The Good, the Bad, and the Unknown - UK Resilience Meets Global Policy Crosswinds

NatWest’s July 2025 macroeconomic update assesses the UK’s steady domestic recovery against a backdrop of policy divergence, housing market softness, and evolving global risks.

• UK growth in Q1 was broad-based, with rising household consumption, increased mortgage activity, and modest corporate credit expansion supporting a cautiously optimistic outlook.

• US labor data signal continued resilience, yet monetary tightening and expiring tariff pauses may delay further rate cuts.

• Euro area inflation ticks up slightly, but underlying fundamentals remain steady, keeping the ECB on a measured path.

For a deeper analysis of domestic strength amid global uncertainties, explore the full macro commentary.