Saudi Arabia announced it will roll over its additional voluntary 1mn bpd oil output cut until the end of the year, which we think will push the economy into a sharp contraction over the second half of this year. On the global front, the subsequent rise in oil prices could provide an unwelcome surprise to energy inflation over the coming months. Elsewhere, reports that the review of Egypt’s IMF deal may be delayed once more could reignite concerns about a lack of external financing. This may crystallise fears about sharper adjustment in the pound and, in turn, the risk of a sovereign default.
Note: We will be discussing what the Egyptian government needs to do to get the country's economy and IMF deal back on track in a Drop-In on Wednesday 13th September. Register here to join.
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