The US interest rate cut on Wednesday means lower borrowing costs, more disposable income and a boost to spending across the US dollar-pegged economies in the Gulf and the Middle East.
Sectors such as property, construction, retail, automotive, tourism and hospitality are expected to benefit, as consumer confidence and discretionary spending improve, analysts say.
However, the scale of the trickledown effect from the rate cuts will vary, depending on fiscal buffers and the fundamental strength of respective economies in the region.
“For consumers, a rate cut recalibrates financial behaviour by altering incentives for saving and spending,” Daniel Takieddine, co-founder and chief executive of Sky Links Capital Group, said.
“With returns on savings accounts diminished, the impetus to save weakens, while lower borrowing costs for mortgages, auto loans and personal credit make spending more attractive.”
The shift is expected to drive consumption and boost spending, especially on big-ticket items such as cars and homes and will also improve consumer sentiment.
“Feeling more optimistic about the economy and their personal finances, households are more likely to increase discretionary spending,” Mr Takieddine added.
“For those with existing variable-The US Federal Reserve entering a new cycle of interest rate cuts has direct implications for most Gulf economies as well as for Jordan whose currencies are tied to the US dollar. Their central banks typically mirror the Fed’s moves in their monetary policy stance.
The Fed cut US interest rates by 25 basis points on Wednesday amid concerns over the strength of the labour market in the world’s largest economy. The rate-setting Federal Open Market Committee has lowered the benchmark rate to a range of 4 per cent to 4.25 per cent.
The Fed’s quarter-point rate cut, the first since President Donald Trump resumed office in January, was widely expected by markets, traders and investors.
The UAE Central Bank, which follows Fed decisions, also reduced rates by 25 basis points after the announcement. The banking regulator said it would cut the base rate applied to its overnight deposit window by 25 basis points to 4.15 per cent, from 4.40, effective from Thursday.
Analysts say lower interest rates tend to stimulate economic activity, as consumers and companies can borrow at lower rates for purchases and investment, which drives consumption and economic growth.
New forecasts released by the Fed showed the central bank projects to cut rates by another 50 basis points this year, which would lower the federal funds rate to about 3.6 per cent in December.
Upbeat consumer sentiment
A drop in policy rates in the Gulf is a boon for consumers whose credit card debt and personal loans would carry lower interest.
Vijay Valecha, chief investment officer at Century Financial, said it will not only free up cash but it also means cheaper mortgage rates, which would encourage people to buy homes.
Demand for residential and commercial properties is set to increase, which is a good sign for the property market, said Shivam Dubey, associate partner of mortgage advisory at Youae Mortgages.
The market could experience increased activity and the “heightened demand could support property prices and stimulate overall market growth”, he said.
Because lower interest rates may discourage traditional saving, some homeowners may invest in renovations that enhance their property’s value, he added.
For developers, lower global and regional borrowing costs reduce the financial burden of project financing and refinancing, according to a report by ValuStrat.
Cheaper debt makes it easier to service existing loans, fund new construction and explore redevelopment projects.
“Developers with strong balance sheets will be best positioned to take advantage of this environment, especially in prime locations where demand is resilient,” the report said. “However, while financing costs may ease, underlying fundamentals such as oversupply and demand shifts still determine project viability.”
The retail sector is expected to be the biggest beneficiary of a rate cut and subsequent rise in consumption as customer confidence grows.
Spending on durable goods, cars and luxury items is set to rise as lower loan servicing costs free up cash, Hamza Dweik, head of trading for Middle East and North Africa at Saxo Bank, said.
In Jordan, where household debt levels are more sensitive to interest rate changes, a Fed cut may offer “meaningful relief”, improve consumer sentiment and boost domestic consumption, he added.
Improved investment opportunities
Lower interest rates not only bring relief for households, they also ease financial pressure on governments and the corporate sector, analysts say.
The move will stimulate state investments, especially in non-oil sectors, and support governments’ fiscal expansion efforts.
For businesses in the Gulf, lower interest rates would help companies gain easier access to capital, potentially reigniting momentum in property and infrastructure development, Mr Dweik said.
Banks may record a “slight compression” in net interest margins but this may be offset by higher lending volumes and better asset quality, he added.
