The latest economic news and market highlights from the UK and abroad.
This week's headlines:
UK diesel price hits all-time high – UK diesel prices hit an all-time high of 199.3p per litre, according to the RAC, with the cost having risen by around 40% since the US-Iran war. Prices at some forecourts may have already breached the £2 mark. Petrol prices have also risen but are yet to reach levels last seen since the outbreak of the Russia-Ukraine war.
Burnham intends to end the pension triple lock – at the Labour Party conference, Andy Burnham announced his intention to end the triple lock on pensions after the next general election. Under Burnham’s plans, the state pension would rise by either inflation or 2.5%, whichever is higher, removing the annual link to wage increases. A longer-term link to earnings is expected to remain.
Nvidia increases share buyback programme – the company announced a $150bn share buyback, raising the total amount of buyback to $235bn. This eclipses the previous record held by Apple, following its $110bn buyback in 2024. Nvidia also announced a new open-source technology that can stop AI from going rogue.
Further AI safety concerns – Reuters reported this week that Anthropic’s IPO documents contain plans to warn investors that the tech may pose “catastrophic or existential risks to humanity”. OpenAI this week also scrapped the roll out of its latest GPT-6.1 Astra system due to safety concerns.
US long-term bond yields reach highest level since 2004 – On Thursday, 30-year Treasury yields reach 5.5%, their highest level since June 2004. The 10-year US treasury yield rose as high as 5.23%, its highest since 2007. Rising crude oil prices and strong economic data led to views of faster rate rises by the Federal Reserve (Fed).
What this means for financial advisers and clients
High and on fumes
The cost of diesel is high which is a concern. The UK government is concerned that the US could restrict diesel exports to reduce prices at home which would push prices even higher. The US has warned Europe to release its diesel reserves or face an export ban.
Diesel prices don’t just affect what you pay at the pump. Diesel is vital to logistics and industry, so higher prices could feed through to the cost of goods and services. Agriculture is also heavily reliant on diesel and, with the harvest in full swing, higher costs could put further pressure on farmers. Together, these factors could add to inflationary pressures around the world.
UK households could face another squeeze too. Energy bills are set to rise in January, with a typical annual bill forecast to jump by £276, according to Cornwall Insight.
Clock running out on the Triple Lock?
The pension triple lock costs the UK a lot, and Andy Burnham this week announced plans to end it if he wins the next election. It’s controversial, and previously seen as politically unthinkable, but it will save billions in the long term. The government predicts savings could reach £15bn a year by 2040.
Turbulent bond markets are looking for signals of whether the UK is being financially responsible, could this be a sign that Burnham is promising just that?
AI positioning
Nvidia’s financial position is different to other companies in the AI space. While others are aiming to raise money through IPOs – like OpenAI and Anthropic – or by selling debt – like Oracle – Nvidia has significant cash reserves. Its unprecedented buyback suggests that they think it’s better to return that cash to shareholders rather than reinvest it elsewhere.
Andrew Bailey this week warned that the AI boom could trigger market shocks, saying that not everyone wins in a technology race. “Google was not the first market leader in internet search. It was Netscape, nobody can remember Netscape today.”
Chart of the week: Diesel-fuelled Democrats
Source: Bloomberg, Polymarket
Why’s this worth sharing?
We’re familiar with bull and bear markets, and it seems many investors fear bears.
We’ll keep it brief. There’s a direct correlation between the odds of the Democrats winning the US midterm elections, according to prediction betting market Polymarket and the US diesel price.
Higher fuel prices are being felt at the pump, and the impact of the conflict with Iran could become an important issue for US voters.
With diesel prices near record highs in all key Senate battleground states, including Georgia, Minnesota, Texas and Michigan, diesel could be what fuels an election loss for the Republicans.
The Markets
UK: The global bond sell-off driven by inflation fears caused markets to drop this week. The UK 30-year bond yield hit a 28-year high, touching 6% before easing slightly.
US: Surging oil prices continued to drive inflation concerns, leading to a volatile week in US markets. The 10-year Treasury yield reached 5.34%, its highest level since 2002.
Europe (ex UK): Eurozone government yields surged to multi-year highs, and the French-German 10-year spread had its widest gap since 2012. This followed the unveiling of France’s 2027 budget, featuring €43bn in spending cuts and tax hikes. Banking stocks fared badly as there were concerns about high interest rates on the broader economy.
Japan: The Nikkei hit six-week highs due to AI optimism, but bond yields remained volatile.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | -0.27% | -2.51% |
| IA Sterling Corporate Bond | -0.33% | -1.16% |
| IA Global High Yield Bond | -0.85% | 0.90% |
| FTSE All Share | -2.20% | 8.07% |
| FTSE USA | -0.73% | 14.71% |
| FTSE World Europe ex UK | -2.92% | 5.91% |
| FTSE Japan | 0.94% | 24.23% |
| FTSE Asia Pacific ex Japan | -0.90% | 24.06% |
| FTSE Emerging | -0.87% | 12.35% |
Source: FE. GBP returns as at close of business on Thursday 1st October 2026.
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