The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- Iran war heats up again – In the week of the Ayatollah’s funeral, Iran and the US exchanged attacks again, breaking the fragile ceasefire. Trump declared the ceasefire over but also claimed that Iran wanted a deal. Shipping stopped.
- Bank of England (BoE) warns of stability risks – This week the BoE released its Financial Stability Report. While it referred to the war in Iran, it also highlighted growing risks from increased leverage in equity markets, private credit, higher levels of global sovereign debt issuance, cyber and AI-related risks, and high asset valuations. Despite these concerns and recent geopolitical shocks, the BoE concluded that the UK financial system remains resilient and capable of supporting households and businesses.
- International Monetary Fund (IMF) upgrades UK growth forecast – The IMF’s July update upgraded the UK’s projected GDP growth to 1% for this year. This makes the UK the third fastest-growing economy in the G7.
- SK Hynix raises $25.6bn in share sale – The South Korean chipmaker raised $25.6bn in a New York share offering, the biggest ever listing by a foreign company in the US. A key supplier to AI giant Nvidia, the company sold 177.9m shares for $149 each. Having nearly tripled its share price in its home market, the deal gives the company easier access to international investors.
- EasyJet agrees to surprise takeover bid – One of Europe’s largest airlines, EasyJet agreed in principle to a £5.7bn takeover proposal from US firm Apollo Global Management. It came after accepting a previous bid from US investment company Castlelake at £5.2bn. The deal increased its share price by 81% from May.
What this means for financial advisers and clients
Oil prices creeping up
The peace this week between the US and Iran crumbled, and shipping in the Strait of Hormuz has halted once again. This has had an impact on oil prices, but we’re not back to where we were before the memorandum of understanding.
Trump has so far kept US boots off the ground, which has appeased markets, suggesting that the war won’t cause permanent damage to oil production facilities.
Inflation still a concern
That said, inflationary pressure remains a concern.
Minutes from a Federal Reserve (Fed) meeting released on Wednesday made clear that the war was putting upward pressure on rates.
While last week rates looked likely to stay where they are, protracted uncertainty in the Gulf makes rises more likely.
UK positioned well
However, the reports from the BoE and IMF offer some reassurance. While they are based on data from before the ceasefire was broken, they suggest that the UK is well placed to stand up to shocks.
Chart of the week
Source: Bloomberg
Why’s this worth sharing?
When the memorandum of understanding was announced and the Strait reopened, it seemed like the world was just waiting for someone to turn the oil tap on.
Oil prices dropped, and monetary policymakers relaxed a bit.
In reality, the number of crossings, while meaningfully higher, was only a third to a quarter of what it was before.
While oil prices are still nowhere near their peaks this year, it’s worth noting that even when oil was moving again, it wasn’t doing so quickly or at a rate to fix the previous supply disruption.
Now that supply has stopped again, could further price shocks be on the horizon?
The Markets
UK: The FTSE 100 and 250 showed losses this week due to US-Iran tensions and a steep drop in pharmaceutical and defence stocks, notably driven by AstraZeneca having a trial setback.
US: While slightly down, the S&P 500 is trading just shy of record highs shrugging off broader economic concerns.
Oil: Brent Crude is up over 5% this week, though it is lower than previous points in the crisis.
Japan: Saw an initial midweek dip caused by the global tech and semiconductor selloff but rebounded on renewed enthusiasm for AI investments.
Emerging markets: Many emerging markets saw weekly declines, but South Korea saw stocks rebound later in the week fuelled by sentiment around semiconductors with optimism around SK Hynix’s deal.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | -1.63% | 7.41% |
| FTSE 250 | -1.09% | 5.43% |
| S&P 500 | -0.18% | 11.16% |
| NASDAQ | -0.16% | 18.67% |
| FTSE Developed Europe ex UK | -1.57% | 8.07% |
| FTSE Emerging | -1.28% | 9.72% |
| FTSE Japan | -2.36% | 16.15% |
| Brent Crude | 5.29% | -6.80% |
| Gold Spot | -1.11% | -3.97% |
| UK 10yr Gilt yield | +11bps | +43bps |
| US 10yr Treasury yield | +9bps | +40bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 9th 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.
