Levent Gürses
In New York, Mayor Zohran Mamdani has fulfilled yet another campaign promise by ensuring that the rate of increase for new tenancy agreements is zero. In Turkey, however, price rises are coming one after another even before the June inflation figures have been announced and before pension payments and civil servants’ pay rises have been finalised. Price rises have been implemented for motorways and bridges, fuel and other goods. The wave of price rises looks set to continue at an accelerated pace following the monthly wage increases.
June inflation stood at 0.99 per cent; annual inflation at 32.11 per cent
The Turkish Statistical Institute (TÜİK) has released the June inflation figures. According to these, the Consumer Price Index (CPI) rose by 0.99 per cent month-on-month, whilst annual inflation stood at 32.11 per cent. Economists had expected the CPI to rise by 1.04 per cent in June and for the annual rate to fall to 32.17 per cent.
According to TÜİK, the change in the CPI (2025=100) in June 2026 was a 0.99 per cent increase compared with the previous month, a 17.76 per cent increase compared with December of the previous year, a 32.11 per cent increase compared with the same month of the previous year, and a 32.03 per cent increase compared with the twelve-month average.
The highest increase among the main expenditure groups was in housing, whilst food inflation stood at 35 per cent
The annual changes in the three main expenditure groups with the highest weightings were: a 35.45 per cent increase in food and non-alcoholic beverages, a 31.15 per cent increase in transport, and a 45.14 per cent increase in housing, water, electricity, gas and other fuels. The contributions of these main expenditure groups to the annual change were 8.61 percentage points for food and non-alcoholic beverages, 5.19 percentage points for transport, and 5.92 percentage points for housing, water, electricity, gas and other fuels.
The rate of increase for pensions and salaries has been confirmed
Following the release of TÜİK’s inflation figures for June, the increases for pensioners’ monthly payments and civil servants’ salaries for the six-month period have been confirmed. The inflation rate compared to the final month of last year stood at 17.76 per cent.
A SSK and BAĞ-KUR pensioner receiving a monthly pension of 20,000 TL will receive 23,552 TL in July, based on the confirmed inflation rate of 17.76 per cent. SSK and BAĞ-KUR pensioners had received a 12.19 per cent pay rise at the start of the year for the first half of 2026. Following a decision by the Turkish Grand National Assembly (TBMM), the minimum pension was raised to 20,000 TL.
The pay rise for civil servants and pensioners for the first six months of 2026 was 18.6 per cent. In the second six-month period, the collective agreement pay rise will be applied at a rate of 7 per cent. Based on these calculations, adding the 7 per cent increase stipulated in the 8th Collective Agreement will result in a total increase of 13.52 per cent.
The rent increase rate for July has also been confirmed
With the announcement of the June inflation figures, the rate of increase for residential and commercial properties in July has also been finalised. Accordingly, the rent increase rate for July has been set at 32.03 per cent.
Price rises have begun to take effect even before monthly wage increases
Even before the interim pay rise rate for pensioners and public sector workers had been announced, July began with a wave of price rises on top of existing increases. Price rises have been announced across the board, from healthcare to fuel, and from bridge tolls to tobacco and alcohol products. Whilst an interim pay rise for the minimum wage – which remains below the poverty line – is not on the government’s agenda, the Energy Authority has stated that a 50 per cent increase is required over a three-month period for electricity and gas prices, which were already raised in April.
A second increase of between 15 and 18 per cent has been applied on top of the 25 per cent rise in toll charges for bridges built under the build-operate-transfer model, which took effect in January. The new prices have come into force. The car toll for the Osmangazi Bridge has risen from 995.00 TL to 1,170.00 TL. The toll for the 1915 Çanakkale Bridge has also risen from 995.00 TL to 1,170.00 TL. In percentage terms, the highest increase – at approximately 18 per cent – was applied to the tolls for motorbikes (at both the Çanakkale and Osmangazi bridges) and heavy goods vehicles, whilst the increase for cars stood at 17.59 per cent.
