Australia is set for longer, higher inflation, an influential global economic body has remarked, as it warns of a “prolonged correction” if the AI bubble bursts.

The International Monetary Fund’s forecast for Australia’s economic growth was unchanged in its latest World Economic Outlook update, released on Monday night AEDT.

The Brussels-based organisation still expects Australia’s gross domestic product to grow by 2.1 per cent this calendar year and 2.2 per cent in 2027, but noted it is “projected to see some drawn-out persistence in above-target inflation”.

Australia’s headline inflation rate is currently 3.4 per cent – above the Reserve Bank’s two to three per cent target band – and Treasury estimates it will remain above target until at least June.

“The global economy is incredibly uncertain, with persistently high inflation still a challenge for many countries around the world, and that’s reflected in this report,” Treasurer Jim Chalmers said.

Despite the challenges of persistent inflation, global growth has shown notable resilience to US President Donald Trump’s tariffs, IMF economists Tobias Adrian and Pierre-Olivier Gourinchas said.

But that resilience could be put to the test if AI optimism is pierced by disappointing outcomes, “and a more prolonged correction in stock market valuations – which have increasingly been lifted by only a few technology firms – could ensue”. 

That would trigger a costly reallocation of capital and labour and a decline in business dynamism, the report said.

Negative wealth effects would weigh on private consumption and investment. Spillovers would radiate to the rest of the world through tighter global financial conditions.

“Volatility in the global economy was a key feature of my discussions with international counterparts last week and it will continue to weigh heavily on Australia in the months and years ahead,” Dr Chalmers said.

“These global challenges put a premium on the type of responsible economic management that has been a hallmark of the Albanese government from day one.”

HSBC Australia chief economist Paul Bloxham said more than responsible economic management was needed from the government.

He called for a more ambitious “pro-growth” reform agenda to unlock more business investment and innovation.

“As we see it, Australia has an abundance of growth opportunities, given its large resource endowment, strong ties to Asia, and tech and energy transition-related opportunities,” he wrote in a research report.

“In particular, faster progress is needed on making the energy transition and supporting the availability of low-cost energy supply along the way.”

Lower energy costs would help boost investment in critical minerals, while more needed to be done to direct exports towards the fast-growing Indian and Southeast Asian economies, he said.

Major gun and hate speech reforms are expected to be waved through parliament in near-record time after MPs held late meetings to thrash out a deal on the contentious changes.

Labor will introduce legislative changes to clamp down on groups that voice hate against people of other faiths, bring in stronger background checks for firearm owners and set up a national gun buyback.

Debate on the overhaul, which follows December’s Bondi Beach mass shooting, will begin in parliament on Tuesday morning. Prime Minister Anthony Albanese wants the reforms to pass on the same day.

Labor originally planned to introduce the gun and hate speech reforms in a single package, but was forced to split the bill due to fierce opposition to proposed racial vilification laws from the coalition and the Greens.

After the prime minister and Opposition Leader Sussan Ley discussed the reforms on Monday morning, Liberal MPs met in the evening to formalise their position ahead of a joint partyroom meeting with their coalition partner the Nationals on Tuesday.

Liberal sources told AAP on Monday night their party had put forward a series of technical amendments which had been accepted by Labor.

The changes include tightening the definition of a preacher or religious leader, introducing mandatory two-year reviews of the legislation and requiring consultation with the opposition leader when listing an extremist organisation.

Nationals MPs still have concerns about the impact the reforms could have on free speech.

The Greens have said they will not back the hate speech legislation due to the effect it could have on political commentary including protests, leaving the coalition as the only viable partner to pass the bill through the Senate.

While provisions making it illegal to vilify someone based on their race have been dropped, the watered-down legislation would still allow the government to effectively outlaw groups that promote hatred, likely including neo-Nazi organisation the National Socialist Network and radical Islamist collective Hizb ut-Tahrir.

The proposed laws would also allow the government to refuse or revoke the visas of people who hold extremist views.

