The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- North American tariff war – hopes of a trade agreement faded after negotiations broke down last weekend. The US announced tariffs of up to 50% on Canadian goods, including cars. Canada swiftly retaliated with up to 50% tariffs on a “dollar for dollar” basis.
- UK energy bills to hit three year high – the UK’s energy cap is set to rise by 4% from October raising energy bills across the country when winter temperatures set in. A typical household will pay £60 more a year, though customers on fixed rate tariffs will be unaffected.
- Meta settles lawsuit over child safety claims – the owner of Facebook and Instagram agreed to pay up to $18bn to settle claims brought by 29 states that said its platforms harm children. The deal also includes promises to introduce certain rules for teenagers including daily limits and nighttime blocks. The money will be spent on programs associated with the impacts of social media on children.
- Anthropic wins case – a judge has ruled that the US Department of Defense acted unlawfully when it designated AI company Anthropic a supply chain risk. The dispute stemmed from the company’s decision to not permit its AI technology to be used for military applications, including surveillance or autonomous weapons.
- US targets Iran with more sanctions – the US launched the “single greatest financial offensive ever” this week against Iran with more sanctions. Intended to block more revenue, the sanctions target other countries who continue to trade with Iran including China – its biggest trading partner – Turkey, Armenia, and Pakistan.
What this means for financial advisers and clients
Tariffs strike again
Trump has resorted to more tariffs after trade negotiations broke down with Canada, including complaints over French language prioritisation on Netflix, and attempts to dictate how Canada could trade with other countries. We’ve seen it before in his playbook, but Canada isn’t backing down this time.
The tariffs could harm businesses on both sides of the border with automakers hit hard by the US tariffs. Many cars popular in America are built in Canada by US companies, but a lot of auto parts are also manufactured there, which could push up prices for US citizens who already have cars.
Canada's response has been equally forceful. Its retaliatory tariffs appear carefully targeted at industries and regions that could create political pressure ahead of the US midterm elections.
Perhaps more significantly, the dispute risks causing lasting damage to the relationship between two long-standing trading partners. Canadian Prime Minister Mark Carney noted “We cannot depend on traditional alliances when the rules of the game have fundamentally changed”. This could mean increased trade with Europe and other American countries, but also may lead other countries to take a stand against Trump’s tariffs if he resorts to the tactic again.
UK energy bills climb
We’re seeing energy bills rise again. The last increase to the energy cap came as we were entering summer, when many households typically use less energy. But with winter approaching, this latest rise could place more UK households under financial pressure as energy use increases. Many households may choose to fix their energy bills to gain more certainty over their monthly costs.
It is also a reminder that global events can have an impact here in the UK, with tensions between the US and Iran contributing to higher energy prices.
Anti-social media part 2.
Meta’s trial was a big moment for social media companies. After strongly defending its approach to protecting children on its platforms, it was surprising to see the company reach a settlement. Part of the settlement depends on YouTube and Tiktok agreeing to make changes to their apps. This will put pressure on both companies, as California’s Attorney General Rob Bonta and other states take a closer look at their practices.
The spotlight on social media companies and their practices isn’t over. More changes, investigations and fines could be coming for the sector.
More sanctions
New sanctions against Iran aim to topple the regime. However, their effectiveness remains uncertain. China has said that it would protect its own interests and has a history of ignoring sanctions. Pakistan may face a more difficult balancing act. While their top trading partner is the US, it also plays a key mediator between the US and Iran. Turkey however, a Nato nation, is a large trading partner of Iran and could be deeply impacted by the change as it can’t stop trading with it. With Turkish inflation at 31.8% it will struggle to comply with the sanctions.
Despite this, many believe that sanctions will have a limited impact on Iran’s revenues. Iran already face a lot of sanctions, and the US might not have what it takes to follow through on the impacts for other countries. They’ve already backed down from a trade war with China this year. Global markets didn’t really react to the news either.
Chart of the week
Source: Bloomberg, Mapping English Football: How Many Clubs Now Have US Owners? - Bloomberg
Why’s this worth sharing?
Jeff Bezos recently joined a consortium that took a large stake in Liverpool FC, with an option to take a controlling stake in the next 12 months which valued the club at £5-6bn. Perhaps to try and get Prime a prime position in front of Liverpudlian eyes around the stadium?
But he’s not alone in trying to take a stake in our beloved game. While the UK is often seen as an unloved market, our football teams seem to hold great appeal to US investors.
Capital typically goes towards assets that look undervalued. The growing number of US owners in English football demonstrates how they’re prepared to commit capital when they believe the long-term value exceeds the current price. In the world of finance, the UK market is on track for the biggest year of takeovers since 2021 as US buyers circle firms on the London Stock Exchange. There were £74bn of offers in the first half of the year.
Despite periodic concerns about the UK economy, international investors are continuing to commit billions of pounds to UK assets. The same things that attract investors to English football clubs can also attract investors to other UK companies. Global reach, established brands, reliable governance with fair competition, and the potential for long-term growth.
US owners also didn’t invest because they expect to win immediately next season, they invested because they believe in the long-term commercial value of the club. Successful investing often requires the same mindset.
The Markets
UK: UK equities faced a mixed week, driven by strong UK productivity news and fears around persistent inflation.
US: US equities were lifted on Thursday by an AI-driven tech surge, but earlier in the week were muted by inflation news from the Federal Reserve (Fed) and the trade friction with Canada.
Europe (ex UK): European equities started the week on a positive footing, supported by stronger-than-expected German export data. However, sentiment faded as investors digested broader economic concerns and warnings from the European Central Bank that lending conditions could tighten further, potentially weighing on future growth.
Japan: Japanese equities benefited from the continued strength of the AI theme, with technology-related stocks providing support towards the end of the week.
Asia Pacific ex Japan: Gains were driven by AI related companies, but trading volumes were thinned across the week as investors sought interest rate news from the Fed.
Gold: Gold saw a three-month high as continued conflict in Iran and ongoing political uncertainty fuelled a rally in the asset typically seen as a safe haven for investors. It’s on track for its best monthly performance since 1999.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | 0.27% | -1.07% |
| IA Sterling Corporate Bond | 0.25% | 0.36% |
| IA Global High Yield Bond | 0.39% | 1.88% |
| FTSE All Share | -0.08% | 11.63% |
| FTSE USA | 1.06% | 12.37% |
| FTSE World Europe ex UK | -0.29% | 11.13% |
| FTSE Japan | 1.18% | 18.18% |
| FTSE Asia Pacific ex Japan | 0.36% | 22.12% |
| FTSE Emerging | 0.72% | 11.65% |
Source: FE. GBP returns as at close of business on Thursday 27th August 2026.
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