+965 2224 8361
Daily Economic Update
02.09.2025Egypt: Banks’ net foreign assets reach highest level in more than a decade. Commercial banks’ NFAs rose by 64% m/m to $8 billion in July, which marks their highest level since November 2014. Total banking system NFAs, which includes the central bank, rose by 24% m/m to $18.5 billion by the end of July, the best reading since February 2021.Carry trade inflows are likely the main reason behind this increase, pending further confirmation, and not least to assess the sustainability of these increases going forward.
Eurozone: Unemployment ticks down in July, highlighting labor market resilience. The unemployment rate in the Eurozone fell to 6.2% in July (from 6.3% in June), a record low last seen in November 2024, and in line with market estimates. The eurozone’s unemployment rate has remained relatively low by eurozone standards, a sign that firms might be careful about losing employees at a time when the proportion of the working-age population continues to diminish, though it also suggests that the bloc is more resilient than expected amid fallout from the global trade war even if growth is still unimpressive (+0.1% q/q in Q2). Looking ahead, the ECB is widely expected to hold rates steady at their September 11 policy meeting, but discussions about further cuts may well resume in the autumn if the economy weakens further.
UK: Annual house price rises eased to 2.1% in July, according to Nationwide data. The annual increase in UK house prices eased to 2.1% y/y in August from 2.4% in July, according to Nationwide. On a monthly basis, residential property prices declined by 0.1% after a solid increase of 0.5% in July, keeping the ytd change in negative territory at -0.1%. The agency highlighted worsening affordability and elevated mortgage rates as being behind the subdued price performance. We note that UK labor market conditions have deteriorated in recent months, which may also be taking a toll on the housing sector. The outlook remains cautious, given some early signs of stabilization in economic activity, but slowing wage growth and government fiscal consolidation efforts could limit any meaningful increase.