Opposition home affairs spokesman Jonathon Duniam on Monday night praised elements of the bill allowing the government to shut down hardline extremist groups.

“I think there is space for increasing capacity to crack down and clamp down on some of these groups,” Senator Duniam told Sky News.

“That is a small part of what the government should be doing.”

Nationals leader David Littleproud said he supported the provisions allowing extremist preachers’ visas to be cancelled, but negotiations with the government were ongoing.

“There are elements that we want to support, but there are other elements that obviously we have serious issues about,” he told the ABC’s 7.30 program.

Mr Albanese said if the legislation did not pass parliament this week, there would not be another chance to deal with it.

“We’re not a government that puts things up over and over again to see them defeated,” he told ABC Radio on Monday.

British Prime ‍Minister Keir Starmer has called for calm discussion to avert a possible trade war with the US over Greenland, appealing to President Donald ​Trump to respect alliances such as NATO rather than undermine them.

All but ruling out retaliatory levies against the United States if Trump carried out his ⁠threat to impose tariffs on imports from Britain and seven other countries unless the US was allowed to buy Greenland, Starmer sought to de-escalate the war of words.

He used an early morning press conference to set out what he described as the values underpinning his approach towards Trump, which has been criticised by opposition politicians for being too weak, by saying “pragmatic does not mean being passive”.

After telling ‌Trump his ​threatened tariffs were wrong on Sunday, Starmer doubled down to say he would use “the full strength of government” to try ‍to stop the US decision, one, he said, that could only hurt already stretched households.

“Tariffs should not be used against allies in this way,” Starmer said, adding that he was not looking to escalate a tariff war at this point.

“A tariff war is in nobody’s interests, and we have not got to that stage. And my focus, therefore, is making sure we don’t get to that stage.”

Trump threatened tariffs on imports from the ​eight nations that sent small numbers of military personnel to Greenland last week, following ‌Trump’s repeated statements he wanted to take over Denmark’s vast Arctic island to ensure US security.

Starmer said he told Trump on Sunday those forces were “clearly there to assess and work on risk ​from the Russians”. He said he hoped that there was now “real clarity” about that.

The British prime minister signalled his approach would differ from ‍that of the European Union, which has discussed options to respond, including a package of tariffs on 93 billion euros ($A162 billion) of US imports.

Instead, he said, Britain should work to nurture a relationship with the United States that was crucial for UK security, intelligence ​and ​defence, while disagreeing with the tariff threat and working diplomatically ​to avert it.

Starmer said the threats risked causing a “downward spiral” for Britain, ​in terms of trade and the weakening of alliances.

“I do not want to see that happen,” he said, but he added: “That doesn’t mean that we put to one side our principles and our values. Quite the contrary, we’re very clear about what they are.”

Starmer has built a solid relationship with Trump and in May 2025 he became the first leader to secure a deal to lower some tariffs.

Asked if he thought Trump was genuinely considering military action, Starmer said: “I don’t, actually. I think that this can be resolved and should be resolved through calm discussion.”

Global markets are facing volatility after President Donald Trump vowed to slap tariffs on eight European nations until the US is allowed to buy Greenland, injecting fresh trade uncertainty ‍as stocks slid and the dollar broadly weakened.

Trump said he would impose an additional 10 per cent import tariff from February on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain, which will rise to 25 per cent on June if ​no deal is reached.

Major European Union states decried the tariff threats over Greenland as blackmail on Sunday. France proposed responding with a range of previously untested economic countermeasures.

The euro firmed 0.26 per cent to $1.1628 after it initially dropped to its lowest since November as investors ⁠sold off the dollar broadly, lifting other major rival currencies.

In European markets, EUROSTOXX 50 futures and DAX futures both fell 1.1 per cent. Japan’s Nikkei dropped one per cent as risk-off sentiment prevailed.

“Hopes that the tariff situation has calmed down for this year have been dashed for now – and we find ourselves in the same situation as last (northern) spring,” said Berenberg chief economist Holger Schmieding.