Prices rise immediately when oil prices go up, but there’s no reaction when they fall
Fluctuating oil prices following US-Iran tensions have led to price rises for petrol. Whilst the price per litre of petrol rose by 2 lira 19 kuruş, the increase was reflected at the pump as 55 kuruş due to the escalator system. Accordingly, on the European side of Istanbul: the price per litre of petrol is 62.77 TL, diesel is 64.61 TL and LPG is 31.99 TL.
Inflation rises across the board
According to the Istanbul Chamber of Commerce (İTO) Istanbul Consumer Price Index for June 2026, which serves as an indicator of retail price movements in Istanbul, inflation in the city was calculated at 1.14 per cent compared to the previous month and 35.94 per cent compared to the same month of the previous year.
According to the İTO statement, in June 2026, compared with the previous month, the Communication expenditure group rose by 4.28 per cent, the Alcoholic Beverages and Tobacco expenditure group by 4.20 per cent, the Household Goods expenditure group by 3.14 per cent, and the Housing expenditure group by 2.37 per cent; the Miscellaneous Goods and Services expenditure group by 1.66 per cent, the Restaurants and Hotels expenditure group by 1.25 per cent, the Health expenditure group by 0.75 per cent, the Food and Non-Alcoholic Beverages expenditure group by 0.65 per cent, and the Recreation and Culture expenditure group by 0.12 per cent.
According to TEPAV, food inflation stands at 32.6 per cent
The Food Price Index (TEGE) for June 2026, compiled by the Turkish Economic Policies Research Foundation (TEPAV), has been published. Based on data collected between 1 and 25 June, monthly food inflation was calculated at minus 0.23 per cent. Consequently, food prices showed a slight decline in June. Food inflation figures for June from other institutions had not yet been released as of 30 June. The decline was driven by a fall in vegetable prices. Annual food inflation, however, remained high at 32.6 per cent.
In June, the products with the sharpest price falls in the fresh fruit and vegetable category were tomatoes, fresh beans and various types of lettuce. In contrast, significant increases were observed in the prices of dried onions, aubergines and potatoes. Outside the fresh fruit and vegetable category, the highest price increases were recorded for imported salmon, other fish and spreadable chocolate cream. Other ready meals, fresh aromatic herbs and eggs, meanwhile, were among the products whose prices fell.
The hunger threshold rose by 37 per cent in one year
Türk-İş announced the results of its Hunger and Poverty Threshold survey for the June 2026 period. According to the findings, the hunger threshold – which represents the monthly food expenditure required for a family of four to maintain a healthy and balanced diet – rose to 35,758.88 TL.
The poverty line, which includes not only food expenditure but also basic necessities such as clothing, housing, transport, education and healthcare, was calculated at 116,478.40 TL. The monthly cost of living for a single worker, meanwhile, rose to 46,248.50 TL.
In a statement, Türk-İş noted that the failure to increase the minimum wage in the second half of the year had weakened workers’ purchasing power. It was noted that fewer goods could be purchased with the same income, and that many households were struggling to meet their basic needs. According to Türk-İş, food inflation stood at 1.66 per cent monthly, 36.93 per cent annually. The six-month increase in food prices was calculated at 18.63 per cent.
Mamdani kept his word: Rent increases frozen for one million flats in New York
The New York Rent Board has decided not to allow rent increases in approximately one million rent-controlled flats. The decision marks the fulfilment of one of Mayor Zohran Mamdani’s key campaign promises.
The New York Rent Board has decided to freeze rent increases for approximately one million rent-controlled flats for up to two years. According to a Reuters report, the decision is seen as the fulfilment of one of the key pledges highlighted by Mayor Zohran Mamdani during his election campaign, following his appointment in January.
