Market Information Friday 8 August 2025

The Bank of England cut interest rates from 4.25% to 4.00%. The decision followed a historic second vote, after the committee initially failed to reach a majority. Four out of nine members opposed the cut due to concerns over persistent inflation. The final decision passed with a narrow 5–4 majority, after one member revised his stance from supporting a larger rate cut. The Bank reiterated in a statement that future cuts would be gradual and cautious, and hinted that the current rate-cutting cycle may soon end. While inflation is forecasted to rise to 4% — twice the Bank’s target — recent signs of labour market weakness add complexity to the outlook.

In June, German exports increased by 0.8% compared to the previous month, while imports increased more sharply by 4.2%. Year-on-year exports increased by 2.4% while imports increased by 7.9% YoY. The lower export growth was partly caused by lower exports to the U.S. These fell by 2.1% month-on-month and 8.4% year-on-year. Exports to China also decreased by 1.1% month-on-month. Meanwhile, imports from the U.S. surged by 19.8% month-on-month and imports from China rose by 5.8% month-on-month. Germany’s trade surplus fell to €14.9 billion from €18.5 billion in May.

In Q2, labor costs in the U.S. increased by 1.6%, slightly above the expected 1.5%. Labor productivity rose by 2.4%, also beating the forecast of 2.0%. Q1 figures were revised: labor costs rose by 6.9%, while productivity fell by 1.8%.

The 6M Euribor increased with 1 basis point to 2.09% compared to previous business day. The 10Y Swap decreased with 3 basis points to 2.60% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.