Europe Explained

On Sunday President Trump announced that Russia and Ukraine had agreed to an "energy ceasefire", effective immediately. He gave no details, and neither Moscow nor Kyiv immediately confirmed it. Ukraine's president, Volodymyr Zelenskyy, said Ukraine would stop striking Russian refineries if Moscow stopped attacking Ukraine's energy system.

The announcement followed a tense weekend. Mr Trump said it was time for Ukraine to get a new president, and on Friday he struck a deal for Russia to supply diesel to the United States. Ukrainian and European officials said that deal helps fund Russia's war. A White House official said a deal to stop hitting power stations and grids could come next if refinery attacks stop. Mr Zelenskyy said a vote during the war would be unlawful, but that Ukraine could hold elections if Russia agreed to a 60-day ceasefire, with security guarantees.

Both countries are fighting a long-range war from the air while their armies remain largely deadlocked on the ground. On Sunday a Ukrainian drone attack shut a data centre run by the Russian tech company Yandex, the third strike on its facilities in four days. Roughly a fifth of Ukraine is under Russian occupation.

A Budget is when a government says how much money it will raise in taxes and how it will spend it. This one is the first for Chancellor John Healey, who was newly appointed, under Prime Minister Andy Burnham. It falls on Wednesday 28 October.

Some measures are already announced: a £2 cap on bus fares, VAT taken off electricity bills, and a cut in business rates for pubs and clubs. The 16-17 Saver railcard will be valid for a full year, so 18-year-olds keep 50% off most train fares.

Other changes are expected but not confirmed, such as reform of Capital Gains Tax, a tax on profits from selling things like shares, and welfare changes. The Prime Minister has committed to not raising income tax rates.

Governments borrow by selling bonds, which are promises to repay with interest. Investors have demanded up to 5% a year to lend to France for 10 years, the highest since July 2002. France also pays more than Germany: the gap reached 152 basis points, its widest since the eurozone crisis of 2011-2012. France now pays more to borrow than Italy and Greece.

The reason is debt. France's public debt hit €3.6 trillion in the second quarter of 2026, or 119% of its national income, up from 115.6% a year earlier. Its deficit, the gap between what it spends and what it raises each year, is expected to hit 5.4% of national income, above the EU's limit of 3%.

Prime Minister Sébastien Lecornu's minority government has proposed about €54 billion of spending cuts and extra revenue for 2027. Markets were not reassured, as he lacks a majority. Parliament begins debating the budget on 13 October.