Take two: US inflation rises; China’s GDP growth rate eases
- 21 July 2025 (3 min read)
What do you need to know?
US annual inflation rose in June, suggesting that President Donald Trump’s tariff policy is pushing up costs for Americans. The Consumer Price Index increased to 2.7% from 2.4% in May, driven by increased shelter, energy and food prices. Core inflation, excluding food and energy, rose 2.9% compared to 2.8% in May. However, the increased trade tariffs helped raise an additional $47bn of revenue from custom duties in the second quarter (Q2), according to reports. Elsewhere, Eurozone annual inflation was confirmed at 2.0% in June from 1.9% in May, with a rise in services costs the biggest contributor. Core inflation was unchanged at 2.3%.
Around the world
China’s economic growth rate eased to 5.2% year on year in Q2, slightly ahead of market expectations of 5.1%, but down from 5.4% in the first three months of the year. While growth was helped by a jump in exports, as firms tried to get ahead of new tariffs, retail sales eased back. Earlier this year, the US increased its tariffs on Chinese imports which drove Beijing to introduce stimulus measures to mitigate the impact on the economy. For 2025 as a whole, the world’s second largest economy has set a GDP growth target of “around 5%”.
Figure in focus: 9,000
The FTSE 100 share index surpassed the 9,000-point threshold for the first time last week, hitting a new intra-day record high on Tuesday. The blue-chip index has benefited as investors have pivoted away from America, while the UK’s recent trade agreement with the US has helped bolster optimism. Elsewhere, the US S&P 500 and Nasdaq indices also reached record highs last week, driven by better-than-expected corporate earnings and robust economic data including retail sales and unemployment claims.
Words of wisdom
Digital wallet: An application on a mobile phone or other electronic device that stores the user’s payment information, so they can make purchases without using physical cards or cash. Digital wallets accounted for more than a third of global consumer-to-business spending in 2024, at some $15.7trn, according to the 2025 Worldpay Global Payments Report. That represents almost 10 times the value in 2014 and is expected to reach more than $28trn by 2030. Cash fell to 15% of payment value in 2024 from 44% a decade earlier, Worldpay said.
What's coming up?
On Tuesday, the Reserve Bank of Australia posts the minutes from its recent policy meeting, where officials chose to leave rates unchanged at 3.85%. The European Central Bank meets on Thursday to decide on monetary policy - policymakers lowered the benchmark rate by 25 basis points (bp) to 2% at their June meeting. Also on Thursday, several flash composite Purchasing Managers’ Indices are issued, including readings for the Eurozone, US, UK and Japan. Germany's closely watched Ifo Business Climate Index is published on Friday.
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