Central banks in Europe and Türkiye are heading into a week where they will deliver their latest decisions on monetary policy amid a fresh dilemma posed by the restart in tensions between the U.S. and Iran, which threaten to fuel energy price volatility and complicate the inflation outlook.

Both the European Central Bank (ECB), which oversees economic policy in the eurozone, and the Central Bank of the Republic of Türkiye (CBRT) are expected to hold interest rates on July 23, as conflict weighs on activity and adds fresh pressure on prices, analysts and polls suggest.

Still, markets would look at hints and predictions on the future inflation outlook for the remainder of the year, as well as for more details on what the policymakers currently consider to be the main sources of the strain.

After becoming the first among major banks to hike rates due to the U.S.-Iran war on June 11, the ECB is due to stay on hold this week but will hike for the second time this year in September as a renewed energy price surge raises the risk of more intense inflation pressures, according to a growing majority of ​economists polled by Reuters.

A 20% jump in oil prices following a re-escalation of war in the Middle East has prompted markets to price ‌in two more rate hikes this year, compared to one until the cease-fire arrangement between the U.S. and Iran abruptly ended.

The ECB has already raised rates once this year, unlike many of its peers, including the U.S. Federal Reserve (Fed), the Bank of England (BoE) and the Bank of Canada.

While preliminary official data showed eurozone inflation eased to 2.8% in June, that is still above the ECB’s ​2.0% target, keeping alive the case for higher rates. But weak growth and limited evidence of second-round effects argue for caution.

All 74 economists in the ​July 13-16 Reuters poll expected the ECB to leave its deposit rate unchanged at 2.25% next week, in line with market pricing.

A 70% majority of respondents, 52 ​of 74, expected one more rate hike this year, probably in September, up from around 60% in last month’s poll.

“The ECB probably would have needed to hike anyway, even if we hadn’t had all of this extra noise around the Strait of Hormuz over the past week or so,” said Chris Scicluna, head of economic research at Daiwa Capital Markets.

“Gas prices are ​significantly higher and electricity power prices are higher as well. The ECB is going to have to take account of this when it next updates its ​forecast in September. But for now, it will judge there’s no urgency for it to raise rates just yet again.”

Nearly 30% of economists still see rates unchanged for the rest ‌of the ⁠year, while only three expect two more hikes.

Policymakers have struck a cautious tone on inflation risks, particularly second-round effects, but have called for vigilance.

“The balance in the Governing Council today is slightly more on the side of the hawkish people, even though everybody knows pretty well that because of the growth momentum we have today in the euro area, they have to be very cautious with a policy rate hike,” said Alain Durre, head of Europe macro research at Natixis.

“It’s very ​difficult to be confident about anything right now. But it’s very clear to me the higher energy inflation goes … ​the bigger the risk ⁠of second-round effects on wages and subsequently prices as firms raise their prices to pay a higher wage bill,” said Simon Wells, chief European economist at HSBC.

“So yes, if we go into the September meeting with oil at $90 and still highly uncertain about where things are heading with possible upside risks to that, it may well be ⁠prudent for ​the ECB to hike again.”

The eurozone economy contracted 0.2% in the first quarter but was expected to ​have grown 0.2% last quarter and expand at a similar pace in this one and the next, the poll showed, putting 2026 growth at 0.5%. That marked a fourth straight downgrade to forecasts.

CBRT also expected to stay on hold

The CBRT, which has kept interest rates unchanged at 37% in its last three meetings, in line with expectations, and has not changed the overnight lending and borrowing rates, is similarly expected to remain cautious and keep the policy rate within the same range.

Even though most economists predict that the bank would stay at 37%, some forecasted that the Monetary Policy Committee (MPC) meeting could result in an additional interest rate cut of 100 to 150 basis points, a report by Sabah newspaper said.

According to a survey conducted by Matriks Haber with the participation of 33 economists, 32 of the participants predicted that the policy rate would remain at 37%, while only one economist predicted a 300 basis point cut, bringing the rate down to 34%.

