Good morning from the Financial Times. Today is Wednesday, November 8th, and this is your

F.T. News briefing. Rising wages in Eastern Europe could come back to bite and Israel has changed its

position on who should control Gaza. Plus the icy relationship between Australia

and China is starting to thaw.

I'm Sonia Hudson and for Mark Filipino, and here's the news you need to start your day. The The International Monetary Fund is warning that soaring wages in Eastern Europe could actually hurt the region.

Incomes have risen at double-digit rates in many countries, but the IMF says that despite

that productivity has pretty much stalled. And the fund is now warning that that

could make the region less attractive to the Western European companies that have

been expanding there. It's also unlikely to help these countries tackle inflation, which has been

running higher than the EU's average. But the IMF's comments will probably fall on

deaf ears in many Eastern European capitals.

The incoming government in Poland, for example, is expected to raise wages even more in response

to pressure from labor unions. Israel is planning to keep control of Gaza indefinitely.

That's what Prime Minister Benjamin Netanyahu told ABC News

on Monday. I think Israel will for an indefinite period will have the overall

security responsibility because we've seen what happens

when we don't have it. When we don't have that security responsibility,

what we have is the eruption of Hamas terror on a scale that we couldn't imagine.

It's a reversal from what Israeli officials said earlier in the country's war with Hamas.

Netanyahu said this week that the Gaza Strip should be governed by quote those who don't want to continue the way of

Hamas. It wasn't clear whether he was referring to the Palestinian Authority or another government.

All this has people asking, what comes next for Gaza?

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