“Investment flows might shift away from fixed-income instruments towards equities and real estate, as lower rates reduce returns on traditional savings,” Mr Dweik added.
Deposit rates would also probably fall, encouraging people to explore alternative asset classes, including stocks and cryptocurrencies, he said.
‘Tailwind’ for Gulf economies
From a macroeconomic perspective, the rate cut is a positive development for the UAE as well its peers in the Gulf, according to analysts.
The strong gross domestic product and foreign reserves of the UAE, the Arab world’s second largest economy, mean the country has “ample capacity to absorb and transmit the benefits of easier financial conditions”, Mr Valecha said.
In the Gulf, central banks collectively hold more than $760 billion in foreign assets, providing substantial external buffers, which means lower policy rates can effectively reduce sovereign and corporate refinancing costs, and support diversification programmes such as Saudi Vision 2030 and the UAE’s industrial sector growth strategy, he added.
While Jordan will benefit from the rate cut, it faces fundamental constraints because of its high public debt ratio of nearly 117 per cent of GDP.
“Fiscal pressures and elevated debt servicing mean less room for government spending to complement monetary easing,” Mr Valecha said.
“Nonetheless, households and small businesses would benefit from lower borrowing costs on loans and mortgages, easing financial stress in an economy where private consumption makes up more than 80 per cent of GDP.”
Jordan will have “modest relief” compared to Gulf countries but that is still important for sustaining domestic demand.
“Overall, a Fed cut would act as a tailwind, lifting growth, confidence, and investment across the UAE and GCC, while offering Jordan a measure of relief against tighter fiscal realities,” Mr Valecha said.
Inflation growth in the region, particularly in the UAE, has also remained muted in past several quarters, which also encourages higher consumer spending.
Inflation in the UAE stood at 1.4 per cent in the first quarter of 2025 and the central bank has slightly revised down its inflation forecast for 2025 to 1.9 per cent from 2 per cent.
The CBUAE has also lowered its inflation estimate for 2026 to 1.9 per cent from 2.1 per cent.
“The inflation trend in the region has been benign, with interest rates higher than required,” Monica Malik, chief economist at Abu Dhabi Commercial Bank, said.
“As such, the expected rate cuts will be positive for sentiment, consumption activity and credit demand. The lower rates will also be welcome for the corporate segment,” she added.
The rate cut may help counteract “global disinflationary pressures and support domestic demand” without significantly stoking consumer prices in the Gulf region, Mr Dweik said.
“A weaker dollar, typically associated with Fed easing, might also support oil prices, benefiting GCC exporters,” he added. “However, volatility in energy markets remains a risk, especially as global demand patterns evolve.”
While the Fed rate cuts will have positive implications for the dollar-pegged economies of the region, it does raise questions about the syncing of business cycles in the US compared to the Gulf.
“Clearly fed cuts automatically translate into an easing of financial conditions in pegged economies, which is pro-growth and therefore good news for most sectors,” Farouk Soussa, Mena economist at Goldman Sachs, said.
“But it does raise questions of whether a one size fits all monetary policy is appropriate if business cycles in the GCC and the US are out of sync.”
An example of this is the housing sector, where valuations are rising steeply in the UAE, for example, and rents rising sharply in Saudi, he said.
“A cut in rates potentially inflates prices even more in these markets, which may not necessarily be welcome.”
KILLING OF QASSEM SULEIMANIHow to tell if your child is being bullied at school
Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
Results:
Women:
1. Rhiannan Iffland (AUS) 322.95 points
2. Lysanne Richard (CAN) 285.75
3. Ellie Smart (USA) 277.70
Men:
1. Gary Hunt (GBR) 431.55
2. Constantin Popovici (ROU) 424.65
3. Oleksiy Prygorov (UKR) 392.30
Results
5pm: Maiden (PA) Dh80,000 (Turf) 1,200m. Winner: Majd Al Megirat, Sam Hitchcott (jockey), Ahmed Al Shehhi (trainer)
5.30pm: Handicap (PA) Dh80,000 (T) 1,600m. Winner: Dassan Da, Patrick Cosgrave, Helal Al Alawi
6pm: Abu Dhabi Fillies Classic Prestige (PA) Dh110,000 (T) 1,400m. Winner: Heba Al Wathba, Richard Mullen, Jean de Roualle
6.30pm: Abu Dhabi Colts Classic Prestige (PA) Dh110,000 (T) 1,400m. Winner: Hameem, Adrie de Vries, Abdallah Al Hammadi
7pm: Wathba Stallions Cup Handicap (PA) Dh70,000 (T) 2,200m. Winner: Jawal Al Reef, Richard Mullen, Ahmed Al Mehairbi
Handicap (TB) Dh100,000 (T) 2,200m. Winner: Harbour Spirit, Adrie de Vries, Jaber Ramadhan.
