EUR News
LAST UPDATE: July 26, 2025
UK public finances could be pushed off course, IMF warns
The IMF warned that the UK government’s limited fiscal headroom (£9.9 bn) may not be enough if economic growth slows or interest rates rise, risking missed public finance targets.
Insight
Despite improvements under Chancellor Reeves, fiscal constraints and external trade shocks could destabilize the recovery; proactive tax or spending flexibility is advised.
Charge higher-income patients for NHS to offset UK’s spending squeeze, says IMF
The IMF recommended co-payments for higher-income NHS users and reconsidering the pensions triple lock to alleviate long-term fiscal strain.
Insight
These suggestions illustrate the stark trade-offs ahead: sustaining universal services will likely require politically sensitive reforms or new revenue paths.
UK’s Reynolds Says Government Won’t Introduce ‘Daft’ Wealth Tax
Business Secretary Jonathan Reynolds rejected calls for a wealth tax, calling it a “daft” and impractical proposal while emphasizing realism over populism.
Insight
The rejection reflects cautious fiscal strategy by the government, seeking to avoid unworkable tax policies and maintain business confidence amid fiscal pressures.
UK short-term inflation expectations rise, Citi and YouGov say
A survey by Citi and YouGov showed short-term public inflation expectations rose to 4% in July (from 3.9%), while long-term expectations remained around 4.2%.
Insight
Elevated inflation expectations may influence the Bank of England’s decision-making. Persistent high expectations suggest interest rates may remain elevated despite hopes for cuts.
Trump’s Private Scottish Trip Comes With Risks for UK’s Starmer
Donald Trump arrived in Scotland for a private five‑day visit to his mother’s ancestral home and golf resorts. The trip occurs just weeks before his official state visit, placing UK PM Starmer in the spotlight amid potential political optics. (Bloomberg.com)
Insight
The overlap between Trump’s personal itinerary and official duties presents strategic risks for Starmer, who must manage public perceptions and diplomacy ahead of broader UK‑US engagements.
Europe’s Far‑Right Says 2040 Climate Target Should Be Rejected
The far‑right “Patriots for Europe” bloc in the European Parliament called on the EU to reject the proposed 90% emissions reduction target by 2040, warning it would devastate energy‑intensive sectors. (Bloomberg.com)
Insight
The stance reveals growing political resistance within EU institutions to aggressive climate policies, signaling possible legislative delays or rollbacks—especially from nationalist parties.
EU fires warning shot at Spain over Huawei reliance
The European Commission formally rebuked Spain for awarding a €12 million contract to Huawei for judicial wiretap storage—contradicting EU guidance that high‑risk vendors should be excluded. (ファイナンシャル・タイムズ)
Insight
The episode underscores rising EU concern over member state divergence from collective cybersecurity norms and may complicate intelligence cooperation with Spain.