Trump’s sweeping “Liberation Day” tariffs in April 2025 sent shockwaves through markets. Investors then largely looked past US trade threats in the second half of the year, viewing them as noise and responding with relief as Trump made deals with Britain, the EU and others.

While that lull might be over, market moves on Monday could be dampened by the experience that investor sentiment had been more resilient than expected in ‌2025 and global economic growth stayed ​on track.

US markets are closed on Monday for Martin Luther King Jr. Day, which means a delayed reaction on Wall Street. US stock futures were 0.7 per cent lower in early Asian hours. The cash Treasury ‍market was shut, but 10-year futures firmed one tick.

The implications for the dollar were less clear, although the greenback was broadly lower on Monday. It remains a safe haven, but could also feel the impact of Washington being at the centre of geopolitical ruptures, as it did last April.

The dollar weakness lifted the safe haven yen and Swiss Franc. Bitcoin, a liquid proxy for risk, fell nearly three per cent to $92,602.64.

“While you would argue that the tariffs threaten Europe, in fact, it’s actually the dollar that is bearing the brunt of it, because I think markets are pricing in increased political risk premia on the US dollar,” said Khoon Goh, head of Asia research at ANZ.

Capital Economics said the countries most exposed to increased US tariffs were the UK and Germany, estimating ​that a 10 per cent tariff could reduce gross domestic product in those economies by around 0.1 per cent, while a 25 per cent tariff could knock 0.2 per cent–0.3 per cent off of ‌output.

European stocks are near record highs. Germany’s DAX and London’s FTSE index are up more than three per cent this month, outperforming the S&P 500, which is up 1.3 per cent.

Denmark’s closely managed crown will also likely be in focus. It has weakened, but rate differentials are a major factor and it remains close to the central rate at which it is pegged to ‍the euro, and not far from six-year lows.

“The US-EU trade war is back on,” said Tina Fordham, geopolitical strategist and founder of Fordham Global Foresight.

Trump’s latest move came as top officials from the EU and South American bloc Mercosur signed a free-trade agreement.

Trump has also weighed intervening in unrest in Iran, while a threat to indict Federal Reserve Chair Jerome Powell ​has reignited ​concerns about the US central bank’s independence.

Against this backdrop, safe-haven gold has surged, gaining over one per cent on ​Monday to a record of $4,689.39 per ounce. The yellow metal is up nearly eight per cent in January, after gaining 64 per cent last ​year.

Given Trump’s recent Fed attacks, an escalation with Europe could pile pressure on the dollar if it adds to worries that US policy credibility is becoming critically impaired, said Peel Hunt chief economist Kallum Pickering.

The World Economic Forum’s annual risk perception survey, released before its annual meeting in Davos next week, which will be attended by Trump, identified economic confrontation between nations as the number one concern replacing armed conflict.

China’s population fell for a fourth consecutive year in 2025, ‍dropping by 339 million to 1.405 billion, a faster decline than ​2024.

Official data released on Monday revealed the total number of births ⁠in China dropped to 7.92 million in 2025, its lowest in decades, from 9.54 million in 2024.

The number of deaths rose to 11.31 million from 10.93 million ‌in 2024, figures ​from China’s National Bureau of Statistics showed.

China’s population ‍has been shrinking since 2022 and is ageing rapidly, and has complicated Beijing’s plan to boost domestic consumption and rein in debt, with hundreds of millions of people set to ​leave the workforce at ‌a time when pension budgets are already stretched.

Marriages in China plunged by a ​fifth in 2024, the biggest drop on record, with ‍more than 6.1 million couples registering for marriage, down from 7.68 million in 2023.

Marriages are typically ​a ​leading indicator for birth ​rates in China.

In the coming year, ​however, the country may see a slight temporary increase in births, demographers said, after China in May 2025 started allowing couples to get married anywhere in the country – instead of their place of residence – making the process easier.

