The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- US Inflation below expectations – prices rose 3.5% in the year to June, down from 4.2% in May - a bigger drop than expected which reduced the expectations of a future rate rise.
- UK Economy returns to growth – UK gross domestic product (GDP) grew by 0.1% in May according to the Office for National Statistics (ONS). This comes after the economy contracted in April.
- British Steel taken into public ownership – after years of uncertainty, British Steel has now been nationalised. Its closure would have left the UK as the only G7 country without the ability to make virgin steel, which is considered critical to the UK economy, infrastructure and defence.
- US and Iran continue to trade blows – Iran launched strikes on US bases in neighbouring Gulf states, while the US continued its military action in Iran. The US also resumed its blockade, that was withdrawn in the memorandum of understanding. Iran has warned the US it should “expect the closure of other oil and gas export routes that serve the interests of the United States and its allies”.
- New PM from Monday – Andy Burnham will become Prime Minister following the resignation of Keir Starmer. Starmer is expected to formally resign on Monday morning to the King, before Burnham requests to form a new government.
What this means for financial advisers and clients
Inflation surprise
Given the backdrop, it was a surprise that the US had a fall in inflation. It does mean that future rate hikes seem less likely, but with the ongoing war in Iran, the question is whether this downward trend can be sustained.
Summer of Growth?
Growth has softened in the last few months, with sectors like manufacturing, hospitality, travel and entertainment flagging the US-Iran war as having a drag on activity. Looking forward, hot weather and the World Cup could boost consumer spending in June and July - but higher energy costs may hold back some of that growth.
Number 10 is sorted, but who’s moving into Number 11?
It’s pretty much all confirmed that Andy Burnham will be picking up the keys to Number 10 on Monday. But for us, who’s going to be the next chancellor? Journalists think it’ll be Shabana Mahmood who sits to the right of the party, but Ed Miliband, Yvette Cooper and Wes Streeting are also in the mix.
Whoever it is will face high debt, low growth and the economic fallout from the war in Iran. We’re interested to see what their policies will be.
Chart of the week
Source: YouGov. Survey of 6,297 US Adults July 2026. Responses of “not sure” aren’t shown.
Why’s this worth sharing?
If you found yourself crying out at any points during the World Cup, shouting what you would have done differently, then this chart might be for you.
41% of US men under 30 think they’d ‘definitely or probably’ score a penalty kick in a FIFA World Cup match. We think that’s a pretty bold claim.
What’s interesting is as the survey responses get older across genders, they tend to have a more conservative view of what’s possible - which, when it comes to investing, nicely reflects how optimism and risk tolerance change over time.
In our younger years we’re generally more willing to take on risk. We can ride out the ups and downs, knowing that the end goal is a long way off. Time is on our side, there’s plenty of opportunity to recover from setbacks. As we get older, we’re naturally less tolerant of risk. There are only so many World Cups left, and in practice, only a short while until we have to start drawing on our savings.
Nobody enjoys seeing their team lose - or their portfolio fall in value. But successful investing isn't about predicting every twist and turn. It's about taking the right level of risk for your goals and giving your plan the time it needs to succeed.
The Markets
UK: The FTSE 100 and 250 grew this week benefitting from defensive qualities due to banks, consumer staples and oil stocks like BP which offset declines due to the US-Iran war.
US: The S&P 500 had a volatile week, pulled between the encouraging inflation data and a deepening sell-off of AI technology stocks.
Oil: Oil prices continued to rise over escalating US-Iran tensions.
Japan: The Nikkei slid into technical correction territory, dragged down by the global tech sell off and mounting geopolitical tensions.
Emerging markets: Emerging markets also saw a small decline navigating a combination of the global tech rout, escalating trade hurdles between the US and Brazil, and further fallout from the disruption in oil supply.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.70% | 8.44% |
| FTSE 250 | 1.41% | 7.64% |
| S&P 500 | -0.58% | 10.23% |
| NASDAQ | -1.64% | 15.04% |
| FTSE Developed Europe ex UK | -0.33% | 7.47% |
| FTSE Emerging | -0.15% | 9.80% |
| FTSE Japan | -0.57% | 14.95% |
| Brent Crude | 0.96% | 3.46% |
| Gold Spot | -1.59% | -7.88% |
| UK 10yr Gilt yield | +2bps | +49bps |
| US 10yr Treasury yield | -6bps | +40bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 16th July 2026.
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.
