What’s happened: The UK’s Department for Business and Trade (DBT) published its annual report on trade with Israel.

• The report measured a volume of trade of £6.2 billion for the four quarters ending on June 30, 2025. This was an increase of 3.7 per cent, or  £218 million, from the equivalent period the previous year, despite including the month of June 2025 when, during the war with Iran, trade was largely halted.
• According to the DBT report on trade with Israel, Israel was the UK’s 42nd largest trading partner (all of the UK’s top ten trading partners are in Europe except for the US and China which are the first and fifth largest, respectively).
• The increase in trade was due more to UK exports to Israel, which increased 10.6 per cent, than UK imports from Israel, which actually decreased by 4.6 per cent.
• The volume of trade between the two countries had been on a steady growth path for most of the last decade, interrupted only by the outbreak of war in 2023.

Context: According to the DBT report, trade between the UK and Israel stood at £3.6 billion in 2015 and grew each year until reaching a high in 2022 of £7.1 billion, before falling to £6.3 billion in 2023 when the Israeli economy experienced a severe contraction in the fourth quarter, and £6.0 billion in 2024.

• The increase in trade this year brings the two countries closer to the prewar figures.
• The top goods exported from the UK to Israel include medicinal and pharmaceutical products, cars, beverages, and railway equipment. Among the top goods imported to the UK from Israel are mineral manufactures, vegetables and fruit, plastics, and scientific instruments.
• Even larger trade volumes are recorded in services, mostly financial, travel, and computer and information services in both directions.
• The new data were hailed in the Jewish News as a failure of efforts to boycott Israel in Britain, which quoted Russell Langer, Director of Public Affairs at the Jewish Leadership Council, as saying, “These figures also highlight that those using the conflict in Gaza to sow divisions between communities here in the UK through boycotts have failed. The government should now resume free trade negotiations for the benefit of British businesses and consumers.”

Looking ahead: Two important developments on the Israeli economy are expected in the coming weeks.

• The Finance Ministry is due to present its budget proposal for Government approval in the coming weeks, after presenting the “budget principles” earlier this week. The Cabinet is expected to approve the budget by December 4, and the Knesset is expected to approve it sometime in January 2026.
• Under Israeli law, if no budget is approved by March 31, parliament automatically dissolves and early elections are called. Elections are scheduled anyway for October 2026 at the latest. The absence of an approved budget means that the Government keeps operating month to month according to prorated allocations from the previous year’s budget.
• According to the budget principles presentation, the Finance Ministry will seek significant cuts in defence spending in the coming fiscal year as well as impose a new tax on bank profits. Another item mentioned in the principles proposal that is less likely to get approval from other ministers in cabinet is the partial privatisation of rail service in Israel.
• On November 24, the Bank of Israel will announce its decision on interest rates. The BOI has not made any changes in Israel’s interest rates in more than two years. Historically, Israeli rates were considerably higher than those in Europe and North America, but that gap close after the global financial crisis in 2008. During the short burst of inflation at the end of the coronavirus pandemic, Israel raised its rates along with western countries, mostly in 2022.
• Since the war which began in October 2023, Israel has consistently had slightly higher interest rates than western countries, reflecting a return of the risk premium. While rates have begun to fall elsewhere, in Israel they held steady. Lower than expected inflation figures published this week are expected to push the Bank of Israel to consider lowering rates.
• A strong shekel, which adversely affects exports, is seen as another reason to reduce rates. Should there be another outbreak of fighting in Gaza or Lebanon, however, it is unlikely that the BOI will go forward with the expected rate cut.
• The BOI’s interest rate stand currently at 4.5 per cent (compared to Bank of England’s 4 per cent) with the inflation rate at 2.5 per cent (compared to 3.8 per cent in the UK). 
• The jump in interest rates in 2022 and 2023 has been a burden for Israeli homeowners with mortgages, as fully fixed-rate loans are comparatively rare in Israel. On the other hand, the total mortgage debt in Israel is significantly lower than in comparable countries (30 per cent of GDP in Israel, as opposed to 115 per cent in the UK, 131 per cent in Switzerland, 93 per cent in Australia, and 62 per cent in Canada).