China’s economy expanded at a five per cent annual pace in 2025, buoyed by strong exports despite US President Donald Trump’s tariffs.

However, growth slowed to a 4.5 per cent rate in the last quarter of the year, the government said on Monday.

That was the slowest quarterly growth since late 2022, during the COVID-19 pandemic. The economy, the world’s second largest, grew at a 4.8 per cent annual pace in the previous quarter.

China’s leaders have been trying to spur faster growth after a slump in the property market and disruptions from the pandemic rippled through the economy.

As expected, annual growth last year was in line with the government’s official target for an expansion of “about five per cent.”

Strong exports helped to compensate for weak consumer spending and business investment, contributing to a record trade surplus of $US1.2 trillion ($A1.8 trillion).

“The key question is how long this engine of growth can remain the primary driver,” Lynn Song, chief economist for Greater China at Dutch bank ING wrote in a recent note.

Chinese exports to the US suffered after President Donald Trump returned to office early last year and began raising tariffs.

But that decline was offset by shipments to the rest of the world. Soaring imports of Chinese goods are leading some other governments to take action to protect local industries, in some cases raising import duties.

“Should more economies also start ramping up tariffs on China, as Mexico has done and the EU has threatened to do, eventually, a tighter squeeze will be seen,” said Song.

China’s leaders have repeatedly highlighted boosting domestic demand as a policy focus, but their effects have so far been limited. A trade-in program for drivers to replace older cars with more energy-efficient models, for example, has been losing steam in recent months.

“Stabilisation, not necessarily recovery, of the domestic property market is key to revive public confidence and, hence household consumption and private investment growth,” said Chi Lo, senior market strategist for Asia Pacific at BNP Paribas Asset Management.

China has also provided trade-in subsidies for home appliances such as refrigerators, washing machines and TVs. While major consumer stimulus policies in 2025 – including such subsidies – are set to continue in 2026, they may be scaled back, Weiheng Chen, global investment strategist at J.P. Morgan Private Bank, said in a recent note.

Investments in artificial intelligence and other advanced technologies remain a key priority for China’s ruling Communist Party as it moves to boost self-reliance and rival the US.

Many ordinary Chinese and small businesses are struggling with tough times and troubling uncertainty over jobs and incomes.

Some economists and analysts believe China’s actual economic growth in 2025 was slower than official data suggest. The Rhodium Group, a think tank, said last month it expected China’s economy to grow only by 2.5 per cent to three per cent last year.

The Chinese economy expanded at a five per cent annual rate in 2024, and 5.2 per cent in 2023, according to government data. Ambitious official growth targets have also trended down over the past few years, from six per cent to 6.5 per cent in 2019 to “around five per cent” in 2025.

A slower annual expansion is expected for 2026. Deutsche Bank forecasts that China’s economy will grow about 4.5 per cent in 2026.

The number of billionaires worldwide continues to rise and their wealth is growing at an astounding pace.

A report published by Oxfam ahead of the start of the World Economic Forum in Davos on Monday said the world’s roughly 3000 billionaires held a combined fortune of $US18.3 trillion ($A27.4 trillion) in 2025. 

The anti-poverty and development organisation releases an annual report on global inequality ahead of the meeting in the Swiss alpine resort town of Davos.

Adjusted for inflation, the billionaires’ wealth has increased by more than 80 per cent since March 2020. At the same time, nearly half of the global population continues to live in poverty, Oxfam said. 

The report draws on data from multiple sources, including Forbes estimates of billionaire wealth, World Bank figures and the UBS Global Wealth Report. 

Billionaire wealth grew by about 16 per cent last year – three times faster than the average rate of growth in previous years.

The world’s 12 richest people now own more wealth than the poorest half of the global population, or more than four billion people. 

The world’s richest man, Elon Musk, earns in four seconds what an average person makes in a year, Oxfam said. 

Musk would need to give away more than $US4,500 ($A6,738) every second for his fortune to begin shrinking.  