Killing of Qassem SuleimaniKey facilities
Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
Premier League-standard football pitch
400m Olympic running track
NBA-spec basketball court with auditorium
600-seat auditorium
Spaces for historical and cultural exploration
An elevated football field that doubles as a helipad
Specialist robotics and science laboratories
AR and VR-enabled learning centres
Disruption Lab and Research Centre for developing entrepreneurial skills
Premier League results
Saturday
Crystal Palace 1 Brighton & Hove Albion 2
Cardiff City 2 West Ham United 0
Huddersfield Town 0 Bournemouth 2
Leicester City 3 Fulham 1
Newcastle United 3 Everton 2
Southampton 2 Tottenham Hotspur 1
Manchester City 3 Watford 1
Sunday
Liverpool 4 Burnley 2
Chelsea 1 Wolverhampton Wanderers 1
Arsenal 2 Manchester United 0
Killing of Qassem SuleimaniNew Zealand 15 British & Irish Lions 15
New Zealand 15
Tries: Laumape, J Barrett
Conversions: B Barrett
Penalties: B Barrett
British & Irish Lions 15
Penalties: Farrell (4), Daly
UAE currency: the story behind the money in your pocketsUAE currency: the story behind the money in your pocketsSkewed figures
In the village of Mevagissey in southwest England the housing stock has doubled in the last century while the number of residents is half the historic high. The village’s Neighbourhood Development Plan states that 26% of homes are holiday retreats. Prices are high, averaging around £300,000, £50,000 more than the Cornish average of £250,000. The local average wage is £15,458.
%E2%80%98White%20Elephant%E2%80%99
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POSSIBLE ENGLAND EURO 2020 SQUAD
Goalkeepers: Jordan Pickford, Nick Pope, Dean Henderson.
Defenders: Trent Alexander-Arnold, Kieran Trippier, Joe Gomez, John Stones, Harry Maguire, Tyrone Mings, Ben Chilwell, Fabian Delph.
Midfielders: Declan Rice, Harry Winks, Jordan Henderson, Ross Barkley, Mason Mount, Alex Oxlade-Chamberlain.
Forwards: Harry Kane, Raheem Sterling, Marcus Rashford, Jadon Sancho, Tammy Abraham, Callum Hudson-Odoi.
More from Rashmee Roshan LallZayed Sustainability PrizeThe five pillars of IslamThe five pillars of IslamGifts exchanged
King Charles – replica of President Eisenhower Sword
Queen Camilla – Tiffany & Co vintage 18-carat gold, diamond and ruby flower brooch
Donald Trump – hand-bound leather book with Declaration of Independence
Melania Trump – personalised Anya Hindmarch handbag
Mohammed bin Zayed MajlisSafety ‘top priority’ for rival hyperloop company
The chief operating officer of Hyperloop Transportation Technologies, Andres de Leon, said his company’s hyperloop technology is “ready” and safe.
He said the company prioritised safety throughout its development and, last year, Munich Re, one of the world’s largest reinsurance companies, announced it was ready to insure their technology.
“Our levitation, propulsion, and vacuum technology have all been developed […] over several decades and have been deployed and tested at full scale,” he said in a statement to The National.
“Only once the system has been certified and approved will it move people,” he said.
HyperloopTT has begun designing and engineering processes for its Abu Dhabi projects and hopes to break ground soon.
With no delivery date yet announced, Mr de Leon said timelines had to be considered carefully, as government approval, permits, and regulations could create necessary delays.