What’s happened: Two unrelated domestic scandals have burst into public consciousness this week in Israel, sparking heated reactions across the political spectrum:

• Senior officials in the Histadrut, Israel’s largest labour federation, were detained on Monday following a two-year undercover police investigation into corruption.
  • According to police, the probe uncovered links between the federation, several local authorities, prominent businessmen, state-owned enterprises, and, according to local media reports, possibly government ministers.
  • Among those detained was the Histadrut’s chairman, Arnon Bar-David.
• The recently resigned military advocate general Yifat Tomer-Yerushalmi was also detained by police yesterday after having gone missing on Sunday.
  • Tomer-Yerushalmi resigned her post after admitting that she oversaw the leaking of footage showing soldiers allegedly abusing a Palestinian detainee, as well as misleading both the Supreme Court and the Ministry of Justice about the affair.
  • Five soldiers are being tried in the abuse case, and their cause has been adopted by leading figures on the far right in the Knesset.

What’s happening: Ultra-Orthodox (Haredi) communities are planning a huge demonstration in Jerusalem, dubbed the “million-man march” to protest against the military conscription of yeshiva students and the arrest of draft dodgers.

• According to the organisers there will not be any political speeches but only a special prayer service.
• The rally has the backing of both the Sephardi and Ashkenazi ultra-Orthodox political factions. Each community expected to gather in its own pre-determined area headed by its rabbis.
• Students have been encouraged to attend, but to refrain from provocations.
• Ahead of the rally, ultra-Orthodox journalist Aryeh Ehrlich wrote an op-ed in Yediot Ahronot, “Hundreds of thousands of Haredim from across the country, myself included, will flock to the gates of Israel’s eternal capital to cry out from our  hearts. Not a cry of protest, but a cry of affirmation. It won’t be anti-draft demonstration, but one of pro-Torah study in the Land of Israel; a cry of support for the sentiment that one cannot accept a reality in which in the world’s only Jewish country Torah students are arrested simply for continuing a centuries-old tradition, forced to endure sanctions, arrests, humiliation, and hostility; a cry in favour of the recognition that a Jewish state must value Torah study, honour those who devote their lives to it, and ensure the continuity of the glorious Torah world, which arose hundreds of years ago in Europe, which was destroyed by the Nazis and was reborn from the ashes in the Holy Land.”
• In parallel to protest will be a (likely much smaller) counter demonstration led by former MK Yoaz Hendel and his newly formed Reservists Party. Their demonstration is framed as “Fighting for Home.”

Context: The rally was originally timed to coincide with the Knesset debate of the new military draft bill, and to represent a unified show of force of the ultra-Orthodox world.

• MK Boaz Bismuth (Likud) the Chairman of the Foreign Affairs and Defence Committee, and the author of draft bill, has since announced that the latest iteration will not be presented today. This is reportedly at the request of Prime Minister Netanyahu, who wishes to review the document to avoid “unwanted surprises.”
• Bismuth replaced MK Yuli Edelstein (also Likud) as the chairman of the committee and the lead on drafting the bill in the summer due to Edelstein insistence on harsher sanctions against ultra-Orthodox men that did not enlist. He was removed at the behest of the ultra-Orthodox political factions and in effort to maintain political stability within the coalition.
• Although the final text is not yet in the public domain, the Netanyahu government argues that the overall objective is to reduce the longstanding exemption for ultra-Orthodox yeshiva students and apply more equal mandatory service for everyone. Moreover, it argues that it is aimed at finding middle ground that protects religious learning whilst meeting the country’s military needs. Crucially the army is also waiting to receive the latest iteration of the bill.
• At the same time, the Likud Party appears divided on the bill and it remains unclear if any Likud MKs will participate in the rally. Likud’s Communications Minister Shlomo Karhi wrote on X, that the bill was “excellent….acknowledging Torah study and those for whom ‘Torah study is their profession,’ while fully drafting the rest in keeping with draft rate in the general population.” He added that the prayer rally “stands against everyone doing everything they can to sabotage, damage and divide. Lapid, Liberman, the fired attorney general, her gang of cohorts and the Supreme Court judges.”
• Others in the Likud disagree, MK Moshe Saada (Likud) told Israel Hayom, “The bill, in its current format, will not pass. It needs to be amended. The principle of ‘if you don’t serve, you won’t receive’ must be inserted into the bill. Only then will it pass.”
• Opposition figures are even more critical, with the Leader of Opposition MK Lapid writing on X, “Likud voters enlist, fight, get killed and injured to defend the homeland, while elected Likud representatives are encouraging corruption and draft evasion. The Likud has ceased to be a national party, and has become a branch of the Haredim and Ben Gvir. In the government we form, everyone will enlist, everyone will study core curriculum, everyone will work. Rights come with duties.”
• In broad strokes, the bill will formally set recruitment targets for the coming years relating to approximately 50 per cent of eligible recruits, steadily rising in line with the demographics. For example the proposed targets are 4,800 in the first year, 5,760 in the second, 6,840 in the third and 7,920 in the fourth year.
• However these figures fall short of the reported additional 12,000 recruits needed by the army to offset the huge burden placed on reservists over the last two years.

