NEAM Insights

3Q 2026 UK Economy Overview Growth had been expected to slow following a stronger-than-expected start to the year, with GDP expanding by 0.6% QoQ in the first quarter. However, despite headwinds from higher energy prices, elevated borrowing costs, and continued geopolitical uncertainty, economic activity exceeded expectations, with second-quarter GDP growth revised higher to 0.5% QoQ from an initial estimate of 0.4%. The more timely, but more volatile, monthly GDP series also suggested the economy entered the third quarter on a firmer footing, with the Office for National Statistics (ONS) estimating output increased by 0.4% MoM in July, well above consensus expectations for no growth. Read More

2Q 2026 UK Economy Overview As oil prices finished the second quarter roughly US$3 above the level seen for a barrel of oil in the days leading up to the 27 February conflict escalation in the Middle East, inflation in the UK, too, fell as the quarter closed. Headline CPI rose to 3.3% in March, driven by higher fuel and energy costs, before easing to 2.8% in both April and May as lower regulated electricity prices and softer services inflation more than offset continued strength in energy inflation. In its April Monetary Policy Report (MPR), the Bank of England (BoE) had expected inflation to reach 3.0% and 3.3% in April and May, respectively. Core inflation also moderated, falling from 3.1% to 2.6% over the quarter, while services inflation declined from 4.5% to 3.7%, suggesting limited evidence of significant second-round effects thus far. Read More

Introduction Since 2010, stability in the euro area has been tested on several occasions as many peripheral nations have undergone periods of economic and market stress. In response, European authorities have put forward proposals to make the monetary union more resilient. Completing the Banking Union, developing the European fiscal framework and providing euro area stabilisation tools to deal with large asymmetric shocks are among the topics that have been discussed. A key issue that has been repeatedly mentioned has also been the lack of a euro area-wide ”safe asset.” Read More