Andy Burnham, expected to become the UK prime minister this month, is considering merging the annual budget with the spending review to set priorities ahead of the 2029 general election. Burnham is facing pressure to adopt policies including a land tax, public control of utilities and ambitious devolution.

European Central Bank Governing Council member Emmanuel Moulin highlights that artificial intelligence introduces significant uncertainty to inflation dynamics by influencing both supply and demand. Moulin cautions that AI could lead to heightened inflation volatility, complicating predictions about overall price trends.

Economists have reduced their eurozone growth forecast for this year to 0.5% from 0.7%, citing renewed hostilities in the Middle East that have disrupted energy shipments. The European Central Bank is expected to raise interest rates in September, with a rate cut projected for September 2027.

Oil prices surged more than 4% as the US and Iran exchanged military strikes, threatening energy shipments via the Strait of Hormuz. Brent crude rose to $79.11 a barrel, while US West Texas Intermediate reached $74.36. The conflict has raised concerns about the future of a recent US-Iran agreement aimed at reopening the strait.

The UK could see a £33 billion economic boost by accelerating digital finance initiatives, according to Chris Woolard, chair of a new task force. The task force's report outlines a 12-month plan focusing on tokenizing assets and utilizing distributed ledger technology to enhance transaction efficiency and security. The global market for tokenized assets could reach $88 trillion by 2035, and the UK could become a leading center if it moves quickly.

The UK's transition to T+1 settlement is progressing well, with 83% of firms actively engaged in their programs. However, the UK Accelerated Settlement Taskforce emphasizes the need for firms to move from planning to execution, ensuring full funding and addressing key dependencies. The settlement rate target will be based on the average CREST settlement rate from the three months before implementation. Firms should prepare for industry testing in early 2027 and focus on automation and operational resilience.

US Commodity Futures Trading Commission Chairman Michael Selig has urged lawmakers to pass the Clarity Act to avoid regulators unilaterally writing rules for digital assets. The House passed the bill in July 2025, but the Senate has yet to vote on it. Sen. Cynthia Lummis says negotiations are ongoing, focusing on issues such as decentralized finance and illicit finance provisions.

The European Securities and Markets Authority has initiated a Common Supervisory Action to assess the digital operational resilience of crypto asset service providers, with a focus on custody services. Running from the second half of 2026 to the first half of 2027, the initiative aims to address risks associated with distributed ledger technology, including governance, key management and incident response.

China Central Depository and Clearing is close to finalizing initial margin rules that would allow Chinese government bonds to be used as collateral for non-cleared over-the-counter derivatives. The move, which aligns with international best practices, is expected to begin soon, although banks anticipate gradual acceptance of Chinese government bonds as collateral in cross-border trades.

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