Recent economic data released by Germany and the UK reveal more than just regional issues. Behind a few seemingly ordinary numbers, there are implications for the entire global supply chain, capital flows, and policy rhythms — which is why every market participant should take them seriously.

🌍 Germany Economy: The Transmission Chain of Europe's Recession

Germany, the largest economy in the Eurozone, is sending warning signals. In 2025, corporate bankruptcies reached 23,900, a new high in 11 years. Manufacturing and services are hit hardest, with nearly 30% of management openly expressing uncertainty about future business prospects. This is not just about bleak numbers.

The key issue is that small and medium-sized enterprises in Germany—hidden champions in automotive parts and precision machinery—are going bankrupt in large numbers. As a result, gaps are appearing in the global supply chain. Chinese auto parts exporters, although receiving replacement orders and seemingly benefiting, face a 40% year-over-year surge in foreign exchange risk. On the other hand, U.S. tariffs have already severely suppressed German exports, with an estimated cumulative loss of €290 billion over the next four years. A major global trading power experiencing persistent weakness in exports indicates that the global trade recovery remains distant.

💷 Bank of England: Policy Divergence Creates Turmoil

The Bank of England just cut interest rates by 25 basis points, bringing the rate down to 3.75%. Among Europe’s four major central banks this week, only the UK took action. The European Central Bank is expected to keep rates unchanged. This policy divergence is amplifying market volatility.

The interest rate differential between the UK and the US, as well as between the UK and the Eurozone, is changing, prompting a reallocation of cross-border capital. The pound has already experienced significant fluctuations due to the rate cut, and G10 currencies are reacting collectively, impacting the stability of the global forex market. In the short term, high-yield emerging assets may attract some capital inflows, but in the long run, economic uncertainties in Germany and the UK will drive safe-haven funds back to developed economies. Countries with high external debt in emerging markets will face increased financing costs.

All these chain reactions will ultimately be reflected in capital markets and the cryptocurrency market.