The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- UK borrowing rises in August – UK borrowing was £13.8bn last month, almost a fifth higher than the year before according to the Office for National Statistics (ONS). £3.5bn higher than forecasters expected. The interest the government pays on its debts rose to £8.8bn, the highest level since records began in 1997.
- Delays in AI IPOs – SB Energy a subsidiary of Softbank which has proposed to build the world’s largest data centre in Ohio had originally planned its initial public offering this month. Now it’s been questioned by investors over its $50bn valuation. Holtec, a company looking to supply energy for AI, also looked to delay its IPO indefinitely due to concerns over investor confidence for new IPOs.
- Trump welcomes Xi to the White House – President Xi Jinping is visiting the US for talks with Donald Trump. Alongside announcements of pandas being sent to Atlanta Zoo and student exchanges, a truce to the trade war was announced. Further discussions about AI and trade are expected to take place during the visit.
- Open AI Agent hacks Australian Government website – In a world first an AI agent hacked the Australian government website. The agent gained access to a statistics portal containing non-sensitive data from the universal healthcare system Medicare.
- US long-term bond yields reach highest level since 2004 – Thursday saw 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 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
Borrowing
UK and US borrowing is now very expensive. In the UK this means that the Chancellor’s budget next month is going to be under a lot of pressure. Inflation rose to its highest in five months in August compared with a year ago, meaning spending costs will also rise putting further pressure on, despite increased tax receipts in August.
And this week the International Monetary Fund (IMF) warned the UK and US to bring their spiralling debt costs under control – with the US’s debt now at over $40tn.
To get debts under control, tough measures will be needed from governments and central banks.
AI on shakey ground
After last week’s push for an AI slowdown, we’ve now seen a further security breach caused by AI in Australia, which will have shaken confidence in AI’s safety for Governments and companies.
Added to this, we see AI related IPO’s attracting increasing scepticism over their aspirations for growth. Though the demand is still enormous. Companies have already committed trillions of dollars to AI infrastructure, PIMCO estimates that more than $5tn in spending will be needed by 2030 for the buildout - and companies will need to access capital markets to raise this money.
Trump also attempted to rebrand AI as “Super Intelligence” as artificial sounds “fake”. We’ll wait to see if the name change takes off.
US and China talk
One of the main topics expected to be discussed by Xi Jinping and Donald Trump this week is AI, which the US and China are in competition over.
Xi has stated a wish for AI to be under human control, while Trump has previously downplayed the risks of AI. There’s a lack of trust on both sides as neither side wants to slowdown development, but a hotline for AI safety incidents between the two nations has already been confirmed.
While anything of substance has yet to be announced, Apple’s Tim Cook, Open AI’s Sam Altman, Amazon’s Jeff Bezos and Nvidia’s Jensen Huang were all in attendance at the White House.
No AI agreements were met, but they did announce a truce to pause the trade war for two months, allowing more time to work on a bigger deal. If successful, this could see greater cooperation between the US and China.
Chart of the week: Fat Bear Week
Source: Fat Bear Week, Explore.org
Why’s this worth sharing?
We’re familiar with bull and bear markets, and it seems many investors fear bears.
However, these bears aren’t on the stock market. Each year Alaska’s Katmai National Park celebrates 'Fat Bear Week', showcasing how bears get ready for hibernation by making the most of favourable conditions while they can.
There’s a call-out here for investors. Today's market story continues to be dominated by AI enthusiasm, a small number of large technology companies and expectations around future growth. But as this week's delays to AI-related IPOs and renewed debate around valuations show, even the strongest investment themes can face periods of scrutiny.
Rather than trying to predict which trend will lead markets next, diversified portfolios are built to cope with changing conditions. Like the bears preparing for winter, successful investing is often less about reacting to every headline and more about being prepared for whatever comes next.
The Markets
UK: A volatile week dominated by surging geopolitical risks, swinging oil prices and the global bond sell-off, though the FTSE 100 entered positive territory by the end of the week following hopes of diplomatic breakthroughs between the US and Iran.
US: A similarly turbulent week in the US, with treasury yields pushed to 19-year highs alongside volatility in tech stocks.
Europe (ex UK): Like the US and UK markets were under pressure from soaring global bond yields and crude prices.
Japan: The price-weighted Nikkei 225 saw a five-day winning streak, driven by a rally in tech stocks. However, the market-cap weighted FTSE Japan index saw volatility throughout the week over global macro pressures.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | -0.59% | -2.22% |
| IA Sterling Corporate Bond | -0.44% | -0.72% |
| IA Global High Yield Bond | 0.16% | 2.11% |
| FTSE All Share | 0.17% | 10.30% |
| FTSE USA | 1.85% | 15.22% |
| FTSE World Europe ex UK | 0.60% | 8.59% |
| FTSE Japan | -0.21% | 20.38% |
| FTSE Asia Pacific ex Japan | 2.15% | 25.50% |
| FTSE Emerging | 1.20% | 13.75% |
Source: FE. GBP returns as at close of business on Thursday 24th September 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.