Looking ahead: The demonstrations are expected to cause widespread disruption in the capital. The Jerusalem-Tel Aviv highway will be closed from 12:00, and the Jerusalem light rail will not operate in the area. Buses will not be able to leave the central bus station along their regular routes.

• The demonstration is scheduled to begin at 2:00 pm local time near the Knesset and is expected to last about two hours.
• The police plan to set up a dividing fence between the two demonstrations to avoid friction.
• MK Bismuth is now expected to present the bill to committee members next Monday.

What’s happened: The Knesset convened on Monday for the opening ceremony of the winter session following a three‑month recess, marking the fourth session of the 25th Knesset.

• As usual the opening ceremony was led by Speaker Amir Ohana, and included speeches from President Herzog, Prime Minister Netanyahu and Leader of the Opposition Lapid.
• At the start of the session, Ohana referred to the relatively new President of the Supreme Court Yitzhak Amit as simply “Supreme Court judge,” sparking an uproar in the plenum. MK Gilad Kariv of the opposition party The Democrats heckled the speaker calling him a “nobody” adding, “isn’t the incitement enough for you? Wasn’t October 7 enough? You bring disgrace to this house.”
• During his speech Ohana continued his attack on the judiciary, accusing it of “trampling the Knesset and harming democracy” and warning that, “when the Basic Law: Reasonableness is struck down by the High Court during wartime, that is a severe precedent.” Ohana claimed that the judicial system is operating “without checks and balances” adding, “there is no longer anywhere in the democratic world an authority whose power is infinite and unlimited…except the Israeli judicial system.”
• President Herzog began his speech by deliberately addressing Amit as “Supreme Court President” and was greeted with applause from the opposition. He announced he would skip his pre‑written speech to respond to Ohana. “I had a long and programmatic speech prepared, but this is a very important moment in our lives and the heart bleeds. There is a difference between a principled debate, which is legitimate, and lack of courtesy, harm to human dignity, harm to other authorities and to Israeli judges.”
• Herzog affirmed, “I will stand up for the judges of Israel. When we today bury two heroic soldiers, when the body of another fallen hostage returns today, we cannot ignore where we are dragging ourselves as a nation…instead of dealing with what matters most, are busy with the question of whether the Supreme Court President will be invited and under what title. Supreme Court President, I welcome you.”
• Prime Minister Netanyahu spoke next and also weighed in, recognising that “Amit is president of the Supreme Court. That is a fact.”
• He then pivoted to discuss the hostages, saying, “We are committed to bringing everyone home, until the last one. These are not empty words.”
• Last night the body of Tal Haimi, a 41-year-old resident of Kibbutz Nir Yitzhak, was returned to Israel. Haimi commanded the kibbutz’s civilian security squad and was killed in the fighting with Hamas terrorists in the kibbutz on October 7, 2023. He is survived by a wife and four children.
• Netanyahu cited Israeli achievements across numerous fronts. He criticised those who demanded to end the war earlier, which would have given Hamas, “a crushing victory” and explained that an early end would have left Yahya Sinwar, Hezbollah and the Iranian axis very strong. According to Netanyahu, “Iran would continue to produce tens of thousands of ballistic missiles at an accelerated pace and within a few months it would develop atomic bombs with the aim of destroying us, including you and everyone, Jews, Arabs, right-wingers, leftists. Everyone would go up into the sky in atomic smoke.”
• Netanyahu also called for domestic unity, “to lower the height of the flames. In a democracy, it is possible to reach decisions by a majority and a minority, it is also possible to reach compromises.”
• He also said that the government would “pass the 2026 budget soon.”
• Relating to the controversial anticipated legislation over ultra-Orthodox military service Netanyahu said, “we will submit for Knesset approval a draft law that will result in the draft of 10,000 yeshiva students within two years. This is a real revolution, something that has not happened since the establishment of the state.”
• In his remarks, Leader of the Opposition Lapid took aim at the Knesset Speaker, saying “MK Ohana, this Knesset is not yours. It belongs to the people of Israel.”
• He went on to address the Prime Minister, “I listened very attentively to your speech and wondered in what reality it was taking place. You said that we bombed Iran, who was the prime minister when Iran gained power? You said that Hezbollah had accumulated 150,000 missiles – who was the prime minister at that time?” He reminded the prime minister that it was he (Lapid) that had warned of an impending disaster shortly before October 7 2023.    

