defence spending, despite all the other economic problems that the continent is grappling with. 

Germany has voted to bring in a military service programme for 18-year olds, which will be voluntary for now. However, there will be a mandatory medical exam for all 18-year men to assess their fitness for possible military service from 2027 onwards. This will allow Germany to call up all those who are fit enough immediately if necessary. 

Britain, which is also considering some sort of military volunteering option for teenagers, has set out its Atlantic Bastion strategy to protect the waters around the country and in the Atlantic, where there are many undersea cables for energy and telecommunications. The fear is that Russian ships have already mapped these cables and could attack them, hitting the UK’s infrastructure. The government says there has been a 30 percent increase in the number of Russian vessels threatening UK waters in the last two years. As part of this, Britain has also signed a defence pact with Norway to hunt Russian submarines. But critics say that Britain has run down its military capability, leaving the country vulnerable, and that the Navy does not have the resources to fully protect against the scale of the Russian threat. 

Meanwhile, a sort of peace continues in Gaza, though there has been some fighting and around 400 people have been killed. However, more aid is getting through so that the immediate risk of famine is now abating. Thoughts are now turning to the second phase of the peace plan, which should see Hamas disarm and reconstruction beginning within Gaza. Some Israeli cabinet ministers have talked about building settlements in Gaza, though it’s not clear how serious they are about this. There have also been continuing reports of Israeli settlers harassing Palestinians virtually unchecked in the occupied West Bank. 

However, the marches and demonstrations supporting one side or the other in this never-ending conflict that took place in Britain and other western democracies have now mostly subsided. Consequently there’s less risk of outbreaks of violence though the wintry European weather may also have played a role and the atmosphere remains febrile. And in Australia a horrific attack on a Jewish group at Bondi beach sent shock waves around the world, and prompted tougher gun control measures in Australia. Pope Leo used his first overseas trip, travelling first to Turkey and then onto Beirut, to state: “We must strongly reject the use of religion for justifying war, violence, or any form of fundamentalism or fanaticism.” 

Most of this year’s other conflicts have also quietly continued throughout December though there has been a pause in the fighting between Thailand and Cambodia thanks to a new ceasefire deal. 

Torrential rain and cyclones have hit a number of Asian countries, including Indonesia, Sri Lanka, Thailand, Vietnam, the Phillipines and Malaysia, causing widespread damage and around a thousand deaths. Such storms do not normally form around the equator because there’s not enough Coriolis force from the Earth’s rotation there to spin the storms into their classic cyclonic structure. However, climate change is causing warmer seas, which is leading to heavier rainfall. 

European governments, led by the British and Danish, have met at the Council of Europe to discuss ways to reform how the European Convention on Human Rights (ECHR) is applied to migration cases, essentially to make it easier to return illegal migrants. The aim is not so much to make changes to the laws, which would take many years to legislate, but simply to the way that the European Court of Human Rights (ECtHR) interprets how that law should be applied. Several right wing British political parties have threatened to pull out of the ECHR altogether. 

The British Chambers Of Commerce, which represents 50,000 firms, has told the government that closer EU ties are a strategic necessity as British exporters are struggling to trade with the EU. This follows an annual survey of 1000 members that has revealed that a growing number of companies are being affected, which is hitting the government’s plan to grow the economy. But then Brexit was always going to be a gamble, and it was always more likely that living standards would go down rather than up, but now that this is starting to bite there is more discussion of the wisdom behind Brexit. It is still politically toxic to talk about the UK rejoining the EU but there is growing support for some kind of customs union.

Dame Emma Walmsley, chief executive of the pharmaceuticals giant GSK, has said the company will invest £23 billion in the US by 2030, a move that further highlights the exodus of investment from Britain. GSK, formerly known as GlaxoSmithKline, is the largest British pharmaceutical manufacturer but makes half of its profits from the US. Another British drug maker, AstraZeneca, had earlier paused plans to invest £200 million into a Cambridge research facility while it switched its investment to the US, and the American company Merck, also known as MSD, scrapped its plan to invest £1 billion into its UK operations. All this is partly because its easier to raise capital in the US, where there is also less regulation on pricing. But it’s also worth noting that the UK gave up its role hosting The European Medicines Agency after Brexit, meaning that there is less desire amongst pharmaceutical multinationals to maintain a UK headquarters. 

Ever helpful, the Office for National Statistics has revealed that the British economy unexpectedly shrank by 0.1 percent in October despite predictions that the gross domestic product would rise by that amount. In reality the UK economy has not grown since June, having flatlined in August and declined in September by 0.1 percent. Some of this has been blamed on a serious cyber attack on the carmaker Jaguar Landrover, with production shutdowns rippling throughout the supply chain. But many economists also point to the long run-up to last month’s budget, which caused many consumers and businesses to pause their spending plans, highlighting the overall lack of economic confidence within the UK.

There was an unexpected drop in UK inflation, now down to 3.2 percent for the year up to November. The Bank of England is now hoping that inflation could fall further, perhaps closing in on the 2 percent target by the coming spring or summer though this is partly because the bank is also forecasting zero economic growth for the first part of the year. 

There is some risk that a Christmas spending splurge could push inflation back up but the current data suggests that consumer confidence is too low to see any real spending, despite better than expected sales on Boxing Day. If anything, the weakness in the economy is now a bigger issue than the inflation. Consequently, the Bank’s Monetary Policy Committee responded by cutting interest rates from 4 percent to 3.75 percent, as had been widely expected, but warned that the pace of any further rate cuts would slow down. 

In contrast, the Bank of Japan increased its benchmark rate by 0.25 percent to 0.75 percent, in an effort to counter inflation, which rose in November by 3 percent. This is the first such rise since January 2025 though many economists expect a further rise to 1.0 percent.

In contrast the US economy picked up in the three months to September. Consumer spending rose from 2.5 percent in Q2 to 3.5 percent, while imports were down due to the tariffs and US exports have bounced back. However, the figures were delayed by the government shutdown and most economists expect that the shutdown will impact the results from this quarter. 

Nonetheless, inflation has fallen for most countries from the very high levels that most nations experienced after the pandemic. Prices around shipping and energy are starting to stabilise, not because the challenges are improving but because manufacturers now understand the risks and have factored them into their costs. So December for most of us has seen an uneasy calm, but I don’t think anyone is expecting anything other than more storms to come in the New Year.