In a vote held on Thursday, the Board decided by a vote of 7 to 1 that the rate of increase for new one- and two-year tenancy agreements, commencing from October, would be zero. Following the decision, Mamdani stated: “This is a historic victory for New York’s tenants. This is the relief that working people across our city deserve.”
The decision directly affects approximately a quarter of the population living in rent-controlled flats in New York. Each year, the city’s Rent Board determines the permissible rent increase rates for rent-controlled flats, taking into account factors such as wages, inflation, maintenance costs, taxes and landlords’ incomes.
Central Bank reserves at 13-month low
The Central Bank’s total reserves fell below the 150 billion dollar mark for the first time since the week of 16 May 2025, during the week ending 26 June 2026. Total reserves stood at 149 billion 205 million dollars in the week ending 26 June, a decrease of 7 billion 991 million dollars compared to the previous week.
Accordingly, as at 26 June, gross foreign exchange reserves fell by 5 billion 260 million dollars to 54 billion 251 million dollars. During this period, gold reserves fell by 2 billion 731 million dollars, from 97 billion 685 million dollars to 94 billion 954 million dollars. Consequently, the Central Bank’s ’s total reserves fell by 7 billion 991 million dollars in the week ending 26 June compared with the previous week, dropping from 157 billion 196 million dollars to 149 billion 205 million dollars.
The five-month foreign trade deficit reached 42.7 billion dollars
According to the May foreign trade figures released by TÜİK, exports in that month fell by 9.5 per cent compared with the same month of the previous year to 22 billion 461 million dollars, whilst imports fell by 10.8 per cent to 28 billion 71 million dollars.
In the January–May period, exports rose by 0.2 per cent compared with the same period of the previous year to 111 billion 118 million dollars, whilst imports rose by 1.1 per cent to 153 billion 834 million dollars.
In May, the foreign trade deficit fell by 15.6 per cent compared with the same month of the previous year, dropping from 6 billion 643 million dollars to 5 billion 610 million dollars. The export-to-import coverage ratio rose from 78.9 per cent in May 2025 to 80.0 per cent in May 2026.
In the January–May period, the trade deficit increased by 3.6 per cent, rising from 41 billion 242 million dollars to 42 billion 716 million dollars. The export-to-import coverage ratio stood at 72.9 per cent in the January–May period of 2025, but fell to 72.2 per cent in the same period of 2026.
In the first five months of the year, the largest exports were to Germany, totalling 9.27 billion dollars, whilst the largest imports were from China, totalling 21.03 billion dollars.
World Wealth Report: Dollar millionaires are rising rapidly
According to a report compiled by the Swiss-based UBS Bank, the number of dollar millionaires worldwide increased by one million last year.
Turkey was the second-fastest growing country in the world in terms of dollar millionaires. Last year, private wealth increased markedly worldwide, particularly in Europe, the Middle East and Africa. Whilst total global wealth rose by 10.8 per cent, the increase in Europe, the Middle East and Africa exceeded this average.
In the global ranking of average wealth per person, the Swiss top the list. With $910,382 per adult, Switzerland is followed by the US and Luxembourg. Germans, with an average wealth of approximately 304,000 euros, rank 14th in this statistic. The calculated wealth figures include property.
There are around 93,000 dollar millionaires in Turkey
As in previous years, more than half of global private wealth is concentrated in the US and China. According to the study, which shows that wealth exceeding 5 million dollars in particular has seen strong growth in 2025, approximately one million people worldwide have attained millionaire status (based on US dollars). Approximately half of these new millionaires reside in the US. The US is followed in this regard by China, Japan, Germany, the UK and France. According to the study, Turkey ranks second only to Lithuania in terms of the highest percentage increase in the number of dollar millionaires worldwide. In Turkey, where the number of millionaires rose by 6.4 per cent (5,650 people) from 2024 to 2025, the total number of millionaires stands at around 93,000.