Context: The government begins this session as a minority as the two ultra-Orthodox parties quit the coalition in the summer, while committing not to bring down the government for the time being. Shas and UTJ are currently waiting to see the final version of the military draft bill that they hope will enshrine religious learning and allow thousands of ultra-Orthodox young men to avoid military conscription.

• Earlier in the summer the government removed MK Yuli Edelstein (Likud) as head of Foreign Affairs and Defence Committee, replacing him with MK Boaz Bismuth (Likud) who is considered more sympathetic to the ultra-Orthodox position.    
• The issue of the ultra-Orthodox military service is the most contentious domestic political issue. The government hopes to pass legislation on this during this Knesset session.
• The government’s taunting of Amit, the President of the Supreme Court, is part of their contempt over being unable to change the composition of the court and determine a new method to choose the court’s president. This was considered an important component of the government’s mostly unsuccessful judicial reform agenda.
• Notably yesterday, Ohana was wearing the hostage pin on his lapel having ceremoniously removed it during Trump’s Knesset visit. He had faced pushback being accused of forsaking the remaining dead hostages still held by Hamas.
• There is ongoing speculation whether Netanyahu will call early elections and capitalise on the return of all the living hostages and the strong endorsement he has received from President Trump.    
• For now it appears that he does not yet want elections. He is hopeful that there is still time to expand the Abraham Accords during this term and bring more diplomatic achievements to his record.
• Netanyahu’s mention of passing a state budget is significant as he will need a majority (support from the ultra-Orthodox) which will only happen if they first pass the draft dodging legislation. The budget is expected to include significant cuts in government spending in order to pay for the war.
• On one level none of Netanyahu’s partners, the hard right or the ultra-Orthodox, want early elections and there are also several disputes among them:
  • Whilst Netanyahu and the Likud support the Trump deal, Ben Gvir and Smotrich are against ending the fighting while Hamas remain in (even partial) control.
  • Whilst the ultra-Orthodox continue to refuse to perform military service, the religious Zionists’ sector enthusiastically enlists.  
  • Ben Gvir looks to abrogate the status quo agreement and pray on Temple Mount, Netanyahu consistently defends it, whilst the ultra-Orthodox are aghast at what they see as the desecration.
• The end of the fighting and the ceasefire have reignited the public fight for a state commission of inquiry into the events of October 7. Netanyahu wants to establish either a governmental commission or at least a commission that he can appoint. The members of a state commission are traditionally appointed by the Supreme Court President. The prime minister would want to appoint a commission before new elections so not to risk having the next government appoint it.
• Although Netanyahu may not want elections, the chances of the government surviving the almost six month winter session are low.

Looking ahead: Hamas has retuned 13 bodies in the last week but is still holding the remains of 15 deceased hostages in Gaza. It is expected to return more of them to Israel in response to pressure from the US.

• Today, US Vice President JD Vance is scheduled to arrive in Israel. He will join Steve Witkoff and Jared Kushner meeting political and military leaders to discuss the implementation of the next phase of the Trump Plan. Israel has demanded that the US not allow reconstruction work in the Gaza Strip to begin unless Hamas first shows real willingness to disarm.
• The coalition hopes to have a draft text for the military conscription bill in the next two weeks.
• According to law, the government has until the end of March to pass a state budget, if it fails to do so, the Knesset will automatically be dissolved.

What’s happened: At least four people have been killed in a terror shooting at Ramot Junction in northern Jerusalem on Monday morning. 