Aston martin DBX specs
Engine: 4.0-litre twin-turbo V8
Transmission: nine-speed automatic
Power: 542bhp
Torque: 700Nm
Top speed: 291kph
Price: Dh848,000
On sale: Q2, 2020
More on animal traffickingIraq negotiating over Iran sanctions impact
US sanctions on Iran’s energy industry and exports took effect on Monday, November 5.
Washington issued formal waivers to eight buyers of Iranian oil, allowing them to continue limited imports. Iraq did not receive a waiver.
Iraq’s government is cooperating with the US to contain Iranian influence in the country, and increased Iraqi oil production is helping to make up for Iranian crude that sanctions are blocking from markets, US officials say.
Iraq, the second-biggest producer in the Organization of Petroleum Exporting Countries, pumped last month at a record 4.78 million barrels a day, former Oil Minister Jabbar Al-Luaibi said on Oct. 20. Iraq exported 3.83 million barrels a day last month, according to tanker tracking and data from port agents.
Iraq has been working to restore production at its northern Kirkuk oil field. Kirkuk could add 200,000 barrels a day of oil to Iraq’s total output, Hook said.
The country stopped trucking Kirkuk oil to Iran about three weeks ago, in line with U.S. sanctions, according to four people with knowledge of the matter who asked not to be identified because they aren’t allowed to speak to media.
Oil exports from Iran, OPEC’s third-largest supplier, have slumped since President Donald Trump announced in May that he’d reimpose sanctions. Iran shipped about 1.76 million barrels a day in October out of 3.42 million in total production, data compiled by Bloomberg show.
Benchmark Brent crude fell 47 cents to $72.70 a barrel in London trading at 7:26 a.m. local time. U.S. West Texas Intermediate was 25 cents lower at $62.85 a barrel in New York. WTI held near the lowest level in seven months as concerns of a tightening market eased after the U.S. granted its waivers to buyers of Iranian crude.
Naga
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Mohammed bin Zayed MajlisKill%20
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The years Ramadan fell in MayEvacuations to France hit by controversy
Over 500 Gazans have been evacuated to France since November 2023
Evacuations were paused after a student already in France posted anti-Semitic content and was subsequently expelled to Qatar
The Foreign Ministry launched a review to determine how authorities failed to detect the posts before her entry
Artists and researchers fall under a programme called Pause that began in 2017
It has benefited more than 700 people from 44 countries, including Syria, Turkey, Iran, and Sudan
Since the start of the Gaza war, it has also included 45 Gazan beneficiaries
Unlike students, they are allowed to bring their families to France
UAE currency: the story behind the money in your pocketsThe five pillars of Islam
6.30pm Meydan Classic Trial US$100,000 (Turf) 1,400m
Winner Bella Fever, Dane O’Neill (jockey), Mike de Kock (trainer).
7.05pm Handicap $135,000 (T) 1,400m
Winner Woven, Harry Bentley, David Simcock.
7.40pm UAE 2000 Guineas Group Three $250,000 (Dirt) 1,600m
Winner Fore Left, William Buick, Doug O’Neill.
8.15pm Dubai Sprint Listed Handicap $175,000 (T) 1,200m
Winner Rusumaat, Dane O’Neill, Musabah Al Muhairi.
8.50pm Al Maktoum Challenge Round-2 Group Two $450,000 (D) 1,900m
Winner Benbatl, Christophe Soumillon, Saeed bin Suroor.
9.25pm Handicap $135,000 (T) 1,800m
Winner Art Du Val, William Buick, Charlie Appleby.
10pm Handicap $135,000 (T) 1,400m
Winner Beyond Reason, William Buick, Charlie Appleby.
