Terms to help you understand the news better.

The name originally came from the initial letters of Brazil, Russia, India, China and South Africa. In 2026, BRICS has 11 members: Brazil, China, Egypt, Ethiopia, India, Indonesia, Iran, Russia, Saudi Arabia, South Africa and the United Arab Emirates.

It is a platform through which countries coordinate their positions on global trade, finance, energy and reforms of international institutions. However, its members do not always act in unison, and their interests often differ significantly.

Why is it important?

The members account for a large share of the world’s population, raw materials, production and economic weight. If they agree on trading in local currencies or reforms of the IMF and World Bank, the rest of the world cannot ignore it.

Reducing dependence on the dollar and developing shared payment infrastructure are being discussed. But this is not the same as introducing a single currency.

Official BRICS 2026 website ↗

The ECB targets 2% inflation over the medium term. The Fed has a dual mandate: stable prices and maximum employment. That is why they may make different decisions in similar circumstances.

A change in central bank interest rates feeds through to financial markets and later to household and business loans. It is therefore not an isolated number, but a signal that affects consumption, investment, the labour market and inflation.

Why does Europe watch the Fed?

The dollar and US financial markets have global importance. US interest rates affect the dollar’s appeal, asset prices and broader financial conditions, which is why the Fed and ECB often appear together in the news.

Energy and food respond sharply to geopolitics, weather and harvests. The ECB therefore also monitors HICP excluding energy and food to get a clearer view of longer-term pressures.

A simple example

If oil becomes cheaper, petrol and energy pull headline inflation down. At the same time, however, rents, services, restaurant prices and wages may rise. The overall figure then looks calmer even though core inflation remains high.

The definition of core inflation can differ between statistics. It is therefore always useful to check which items a particular indicator excludes.

Slovakia

Slovakia's debt brake uses several sanction bands. The upper thresholds are gradually being tightened; in 2027, the upper limit is set to reach 50% of GDP. Preliminary public debt for 2025 was 61.4% of GDP, placing it in the highest sanction band.

Czechia

Czechia’s debt brake is set at 55% of GDP. Saying that “the country is approaching the debt brake” is therefore insufficient without naming the country.

Measures can range from a proposal to reduce debt to stricter budget constraints. Fiscal consolidation may affect taxes, public spending, investment or salaries paid from the state budget, but the specific steps are a political decision.

After Russia's invasion of Ukraine began, the EU and other countries banned transactions involving some of the Russian central bank's reserves.

The European debate therefore focused not only on the reserves themselves, but also on the extraordinary revenues they generate while immobilized. In 2024, the EU established a framework for using net extraordinary revenues to support Ukraine; most were later linked to EU and G7 loans.

Why is it complicated?

The issue brings together sanctions, property rights, the immunity of state assets, international law and precedent. So when a headline says “Europe will use Russian assets”, the question to ask is: does it mean the assets themselves, or only the income from them?

Hormuz connects the Persian Gulf with the Gulf of Oman and the open ocean. About a quarter of global seaborne oil trade and a significant share of LNG pass through the strait.

Why don’t ships take another route?

For a large share of Persian Gulf production, there is no alternative with the same capacity. Saudi Arabian and UAE pipelines can reroute only part of the flow.

Oil prices therefore respond even to the risk of transport restrictions. A greater likelihood of disruption, more expensive tanker insurance, ship delays or export restrictions can be enough. The consequences may feed through to fuel prices, transport, manufacturing and inflation.

EIA: global oil chokepoints ↗

Imagine a bond that pays a fixed amount of interest every year. If it sells for less on the market, the same payment represents a higher yield relative to the new price. That is why a headline saying “yields are rising” often means the prices of existing bonds are falling.

Why does it matter?

Government bond yields help determine how much governments, companies and banks pay to borrow. Rising yields can gradually translate into more expensive funding and pressure on share prices. Changes in yields alone, however, do not tell us whether the cause is inflation, expected interest rates or higher risk.

Investor.gov: bond price and yield ↗

For example, a sharp rise in energy prices can make production and transport more expensive. Companies raise prices but also cut production or hiring. The economy then weakens even as prices continue to rise.

Why is this a problem for central banks?

Higher interest rates can curb inflation, but also slow an already weak economy. Lower rates can support growth, but increase price pressures. One weaker growth figure or one month of high inflation does not yet confirm stagflation.

IMF: energy and the risk of stagflation ↗

GDP measures the value of goods and services produced. When assessing a recession, its real value is examined, meaning after adjustment for price changes. An economy can experience a brief, mild decline or a longer downturn with a significant impact on employment.

What does this mean for people?

Companies may postpone investment and hiring. Households tend to be more cautious about large purchases. So when you see a recession headline, it is worth looking at the labor market, real wages and the size of the decline as well as GDP itself.

IMF: what is a recession ↗

The gas is cooled to approximately −162 °C, loaded onto a specialised ship and usually regasified at the destination terminal. This means countries do not have to rely solely on pipeline supplies from the nearest producers.

Why does it affect energy bills?

LNG also requires paying for liquefaction, transport and terminal capacity. When global demand increases or shipping is disrupted, supply prices can rise. Their impact on a particular household also depends on contracts, reserves and how prices are set.

EIA: how LNG works ↗

A language model learns patterns from vast amounts of text and constructs a likely continuation when it answers. It can help with summarising, translation, writing or ideas. Similar generative systems also create images, speech and video.

What is an AI “hallucination”?

It is an answer that looks credible but contains an incorrect or invented claim. This could be a date, number, name, quotation or a link that does not exist. When reading news, therefore, open the original source and verify the key claims; fluent writing alone is not evidence.