| Hi there, it's Helen Chandler-Wilde, a UK journalist and Readout editor in London. Hope you enjoy today's newsletter. Right, here we go again: Donald Trump has been elected president of the US, and just like last time it has shocked many. Whatever your opinion, it's important news for the UK, and is only just starting to be digested in Westminster and the City. In Parliament today, it was Kemi Badenoch's first Prime Minister's Questions as leader of the opposition. Naturally, questions turned westward, with Badenoch quizzing Keir Starmer on whether he would commit to increasing defense spending — something that Trump has said Europe and the UK must do. This is easier said than done, writes Bloomberg Opinion's Lionel Laurent today. Shifting from European reliance on US defense to Trump's "America First" foreign policy is now complicated by the "slow agony" of the Old Continent's "economic and productivity decline," he writes, which makes any increase in spending or state capacity much harder. Trade could be a major issue, too. The optimist's view is that Trump could reopen talks of a full trade deal between the two countries – something that stalled and under the current US government. Yet the pessimist's view is that Trump's love of tariffs will hit the UK, badly. With Trump in the White House and Starmer in Downing Street, politics on each side of the Atlantic are now divergent. But Starmer has been working on his relationship with Trump, with the two having dinner together in Trump Tower in New York in September. Moving to a formal meeting, or a state visit, would mean addressing the awkwardness of Foreign Secretary David Lammy promising in 2017 that he would be "out protesting on the streets" if Trump came to the UK. Trump, for his own part, has indicated to associates that he thinks Starmer is "very left-wing." The election will no doubt also put the cat among the pigeons in Parliament. Reform UK leader and MP Nigel Farage, known to have a good relationship with Trump, was spotted at his election party last night in Florida. There's a conceivable situation in which backbench MP Farage is considered a closer confidante of the US President than the foreign secretary. That would be tricky, to say the least. There are still yet more big news events coming this week, including the Bank of England's rate decision tomorrow, when policymakers are expected to cut by 25 basis points. But the effects of the Trump win are so far-reaching that they extend even to British monetary policy, with new trade policy possibly complicating the path to any cuts beyond that. And markets are still adjusting to the effects of last week's budget, with Philip Aldrick last night reporting that increased borrowing costs for the government has wiped out all the UK's fiscal headroom. Surging gilt yields have now been compounded by the results of the US election, meaning any comments from Andrew Bailey will be very closely watched. Much more to come — yet somehow it's still only Wednesday. Want this in your inbox each weekday? You can sign up here. | 
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