Actual unemployment: 12,627,000 people unemployed
In contrast to the narrowly defined unemployment rate of 8.2 per cent announced by TÜİK in May, the underemployment rate – which reflects actual unemployment, or the broadly defined unemployment rate – remains close to its highest levels at 31 per cent. Actual unemployment has not fallen into single figures even once in the past 149 months, equivalent to the last 12.5 years. According to TÜİK, 2 million 883 thousand people are unemployed; according to DİSK-AR, the figure is 12 million 627 thousand citizens.
According to TÜİK’s revised data, the highest broad-definition unemployment rate was recorded at 31.6 per cent in June 2025. Whilst the broad measure of unemployment has remained above 25 per cent for 24 months, it has not fallen below 20 per cent for a full 77 consecutive months.
Among the young population aged 15–24, the narrow measure of unemployment stood at 14.8 per cent. Within this age group, the unemployment rate was calculated at 11.2 per cent for men and 21.8 per cent for women. This inequality continues to manifest itself in actual female unemployment figures. According to a report by the DİSK Research Centre (DİSK-AR), broad-definition female unemployment stands at 40.8 per cent, the highest level among all types of unemployment.
Whilst DİSK-AR’s calculations reveal that the actual number of unemployed people stands at 12 million 627 thousand, the Turkish Statistical Institute (TÜİK) counts only 2 million 883 thousand of these as unemployed. According to TÜİK, the number of unemployed stood at 2 million 820 thousand in January 2014. It is noteworthy that, despite changes in the population, the working-age population and the number of people in the labour force over the intervening 12 years, the number of unemployed and unemployment rates have remained at similar levels.
Production and exports have become concentrated in low-tech sectors
According to TÜİK data, industry has become concentrated in low and medium-low technology sectors. Whilst the share of high technology in production remained at 3.6 per cent, the economic weight of sectors such as textiles and base metals continued to decline.
As reported by the BirGün newspaper, based on TÜİK’s Annual Industrial Products (PRODCOM) Statistics for 2025, sales by enterprises from production reached 24 trillion 28 billion lira. Sales from production had been calculated at 18 trillion 814 billion lira in 2024. Whilst food industry products accounted for the largest share of total sales, the share of high-technology products remained at 3.6 per cent. In terms of production, the combined share of the low and medium-low technology groups stood at 67.5 per cent, whilst the share of the medium-high technology group was 28.8 per cent.
This lack of high-tech products is also evident in the export figures. According to TÜİK’s May foreign trade data, the share of high-tech products within manufacturing industry exports was limited to just 3.1 per cent. Whilst the share of manufactured goods in total exports stood at 93.8 per cent during the January–May period, the share of high-technology products within manufactured goods exports was 3.4 per cent.
The slump in the retail sector continues
The Retail Confidence Index, published by TEPAV, continued to fall in May 2026 on both a monthly and annual basis. Although there was a slight improvement in sales expectations within the sector, the fragility of small retailers and large stores regarding the future persists. According to the data, retail confidence fell by 1.3 points compared with the previous month and by 18.8 points compared with the same period last year, dropping to -8.4 points in May 2026. The main factor behind the decline was retailers’ negative assessments of business volumes over the past three months.
Banks are profitable, but the number of non-performing loans and profits has risen by 32 per cent
Banks continued to increase their profitability in the first five months of 2026. Net bank profits rose by 58.2 billion TL in just one month, whilst the ratio of non-performing loans also increased.
According to BDDK data, the banking sector’s net profit for the January–May 2026 period rose by 29 per cent compared with the same period last year, reaching 421 billion 789 million TL. In the January–May period of the previous year, the banking sector’s net profit had stood at 326 billion 800 million TL. Banks’ net profit for May alone stood at 58 billion 213 million TL.