Moreover, the median and average expectations regarding the timing of the first interest rate cut pointed to September.

Türkiye’s consumer price inflation moderated in June to the lowest level in three months, coming in at 32.1%, according to official data.

On a monthly basis, the prices increased 0.99% after rising 1.71% in May, coming in below a 1% rate for the first time since late 2025.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

The head of the top Turkish business association called on Sunday for a sustained continuation of the disinflation process, as he also urged strengthening of the selective financing and support for the real sector in the country.

Independent Industrialists and Businessmen’s Association (MÜSIAD) Chair Burhan Özdemir shared the business community’s main expectations for the upcoming period with Anadolu Agency (AA).

“Today, the most critical agenda item for the real sector is access to finance and financing costs,” Özdemir said.

“The business community’s main expectation for the upcoming period is the determined continuation of the disinflation process, making financial conditions more predictable and strengthening selective financing mechanisms that support the investment capacity of the real sector,” he noted.

He also said the first half of the year was marked by a period in which uncertainties in the global economy became more permanent, geopolitical risks gained greater importance in economic decision-making processes, and countries searched for new areas of growth.

While noting that economic resilience, supply security, national competitiveness and capacity building in strategic sectors have become among countries’ top priorities in the new period, Özdemir said that the geopolitical developments are now viewed not only “as political risk factors but also as key elements directly affecting economic balances through energy supply security, logistics costs, access to critical raw materials and production costs.”

At the same time, according to Özdemir, the main issue that stood out for the Turkish economy in the first half of the year was the growing visibility of the macroeconomic rebalancing process.

He noted that the disinflation process, the recovery in foreign exchange reserves, improvements in the current account balance and a more balanced outlook in financial markets were among the key indicators closely monitored by investors.

The Turkish disinflation process slowed down temporarily following the outbreak of the U.S.-Israel-Iran conflict at the end of February. However, the annual inflation has dipped more than expected to 32.1% in June, according to official data.

Increasing capacity in advanced tech, competitiveness

Also highlighting the importance of turning existing advantages into lasting competitiveness at a time when global investment competition is intensifying, Özdemir referred to the factors such as digital transformation and high value-added capacity increase.

“Increasing capacity in advanced manufacturing technologies, digital transformation, energy transition and high-value-added sectors is among the key factors that will strengthen Türkiye’s position in the global economy,” he argued.

The MÜSIAD head also said the transformation in global trade offers Türkiye important opportunities not only to maintain its current export performance but also to transition toward a higher value-added production structure.

He stated that the decisive factors for the Turkish economy’s performance will be making macroeconomic gains permanent and advancing the reform agenda within a supportive framework.

He also pointed out that the fundamental conditions for sustainable growth, a stable investment environment and competitiveness are the establishment of a low and predictable inflation environment.

Moreover, he added that the success of the disinflation process is important not only for price stability but also for improving economic actors’ expectations and rebuilding the investment environment.

“A permanent improvement in inflation expectations will contribute over time to making financing conditions more predictable and sustainable,” he noted.

Strengthening selective financing mechanisms

Furthermore, Özdemir said tight financial conditions, including high interest rates and limited credit availability, have increased financing costs for new investments, raised working capital needs and made financial planning more difficult, particularly in investment-intensive sectors.

He noted that the rebalancing process in domestic demand could create pressure on production volumes, capacity utilization rates and profit margins in some sectors.

“The main policy priority should be establishing a balanced framework between the goal of price stability and preserving production capacity,” he said.

Özdemir emphasized that the effectiveness of tight monetary policy should be supported by complementary policies that encourage productive investments, strengthen supply capacity and increase the economy’s long-term growth potential.

“It is important that financing opportunities are directed toward strategic areas that increase economic efficiency and competitiveness rather than general credit expansion,” he suggested.

“Strengthening selective financing mechanisms for export-oriented production, technology investments, digital transformation, green transformation, high-value-added production and productivity-enhancing projects will be critical for the long-term competitiveness of the Turkish economy,” he added.

