EUR News
LAST UPDATE: June 12, 2025
EU, Britain strike deal on Gibraltar’s post‑Brexit status
The EU and UK finalized an agreement to ease movement for people and goods across the Gibraltar–Spain border, allowing ID-based travel and dual-border control at Gibraltar’s airport and port.
Insight
This compromise smooths a major post-Brexit friction point and reinforces the notion that pragmatic border solutions can be achieved even where sovereignty disputes remain unresolved.
UK economy suffers worst monthly contraction since 2023
In April 2025, UK GDP fell by 0.3%, the steepest monthly drop since October 2023. The decline reflected a record £2 billion fall in goods exports to the US, weakened services, and expired tax breaks.
Insight
The sharp contraction underscores the tangible economic consequences of Trump-era tariffs and domestic fiscal changes, heightening pressure on the government and Bank of England to take policy action.
Trump Tariffs Prompt Largest‑Ever Drop in UK Goods Exports to US
UK goods exports to the US plunged by £2 billion in April—the largest monthly decline on record—following the imposition of 10% tariffs on British goods, including automobiles and metals.
Insight
The record export loss highlights how tariff policies have direct and immediate impacts on trade flows. UK firms may accelerate market diversification or lobby for tariff relief.
Norway companies expect firm growth in Q2 and Q3, central bank survey shows
A Norges Bank business survey found that Norwegian firms anticipate robust growth in the second and third quarters of 2025. Strong demand especially noted in oil services and broad private-sector expectations.
Insight
The optimism suggests resilience in Norway’s economy despite global uncertainties, providing central bank room to potentially delay rate cuts—even as inflation pressures linger.
Polish interest rates may be cut 3 more times in 2025, says c.banker Kotecki
Poland’s central bank governor, Adam Kotecki, indicated that policy rates could fall up to three more times this year, citing easing inflation and the need to support growth.
Insight
The signal of further rate cuts underscores the bank’s readiness to pivot to a growth-supportive stance. This could encourage private investment but may also pressure the zloty if market expectations overshoot.
Romanian Inflation Climbs to One-Year High as Leu Hits Record Low
Romania’s annual inflation rose to 8.5% in May—a one-year high—driven by surging food and energy prices. The leu depreciated to a record low against the euro, intensifying cost-of-living pressures.
Insight
The simultaneous currency weakness and inflation surge pose a test for the central bank’s credibility. Policymakers may be forced to maintain restrictive rates longer, risking a slowdown in economic recovery.
Avoiding ratings downgrade should be top objective for Romania, debt chief says
The head of Romania’s debt agency urged the government to prioritize avoiding a sovereign credit rating downgrade by enforcing fiscal discipline and curbing debt growth.
Insight
The warning reflects external financing constraints emerging as costs rise. Holding onto current ratings will be critical to anchor borrowing costs and maintain investor confidence.