The years Ramadan fell in MayMore from Neighbourhood Watch:The Voice of Hind Rajab
Starring: Saja Kilani, Clara Khoury, Motaz Malhees
Director: Kaouther Ben Hania
Rating: 4/5
Jebel Ali results
2pm: Handicap (PA) Dh 50,000 (Dirt) 1,400m
Winner: AF Al Moreeb, Antonio Fresu (jockey), Ernst Oertel (trainer)
2.30pm: Maiden (TB) Dh 60,000 (D) 1,400m
Winner: Shamikh, Ryan Curatolo, Nicholas Bachalard
3pm: Handicap (TB) Dh 64,000 (D) 1,600m
Winner: One Vision, Connor Beasley, Ali Rashid Al Raihe
3.30pm: Conditions (TB) Dh 100,000 (D) 1,600m
Winner: Gabr, Sam Hitchcott, Doug Watson
4pm: Handicap (TB) Dh 96,000 (D) 1,800m
Winner: Just A Penny, Sam Hitchcock, Doug Watson
4.30pm: Maiden (TB) Dh 60,000 (D) 1,600m
Winner: Torno Subito, Sam Hitchcock, Doug Watson
5pm: Handicap (TB) Dh 76,000 (D) 1,950m
Winner: Untold Secret, Jose Santiago, Salem bin Ghadayer
ABU DHABI CARD
5pm: UAE Martyrs Cup (TB) Conditions; Dh90,000; 2,200m
5.30pm: Wathba Stallions Cup (PA) Handicap; Dh70,000; 1,400m
6pm: UAE Matyrs Trophy (PA) Maiden; Dh80,000; 1,600m
6.30pm: Sheikha Fatima bint Mubarak (IFAHR) Apprentice Championship (PA) Prestige; Dh100,000; 1,600m
7pm: Sheikha Fatima bint Mubarak (IFAHR) Ladies World Championship (PA) Prestige; Dh125,000; 1,600m
8pm: Sheikh Zayed bin Sultan Al Nahyan Jewel Crown (PA) Group 1; Dh5,000,000; 1,600m
RESULTS
6.30pm Handicap (TB) US$65,000 (Dirt) 1,400m
Winner Golden Goal, Pat Dobbs (jockey), Doug Watson (trainer)
7.05pm Dubai Racing Club Classic Listed Handicap (TB) $88,000 (Turf) 2,410m
Winner: Walton Street, William Buick, Charlie Appleby.
7.40pm Dubai Stakes Group 3 (TB) $130,000 (D) 1,200m
Winner Switzerland, Tadhg O’Shea, Satish Seemar
8.15pm Singspiel Stakes Group 3 (TB) $163,000 (T) 1,800m
Winner Lord Giltters, Adrie de Vries, David O’Meara
8.50pm Al Maktoum Challenge Round-1 (TB) $228,000 (D) 1,600m
Winner Military Law, Antonio Fresu, Musabah Al Muhairi.
9.25pm Al Fahidi Fort Group 2 (TB) $163,000 (T) 1,400m
Winner Land Of Legends, Frankie Dettori, Saeed bin Suroor
10pm Dubai Dash Listed Handicap (TB) $88,000 (T) 1,000m
Winner Equilateral, Frankie Dettori, Charles Hills.
Zayed Sustainability PrizeMohammed bin Zayed MajlisMore coverage from the Future ForumRead more about the coronavirusThe burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
Read part four: an affection for classic cars lives on
Read part three: the age of the electric vehicle begins
Read part one: how cars came to the UAE
Killing of Qassem SuleimaniMore from Armen SarkissianZayed Sustainability Prize
KEY HIGHLIGHTS
Healthcare spending to double to $2.2 trillion rupees
Launched a 641billion-rupee federal health scheme
Allotted 200 billion rupees for the recapitalisation of state-run banks
Around 1.75 trillion rupees allotted for privatisation and stake sales in state-owned assets
Ain Dubai in numbers
126: The length in metres of the legs supporting the structure
1 football pitch: The length of each permanent spoke is longer than a professional soccer pitch
16 A380 Airbuses: The equivalent weight of the wheel rim.
9,000 tonnes: The amount of steel used to construct the project.
5 tonnes: The weight of each permanent spoke that is holding the wheel rim in place
192: The amount of cable wires used to create the wheel. They measure a distance of 2,4000km in total, the equivalent of the distance between Dubai and Cairo.
Aggro%20Dr1ft
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Singham Again
Director: Rohit Shetty
Stars: Ajay Devgn, Kareena Kapoor Khan, Ranveer Singh, Akshay Kumar, Tiger Shroff, Deepika Padukone
Rating: 3/5
Why seagrass matters
Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
Biodiversity: Support species like sea turtles, dugongs, and seabirds
Coastal protection: Reduce erosion and improve water quality