Billionaires earn an average of $US6,000 ($A8,984) during a 20-minute power nap and $US145,000 ($A217,105) during an eight-hour night’s sleep.  

Some 65 world leaders are due to participate in this year’s forum in Davos, Switzerland – a record number – along with dozens of central bank chiefs and finance ministers, plus titans of the business world. 

Oxfam is one of the meeting’s most steadfast critics, arguing the gathering of global elite too often pays only lip service to the problems of the poor. 

Oxfam also warned that growing economic power among billionaires is increasingly translating into political influence, particularly in the United States, which it said is eroding democratic systems.  

Forbes recently wrote that US President Donald Trump has “presided over the most lucrative presidency in American history”, adding billions to his net worth, largely through cryptocurrency ventures. 

Trump is leading the largest-ever US delegation to Davos and is scheduled to address the conference on Wednesday.

Oxfam’s report said 100 billionaire families spent a record $US2.6 billion ($A3.9 billion) during the most recent US presidential election campaign. 

The report also raised concerns about global media concentration, writing that “over half of the world’s largest media companies have billionaire owners, and nine of the top 10 social media companies in the world are run by just six billionaires”. 

The trial of claims brought by Prince Harry and several other high-profile figures against the publisher of the Daily Mail over allegations of unlawful information gathering is due to begin in Britain’s High Court.

Harry, Elton John, his husband David Furnish, campaigner Doreen Lawrence, politician Simon Hughes and actresses Sadie Frost and Liz Hurley are all taking action against Associated Newspapers Limited (ANL).

The group claims that the publisher carried out or commissioned unlawful activities such as hiring private investigators to place listening devices inside cars, “blagging” private records and accessing private phone conversations.

ANL, which also publishes the Mail on Sunday, has strongly denied wrongdoing.

The trial before Justice Nicklin will be heard at the Royal Courts of Justice from 10.30am on Monday and is due to last nine weeks.

The group started their legal cases against ANL in 2022, with documents setting out the claims naming dozens of journalists, including some national newspaper editors.

In 2023, ANL failed to have the cases thrown out before a trial on the basis that they were “time-barred”, or brought too late.

In written submissions for the hearing in May that year, Adrian Beltrami KC, for ANL, said that the legal actions were “stale”.

He also said that the individuals had to prove they did not know earlier, or could not have discovered earlier, that they might have had a claim against it for alleged misuse of their private information.

Barrister David Sherborne, for the group, told the hearing that the unlawful acts in the claim include illegally intercepting voicemail messages, listening to live landline calls and obtaining medical records.

“They range through a period from 1993 to 2011, even continuing beyond until 2018,” he said,

Justice Nicklin dismissed ANL’s bid to have the claims dismissed in November 2023, ruling that the publisher had not delivered a “knockout blow” to the claims.

He concluded that each of the group had a “real prospect” of demonstrating that ANL concealed “relevant facts” that would have allowed them to bring a claim against the publisher earlier.

There have been several preliminary hearings in the claim, including one in November 2024 that heard that Lady Lawrence was “alerted” to a potential legal claim by a text from Harry.

Harry has previously brought legal action against other newspaper publishers over allegations of unlawful information gathering.

He was awarded by a judge stg140,600 ($A280,300) in damages from Mirror Group Newspapers in 2023, and settled a claim against News Group Newspapers, the publisher of the Sun and the now-defunct News Of The World.

The prime minister has read out the names of 15 slain Hanukkah revellers whose lives were “cruelly stolen” in the nation’s worst terror attack.

After a minute of silence, Anthony Albanese moved a condolence motion in federal parliament for the victim’s of the December 14 Bondi massacre, with 10-year-old Matilda the youngest on the list of those killed.

“The minute of silence that we have just observed echoes with those 15 names, 15 innocent people for whom today should be just another Monday morning,” he said as parliament returned.

“Another day in this beautiful country they loved, in the embrace of the family and friends they adored.”

He also told the Jewish community they were not alone in their grief.