The total value of loans granted by banks reached 26 trillion lira, whilst in the same month last year this figure stood at 18.9 trillion lira. Since the end of 2025, the total value of loans has increased by 12.6 per cent. Loans granted recorded a 37.8 per cent increase over the course of a year. The rise in non-performing loans was also reflected in the data. The non-performing loan ratio rose to 2.69 per cent by the end of May. This ratio stood at 2.65 per cent in April.
Personal loan and credit card debts reached 6 trillion 483 billion lira as of the week of 19 June. Whilst personal loan debts rose to 3 trillion 319 billion lira, the credit card debt balance also rose to 3 trillion 162 billion lira.
The value of personal loan and credit card debts subject to legal enforcement proceedings rose to 312 billion lira as of 19 June. There has been a 32.3 per cent increase in the value of debts subject to enforcement proceedings since the start of the year.
The number of enforcement cases has exceeded 25 million
The number of cases in enforcement and insolvency departments has highlighted the impact of the economic crisis on citizens. According to UYAP data, 4,929,000 new cases were filed with enforcement and insolvency departments between 1 January and 27 June 2026. Despite an increase in the number of cases resolved during the same period, the caseload within the system has not decreased. The number of pending cases in enforcement departments reached 25,419,757 as of 27 June.
119,000 companies closed in 4 years; Minister says ‘it’s natural’
According to data from the Ministry of Trade, 119,178 companies and commercial enterprises closed between 1 January 2022 and 31 March 2026, whilst the registrations of 588,382 tradespeople were cancelled over the past five years. According to records from the Tradespeople and Artisans Information System, 588,382 deregistration procedures took place across Turkey over the past five years. According to a report in the Cumhuriyet newspaper, Trade Minister Ömer Bolat argued that closures and deregistrations were not solely due to economic difficulties, but should be viewed as part of the “natural course of commercial life”.
J.P. Morgan expects the interest rate to fall to 35 per cent following two cuts this year
The US-based banking giant J.P. Morgan has revised downwards its year-end 2026 interest rate forecast for Turkey, citing the sharp decline in oil prices and recent signals from the Central Bank of the Republic of Turkey (TCMB) regarding interest rate cuts.
The bank noted that falling energy prices following the ceasefire between the US and Iran could ease the pressure on inflation.
In light of these developments, JPMorgan expects the CBRT to resume weekly repo auctions in July and forecasts that this step could reduce the effective funding rate from 40 per cent to 37 per cent.JPMorgan analysts also forecast that the Central Bank would cut the policy rate by 100 basis points at each of the Monetary Policy Committee meetings on 10 September and 22 October, resulting in a total reduction of 200 basis points during the year, with the policy rate potentially falling to 35 per cent.Commerzbank: A sharp depreciation of the Turkish lira could occur if interest rates fallIn its latest report, Germany-based Commerzbank noted that Central Bank Governor Fatih Karahan is assessing the possibility of monetary policy easing, but that the current inflation outlook does not support interest rate cuts.In a report titled “Karahan signals easing whilst key indicators remain negative”, prepared by Tatha Ghose from the bank’s research department, it was forecast that headline inflation would remain above 30 per cent and that underlying price pressures would persist. Commerzbank warned that should the Central Bank resort to repo funding to lower the effective interest rate, volatility in the Turkish lira could increase and there could be a risk of a sharp depreciation.Murat Ülker: Our turnover was 11 billion dollars in 2018; it now stands at 16 billion dollarsMurat Ülker, a member of the Board of Directors at Yıldız Holding, stated that they had increased their turnover from 11 billion dollars in 2018 to 16 billion dollars at present.Speaking to Vahap Munyar, a columnist for the Ekonomim newspaper, in San Francisco, Ülker said: “Our total turnover in 2018 was 11 billion dollars. Over the past eight years following the restructuring, we have sold 40 factories, some of our brands and our land. We have repaid 7.5 billion dollars in debt. Our turnover now stands at 16 billion dollars.” Ülker added, “Our debts included in the restructuring have fallen to 500 million dollars.”Responding to the question, “Haven’t you been able to settle the 500 million dollars?”, Ülker said, “The terms are very favourable. Why should I settle it all at once? We are making our payments in accordance with the schedule.” Ülker said, “Despite selling 40 factories, our production has increased rather than decreased. This is because we have increased the capacity of our remaining facilities. There are 82,000 people employed across the entire group. We hire 5,000 people every year.”Three banks are merging: to be completed in the final months of 2026Ziraat Katılım, Vakıf Katılım and Halk Katılım banks are preparing to operate under a single umbrella with a new name. This major operation, expected to create significant synergy within the sector, is scheduled to be effectively completed in the final quarter of 2026, whilst the name of the new mega-bank to be formed will be announced to the public in the coming days.
