EUR News
LAST UPDATE: June 13, 2025
UK public’s medium-term inflation expectations stay high in May
A Bank of England survey (May 9–13) shows 5-year inflation expectations remain at 3.6% (highest since Nov 2019), 1–2 year expectations at 3.2% (highest since Nov 2022), while 1-year expectations dipped marginally .
Insight
Persistently elevated public inflation outlook suggests entrenched inflation psychology, complicating BoE’s rate-cut trajectory. This may force policymakers to maintain higher-for-longer interest rates to manage expectations.
UK financial regulators should copy Singapore model, say peers
A House of Lords committee recommends UK regulators (FCA and PRA) adopt a more flexible, growth-oriented “concierge-style” approach modeled after Singapore’s MAS, to streamline authorizations and reduce compliance burdens .
Insight
This signals a growing push to revamp UK financial oversight in the post-Brexit era, balancing stability with competitiveness. Emulating Singapore could boost investment and innovation, though risks of regulatory dilution remain.
Polish central banker Kotecki sees room for 100 bps of cuts in 2026
NBP Monetary Policy Council member Ludwik Kotecki said there is room for up to 100 basis points of interest rate cuts in 2026, as inflation is projected to fall to around 3% by Q3 2025, aided by slower wage and energy-price growth (ainvest.com).
Insight
Kotecki’s stance underscores a dovish shift at the central bank, signaling a potential pivot from tightening to easing. By projecting key inflation metrics returning to target and anticipating lower energy prices, he frames future rate cuts as both feasible and supportive of economic growth—though timing remains cautious, contingent on inflation dynamics.
Swedish CPIF inflation up 2.3% in May
Sweden’s May CPIF (CPI with fixed interest) rose 0.1% m/m and 2.3% y/y, aligning with Riksbank’s 2% target; core CPI (ex‑energy) was 2.5% y/y .
Insight
Matching target levels gives the Riksbank flexibility to cut rates soon, as headline stability and weak economic data support an accommodative policy stance.
Sweden will reach new NATO spending target of 5% of GDP, prime minister says
Prime Minister Ulf Kristersson announced Sweden will meet NATO’s new 5% of GDP defense spending goal, allocating 3.5% to core military and 1.5% to cyber and civil defense by 2030 (reuters.com).
Insight
Sweden’s commitment signals deepening integration into NATO’s strategic objectives and reflects rising security concerns in Europe. Boosting cyber and civil defense shows a holistic approach to modern threats.