“We say to all of you who have travelled here today and to those watching at home, on your long road to healing, Australia will be by your side,” Mr Albanese said.

“Just as our nation came together one week after Bondi to light candles against the darkness, we must continue to raise our voices against the silence.”

The “cruel and senseless” massacre wasn’t random, Mr Albanese acknowledged, stating Jewish Australians were the target of the two Islamic-inspired father-and-son shooters, Sajid and Naveed Akram.

The prime minister called on Australians to channel their anger into meaningful action to ensure a similar attack never happens again.

Opposition Leader Sussan Ley said Jewish Australians had warned of the “menacing storm” of anti-Semitism following the October 7, 2023 attacks in Israel but their warnings went unheard.

To confront and defeat the evil of anti-Semitism, parliament must face an uncomfortable truth, she said.

“Radical Islamist extremism caused this. I repeat, radical Islamist extremism caused this. Leaders need to be able to express this clearly, because if you can’t name the problem, you can’t possibly defeat it,” Ms Ley said.

“For too long, many in our society, especially in positions of authority, have failed to act decisively.”

In the Senate, Liberal frontbencher Michaelia Cash choked back her emotions as she read the names of all 15 victims.

“Behind each of these names is a life taken, a family shattered and a community wounded,” she said.

“Their loved ones will carry this loss forever, and a nation carries a responsibility with them.”

Independent MP Allegra Spender, whose electorate was the site of the attack, said she left Bondi beach with her family just an hour before the horror began.

“Sunday, December 14, is one of the darkest days in modern Australia,” she told the parliament.

“One part of our community, Jewish Australians were murderously targeted. It was an attack on them and an attack on our Australian values. Our country will never be the same, nor should it be.”

Everyone, including parliamentarians, had to reflect on how they contributed to social cohesion and a responsibility not to stoke further hate in their response, Ms Spender said.

“The question is, who we become now, how we honour the memories of the 15 beautiful people we lost, how we honour and care for the dozens who are physically injured and the countless who can never forget the trauma and the bloodshed of the day, and the families who will live with the scars forever.”

More than 20 people have been killed in a high-speed train crash in southern Spain.

Antonio Sanz, regional health minister for the Andalusia province where the crash happened on Sunday evening, said officials fear that the death toll may rise.

Rescue operations are ongoing, he said, adding that 73 injured passengers have been taken to six different hospitals.

The evening train between Malaga and Madrid went off the rails and hit a train coming from Madrid to Huelva, another southern Spanish city, according to the Spanish rail operator Adif.

Two Guardia Civil officials confirmed the death toll to The Associated Press by phone and text message. They spoke on condition of anonymity in line with police rules.

The authorities said that around 100 people were injured, 25 of them seriously.

An Iryo high-speed train operated by Italy’s Trenitalia derailed late on Sunday evening while travelling from Málaga to Madrid and ended up on the neighbouring track.

An oncoming high-speed train operated by the Spanish company Renfe also derailed as a result, according to the emergency services, citing the rail network operator ADIF.

“The Iryo 6189 Málaga – (to Madrid) train has derailed from the ‌track at Adamuz, ​crashing onto the adjacent track. The (Madrid) to Huelva ‍train which was travelling on the adjacent track has also derailed,” Adif, which runs the rail network, said in a social media post.

Adif said the accident happened about ten minutes after ​the Iryo train left Malaga heading ‌towards Madrid at 6:40pm on Sunday (4.40am Monday AEDT).

Iryo is an Italian-run private rail operator. The ​company did not immediately respond to a request for comment.

Adif ‍has suspended all rail services between Madrid and Andalusia.

Andalusia emergency services said on social media that all rail ​traffic ​had been halted and ​emergency services were on their way, ​including at least nine ambulances and emergency support vehicles.

Salvador Jimenez, a journalist for RTVE who was on board the train from Cordoba to Madrid, shared images showing the rear carriage of the train lying on its side, with evacuated passengers sitting on the ‍side of the carriage.