The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- US national debt breaches $40trn – more than doubling in a decade the US National debt has reached the $40trn milestone. It was predicted to reach $39.6trn by the end of this fiscal year and has already surpassed it. US national debt is expected to reach $64trn by 2036.
- US 30-year yields hit highest level since 2007 – stalled talks on Iran along with oil prices moving above $90 a barrel, plus concerns over US debt sent 30-year treasury yields higher. Higher yields were also seen for German, French and Japanese 10-year bonds.
- Chinese robot maker soars on debut – Unitree, a Chinese robot manufacturer jumped to a $48bn valuation on its debut on Shanghai’s star market this week with shares surging more than 600% from its 150.8 yuan listed price to 1,100 yuan. The company which captured attention in February with a demonstration of the robots’ martial arts skills produced 16,000 humanoid robots last year and could produce 100,000 this year.
- Meta on trial – Meta has gone to trial this week with over 29 US states which have brought a joint action against it over child safety concerns on its platforms. The states are seeking $1.4trn in damages along with changes to how Meta handles safety on its apps.
- Merck and Moderna vaccine success – health companies Merck and Moderna announced late-stage trial results for a personalised skin cancer vaccine. The news raised expectations for treating the deadliest form of skin cancer and showing the wider applications of the mRNA vaccine used in Moderna’s COVID-19 vaccine. Moderna’s share price rose 177% on Wednesday after announcing the news, Merck’s 13%.
What this means for financial advisers and clients
US Debt issues
Costs are spiralling out of control, inflation is high, interest rates are high - which means that the managing that deficit is even more expensive. It’s now almost 20% of tax revenue, more than spending on defence.
Bond investors are now demanding a higher yield because of the size of the debt, knowing that they might get a better return from AI companies also looking for investor cash.
The approach to fix this so far has been buying back government debt boosting demand for bonds, but the effect was short-lived. US households could face higher rates for mortgages and credit, and this could also increase other costs for consumers. The US might have to look deeply at fiscal and monetary policy to correct this.
iRobot
Success for Unitree shows what the future might hold for robotics going forward. Chinese tech companies are racing to develop commercially viable humanoid robots, outpacing western companies like Tesla which has only produced a few hundred bipedal robots so far. The applications seem to be wide ranging, from carrying supplies, sorting medications and a variety of military applications. The Bank of America has forecast that there could be 10mn humanoid robots by 2035 and there are expectations that they could see rapid improvements from AI firm DeepSeek as it’s taken a 2.3% stake in the company.
Anti-social media
Meta’s trial is a big moment for social media companies. 29 states deciding to work together is no easy thing. Children’s use of social media and the harms that it can cause have been in the spotlight recently, with Australia introducing a ban for under 16-year-olds - and the UK is planning similar moves.
The outcome of this trial could see greater scrutiny and regulation for social media companies introduced, which would have a major impact on the sector.
Healthcare back?
During the pandemic healthcare stocks took off and we also saw strong performance with a boom in GLP-1 weight loss drugs. They’ve had a great impact on public health, but since then the sector has been rather lacklustre. Investors have been waiting for the next blockbuster move from the industry, and the market reaction to the trial results suggests that they think they may have found it. But is it the next big thing, or an overreaction? We’ll have to wait and see.
Chart of the week
Source: YouGov, May 2026
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The Markets
UK: UK equities faced a mixed week driven by rising inflation data and soft retail sales. The FTSE 100 remained relatively steady.
US: Equities were pressured by rising treasury yields, rising oil prices and disappointing consumer sector reports.
Europe (ex UK): Markets faced persistent downward pressure from climbing bond yields and rising oil prices.
Japan: Japanese equities had a rough week compared to last, with bond yields and a weak yen playing their part in performance.
Asia Pacific ex Japan: A volatile week driven by a mid-week tech sell-off and the spike in oil prices. South Korea’s KOSPI was partially stabilised by the announcement of corporate buybacks from Samsung and SK Hynix.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | -0.17% | -1.35% |
| IA Sterling Corporate Bond | -0.26% | 0.13% |
| IA Global High Yield Bond | -0.35% | 1.59% |
| FTSE All Share | -0.14% | 10.99% |
| FTSE USA | -2.46% | 10.62% |
| FTSE World Europe ex UK | -1.04% | 10.84% |
| FTSE Japan | -3.73% | 16.69% |
| FTSE Asia Pacific ex Japan | -0.76% | 20.39% |
| FTSE Emerging | -0.71% | 9.77% |
Source: FE. GBP returns as at close of business on Thursday 20th August 2026.
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