United Kingdom
This week ended with fresh economic data confirming that the UK is still very much stuck in neutral. In July 2025, GDP growth flatlined – no growth compared to June – and the three-month growth rate slipped to +0.2% from +0.3%. That stagnation reflects a sharp drop in manufacturing output (especially in goods hit by weaker global demand) which offset small gains in services and construction. Alongside that, services output rose modestly over the quarter by about 0.4%, with healthcare, transport/storage, and professional/scientific sectors performing best, though sectors like retail and admin/support dragged. Public expectations are also on edge: long-term inflation expectations are up to ~3.8%, matching levels not seen since 2019, and 12-month ahead expectations have also risen. Face with these numbers, Chancellor Rachel Reeves is under pressure ahead of the Autumn Budget; she’s taken steps to bolster planning and infrastructure, appointing Catherine Howard as infrastructure & planning adviser to unblock private investment and push forward major projects, such as backing for a third Heathrow runway. Politically, the government is leaning hard into the message of “growth,” but with inflation stubborn and business sentiment cautious, the margin for error is small.
In foreign policy and political accountability, this week delivered a shock to the UK political establishment when Prime Minister Keir Starmer dismissed Peter Mandelson from his post as Ambassador to the United States. The firing came after leaked emails showed Mandelson expressing support for Jeffrey Epstein following his 2008 conviction, even calling Epstein his “best pal.” These revelations contradicted the information available when he was appointed, making his continued service untenable amid public and political backlash. However, pressure is again on Starmer about what he knew at the time of appointing Mandelson. Mandelson issued a statement saying he felt “utterly awful” about his past association with Epstein (his decades long association), and in the Foreign Office’s view the depth of his relationship was materially different from what had been disclosed at appointment. As part of the vetting process, many are saying that these emails would have been discovered.
The UK also imposed 100 new sanctions targeting Russian revenue streams and military supply chains. The measures are wide-ranging, tackling oil shipments via so-called shadow fleets, and suppliers of components like electronics and chemicals. The move served both to reinforce UK support for Ukraine and to signal that economic weapons will remain in play.
All told, UK politics this week is a tightrope: economic inertia is real, inflation expectations are creeping, and the government’s credibility in general is being tested.
United States
A grave development shook U.S. politics this week: conservative activist Charlie Kirk was assassinated during a speaking event at Utah Valley University in Orem, Utah. He was onstage as part of his “American Comeback Tour” when a sniper reportedly fired a single bullet – from a nearby rooftop – striking him in the neck.
Kirk, who co-founded Turning Point USA and had become a prominent voice among conservative students and media, was declared dead later that same day. The shooting has prompted an intense manhunt: authorities recovered the suspected rifle, released surveillance video, and appealed to the public for help. Political reaction has been swift and mostly bipartisan in its condemnation, though rhetoric remains heated. President Trump and other conservative leaders have blamed “extreme left-wing rhetoric,” while some liberal voices point to gun laws and the risk posed by political violence in a polarised climate.
In the markets found fresh reasons for optimism this week as inflation indicators came in softer than many feared, reinforcing hopes that the Federal Reserve is poised to begin cutting rates. Some core components of inflation – in particular, parts that feed into the “core PCE” metric that the Fed watches closely – look more benign, which adds fuel to expectations of a 25 basis-point cut next week. Traders are pricing in multiple cuts by the end of the year.
On trade policy, the US continues to put pressure on allies, urging G7 members to impose high tariffs on China and India for continuing to purchase Russian oil. This fits a broader strategy of economic coercion aimed at isolating Russia and cutting off its war financing. The tension between maintaining global supply chains and managing geopolitical risk remains front and centre.
Financial markets responded: equities rallied in Asia and the US, bond yields fell, and the dollar weakened in some pairings, driven by hopes of gentler interest rate settings. Oil prices dipped somewhat amid concerns of softening global demand. Gold continued to see interest as a safe haven.
European Union
This week, the EU pushed deeper into regulatory reform and economic strategy, particularly with data policy and growth investment. A headline event is the Data Act, which becomes fully applicable as of today. This regulation is intended to reshape how data is shared, especially non-personal data, how IoT devices’ data are made available, and how businesses (especially SMEs) can switch between data and cloud providers more easily. On investment, the UK’s moves to unlock planning and infrastructure (while UK-specific) echo themes across Europe: boosting private investment, reducing regulatory friction, trying to overcome sluggish growth.
On the trade front, EU countries are being drawn into the US’s campaign to tighten trade and tariff measures vis-à-vis China and India over Russian oil; there is not yet full consensus – but pressure is rising. Overall, European economic sentiment is cautious: with global demand softening, inflation still a concern, and energy markets unpredictable, the EU is bracing for what could be a rocky winter unless the policy response is sharp and coordinated.
China
China continues to be a dual story of opportunity and tension. On one hand, markets in Asia – including China – are rallying on the back of expectations that the US Fed will begin easing rates; this is giving Chinese exporters some breathing room. On the other hand, trade tensions remain unresolved: the US is pressing for more aggressive actions (tariffs, sanctions) on countries that continue buying Russian oil, which puts China in a delicate position. Domestically, the Chinese government is acting to stabilize financial and industrial sectors, especially where export orders have become volatile. Though fewer specific headline Chinese domestic data releases dominated this week beyond macro-trade and inflation trends, the external posture (trade, diplomacy, sanctions) remains very much in play.
Metals & Oil
The metals and oil sector had a mixed but broadly cautious week. Oil prices came under some downward pressure amid concerns about demand – especially from Asia – and signs that supply could be more abundant than some had expected. In contrast, gold saw continuing interest as uncertainty around inflation and central bank policy (especially expectations of rate cuts in the US) drove demand. Bond yields in key markets fell, which in turns tends to lift non-yielding assets like gold.
Summary
This week will likely be remembered for two major political shocks: the UK’s sacking of Peter Mandelson over his previously undisclosed links to Jeffrey Epstein, and the tragic assassination of Charlie Kirk, which escalates concerns about political violence in the U.S. Economically, both countries are at inflection points—with inflation expectations rising, growth stalling, investors cautious, but with hope that monetary policy may loosen. Europe is trying to steer through regulatory and strategic challenges, while China positions itself amid rising external pressure.