The financial markets are, in fact, no strangers to this merger model. In 2020, the government brought together the country’s largest public insurance companies – Ziraat Sigorta, Halk Sigorta and Güneş Sigorta – under a single umbrella to create the ‘Türkiye Sigorta’ brand. A similar strategy is now being implemented to expand and promote the participation banking sector.
According to the current timetable, this merger—due to be completed in the final months of 2026—will see the resources, branch networks and digital infrastructure of the three public participation banks merged into a single entity.
Preparations to attract Gulf capital
President Recep Tayyip Erdoğan made the first statement on the matter during his speech at the 3rd Istanbul World Islamic Economy Summit held on 5 June, saying, “Another move we will make is the merger of Ziraat, Vakıf and Halk Katılım.”
The BirGün newspaper emphasised that the government is restructuring participatory banking with the aim of attracting Gulf capital; whilst preparations are underway for the merger of the three public participatory banks, the draft Islamic Finance Law—which will introduce a new legal framework for the sector—is also in its final review stage.
Allegations that Emirates NBD has taken action regarding HSBC Turkey
It has been reported that Emirates NBD is conducting talks to acquire HSBC’s Turkish unit. Whilst it was noted that the process is at an early stage and the deal may not materialise, it was reported that HSBC has significantly scaled back its presence in Turkey in recent years, whilst Emirates NBD aims to expand its operations in the country following its acquisition of Denizbank.
Turkey has submitted a letter of intent to join SEPA
Mehmet Şimşek, Minister of Treasury and Finance, stated that Turkey had submitted a letter of intent to join the Single Euro Payments Area (SEPA) to the European Payments Council, “SEPA membership will make cross-border payments faster, safer and cheaper, facilitate trade and investment, and enhance the competitiveness of our companies,” he said. Following the Turkey-EU High-Level Economic Dialogue Meeting, Şimşek held a press conference with (EU) Commissioner for Economic Affairs, Valdis Dombrovskis, at a press conference, noted that the Customs Union had formed the basis of economic relations for over 30 years, but that the world had changed, whilst the Customs Union still operated according to the economic realities of the 1990s, stating, “Today’s economy is not limited to industrial goods. Services, digital trade, public procurement and agriculture are now integral parts of economic integration. For this reason, we view the modernisation of the Customs Union not as a technical update, but as a strategic necessity,” he said.
CHP’s Karabat: The Treasury’s borrowing has turned into a Ponzi scheme
Describing the Treasury’s borrowing model as “Ponzi financing”, CHP Istanbul MP Özgür Karabat stated, “The taxes collected are not going towards investment, production, education or healthcare. Taxes are flowing directly to the interest lobbies and the rentier class.
The Treasury is borrowing again just to pay the interest on its debt. This spiral, known in economics as a Ponzi scheme, is a harbinger of total economic collapse,” he remarked.
