Economic Update

• The European Union's economic output contracted in the first quarter of 2026, according to data released by Eurostat on July 1, 2026. • The chain-linked volumes index dropped from 128.669 in Q4 2025 to 120.654 in Q1 2026, while nominal GDP fell to €4,160,507.4 million. • This decline indicates a downturn in the EU's overall economic activity and a reduction in the total value of goods and services produced.

• The Supreme Court ruled on President Donald Trump's attempt to fire Federal Reserve Governor Lisa Cook, a decision that could redefine presidential authority over the central bank. • This ruling is significant as it may reshape how economic policy is managed and the level of independence the Federal Reserve maintains from executive interference. • Separately, Nobel laureate Robert Shiller addressed the impact of AI on the labor market, stating that while fears of job displacement are warranted, they should be tempered.

• The Bank of England maintained UK interest rates at 3.75% for the fourth consecutive month due to persistent inflation concerns. • The decision was split among the Monetary Policy Committee (MPC), with seven members voting to hold and two voting to increase rates to 4%. • This caution follows May 2026 Consumer Prices Index (CPI) inflation of 2.8%, which remains above the MPC's official 2% target.

• As the final round of group matches for the 2026 World Cup begins, Argentina has emerged as the favorite to win the trophy with a 31% probability. • Other top contenders include Spain at 13%, France at 11%, and England at 9%, though England's quarterfinal chances vary from 30% to 50% depending on their group ranking. • Despite their lead, Argentina faces a 41% chance of elimination by opponents such as Cape Verde, Australia, Belgium, Paraguay, Colombia, or Portugal.

• State Bank of India (SBI) is currently being tracked via a real-time market performance liveblog by The Economic Times. • Key financial metrics report a last traded price of 1052.7, a market capitalization of 972,491.72, and a trading volume of 8,546,071. • Additional valuation data includes a price-to-earnings (P/E) ratio of 11.69 and earnings per share (EPS) of 90.24.

• The ongoing conflict between Israel and the US-Iran axis has disrupted oil and gas supplies across the Middle East. • These disruptions are driving energy price increases, which may lead to higher inflation and reduced GDP growth within the UK. • The severity of the economic shock depends largely on overseas geopolitical decisions and the resulting stability of global energy markets.

• Iran's economy nearly stagnated in 2025, recording a marginal growth rate of only 0.2% while non-oil GDP experienced a contraction. • The slowdown is attributed to a series of conflicts, including a 12-day war with Israel in the summer and a 40-day conflict involving the U.S. and Israel in the winter, alongside January's nationwide protests. • Long-term structural crises, including severe international sanctions, chronic corruption, mismanagement, and declining investment, have further crippled economic activity.