Edition 1

Sep 25, 2025

Your Business Snapshot 📷

The Fed lowered rates to 4% in its first cut since December, balancing rising US unemployment with still-elevated inflation, while the BoE held steady at 4% but eased its quantitative tightening.
Tesla’s price cuts highlight growing pressure from Chinese EV rivals as BYD overtakes in European sales.
US markets remained in focus as the Magnificent 7 tech giants extended their dominance, continuing to shape index performance and investor sentiment.
APIs transform finance by powering open banking, fintech growth and real-time digital payments, while raising new cybersecurity risks.

Economics 📈

Central Banks in Focus

Federal Reserve Chair, Jerome Powell, announced last Wednesday that the central bank would be lowering the benchmark federal funds target rate to 4%, down from 4.25%[1]. These 25 basis points mark the first cut since December and is set against a backdrop of scrutiny from Donald Trump. Mounting labour market pressures, with unemployment rates rising to 4.3% in August, set an important precedent for this week’s bank decision. This comes in combination with sticky inflation, with Jerome Powell adding that inflation risks were still 'tilted to the upside'[2]. The decision taken by the Fed could reflect a risk management approach, with it trying to balance the threats of inflation and unemployment in the US economy.

Last week we also witnessed two other significant monetary policy decisions, those of the Bank of England and the Bank of Japan. The former took the decision to hold interest rates at 4%, while additionally reducing their quantitative tightening commitments. Like the Federal Reserve the Bank of England governor - Andrew Bailey, also warned of 'upside risk around inflationary pressures', but proceeded to cast some blame on fiscal decisions made by chancellor Rachel Reeves surrounding an increase in payroll taxes and the minimum wage[3]. The quantitative tightening measures introduced aim to lower the central bank's bond-selling programme from £100bn to £70bn, which may ease the upward pressure on UK bond yields, currently near decade highs. These attempts by the Bank of England should help to bring down medium-term inflation.

Furthermore, the Bank of Japan also made the decision to hold short-term interest rates at 0.5% following a two-day monetary policy meeting[4]. They also made the decision to start selling $250bn of exchange traded funds (ETFs), as a form of quantitative tightening, a pile which had accumulated following the 13 years of Abenomics which attempted to combat deflation[5]. This signals a shift for Japan, once a country saddled with deflationary pressures and negative interest rates, inflation is now around 3% above the 2% target.

Business 💼

Tesla’s Price Cuts and the EV Race in 2025

Tesla has made moves this year to adjust pricing across its electric vehicle (EV) models in response to weakening demand and intensified competition. In the United States, it has reduced the average transaction price of its vehicles. One comparison shows Tesla’s average ATP dropped by around 9.1% year-over-year in July 2025 compared to July 2024, a larger drop than almost all other automakers[6]. Meanwhile, Tesla’s sales in Europe have been falling sharply. In July alone, registrations dropped by about 40% year-on-year while rival brand BYD saw its registrations more than triple, capturing stronger growth[7][8].

The competitive pressure is coming from multiple directions. Chinese makers like BYD are producing more affordable models, benefiting from lower production costs and aggressive pricing strategies[9]. In Europe BYD overtook Tesla in total EV registrations for the first time in April 2025, signalling that cost leadership is becoming a decisive factor[10]. Tesla’s "premium" pricing model has begun to show strain as buyers weigh total cost of ownership, including subsidies, charging infrastructure, and resale value.

Other signs show Tesla acting to clear inventory. The company has been discounting older versions of the Model Y in the U.S. market to move remaining stock[11]. These adjustments suggest that Tesla is balancing lower revenue per vehicle in favour of maintaining unit sales and market share. However, the risk is that margin compression hits profitability, especially as input costs (batteries, labour, raw materials) remain volatile.

Legal, regulatory, and policy pressures are also relevant. Governments in Europe are investigating subsidies to Chinese EV manufacturers and imposing tariffs or anti-subsidy duties that could reshape competitive dynamics[7]. Consumer protection laws in multiple jurisdictions scrutinise how discounts and incentives are communicated, especially where buyers might feel misled when pricing changes shortly before or after purchase.

Investors have reacted with a mix of optimism and caution. Tesla shares have performed well in some quarters, buoyed by expectations of delivery numbers and its reputation for innovation. Some analysts, however, warn that increasing competition and regulatory uncertainty may erode Tesla’s profitability if costs cannot be managed carefully.

The developments offer a real case study in how market forces, regulation, and pricing strategy interact in high-growth industries. For anyone interested in automotive, finance, or sustainability sectors these trends are worth watching closely as Tesla’s moves this year will likely set benchmarks for peers and newcomers alike.

Markets 💹

Tech Giants Surge Again

The ‘Magnificent Seven’, the group of large-cap tech firms driving US markets, grabbed the spotlight this week.

Firstly, Alphabet (parent company of Google) has passed a $3 trillion market cap, joining 3 other firms (Nvidia, Apple, Microsoft) valued above the landmark milestone. Despite posting robust double-digit growth in revenue and profit in July, they have faced antitrust lawsuits, enforcement actions in the US and Europe, along with a prior court order requiring the conglomerate to be broken up[12]. This underscores investor optimism around artificial intelligence which pushed the company’s Class A and Class C shares to record highs, both around $250[13].

