UK
The UK economy demonstrated resilience in Q1 2025, with GDP expanding by 0.7% quarter-on-quarter, driven by robust retail sales and increased household borrowing. However, the OECD has downgraded the UK’s 2026 growth forecast to 1%, citing uncertainties stemming from U.S. tariffs.
In the financial sector, fintech firm Wise announced plans to shift its primary listing to New York, aiming to tap into deeper capital markets and higher liquidity. This wouldn’t have been received well at the Treasury.
On the defence front, the UK government unveiled a Strategic Defence Review aiming to bolster military capabilities, including plans to build 12 new nuclear-powered submarines and invest £15 billion in the Royal Navy’s nuclear warhead program.
U.S.
The U.S. economy faces mounting pressure as long-term bond yields rise amid investor concerns over fiscal sustainability, driven by high post-pandemic borrowing and the proposed $2.4 trillion “One Big Beautiful Bill.”
Trade relations with China saw a potential thaw after President Trump and President Xi Jinping agreed to resume negotiations, temporarily easing tensions.
However, domestic political dynamics intensified as tech billionaire Elon Musk publicly criticised Trump’s tariff policies, warning they could lead to a U.S. recession. The feud escalated with Musk endorsing calls for Trump’s impeachment, leading to significant implications for federal partnerships with Musk’s companies.
Additionally, the Trump administration reinstated a travel ban affecting citizens from 12 countries, citing national security concerns.
Europe
The European Central Bank cut interest rates by 0.25%, lowering the deposit facility rate to 2% in response to falling inflation, now at 1.9%.
Trade tensions between the EU and China persist, with disputes over electric vehicle tariffs and other trade issues remaining unresolved.
In defence, the EU’s “Readiness 2030” plan aims to mobilise up to €800 billion to strengthen Europe’s defence infrastructure in response to geopolitical threats, notably the ongoing war in Ukraine.
Asia
India is projected to be the primary engine of global economic growth in 2025 and 2026, driven by strong domestic demand and digital infrastructure.
In Japan, retail sales rose by 3.3% year-on-year in April, while industrial output fell by 0.9%. The Tokyo Consumer Price Index, a leading indicator of national inflation, will be released in about three weeks.
Metals
Copper prices have increased by 23.29% since the beginning of 2025, driven by supply concerns and robust demand.
Gold prices experienced a slight decline this week, with the SPDR Gold Shares ETF (GLD) decreasing by 0.52% to $309.45. The front month Gold contract is trading at $3,382 at the time of writing.
Oil
Oil prices are poised for their first weekly gain in three weeks, buoyed by renewed U.S.-China trade talks, which have raised hopes for global economic growth and increased oil demand. Within day, Brent crude dropped 0.44% to $65.04 per barrel (at the time of writing), and U.S. West Texas Intermediate (WTI) crude also slipped 1.25% to $62.99. However, for the week, Brent is up 2.1% and WTI 4%.
Despite forecasts of an oil surplus, oil prices have remained unexpectedly strong, with Brent crude recently climbing to $65.34 per barrel – an 8.5% increase from 2025 lows. This resilience is occurring even as OPEC and OPEC+ significantly ramp up production, adding over 1.2 million barrels per day between May and July, a volume that surpasses projected annual demand growth.
