Akintunde Oyedokun
Research Analyst
Oil prices rose 2% on Monday as Brent reached $70.04 per barrel, driven by a new U.S.-EU trade deal and President Trump’s move to shorten Russia’s deadline to end its war in Ukraine. The agreement includes a 15% U.S. tariff on EU goods and $750 billion in EU energy purchases from the U.S. Markets were also supported by ongoing U.S.-China tariff talks and expectations of increased output from OPEC+ by September.
Bank of England May Slow Bond Sales Amid Market Uncertainty, Political Pressure
The Bank of England is expected to slow the pace of reducing its £558 billion bond holdings, with guidance likely in its August 7 policy update alongside a projected rate cut to 4%. Recent market volatility, political pressure from bond sale losses, and tighter system liquidity have raised uncertainty around quantitative tightening (QT). While the BoE has sold £13 billion in gilts and allowed £87 billion to mature over the past year, sustaining that pace may require record sales. Analysts expect QT to slow, with some predicting a full stop to active sales by October to prevent market disruption.
UK Public Sector Productivity Posts Fastest Growth in 2 Years, Still Lags Pre-Pandemic Levels
UK public sector productivity rose 1.0% year-on-year in Q1 2025—the fastest increase since early 2023—according to the ONS. Despite this improvement, output remains 4.2% below pre-COVID levels, with health sector productivity nearly 9% lower than in 2019. The pandemic and ongoing industrial actions have hindered recovery, and low productivity continues to strain public finances. Revised 2024 data now shows slight growth (0.1%), up from a previously reported decline.
Cold Weather and Dry Spell Threaten Ivory Coast’s Cocoa Main Crop
Ivory Coast’s cocoa farmers are concerned that below-average rainfall and a persistent cold spell could damage the developing main crop due from October to March. Despite early signs of pod growth, farmers warn that continued cloudy skies, low temperatures, and insufficient sunlight may cause flower and pod drop, raise disease risks, and reduce bean quality. Regions like Soubre and Daloa recorded rainfall well below the five-year average, prompting calls for more sunshine and moisture to protect yields.
Nigeria’s Exchange Rate Windfall Drops 73% In H1 2025 As Market Benchmark Closes Arbitrage Gap
Nigeria’s revenue from exchange rate gains dropped by 73% to ₦589.45 billion in H1 2025, down from ₦2.2 trillion a year earlier, as the government’s budget benchmark was adjusted to reflect market rates, eliminating arbitrage-driven windfalls. With the official rate now near ₦1,500/$, FX gains contributed only 6% to total FAAC allocations, compared to 31% in H1 2024. Despite the fall in this revenue stream, total FAAC distributions rose 35.6% to ₦9.72 trillion, indicating growing reliance on non-FX sources. The Federal Government still claimed the bulk of FX gains, but all tiers experienced sharp declines, revealing the fiscal strain subnational entities now face.