Predictable policies, structural reforms

Özdemir also underlined that Türkiye’s long-term goal should be creating a balanced economic structure that permanently lowers inflation while preserving production power, export capacity and investment momentum.

He stressed that Türkiye’s goal of becoming a global investment hub should not be viewed merely as an effort to attract more international capital, but rather as a comprehensive economic transformation program aimed at achieving a higher-value position in global value chains.

He also highlighted the importance of strengthening a predictable, competitive and confidence-building investment ecosystem.

“While macroeconomic stability forms the foundation of this ecosystem, strong institutions supported by structural reforms and effectively functioning market mechanisms will be the main factors determining Türkiye’s long-term attractiveness for global capital,” he said.

Additionally, he also noted that global companies are making investment and production decisions based not only on cost optimization but also on long-term resilience, strategic security and operational continuity.

“We believe that if predictable policies are strengthened with a long-term investment perspective and reforms supporting structural transformation, our country’s weight in the global economy will increase further,” Özdemir said.

More balanced economic composition in H2

Özdemir said that while uncertainties in the global economy would continue in the second half of the year, a more balanced period would emerge as predictability improves through the disinflation process, gradual normalization in financial conditions and macroeconomic rebalancing.

He said expectations from economic policymakers include strengthening policies that preserve production capacity, improve export competitiveness and support private-sector investments.

“Developing long-term investment financing, strengthening export financing mechanisms, facilitating SMEs’ access to finance, and increasing financing and incentive opportunities for productive investments are among the critical priorities,” Özdemir said.

“We expect a more balanced economic composition in terms of growth in the second half of the year,” he also said.

“As the business community, our expectation is that the policy framework, which considers the balance between production, investment and exports while permanently establishing price stability, will continue decisively,” he added.

“If macroeconomic stability is permanently strengthened and the reform agenda continues decisively, we believe Türkiye will increase its attractiveness among international investors, achieve a stronger position in global value chains and consolidate its sustainable growth path,” Özdemir concluded.

Iraq has signed 48 deals and partnerships with American companies, many in the oil sector, during the recent visit by newly-elected Prime Minister Ali al-Zaidi to Washington, his office announced on Saturday.

Oil-rich Iraq has been trying to move past decades of war and unrest, but still suffers from poor infrastructure, failing public services, mismanagement and endemic corruption.

It is in urgent need of an economic boost, especially after losing revenue due to a halt in oil exports caused by the Middle East war.

“A total of 48 agreements, memoranda of understanding, cooperation agreements, and partnership declarations were signed between public and private sector entities in Iraq and the United States,” the Iraqi leader’s media office said.

They include “cooperation and partnerships involving the ministries of oil and electricity… with ExxonMobil, KBR, GE Vernova, Shell, and Halliburton,” as well as several deals related to the construction of a major crude oil pipeline between Iraq and Syria.

Iraq also signed a deal with Starlink, which dominates the global satellite communications sector, to introduce services to the country.

On Tuesday, U.S. President Donald Trump praised Zaidi as a “champion” in a meeting at the White House.

Zaidi, a businessman, came to power this year with U.S. blessing after Trump vetoed another candidate.

He has vowed to boost Iraq’s fragile economy and disarm pro-Iran armed groups in Iraq that have targeted U.S. facilities.

Iraq has long walked a tightrope between the competing influences of allies, the U.S. and neighboring Iran.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

The Chinese firm that previously owned British Steel sought on Sunday compensation from the U.K. government for investment losses it said it incurred following the nationalization of the key manufacturer last week.

The British government took operational control of the company last year after Jingye Group said that it was considering closing the blast furnaces at its Scunthorpe plant in northern England, the last in the U.K. to make “virgin steel” from raw materials.

Jingye Group said in a WeChat statement that the nationalization move tarnished the credibility of the British government, spooked international investors and caused great losses to the company’s operation and British taxpayers’ funds. It also demanded that the U.K. government stop “trampling on international investment rules.”