Famous clothing brand closes its shopsH&M, one of the world’s leading ready-to-wear retailers, is continuing to downsize its global network of shops. The company has closed a total of 136 shops in the last six months and has decided to completely phase out the physical shops of its Monki brand.Automotive giant to close four factoriesGerman automotive giant Volkswagen is in the news with a comprehensive restructuring plan. It is claimed that the company is considering laying off more than 100,000 employees and closing four factories. It is noted that the plan could also radically alter the group’s organisational structure.xImportant warning from the BIS: The AI bubble driving markets could lead to a financial collapseThe Bank for International Settlements (BIS) has warned that, whilst the wave of investment in artificial intelligence (AI) is driving stock markets to record highs, it could lead to a financial collapse due to hidden costs. In its Annual Economic Report, the BIS – known as the ‘central bank of central banks’ – warned that massive spending on artificial intelligence (AI) is accumulating financial vulnerabilities that could amplify any future shocks and spread from the markets to the wider economy.Presenting the findings, BIS General Manager Pablo Hernandez de Cos said the message was underpinned by a sense of ‘urgency’, calling on policymakers to act before a potential reversal makes the eventual correction even more painful. At the heart of the warning lies the scale of spending, which, whilst having supported global growth over the past year, is now a cause for concern.The five largest ‘hyperscalers’ – technology giants competing to build artificial intelligence infrastructure – are on track to allocate over 1 trillion dollars (878 billion euros) to AI-related investments throughout 2025 and 2026; this pace is outstripping their profits and free cash flow, forcing some to take on significant debt just to stay afloat.The BIS notes that this race is fuelled by the belief that, ultimately, only a few dominant players will survive, and that this is encouraging companies to pour money into projects whose returns remain highly uncertain.Past frenzies are being brought to the foreThe report places the current AI boom within a long historical sequence stretching from the canal frenzy of the 1830s to the British railway frenzy of the 1840s, and from the electrification of the 1920s to the dotcom bubble. According to the BIS, each of these began with a genuine technological breakthrough that attracted more capital than commercial returns could justify, and each era ended with ‘a reversal in investment that eventually led to recessions affecting the entire economy’.Another factor exacerbating the risk is inflated share prices and opaque financing structures. The BIS highlights the spread of ‘circular financing’, whereby chip manufacturers and cloud giants partner with artificial intelligence laboratories that commit to purchasing their chips and computing power; in this arrangement, the money effectively flows back to the initial investors as revenue.Warsh: The Fed will decide on an interest rate hike within four weeksKevin Warsh, Chairman of the US Federal Reserve (Fed), announced during a panel discussion at the European Central Bank Forum in Sintra, Portugal, that they would decide within four weeks whether or not to raise interest rates. “When we go into the room and close the door, we will have a thorough discussion, ” said Warsh, without giving the audience any indication of the direction the discussion might take. Whilst inflation in Europe has risen due to the consequences of the war in the Middle East, the European Central Bank (ECB) raised interest rates on 11 June.Inflation fell in Europe in JuneInflation in the Eurozone fell more than expected in June; this eased the pressure on the ECB and bolstered hopes that the energy-driven price shock fuelled by the war in the Middle East had come to an end. According to a Euronews report, whilst Europe was sweltering under one of the most severe heatwaves on record, the latest inflation figures brought a rare piece of cool news.According to Eurostat’s flash estimate, price rises in the eurozone slowed significantly in June; which is seen as a promising sign that the inflation shock triggered by the conflicts in the Middle East is beginning to lose momentum. Annual inflation in the single currency area fell to 2.8 per cent, down from 3.2 per cent in May; this had been the highest rate seen since September 2023. The figure also came in below the 3.0 per cent forecast by economists. On a month-on-month basis, prices actually fell by 0.1 per cent; this was the first monthly decline this year following a series of consecutive increases.Lagarde: ECB is moving beyond the era of extraordinary monetary policyChristine Lagarde noted that the European Central Bank (ECB) is refocusing on its core mandates but must adapt to a more volatile global economy. Speaking at the opening of the European Central Bank’s (ECB) annual forum in Sintra, Spain, on Monday, Christine Lagarde declared that an era in monetary policy had come to an end. Lagarde said that, following a period of more than 10 years shaped by bond purchases, emergency liquidity assistance and forward guidance, the ECB could now once again rely on interest rates – its core tool for combating inflation.However, according to Lagarde, this does not mean the task has become any easier. “Monetary policy has returned to its core tools,” said Lagarde, emphasising that the return to traditional tools “does not mean a return to an idealised past.”
