Key Takeaways
- EU Commission President Ursula von der Leyen has strongly reiterated the European Union's support for a Gaza peace proposal and a two-state solution, emphasizing the EU's readiness to contribute to reconstruction efforts and the establishment of a viable Palestinian state.
- The UK economy demonstrated a mixed performance in Q2 2025, with GDP growing 1.4% year-over-year and total business investment surging 3.0%, significantly exceeding expectations. However, the country's current account deficit widened to £28.9 billion, worse than anticipated.
- Germany's retail sales plummeted 1.1% year-over-year in August, a significant contraction that missed analyst estimates and signals a notable slowdown in consumer spending.
- Sweden's economy showed robust growth in August, with retail sales jumping 4.4% year-over-year and a 0.9% month-over-month increase, alongside a 3.1% rise in non-manual worker wages in July, indicating healthy domestic demand.
European Commission President Ursula von der Leyen has reaffirmed the EU's commitment to a lasting peace in the Middle East, specifically endorsing a Gaza peace proposal and a two-state solution. Speaking on the matter, Von der Leyen highlighted the necessity of a secure Israel and a viable Palestinian state, free from the influence of Hamas. She also announced the EU's intention to establish a Palestine Donor Group and a dedicated instrument for Gaza's reconstruction, underscoring the importance of economic viability for any future Palestinian state.
Across the European continent, economic data released today presented a varied picture. The United Kingdom reported that its Gross Domestic Product (GDP) expanded by 1.4% year-over-year in Q2 2025, surpassing the 1.2% estimate. Quarter-over-quarter GDP growth met expectations at 0.3%. This growth was notably bolstered by a robust increase in total business investment, which rose by an impressive 3.0% year-over-year, far exceeding the 0.1% estimate. Despite these positive indicators, the UK's current account balance deteriorated further, recording a deficit of £28.9 billion in Q2, wider than the anticipated £25.0 billion deficit. Exports saw a slight decline of 0.2% quarter-over-quarter, while imports remained flat. Household saving ratio in the UK increased to 10.7% in Q2 2025, up from 10.5% in Q1.
In contrast, Germany's economic performance in August showed signs of weakness. Retail sales recorded a significant -1.1% year-over-year contraction, a sharp reversal from the previous 2.3% growth and missing the 2.3% estimated increase. Month-over-month, retail sales also fell by 0.2%, worse than the 0.6% expected increase. Furthermore, the Import Price Index in Germany declined by -1.5% year-over-year and -0.5% month-over-month, both deeper falls than anticipated, suggesting easing inflationary pressures but also potentially weaker demand.
Meanwhile, Sweden's economy demonstrated resilience. Retail sales in August surged by 4.4% year-over-year on a working-day adjusted basis, significantly outperforming the previous 2.9% growth. Monthly retail sales also saw a healthy increase of 0.9%, up from 0.3% in the previous period. Additionally, non-manual worker wages in Sweden grew by 3.1% year-over-year in July, indicating a strong labor market.
Further afield, South Africa's M3 Money Supply decelerated to 6.18% year-over-year in August from 6.75% previously. However, private sector credit grew by 5.86%, exceeding the 5.22% estimate, suggesting continued lending activity.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.