The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- A tough sell for UK homeowners – high mortgage rates have been putting pressure on sellers, with over half of the properties listed in January on Zoopla still unsold - and demand dropping from 15% compared to a year earlier. The average mortgage rate for a two-year fix jumped from 4.83% in March to a peak of 5.9% in April. It’s since dropped to 5.54%.
- South Korea to invest $880bn in chips and AI – President Lee Jae Myung unveiled plans to invest heavily in new chip production hubs, data centres and robotics. It comes as Taiwan, China and Japan invest heavily in similar projects.
- US jobs data misses the goal – expectations that the World Cup would drive a hiring boost failed to materialise. The US economy added just 57,000 jobs in June, below forecasts, while hospitality employment fell by 61,000 jobs during the month.
- Burnham floats business rates shake-up – in an interview with LBC, Andy Burnham, who is expected to become the next Prime Minister, suggested that business rates on warehouses could be increased to fund tax cuts for pubs and some high-street businesses. He also said he would stick to pledges Labour made in the 2024 general election manifesto not to raise VAT, income tax, or national insurance.
- Trump discloses finances – Donald Trump released over 900 pages of his finances this week. It revealed he’d made over 21,000 trades during his first year in office and has made over $1bn from crypto and at least $80m from legal settlements.
What this means for financial advisers and clients
It might seem surprising that US hospitality jobs fell during a month when the World Cup was meant to boost demand, especially when we’ve seen social media clips of Brits drinking bars dry.
But what does that have to do with us?
It’s all to do with interest rates.
The latest US jobs report suggests a slowdown in jobs, this presents a Goldilocks scenario for the US economy – not too hot, not too cold, where it could stay just in the right place. This means that expectations of interest rate rises are fading, with only one hike now fully priced in, and not until next year. Previously, rate hikes were very much on the cards for the US with its high inflation figure of 3.8%, partly driven by the war in Iran.
As we know, mortgages are influenced by interest rates, and the war in Iran has added to inflationary pressures on them, causing pressure on borrowing costs and the housing market.
Mortgage rates are coming down, but with the Bank of England not expected to cut interest rates any time soon, any meaningful relief is likely to be gradual.
And while oil prices have eased over the last few weeks – helping to reduce some of that inflationary pressure - we’re still feeling the impact at home, and we still could see the impact for months.
Asia fans out
AI created big winners and losers in the region.
Source: Bloomberg Opinion - data indexed to 100 on Jan 1 2026,
Why’s this worth sharing?
It’s easy to look at Asia Pacific in your holdings and think it’s doing really well. And the FTSE Emerging index is in double digits after over half a year. But it’s worth looking under the hood. Perceptions could be skewed.
The main drivers are Taiwan and Korea, and that is largely coming from three companies. SK Hynix, Samsung and TSMC. The rest of the region hasn’t fared as well, and once you strip those companies out, Korea and Taiwan are lagging too.
Concentration risk is a key concern here, as Asia could be seen as an AI technology play.
It's a good reminder that diversification plays a vital role in helping investors withstand a range of economic scenarios.
The Markets
UK: The FTSE 100 and 250 showed a small amount of growth this week on the back of news that interest rates may remain unchanged going forward.
US: The S&P 500 and Nasdaq both saw falls this week continuing last week’s trend of a selloff in chip stocks. The Dow Jones Industrial Average saw a record high on the news of recent jobs data.
Oil: Oil continued to fall as shipping in the Strait of Hormuz slowly started to recover.
Gold: Gold climbed, recovering some of the losses over previous weeks in one of the sharpest monthly declines in years. This may be on the back of Federal Reserve Chair Warsh’s comments about his determination to bring down inflation to 2%.
For more market insights check out our monthly market update: Five things you need to know from June
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 1.62% | 9.21% |
| FTSE 250 | 1.84% | 6.19% |
| S&P 500 | -0.37% | 10.41% |
| NASDAQ | -2.42% | 17.23% |
| FTSE Developed Europe ex UK | 1.05% | 9.46% |
| FTSE Emerging | 0.61% | 10.34% |
| FTSE Japan | 0.07% | 17.11% |
| Brent Crude | -3.32% | -11.92% |
| Gold Spot | 1.97% | -3.54% |
| UK 10yr Gilt yield | +6bps | +32bps |
| US 10yr Treasury yield | +10bps | +33bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 2nd July 2026.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
