Week Ahead (18 August)

Monday, 18 August – Trump, Zelenskyy and European leaders meet in Washington following inconclusive Alaska summit 

Last Friday’s much-anticipated summit between Donald Trump and Vladimir Putin in Alaska ended without a breakthrough. Despite a red-carpet welcome and Trump declaring “great progress”, no ceasefire was agreed, and no concrete steps were announced to end the war in Ukraine. Instead, Putin restated Russia’s long-standing maximalist conditions, including recognition of its claims over Crimea, Donetsk, Luhansk, Zaporizhzhia and Kherson, as well as Ukrainian neutrality and demilitarisation. For Kyiv, these remain non-starters. Trump, notably, did not mention Ukraine directly in his closing remarks and avoided repeating earlier threats of “severe consequences” if Moscow failed to compromise. Both leaders left the door open for further engagement, with Putin suggesting to meet “next time in Moscow.” 

Today, attention shifts to Washington, where Trump will host Ukrainian President Volodymyr Zelenskyy at the White House, followed by a joint meeting with a select group of European leaders. Ahead of his bilateral with Trump, Zelenskyy reiterated that Ukraine “will not gift its land to the occupier”, warning against a repeat of past failed compromises such as the 2014 annexation of Crimea or the ineffective 1994 Budapest Memorandum. In a carefully balanced statement on X, he expressed gratitude to Trump personally but stressed that it is Russia that “must end this war, which it itself started.” 

Trump, meanwhile, has piled pressure on Kyiv by posting on Sunday night on Truth Social that Zelenskyy could “end the war almost immediately if he wants to”, outlining his own red lines: no return of Crimea to Ukraine and “NO GOING INTO NATO.” Importantly, he has not outlined any corresponding conditions for Moscow. 

European leaders, including Commission President Ursula von der Leyen, UK Prime Minister Keir Starmer, France’s Emmanuel Macron, Italy’s Giorgia Meloni, Finnish President Alexander Stubb and NATO Secretary-General Mark Rutte, are arriving in Washington today to reinforce Zelenskyy’s hand. The leaders coordinated their positions over the weekend, stressing that any settlement must include robust and credible security guarantees for Ukraine and warning they stand ready to impose additional sanctions if Russia stalls negotiations. 

For European leaders, three goals stand out in DC today: 

1. Pin down details on prospective US security guarantees, which Trump’s envoys have suggested could be “Article 5-like.” 

2. Steer discussions towards preparations for a trilateral Trump–Putin–Zelenskyy summit. 

3. Push back firmly against the idea of territorial concessions as the basis for peace. 

Still, some divisions remain within Europe on the exact next steps. Some capitals, notably London, Stockholm, Dublin and The Hague, continue to insist on a ceasefire before substantive negotiations, while leaders such as Macron and von der Leyen have stopped short of demanding it publicly. Adopting a more ‘’hawkish’’ tone, the EU foreign policy chief Kaja Kallas has warned that “Russia has no intention of ending this war anytime soon” and is expected to convene EU foreign ministers in the coming days to maintain pressure on member states. 

Overall, Europe’s strategy is to create conditions that Putin, not Kyiv, rejects, strengthening the case for new sanctions if Moscow continues to stall. Even though today’s meeting has been described as a high-level ‘’debrief’’ of the Alaska summit, it could turn out to be one of the most consequential in recent decades for Europe’s security architecture. 

W/C Monday, 18 August – EU-US trade deal edges towards text finalisation 

Negotiators in Brussels and Washington are moving closer to putting the political outline of last month’s transatlantic tariff deal into writing, even though key elements, particularly on autos, remain unresolved. 

Last Thursday, the European Commission confirmed that it has received a draft joint statement from the US setting out Washington’s proposals. EU trade spokesman Olof Gill stated that “we will ping-pong it back and forth until we get to a final text and I hope we can get there soon”, while declining to give a specific timeline. The statement, expected to run only a few pages, will be a political declaration mapping out next steps for further trade talks rather than a binding agreement. 

The draft follows the 27 July meeting between President Donald Trump and Commission President Ursula von der Leyen in Scotland, where the two announced an agreed framework entailing a baseline 15% US tariff on most EU exports, avoiding a threatened 30% duty that would have taken effect on 1 August. In return, Brussels pledged major purchases of US energy and military equipment, as well as new market openings for American goods. 

Although the 15% baseline is already applied to most covered goods, some of the most high-profile measures are still pending: In autos and car parts, the US has yet to implement its commitment to cut the 27.5% tariff to 15% for EU, Japan, and South Korea.  

Reporting over the weekend suggested that the US is pressing for language on “non-tariff barriers” that could leave the door open to concessions on the EU’s landmark Digital Services Act (DSA). EU officials say they are determined to shield the bloc’s digital rulebook from being targeted in trade talks, while Washington insists the issue was part of the original bargain. The impasse has so far delayed the joint statement, alongside US demands for clearer timelines on EU market access for American foodstuffs and industrial goods. 

For Brussels, the political declaration is seen as a first step toward more comprehensive talks. The aim of both sides is to finalise the joint statement in the coming days, with a view to publishing it as soon as political clearance is secured, potentially as early as this week. 

Wednesday, 20 August – UK monthly inflation figures to be published amid a BoE rift over interest rates 

UK consumer price inflation data for July will be released on Wednesday, offering the first major test of the Bank of England’s latest interest rate decision and providing clues on the policy path into the autumn. The release comes less than two weeks after the Monetary Policy Committee (MPC) voted narrowly to cut Bank Rate by 25 basis points to 4.00%, in its first reduction since May. 

Even though this month’s rate cut was widely anticipated by markets, it still exposed a sharp divide within the MPC: four of the nine members, including Deputy Governor Clare Lombardelli and Chief Economist Huw Pill, voted to keep rates unchanged over concerns that inflation remains well above the Bank’s 2% target. Headline CPI in June unexpectedly rose to 3.6%, up from 3.4% in May, with core inflation at 3.7% and services inflation stuck at 4.7%. The Bank expects inflation to remain close to double the target in the coming months before easing gradually. 

Governor Andrew Bailey has stressed a “gradual and careful” approach to further easing, saying the Bank “stands ready to adjust course” if inflation risks intensify. Markets currently see one more 25 basis point cut as likely before year-end, most probably at the November meeting. 

Against this backdrop, this week’s CPI print will be closely watched for signs of whether recent price pressures, driven by transport, fuel, and services, are beginning to ease. A softer-than-expected reading could tilt the balance toward the doves on the MPC, while any renewed uptick would further strengthen the case for a pause in September ahead of further cuts later in the year.