US employment growth has lost momentum, whilst unemployment in the Eurozone remains at a record low
New labour market data shows the gap widening between the two sides of the Atlantic. Whilst employment growth in the US has slowed sharply, the unemployment rate in the Eurozone remains at a record low. The latest employment figures have highlighted the increasingly pronounced divergence between the world’s leading advanced economies. The sharp slowdown in the pace of hiring in the US stood in stark contrast to the relatively strong European labour markets and their historically low unemployment levels.
According to data from the US Bureau of Labour Statistics, non-farm employment rose by just 57,000 in June. This figure fell well short of the market expectation of 113,000 and signalled a marked slowdown compared with the 172,000 increase recorded in May. Despite this sharp loss of momentum in employment, the unemployment rate fell slightly, contrary to expectations, from 4.3 per cent to 4.2 per cent.
According to data published by Eurostat, the unemployment rate in the Eurozone remained steady at 6.2 per cent in May, maintaining a record low for the currency union. Whilst this figure was exactly in line with market expectations, it also highlights the persistent tightness in the European labour market despite broader economic uncertainties across the continent.
Has Wall Street turned its back on the ‘Magnificent Seven’?
The major tech giants experienced their worst month in years in June, as investors shied away from AI-related trades and capital shifted to other sectors. For over three years, the ‘Magnificent Seven’ (or ‘Mag 7’) – comprising Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla – had been the main driving force behind the rally on Wall Street. However, the picture changed in June 2026.
According to Euronews’ calculations, whilst Nvidia’s shares fell by more than 5 per cent, Microsoft’s dropped by around 17 per cent. This marked the company’s worst monthly performance since December 2000. Alphabet’s shares fell by around 6 per cent, Amazon’s by around 12 per cent and Meta’s by around 11 per cent. In total, the ‘Magnificent Seven’ wiped out approximately $2.3 trillion (€2 trillion) in market capitalisation in just one month.
Financial Times claim: OpenAI offered a 5 per cent stake to the US
According to a report in the Financial Times, OpenAI CEO Sam Altman proposed offering the US government a 5 per cent stake in the company. It was suggested that the shares, valued at approximately $42.6 billion, be transferred to a national sovereign wealth fund to be established with the aim of sharing the economic benefits arising from artificial intelligence with society. According to the report, Sam Altman wants other major American AI companies, including Anthropic, Google and Meta, to similarly contribute a 5 per cent stake; this would create a state-owned share of the entire US AI sector.
This share would be worth approximately 42.6 billion dollars (37.4 billion euros); a significant sum even for a cash-rich company such as OpenAI. This figure is based on the 852 billion dollar (749 billion euro) valuation that investors assigned to the company just three months ago, when OpenAI was raising new funds in March.
Google loses 4.1 billion euro case
The Court of Justice of the European Union (CJEU) has upheld a record fine of 4.1 billion euros against Google, rejecting the company’s appeal against the ruling that found it had abused its dominant position in the Android mobile operating system market. The Court of Justice of the European Union rejected the appeal lodged by Google and its parent company, Alphabet, against the ruling handed down by the General Court of the European Union in 2022.
In its ruling, the Court stated that the fine imposed on Google for abusing its dominant position in relation to the Android operating system was lawful, and announced that the appeal by Google and Alphabet had been dismissed. The €4.1 billion fine imposed on Google has therefore been finalised.
In its 2018 decision, the European Commission had concluded that Google had abused its dominant position by forcing mobile device manufacturers using the Android operating system to pre-install Google Search and the Chrome browser on their devices through various contracts and licence conditions.