Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia.
This week's headlines
📆 Save the date: UK Budget incoming – Chancellor Rachel Reeves has confirmed that the UK’s Autumn Budget will be delivered on Wednesday 26 November. All eyes will be on how the Treasury balances fiscal responsibility with economic growth. Speculation is growing over potential tax increases to address the government's shortfall.
📈 UK sales soar – UK retail sales increased by 0.6% in July, beating expectations of a 0.2% gain. The growth was driven by a 2.5% rise in clothing and footwear sales, and in non-store retail - including online sales.
💼 New faces at Number 10 – Prime Minister Keir Starmer has announced a significant restructuring of his Downing Street team - appointing Darren Jones as Chief Secretary and Minouche Shafik as Chief Economic Advisor to the Prime Minister.
📉 US jobs slowdown – Jobless claims rose to their highest level since June to 237,000. Private payrolls increased by only 54,000 in August, falling short of expectations and suggesting a potential slowdown in economic activity.
👀 All eyes on US payroll data – The U.S. Bureau of Labor Statistics is set to release the August nonfarm payrolls report today, with unemployment expected to rise to 4.3% alongside a modest increase of 75,000 jobs.
What this means for financial advisers and clients
The UK economy continues to strive forward despite negative speculation and government reshuffles. Yet the disorder has not gone unnoticed by financial markets, with the pound weakening by 1.8% against the dollar - its worst day since April - when Donald Trump launched his tariff trade war. Meanwhile the UK’s long-term borrowing costs rose to a 27-year high, piling further pressure on the upcoming Budget.
In the US, the focus is firmly on what appears to be a weakening labour market, and the expectation that this will lead to interest rate cuts. Markets are currently positive on these developments, but the risks remain that expectations may not be met.
Periods like this - when both the UK Government and the US economy are going through moments of change highlight the value of well-balanced, diversified portfolios. They’re designed to offer support to investors through different environments and keep them positioned for whatever direction markets take next.
Chart of the week - weakening US labour market
Source: Macrobond and BNY Investment Institute as at August 2025
Why this matters
The chart above tracks US job creation - with the dark blue bar showing net new jobs each month, and the blue line showing the three-month average. Both point to a slowdown in hiring.
Why does this matter? Jobs help drive consumer spending, which accounts for roughly 70% of US GDP. This is why the Federal Reserve (Fed) has a dual mandate to promote maximum employment as well as seeking to keep inflation under control.
The Fed appears increasingly focused on the US labour market, with Fed officials highlighting that weaker employment may justify interest rate cuts.
As such the CME FedWatch Tool currently indicates a 97.6% probability of a rate cut at the next Fed meeting, but expectations appear very much tied to developments in the job market over the weeks and months ahead.
Market recap
UK stocks mixed
The FTSE 100 pushed higher this week with healthy earnings surprises from large caps. Retailer Currys was the standout, jumping nearly 17% after reporting an uplift in summer sales alongside a £50m buyback proposal. In contrast, mid-cap stocks saw broader selling, with Ithaca Energy and Oxford Nanopore Technologies posting notable losses on company-specific news.
US optimism
The major US indices jumped higher following increased confidence in imminent rate cuts. Tech led the charge, with Alphabet shares climbing more than 9% after a court ruling allowed Google’s continued control of Chrome and Android.
Nikkei dips then flips
A dramatic sell-off in the Japanese bond market signalled anxiety for investors, with the Nikkei 225 dropping over the week. But equities bounced higher this morning after confirmation of a trade deal with the US.
Crude slips
Oil prices fell for the first time in three weeks, following news that OPEC+ will consider increasing output.
Gold boom
Gold soared higher for its strongest weekly performance in three months. Concerns over the independence of the Fed, alongside expectations of rate cuts, contributed to the positivity for gold as a safe-haven asset.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.34% | 16.02% |
| FTSE 250 | -0.56% | 6.88% |
| S&P 500 | 1.30% | 3.76% |
| NASDAQ | 1.57% | 5.31% |
| MSCI Europe ex UK | 0.04% | 16.04% |
| Nikkei 225 | -0.98% | 6.08% |
| Brent Crude | -0.36% | -16.78% |
| Gold Spot | 3.28% | 27.11% |
| UK 10yr Gilt yield | No change | +15bps |
| US 10yr Treasury yield | -5bps | -40bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 4th September 2025.
Stay tuned for next week’s market insights
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