The Chinese company announced it had initiated negotiation procedures under relevant bilateral investment agreements, reserving all rights, including to international arbitration. Jingye said it will also represent British taxpayers seeking to hold the U.K. government and British Steel’s management legally liable. However, it did not specify how it would handle the case.

“The U.K. disregarded Jingye’s continuous investment and significant contribution and was only willing to provide almost zero compensation,” it said.

An independent evaluation will be carried out to determine whether any compensation will be paid to Jingye Group, the U.K. government said last week.

The Department for Business and Trade announced the move on July 17, saying it would save thousands of jobs and protect the U.K.’s national interest by ensuring a supply of domestically produced steel for major construction projects and the defense industry.

British Steel and its forebears have been making steel at Scunthorpe for more than 130 years, building on the U.K.’s development of improved steelmaking technology during the Industrial Revolution. The plant currently employs about 2,700 people.

Jingye bought British Steel in 2020 and said it saved the steel company from crisis.

The Chinese Foreign Ministry on Saturday said the way the U.K. handles the issue would directly influence how Chinese investors view the British investment environment and the credibility of the British government.

“China urges the U.K. to earnestly respect market principles and the spirit of contract, and find solutions on compensation and other issues acceptable to both sides,” it said in a statement.

It added that China supports enterprises in safeguarding their legitimate rights through legal means.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

President Donald Trump was “p***** off” by Israeli Prime Minister Benjamin Netanyahu’s public criticism of a proposed U.S. sale of F-35 fighter jets to Türkiye, a report said Thursday.

Speaking alongside President Recep Tayyip Erdoğan before last week’s NATO summit, Trump said Washington would lift sanctions on Türkiye and signaled a willingness to sell the F-35 jets.

The move would be the biggest gesture yet from Trump to Erdoğan, whom he regularly praises and sees as a close ally. The two countries have enjoyed warmer ties since Trump returned ​to office last year. Erdoğan said he was confident Trump would resolve the issue and end the dispute.

Before Trump’s departure for Ankara, Netanyahu criticized the president’s intention to sell F-35 jets to Türkiye.

Trump was “p***** off” by the Israeli prime minister’s remarks during a Fox News interview, the Axios news site reported Thursday, citing a White House official.

A second official told Axios that Trump felt “Bibi had no right” to weigh in on that issue.

In 2019, the U.S. removed Türkiye from the F-35 program, where Ankara was also a production partner, following its purchase of the S-400 systems. It later also imposed sanctions on its NATO ally.

Washington claimed the system would endanger the jets and is incompatible with NATO systems, while Ankara has repeatedly said there is no conflict between the two and has proposed a commission to study the issue. Türkiye also said it fulfilled its obligations on the F-35s and that its suspension broke the rules.

Reports since Trump’s visit claimed Türkiye ⁠was poised to transfer the S-400s to an unnamed Gulf country. The Turkish Defense Ministry said on Thursday that “multilateral work” on the systems was underway and the public would be informed “once concrete steps are taken.”

Türkiye has long criticized Israeli genocidal operations in Gaza, as well as its attacks on Lebanon and Syria, and it has repeatedly accused Israel of trying to undermine the U.S.-Iran cease-fire.

Meanwhile, Israeli media claimed Trump would host Netanyahu next week, but Axios, citing White House officials, said no meeting had been scheduled.

The Israeli premier has reportedly sought a meeting with Trump for more than two weeks. He has visited the Oval Office six times since Trump returned to office in January 2025.

Reports in Israeli media had indicated that Netanyahu planned to travel to Washington this weekend to attend the funeral of the late Senator Lindsey Graham and meet Trump on Monday.

The trip was canceled on Thursday after Graham’s funeral service was postponed, Netanyahu’s office said in a statement.

Two White House officials reportedly said that Netanyahu wanted to see Trump but that no meeting had been confirmed or placed on the president’s schedule.

