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This week's headlines
- UK interest rates held – The UK’s Monetary Policy Committee (MPC) voted 5-4 to keep interest rates on hold. Four members pushed for a 0.25% cut, signalling the committee is edging closer to easing.
- US government shutdown continues – The US shutdown, which began on 1st October, is now the longest in history. Lawmakers face increased pressure to resolve disputes as hundreds of thousands of federal workers go unpaid.
- Mass US lay-offs – More than 150,000 US job were cut in October, according to private reports. This was driven primarily by tech and retail, as companies lean into AI while seeking to reduce costs.
- China’s trade surplus falls – October data shows China’s trade surplus shrinking as exports fell, after months of front-loading ahead of potential new US tariffs, while imports rose.
- Bitcoin falls – Bitcoin fell over 5% this week, briefly dropping below $100,000, as conviction in prices started to wain and some long-term holders offloaded coins. This pushed monthly prices down 15%, though year-to-date returns remain positive.
What this means for financial advisers and clients
The UK left interest rates unchanged. The decision was tighter than expected as four members voted for a cut. Governor Andrew Bailey (who voted to hold rates) highlighted that while inflation risk had come down, he still wanted to see greater progress towards their 2% target before making a move. Markets are now pricing in a higher chance of a December rate cut – assuming inflation continues to gradually fall, and the upcoming Budget doesn’t deliver any surprises.
Chart of the week - the US; fewer jobs, more profit
Source: Alpine Marco
Why this matters
Despite large-scale layoffs across the US – led by the tech sector but increasingly visible elsewhere – this isn’t a traditional downturn story. Unlike past cycles, companies aren’t cutting staff to protect shrinking margins. In fact, profits continue to climb.
The current wave of job losses points instead to deeper structural market changes. Companies are increasingly turning to AI at the expense of human workers in a bid to improve productivity and minimise costs. Such moves have led to a widening gap between corporate profits – which keep on rising – and the number of private employees in work (Nonfarm private payrolls), which has started to dip below trend. This pattern is no longer confined to the tech sector, and can be seen spreading throughout the economy.
For workers, the long-term implications of such moves raise some serious concerns. But for markets, increased productivity is positive for equity valuations. And, despite these layoffs, the US unemployment rate has barely moved – helped by a simultaneous fall in labour supply, due to factors such as increased deportation rates.
The Markets
UK domestic market weakness
The FTSE 250 fell on concerns around the UK’s economic outlook and uncertainty ahead of the November Budget. The FTSE 100 remined more resilient thanks to its greater exposure to overseas revenues, managing a modest gain.
US dips on tech sell-off
Renewed doubts over AI-linked company valuations and fears of an AI bubble triggered a sell-off in US mega-cap tech stocks, causing US markets to fall.
Mixed results in emerging markets
The Hang Seng was flat after falls early in the week led to dip-buying and a sharp recovery on Thursday. Meanwhile, in line with US markets, the Nikkei 225 sustained losses thanks to fears of excessive valuations in AI linked stocks.
Gold steady as oil falls
Gold paired back losses earlier in the week on US jobs data and hopes of more interest rate cuts. Oil prices moved in the opposite direction, sliding on fears of oversupply as the Organisation of the Petroleum Exporting Countries (OEPC+) increased supply and Saudi Arabia cut its crude prices.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.29% | 22.91% |
| FTSE 250 | -1.13% | 9.59% |
| S&P 500 | -1.48% | 10.02% |
| NASDAQ | -1.99% | 14.98% |
| FTSE Developed Europe Ex-UK | -0.54% | 22.19% |
| FTSE Emerging Markets | 0.18% | 20.43% |
| FTSE Japan | -2.03% | 26.88% |
| Brent Crude | -2.49% | -14.75% |
| Gold Spot | -0.59% | 51.11% |
| UK 10yr Gilt yield | +5bps | -16bps |
| US 10yr Treasury yield | +2bps | -48bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 6th November 2025.
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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.
