Global Economy

US: The US annual inflation rate held steady at 2.7% in July 2025, unchanged from June and slightly below the 2.8% consensus. Price pressures picked up in used cars and trucks (4.8% vs. 2.8% in June), transportation services (3.5% vs. 3.4%), and new vehicles (0.4% vs. 0.2%), while food inflation was unchanged at 2.9%. Shelter inflation eased marginally (3.7% vs. 3.8%), and energy costs fell further (-1.6% vs. -0.8%), with gasoline (-9.5% vs. -8.3%) and fuel oil (-2.9% vs. -4.7%) declining, while natural gas remained elevated (13.8% vs. 14.2%).On a monthly basis, headline CPI rose 0.2%, just below June’s 0.3%—the strongest increase since January—and in line with expectations. Core inflation accelerated to a five-month high of 3.1% y/y (vs. 2.9% in June, above 3% forecast), while the monthly core CPI advanced 0.3% (vs. 0.2% prior), its sharpest gain in six months.

Sub-Saharan African Economies

UK: The British economy grew 1.2% year-on-year in Q2 2025, easing slightly from 1.3% in Q1 but beating forecasts of 1%, according to preliminary estimates. Household spending rose 1.1% (up from 0.9%), government expenditure increased 1.7% (from 1.5%), exports rebounded 3% (vs -0.5%), and import growth slowed to 3.3% (from 7.5%). In contrast, growth in gross fixed capital formation decelerated sharply to 1.3% (from 3.5%), while business investment almost stalled at 0.1% (from 6.1%). On the production side, services expanded 1.2%, just below Q1’s 1.4%, and production output rose 0.3% after stagnating in the prior quarter.

Kenya: The Central Bank of Kenya reduced its benchmark interest rate by another 25 basis points to 9.50% in August 2025, marking a seventh consecutive cut. Kenya’s annual inflation accelerated to 4.1% in July 2025, from 3.8% in June but remained within the central bank’s target range of 2.5% to 7.5%. Governor Kamau Thugge explained that the MPC cut rates to continue promoting lending to the private sector and economic growth, ensuring inflation expectations remain anchored and the exchange rate steady. The central bank has lowered borrowing costs by a cumulative 350-basis points since August 2024.

Nigeria: Nigeria’s annual inflation rate decelerated for the fourth month to 21.88% in July 2025, the lowest level since January 2023, from 22.22% in June, helped by currency stability and a drop in gasoline prices. However, food inflation, the largest component of the inflation basket, accelerated for the second month to 22.74%, from 21.97% the month before. The core inflation rate, which strips out the volatile prices of agricultural produce and energy, slowed to 21.30% in July from 22.76% in June. On a monthly basis, the CPI rose by 1.99% in July, after increasing by 1.68% in the prior month.

Domestic Economy

Major updates during the week:

  • Nigeria’s Headline Inflation eased to 21.88% year-on-year in July 2025, down from 22.22% in June.  However, food inflation rose slightly to 22.74% year-on-year compared to 21.97% the previous month.
  • Dangote Refinery reduced its ex-depot price of premium motor spirit (PMS) to ₦ 820/liter from ₦850/liter previously.
  • PRESCO plc announced plans to acquire a 100% stake in Ghana Oil Palm Development Company Limited (GOPDC), alongside the proposed purchase of Saro Oil Palm Limited (SOP).

Nigerian equity market: NGX closed lower, weighed down by sell-offs in large-cap stocks

Trading activities this week were relatively mixed. The All-Share Index advanced in the first two sessions but was offset by declines in the subsequent three sessions. Consequently, the index closed lower by 0.77% week-on-week at 144,628.20. The downturn was largely attributed to sell-offs in major large-cap stocks, including WAPCO (-5.15%), OANDO (-6.88%), MTNN (-3.26%), ZENITHBANK (-3.01%), GTCO (-2.30%), SEPLAT (-1.30%), and UBA (-1.23%). Nonetheless, sentiment was not entirely bearish, as select stocks such as JBERGER (+17.14%), STANBIC (+10.00%), and AIICO (+8.57%) attracted strong buying interest. Overall, market breadth closed flat at 1.0x, with 49 gainers and 49 decliners recorded during the week. We expect a mixed trading week next week.

Nigerian fixed-income market: Mixed sentiment prevails as investors cherry-pick

This week, the Debt Management Office (DMO) published a revised Q3 bond issuance calendar, increasing the monthly offer size from ₦80–₦120 billion to ₦200–₦240 billion. The update also introduced a new 5-year bond (Aug 2030) to replace the previously listed Apr 2029 issue. Before this release, the market reflected bearish sentiment, with average bond yields rising by 11bps week-on-week. A similar tone was observed in the treasury bills market, particularly across mid- and long-dated maturities, though the market ultimately closed flat at 17.96%. Conversely, Nigeria’s Eurobonds attracted sustained buying interest, driving average yields down to 7.96% from 8.16% the prior week. Overall, we anticipate a continuation of bearish sentiment in the local fixed-income market as investors remain reluctant to accept lower yields.