• According to emergency responders a further seven people are seriously wounded, with others in moderate condition. 
• Preliminary reports suggest two gunmen boarded a bus and opened fire on passengers at close range. The two attackers were subsequently killed.
• Other reports suggest that a manhunt is underway for a third terrorist who escaped. 
• This is the first shooting attack in Jerusalem in almost two years. In November 2023 gunmen opened fire at a bus stop close to the entrance of the city. Four people died in the attack – three by the terrorists and a fourth who was mistakenly killed by IDF soldiers during the incident.

What’s happened: On Sunday, Prime Minister Netanyahu was partially successful in postponing for this week his cross-examination in his criminal trial.

• The Jerusalem District Court agreed to partially accept Netanyahu’s motion after hearing evidence from Mossad Director Barnea, Head of IDF Intelligence Maj. Gen. Binder, and National Security Council Director Hanegbi. Netanyahu had sought a two-week postponement.     
• At the end of last week, the prime minister filed two motions asking to cancel his court appearances for the coming two weeks, on the grounds of “regional developments”. Both motions were rejected by the court.
• Attention on his trial has increased following President Trumps two social media post. Over the weekend Trump wrote, “It is terrible what they are doing in Israel to Bibi Netanyahu. He is a War Hero, and a Prime Minister who did a fabulous job working with the United States to bring Great Success in getting rid of the dangerous Nuclear threat in Iran. How can Israel force its leader to sit in a Courtroom all day long, over NOTHING. It is a POLITICAL WITCH HUNT, very similar to the Witch Hunt that I was forced to endure. This travesty of ‘Justice’ will interfere with both Iran and Hamas negotiations. In other words, it is INSANITY doing what the out-of-control prosecutors are doing to Bibi Netanyahu. The United States of America spends Billions of Dollars a year, far more than on any other Nation, protecting and supporting Israel. We are not going to stand for this.”

What’s happened: A preliminary vote was held early this morning on a bill to dissolve the Knesset which opposition parties had introduced earlier in the week. It was defeated 61-53 when, at the last minute, ultra-Orthodox parties that had threatened to support it mostly backed down and voted with the Government. Two ultra-orthodox MKs voted in favour of the motion, including one minister who is expected to resign. The governing coalition of right-wing parties, religious nationalists, and the ultra-orthodox remains deeply divided on the issue of draft exemptions for ultra-Orthodox men.

• The fight over draft exemptions continues to roil the governing coalition. A Supreme Court ruling last year invalidated the blanket exemptions that had been in place for decades, leading the IDF to begin issuing call-up orders for ultra-Orthodox men.
• In response the coalition has sought to pass laws that would ease or even cancel most of the legal sanctions that might be employed against ultra-Orthodox men who disobey the call-up, including childcare and housing subsidies. But Likud MK Yuli Edelstein, who chairs the powerful Foreign and Defence Affairs Committee in the Knesset, has blocked most of these initiatives, predicating the coalition crisis. Last night, just before the vote, Edelstein leaders of two ultra-Orthodox parties reached a minimal set of “understandings” on softening some of the legal sanctions.
• The threat of ultra-Orthodox parties to bring the government down could extract significant concessions from Prime Minister Netanyahu and his coalition partners, most of whom represent communities who serve in the armed forces and greatly resent the longstanding exemptions. 
• At the same time, the ultra-Orthodox parties have a great deal to lose by going to early elections. While polls project that they will hold a similar number of seats in a new election to what they have now, the rest of the right-wing bloc is expected to go down to defeat, and the ultra-Orthodox will almost certainly find themselves in opposition, facing a much stiffer draft law.
• The failed bill to dissolve Parliament means it will not be possible to table the motion again for at least six months (except through a cumbersome procedure involving collecting signatures of the majority of MKs). Writing in Ynet, Moran Azoulay speculates that opposition leader Yair Lapid still stands to gain from the defeat in the motion to dissolve the house as it will for six months remove the ultra-Orthodox parties major bargaining advantage in extracting concessions on the draft law, and thus weaken their ability to entrench in law the de facto exemptions they presently enjoy.
• Following the vote, Lapid attacked the coalition. “Once again,” he said, speaking in the Knesset, “you’ve spat in the faces of our troops. Once again, you’ve spat in the face of the IDF. You, who call yourselves the fully right-wing government, have sold out our troops. You’ve sold out the IDF, you’ve sold out the fundamental principle of shared service.”