The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- Oil reaches $109 a barrel – the ongoing war in Iran has seen the price of Brent crude hit $109 a barrel as no end to the hostilities is in sight. US forces have struck Iranian tankers and Houthi rebels in Yemen attacked oil facilities in Saudi Arabia.
- European Central Bank (ECB) increases interest rates – the ECB raised interest rates for the second time this year aiming to head off the inflation driven by the war in Iran. The interest rate was raised to 2.5% from 2.25% with indications it’s ready to tighten further if inflation doesn’t improve.
- Chancellor Healey delivers growth speech – the UK chancellor delivered his first major speech on Monday. He acknowledged that borrowing costs remained high and pledged to stick to the fiscal rules. He also declined to comment on increasing taxes, saying that Labour would honour the pledges made in the 2024 manifesto.
- Trump promises $5,000 to every American adult – Donald Trump promised $5,000 to voters in a speech in Texas if the Republicans kept their congressional majority after the midterm elections. Such a plan would cost well over $1tn.
- Surprise UK growth in July – the economy expanded by 0.4% according to the Office for National Statistics (ONS). While previously no growth had been predicted, the shock growth shows the UK’s resilience to the war in Iran. But growth is predicted to slow in the coming months. Businesses involved in AI appear to have boosted growth, but the warm weather and World Cup may have impacted activity.
What this means for financial advisers and clients
Petrol prices shoot up
With the high oil prices, unleaded petrol has risen by 5p a litre in the space of a week according to the RAC. The average price of unleaded is now £1.67 a litre and for diesel it’s £1.89. For unleaded it’s the highest it’s been since the war started.
Despite the conflict, prices are still below the levels reached in 2022 following Russia’s invasion of Ukraine. It goes to show how exposed drivers can be to events thousands of miles away.
Going for Growth
Healey’s speech this week didn’t have a lot of detail, that’s awaited in the Budget on 28th October. And the details will matter. He did however commit to growth and fiscal discipline, which should give some relief to the bond market as large scale borrowing isn’t on the cards. What he can do will be determined by the amount of fiscal headroom that’s available, as last week’s bond sell-off had a substantial impact on the amount of spending the chancellor can carry out with the fiscal policy he’s said he’s sticking to.
You get a check, you get a check
Donald Trump’s promise to give everyone $5,000 ahead of the midterm elections was a big move. One that came as Trump’s poor polling appeared to put him on the defensive. It would have to be approved by Congress and would be larger than the COVID stimulus cheques the US paid out. It would face significant opposition over concerns about runaway inflation and fiscal policy. The US only reached a national debt of over $40tn a few weeks ago.
Even if the Republicans did win, Trump’s previous promise of a tariff dividend to citizens failed to materialise. It’ll be up to US voters to decide whether they trust him enough to follow through on the promise.
Chart of the week
Source: Bloomberg, September 2026
Why’s this worth sharing?
Last week, we wrote about the ongoing commitments to AI expenditure. Here’s an example where a long-term commitment has been made.
AI hyperscaler Oracle has over $130bn of debt due to mature in 2066. Investors are rightly concerned about the amount of debt they’ve taken on to build AI infrastructure. Its share price has fallen 17% year to date.
It’s certainly a scary figure, and it remains to be seen whether the returns from the investments will be enough to repay that borrowing. Maybe Oracle can see a bright future.
With all the noise around AI investments, while you may want to have a toe in the water, it makes sense to make sure you’re diversified. The amount of debt surrounding AI, together with the fact that many banks are invested in the sector and many companies share investments in AI companies like OpenAI and Anthropic, which have yet to list, means that if some AI companies were to fail, it would be a systemic issue affecting many companies.
If you owe £100, it’s your problem. If you owe £100m it’s the bank’s problem. If you owe £100bn it’s everyone’s problem.
The Markets
UK: The FTSE 100 hovered near seven-week lows as oil prices and inflation impacted investor sentiment.
US: The S&P 500, Dow Jones and Nasdaq all dropped for four consecutive days as economic pressure hit tech.
Europe (ex UK): Markets fell sharply following the rate hike and soaring energy costs.
Japan: The Nikkei 225 slumped due to soaring oil prices, rising bond yields and expectations for an interest rate hike.
Asia Pacific ex Japan: A volatile week as markets reacted to rising oil prices and global bond yields.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | -1.41% | -2.59% |
| IA Sterling Corporate Bond | -0.60% | -0.40% |
| IA Global High Yield Bond | -0.43% | 1.67% |
| FTSE All Share | -2.11% | 9.49% |
| FTSE USA | -1.73% | 10.85% |
| FTSE World Europe ex UK | -2.11% | 8.60% |
| FTSE Japan | 0.27% | 21.13% |
| FTSE Asia Pacific ex Japan | 0.39% | 23.45% |
| FTSE Emerging | -0.55% | 12.16% |
Source: FE. GBP returns as at close of business on Thursday 10th September 2026.
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