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
- Nvidia bets on Intel - AI giant Nvidia is investing $5bn into chipmaker, Intel, to co-develop chips for personal computers and data centres – a catalyst for a wider rally into tech stocks globally.
- The Fed cuts - the US central bank lowered rates by 0.25%, as expected, with only Trump-ally Stephen Miran voting for a larger cut. Fed Chair, Powell, signalled more focus on jobs, admitting the labour market is no longer “very solid”.
- BoE holds firm - in a split decision the Bank of England’s (BoE) Monetary Policy Committee voted to keep interest rates at 4%, with two members voting for a 0.25% cut. The Bank also announced they would slow the pace of selling government bonds through their quantitative tightening (QT) programme.
- Sticky inflation - UK inflation remained at 3.8% in August, with a 5.1% rise in food and non-alcoholic drinks, pushing prices higher. With UK inflation higher than any other G7 nation, the BoE aren’t expected to cut interest rates until next year.
- Borrowing costs spike - UK government borrowing jumped to £18bn in August, far higher than the £12.5bn forecast by the Office for Budget Responsibility (OBR) in March. The pound weakened and bond yields rose with concerns over the UK’s public finances.
What this means for financial advisers and clients
By their very nature equity investors can be seen as glass-half full people, while bond investors often lean glass-half empty. It certainly feels that way this week: a flood of optimism in stock markets, which are pricing in continued support from central banks. But momentum in the wider economy still depends on the twin flames of monetary and fiscal easing burning bright.
It’s the fiscal side that has the UK bond market in a tizz. The BoE has shown some acknowledgement of the strain, slowing the pace of its bond sales and selling less longer-dated debt. Yet with government borrowing far exceeding plans, this will only be a modest relief for Chancellor Reeves, who’ll need to show fiscal restraint and consolidation in her upcoming Budget.
Chart of the week - government borrowing off track
Source: Bloomberg, Office for National Statistics.
Why this matters
The pink line shows government borrowing is now expected to exceed the earlier forecast (yellow). Monthly borrowing (black bars) keeps pushing higher.
More borrowing puts pressure on the pound and UK government bonds, as seen this week.
For investors, it underlines the need for diversification – not just across equity markets, but also across defensive assets - and why our solutions invest across a range of fixed interest assets and alternatives such as commodities, infrastructure and idiosyncratic trend strategies.
The Markets
UK misses tech rally
The FTSE 100 slipped this week, dragged down by pharma and energy, showing weakness amidst a global sector rotation towards tech. The mid cap FTSE 250 index rose, boosted by Trustpilot surging after raising margin guidance and announcing a share buyback.
US tech confidence
US markets hit record highs again this week, fuelled by increasing confidence of further rate cuts and news of Nvidia’s $5bn investment in Intel.
European strength
Tech, luxury and automotive stocks led gains, with Stellantis – the maker of Jeep, Peugeot and Fiat vehicles and a growing force in electric cars – rallying after analyst upgrades.
Emerging optimism
Korean and Taiwanese markets raced higher alongside the semiconductor and tech rally. Chinese tech stocks listed in Hong Kong hit their highest level since 2021, as excitement over AI continues to grow in the region, with search engine Baidu jumping 19%.
Bank of Japan spooks market
Japanese equities slipped this morning following an announcement that the Bank of Japan will begin selling its ETF holdings, unsettling investors. The central bank became the largest holder of Japanese stocks in 2020.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | -0.59% | 16.19% |
| FTSE 250 | 0.54% | 8.24% |
| S&P 500 | 0.79% | 4.89% |
| NASDAQ | 1.56% | 7.99% |
| FTSE Developed Europe Ex-UK | 0.85% | 18.05% |
| FTSE Emerging Markets | 1.50% | 14.38% |
| FTSE Japan | -0.15% | 12.10% |
| Brent Crude | 0.96% | -16.69% |
| Gold Spot | 0.35% | 29.58% |
| UK 10yr Gilt yield | No change | +9bps |
| US 10yr Treasury yield | +4bps | -47bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 18th September 2025.
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