Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia – giving you clear insights to support client conversations.
This week's headlines
- UK Budget steadies the ship – Chancellor Rachel Reeves’ Autumn Budget triggered early volatility in gilts and sterling after a leaked OBR report unsettled investors. However, markets regained composure once the full details were unveiled. Sterling strengthened, gilt yields eased back, and the FTSE 100 recovered its early losses. Analysts said the statement struck a careful balance between fiscal discipline and growth support, bolstering expectations that the Bank of England could resume rate cuts in December amid persistently weak GDP data.
- Markets bet big on a US rate cut – Speculation is heating up. Traders now see an 80%+ chance of a December Fed cut after dovish comments from New York Fed President John Williams. Treasury yields have eased, with the 10-year near 4% and the 2-year near 3.5%, reflecting expectations of further policy accommodation.
- US retail slows – The long-overdue September retail sales report suggests the post-summer spending boom is fading. Headline sales rose just 0.2% month-over-month, well below the 0.4% consensus forecast, marking the smallest gain in four months. The key “control group” – a proxy for GDP that excludes volatile components – unexpectedly fell 0.1%, versus expectations for a 0.3% increase.
- Alphabet shakes up AI race – Alphabet electrified markets this week with its aggressive move into custom AI chips, signalling a direct challenge to Nvidia’s long-standing dominance in the semiconductor space. Investor enthusiasm surged after reports that Meta Platforms is in advanced talks to purchase Alphabet’s Tensor Processing Units (TPUs) for its data centres – a potential multi-billion-dollar deal that would mark Alphabet’s first major external chip deployment beyond Google Cloud.
- China slowdown – Industrial profits fell 5.5% year-on-year in October, the sharpest drop in five months, as manufacturing activity contracted and property sector weakness persisted. Retail sales growth slowed to 3.5% in Q3, while infrastructure and manufacturing investment turned negative, underscoring fragile domestic demand.
What this means for financial advisers and clients
After a rather torturous buildup, the UK Budget is now finally out of the way, and thankfully without much fuss. Both the Bank of England and the US Federal Reserve (Fed) are signalling a shift toward more accommodative policy. Markets now expect rate cuts as early as December, which could provide a supportive backdrop for bonds and equities.
Shifts in tech leadership underscore opportunities in AI but call for valuation discipline. Alphabet’s bold move into custom AI chips and its potential partnership with Meta highlight the accelerating pace of innovation. AI remains a structural growth theme, yet sector valuations are elevated. Exposure to leading technology names can drive long-term growth, but selectivity is essential. Companies with diversified revenue streams and strong balance sheets are in a better position to weather volatility, as are portfolios that maintain a balanced allocation between growth sectors and defensive assets.
Recent data from China has underscored economic fragility, which could spill over and weigh on global growth and commodity markets. Despite these challenges, China has a track record of deploying policy levers that could turn the tide and stabilise growth.
Chart of the week - Impact of the Budget on inflation
Source: Office for Budget Responsibility (OBR)
Why this matters
The Government introduced a series of measures in the Budget aimed at easing cost-of-living pressures, including support on energy bills, transport costs, and fuel duty. According to the OBR, these policies are expected to lower Consumer Purchasing Index (CPI) inflation by 0.4% in 2026–27, helping the Bank of England bring inflation back to target and paving the way for interest rate cuts.
The Markets
UK Budget bounce
The FTSE 100 rose nearly 1% on Wednesday after Chancellor Rachel Reeves’ Autumn Budget avoided punitive taxes on banks and major corporates. Financials led gains, with Lloyds, Barclays, and NatWest among the top risers, buoyed by confirmation that no windfall levy would hit lenders.
UK midcaps rally
The FTSE 250 posted solid gains this week, buoyed by investor relief over the Autumn Budget, upbeat corporate updates, and selective sector strength. Retailers were among the week’s biggest movers, as AO World surged nearly 6% after raising its annual profit forecast for the second time in three months. Kingfisher jumped 4.7% on upbeat Q3 results and improved guidance, lifting sentiment across home improvement and discretionary retail segments.
Pound rebounds
The pound is heading for its strongest weekly performance since early August, rising around 0.8–0.9% against the dollar to trade near $1.32, and hitting a four-week high against the euro. The rally reflects a relief rebound following Chancellor Rachel Reeves’ Autumn Budget, as investors unwound short positions built up ahead of the announcement. The strengthening of sterling against major currencies has offset some of the global equity market advances for UK portfolios this week.
Thanksgiving week for US stocks
After a volatile week ending 21 November, when major US indexes posted losses amid concerns over lofty tech valuations, markets staged a recovery. The Dow, S&P500, and Nasdaq logged four consecutive days of gains ahead of Thanksgiving, buoyed by optimism around artificial intelligence stocks and the sharp shift in expectations of a Federal Reserve rate cut in December. UK investors experienced softer gains due to the appreciation of the pound against the dollar.
Gold recovers
Gold prices surged again this week, trading near $4,150–$4,175 per ounce, as investors piled into the metal amid mounting expectations of a U.S. Federal Reserve rate cut in December and persistent geopolitical uncertainty. The yellow metal has now gained roughly 55–60% in $ terms year-to-date, marking one of its strongest annual performances in over four decades.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 1.67% | 22.70% |
| FTSE 250 | 3.47% | 10.83% |
| S&P 500 | 2.08% | 10.56% |
| NASDAQ | 3.17% | 14.32% |
| FTSE Developed Europe Ex-UK | 1.89% | 23.24% |
| FTSE Emerging Markets | 1.01% | 17.23% |
| FTSE Japan | 1.09% | 17.27% |
| Brent Crude | -0.73% | -20.56% |
| Gold Spot | 1.62% | 52.06% |
| UK 10yr Gilt yield | -10bps | -12bps |
| US 10yr Treasury yield | -6bps | -57bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 27th 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.