“Our impression was that Bibi was trying to will a meeting into existence,” Axios quoted an official as saying.

The news outlet said White House officials did not rule out a meeting when Netanyahu eventually travels to Washington for Graham’s memorial service.

The delay comes amid growing tensions between the Trump administration and Netanyahu’s government over the war with Iran.

U.S. Vice President JD Vance suggested Wednesday that members of the Israeli government were seeking to undermine Washington’s diplomatic efforts with Tehran in an effort to prolong the military campaign.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Apple unseated Nvidia on Friday to become the world’s most valuable company, reshuffling the top ranks of tech heavyweights as investors reassess the outlook for artificial intelligence.

Apple ⁠was last valued at $4.88 trillion as its shares ⁠held steady, while Nvidia was roughly at $4.86 trillion, following a 3.5% decline.

The shift in the pecking order illustrates that investors are broadening their focus beyond the most obvious beneficiaries of the AI boom, such as ​Nvidia, which had been at the helm for nearly a year. Apple is reclaiming ​the ⁠top spot for the first time since April last year.

“Apple was seen as a laggard in the AI race because it wasn’t spending to develop models, but now sentiment has changed,” said Toni Meadows, head of investment at BRI Wealth Management.

“Apple is less exposed to capex intensity and better positioned to monetize AI via services, ecosystem lock-in, and hardware upgrades. The re-rating reflects confidence in earnings durability rather than speculative AI upside.”

For a company that was often seen trailing in the AI race, the milestone reflects Apple’s efforts to establish itself more firmly among the sector’s leading players, and could shape how CEO Tim Cook’s final months at the helm are viewed.

Cook is preparing to cede his role to hardware veteran John Ternus in September.

Last month, the company rolled out a long-delayed overhaul of Siri, betting ⁠the ⁠upgraded assistant would help close the gap with Big Tech rivals and new-age startups in the crucial AI race.

Some analysts say Apple is sitting on an AI gold mine in the form of the personal data that lives on every iPhone. The data could make Siri’s answers more useful and the assistant more capable.

The challenge is that such data is locked away in operating systems in the name of privacy and the company would have to find a way to unlock its value.

AI spending lifts new winners

Nvidia became the first company in the world to surpass a $5 trillion market valuation in October, a landmark that propelled it into a rarefied territory that ⁠was far beyond the reach of its rivals.

Being superseded by Apple does not necessarily signal a lasting change in the companies’ relative standing. The chipmaker remains a major beneficiary of AI-related spending, and its graphics processors are powering much of the generative AI frenzy.

Nvidia could also reclaim ​the top spot if sentiment shifts.

Besides, Apple is in a delicate position itself, having raised prices to offset rising ​costs – a strategy that could hurt demand.

“I don’t see any meaningful distinction. Nvidia likely to be a significant participant in whatever happens going forward,” said Benjamin Hall, vice president, alpha research at Segal Marco Advisors.

However, the ⁠AI enthusiasm has ‌spread to ‌other corners of the semiconductor industry. The bigger winners this year have been memory ⁠chipmakers such as Micron, which crossed $1 trillion in market value in May ‌as investors embraced the significance of memory chips in AI infrastructure.

South Korea’s SK Hynix also listed on the Nasdaq earlier this month, adding another player ​to the race for investor attention.

“The new entrants ⁠to the market could spread out the focus away from the pure Magnificent Seven ⁠names into a wider number of names,” Hall said.

The eye-watering chips rally ran into turbulence in July as investors ⁠reassessed the sustainability of the ​artificial intelligence trade, knocking the Philadelphia SE Semiconductor index down almost 19% from its all-time highs.

Despite the steep fall, the index has performed better than Nvidia so far this year.

The Daily Sabah Newsletter

Keep up to date with what’s happening in Turkey,
it’s region and the world.

SIGN ME UP

You can unsubscribe at any time. By signing up you are agreeing to our Terms of Use and Privacy Policy.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.