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Cyprus Removed from EU’s Macroeconomic Imbalance List – What This Means

by News Editor

June 5, 2025

EU Lifts Cyprus from Macroeconomic Imbalance List

Breaking News: The European Commission’s 2025 Spring Package confirms that Cyprus is off the list of countries with macroeconomic imbalances. This achievement stems from a consistent decrease in external and private debt vulnerabilities, bolstered by solid economic growth.

Nevertheless, Cyprus still faces challenges in areas like innovation and the green transition. According to a senior EU official, “Economic growth in Cyprus remains robust despite a volatile global landscape.”

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Major improvements include public finances showing substantial surpluses and a swiftly declining public debt. Diversification efforts in Cyprus’ economy are finally yielding positive outcomes, complemented by enhanced performance across United Nations sustainable development indicators.

Yet, ten predominant challenges have been identified by the commission, warning of risks tied to increasing public expenditures and slight deviations from the fiscal trajectory set for 2025. A glaring issue is research and innovation investment, which falls short compared to the EU average, presenting a need for enhanced collaboration among universities, the financial sector, and businesses.

The commission suggests the development of Cyprus’s financial system beyond banking and emphasizes the need to raise financial literacy levels.

Moreover, Cyprus must intensify its push towards cleaner energy. The nation’s current over-reliance on fossil fuels and imported energy leaves it vulnerable. High electricity costs for domestic usage, alongside low environmental performance, underline the urgency for these reforms.

Notably, Cyprus stands as a low investor in climate change adaptation when set against the EU norm. Using resources from the Recovery and Resilience Facility, Cyprus could address these critical areas swiftly.

Looking to the future, Cyprus is urged to enhance its labor market conditions. Youth engagement in vocational training and education in STEM fields need nurturing to tackle skill mismatches.

Though recent economic achievements mark progress for Cyprus, the commission stresses the importance of continued vigilance and reform to ensure lasting stability and prosperity.

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Bank Of England Holds Rates At 3.75% In Split Vote As Inflation Risks Rise

by THEFUTURE.TEAM

September 17, 2026

The Bank of England kept its benchmark interest rate at 3.75% on Thursday, but the decision was not unanimous. In a 6-3 vote, the Monetary Policy Committee kept rates unchanged, while three members backed a 25-basis-point increase to 4%. Renewed energy price pressures have added to concerns that inflation could remain elevated.

Inflation Pressures Remain

Policymakers said inflation “is likely to rise further over coming quarters,” citing higher and more volatile crude oil and refined energy prices since the conflict began.

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So far, there has been “little evidence” of significant second-round effects, such as broader wage and price increases. Inflation risks, however, are now “tilted to the upside” and have increased since the July Monetary Policy Report.

Energy Prices Add To Inflation Risks

Brent crude has risen 36% since July, reaching $106 a barrel on Sept. 14, while UK wholesale gas prices increased 78% to 207 pence per therm.

Higher energy costs can feed into transport, production and household expenses, raising costs across supply chains. Refinery pressures have also pushed crack spreads, the difference between refined fuel and crude prices, well above pre-conflict levels.

Economy Shows Resilience

Despite the inflation risks, UK economic activity has held up slightly better than the Bank expected. A softer labor market and higher borrowing costs are expected to help reduce inflation over time.

Previous monetary tightening is still working through the economy, according to policymakers. So far, the latest energy shock has not produced clear evidence of a broader wage-price spiral.

Major Central Banks Take Different Paths

The decision comes during a busy period for global monetary policy. The Federal Reserve raised rates Wednesday to 3.75%-4% in its first increase since 2023, while the European Central Bank recently lifted its deposit rate to 2.5%.

The Bank of Japan is due to announce its decision Friday, with markets expecting a rate increase. Thursday’s split vote shows that pressure for tighter policy remains within the Bank of England’s Monetary Policy Committee.