Akintunde Oyedokun
Research Analyst
Oil prices declined for the third consecutive day on Tuesday, driven by rising fears of an economic slowdown as trade tensions between the U.S. and Europe intensified. Brent crude fell 1.2% to $68.39, and WTI August futures dropped 1.6% to $66.15. Diesel prices led losses, down nearly 3%, signaling weakening industrial demand. With the U.S. threatening tariffs and trade talks with both the EU and India stalling, market sentiment turned cautious. However, analysts note prices may find some support if the U.S. delays or eases its tariff plans.
UK Borrowing Surges in June, Raising Pressure For Tax Hikes
Britain’s public borrowing hit £20.7 billion in June—well above forecasts and the second-highest on record for the month—driven by inflation-linked debt interest of £16.4 billion. Over the April–June quarter, the deficit reached £57.8 billion, 15% higher year-on-year. These figures intensify speculation that Finance Minister Rachel Reeves may introduce new tax hikes later in 2025 to meet fiscal targets, especially after the government dropped planned welfare cuts. Economists warn disappointing fiscal trends and slow growth are making Reeves’ goal of balancing day-to-day spending by decade’s end more difficult.
China Eyes Tough Capacity Cuts As Price War Warnings Mount
Beijing’s crackdown on aggressive price wars is fueling expectations of looming industrial capacity cuts to combat deflation, echoing past supply-side reforms. However, this campaign is expected to be more complex and risky, threatening jobs and economic growth. Economists warn that high private sector control, limited stimulus options, and deepening U.S. trade tensions make success uncertain. With youth unemployment at 14.5% and factories cutting wages, cautious steps are likely. The upcoming Politburo meeting may offer more direction, with initial focus on autos, batteries, and solar panels—industries now at the center of fierce price competition.
Egypt Slashes Current Account Deficit On Rising Remittances, Tourism
Egypt’s current account deficit narrowed to $2.1 billion in Q1 2025 from $7.5 billion a year earlier, driven by a surge in remittances from abroad and increased tourism revenue. Remittances rose to $9.3 billion (from $5.1B), and tourism earnings hit $3.8 billion. Meanwhile, oil exports slipped to $1.2B while imports jumped to $4.8B amid rising fuel demand. Suez Canal income fell to $0.8B due to ongoing Red Sea disruptions. Foreign direct investment dropped sharply to $3.8B from $18.2B as Egypt continues to face economic pressure and currency reforms under its IMF deal.
CBN Holds Interest Rate At 27.5% As Inflation Eases For 3rd Month
Nigeria’s central bank kept its benchmark interest rate steady at 27.5% for the third straight time in 2025, vowing to maintain tight policy until inflation risks subside. June inflation dropped to 22.22% from 22.97% in May, marking a third consecutive monthly decline. CBN Governor Olayemi Cardoso cited easing energy costs and FX stability but warned of persistent underlying pressures. The World Bank urged Nigeria to sustain tight monetary and fiscal discipline amid lingering global uncertainties and domestic reforms.