Secondly, Nvidia, who passed a $4 trillion market cap back in July, have announced two major investments which have lifted its stock further. On Tuesday, Nscale was named as a UK-based AI infrastructure for Nvidia, Microsoft and Open AI, with Nvidia personally investing close to $700 million in fresh capital[14]. Furthermore, Nvidia has invested $5bn in one of their largest rivals - Intel, making it one of the largest shareholders at 4%. Intel's share price rose 22% with Nvidia's rising by 3%. This follows a $10bn investment from the Japanese Softbank and the US government last month, and should bring the two competing firms closer together, with more options for collaboration[15].

Finally, we have seen similar announcements from Microsoft, who have committed an astounding $30bn in artificial intelligence investments over the next 4 years. Half of which is set to go to AI infrastructure in Britain, continuing Kier Starmer's transformative tech plans for the UK. With Microsoft currently valued at $3.78 trillion, they are edging closer to Nvidia in a $4 trillion market cap, especially with many Wall Street analysts forecasting the stock price to reach around $630 per share in the next year (currently $508)[16].

Overall, there has been a fresh wave of optimism within the magnificent 7 and this could create a positive outlook for the US stock market more broadly.

Tech 💡

APIs in Finance

Every time you order an Uber, check your balance on a budgeting app, or pay online with PayPal, there is a silent technology working in the background that makes the transaction possible. These connectors, known as Application Programming Interfaces or APIs, are now central to how businesses and financial institutions operate. By allowing different systems to exchange information seamlessly, APIs have become the hidden infrastructure powering digital services across industries.

Financial services highlight their impact most clearly. Open Banking rules in the UK and Europe require banks to provide APIs that let customers securely share data with third parties, enabling a wave of fintech platforms built around real-time payments and personalised financial products[17]. Challenger banks such as Monzo and Starling have leveraged APIs to design flexible systems capable of rapid innovation, while larger incumbents like JP Morgan and Goldman Sachs now offer API suites that embed payments and treasury services directly into client platforms[21]. Data providers such as Bloomberg and Refinitiv also rely on APIs to deliver real-time market information to investors, showing how deeply APIs are integrated into financial decision-making.

The commercial benefits are significant. APIs save time and cost by reducing duplication of work, accelerate innovation by enabling firms to build on each other’s services, and support scalability by letting companies expand globally through existing digital infrastructure. Stripe, which began as an API-first payments company, has grown into a business valued at over $60bn by providing a simple interface that startups and multinationals alike can integrate into their platforms[18].

Yet the risks are equally substantial. APIs have become a growing cybersecurity concern as firms expose more endpoints to partners and third parties. Common weaknesses include poor authentication, excessive access permissions and so-called “shadow APIs,” older or undocumented systems that remain active but unmonitored[20]. A 2025 report found that many organisations are still struggling with API visibility, leaving exploitable gaps that attackers can use to access sensitive financial data[19]. Regulators are increasingly attentive to these risks, particularly in financial services where the exposure of customer information carries both reputational and legal consequences.

APIs are no longer technical footnotes but critical infrastructure. They underpin the growth of fintech, the modernisation of banking, and the global expansion of digital commerce. Their promise lies in efficiency and innovation, but their future will be defined just as much by how well firms secure and govern them.

Bonus Section

Chart of the Week:

This week's bonus edition focuses on our favourite chart of the week. The chart displays the global innovation index rankings, from the World Intellectual Property Organisation (WIPO), which adjusts for the size of a country's economy and population and expresses factors like R&D as a percentage of GDP. This gives us a good picture of productivity and innovation in an economy.

As expected, large and developed economies like the United States, United Kingdom, Germany, France and Japan all score highly in the index, however there is also a strong showing from much smaller sized economies, namely the Nordic countries and Switzerland. As seen Switzerland has consistently ranked first, highlighting its expertise in financial services and quaternary manufacturing. Noticeably China has also managed to secure a spot in the top 10, emphasising its strong output score (patents, trademarks, exports etc.) given its level of inputs (education, research spending etc.)[22].

WIPO has also noted a slight recovery from last year's stalling innovation, with venture capital investment up by 7.7%, unsurprisingly much of the new spending has been concentrated in the United States and more specifically in the Artificial Intelligence sector[22].

Editor: Liam Sanderson

Writers: Liam Sanderson Saaina Bajaj

[1] FT - https://www.ft.com/content/f1d4522b-331e-45d5-b676-24dc5b8e3c92

[2] Reuters - https://www.reuters.com/world/us/feds-rate-cut-comes-with-caveats-leaving-investors-lukewarm-2025-09-18/

[3] FT - https://www.ft.com/content/bf022014-fbf5-48d4-8902-11500cf9be1d

[4] Reuters - https://www.reuters.com/markets/asia/boj-keeps-interest-rates-steady-decides-start-selling-etfs-2025-09-19/

[5] FT - https://www.ft.com/content/408a1df1-54ba-4853-bd59-f20cfe03407b

[6]CleanTechnica - https://cleantechnica.com/2025/08/15/tesla-one-of-only-two-automakers-to-drop-prices-year-over-year-in-usa/

[7]The Guardian - https://www.theguardian.com/technology/2025/aug/28/tesla-sales-in-europe-slump-byd-new-car-registrations-more-than-triple-elon-musk

[8]FXEmpire - https://www.fxempire.com/forecasts/article/why-is-byd-more-popular-than-tesla-in-europe-1544566

[9]FC - https://www.fastcompany.com/91394903/byd-continues-to-surge-past-tesla-in-europe

[10]FT - https://www.ft.com/content/53ec9a08-1112-4969-8982-2d9f06ee8ea4