The latest economic news and market highlights from the UK and abroad.
This week's headlines:
The UK Budget - Chancellor Healey delivered his first budget on Wednesday. Measures included £100 in energy relief for council tax bands A-D and scrapping of the ISA changes planned for April next year.
The Fed refused to hike rates - the US decided to hold interest rates steady at 3.75%-4%.
Anthropic releases IPO paperwork - last Monday the company published its 355-page S-1 filing, unveiling the details of its upcoming stock market listing.
Alphabet shares lose £500bn in a day after results - the company suffered its worst ever day on stock market value due to concerns over AI spending.
What this means for financial advisers and clients
On Budget
Last Wednesday the Chancellor announced his first Budget. Bond markets have been looking for signs of fiscal discipline, and the Budget that was presented seemed to show that the UK isn’t increasing spending or borrowing, with policies within the fiscal headroom.
Bond markets appear to have been pacified by what was by all accounts a relatively uneventful budget. Bond yields dipped during the chancellor’s speech and have remained relatively steady, outperforming US, French and German debt.
While some of the more dramatic changes that were rumoured failed to materialise, there were still several announcements which could affect investors.
Read our full Budget debrief: What the 2026 Budget means for you and your clients.
Holding steady
As we enter the US midterm elections, the Federal Reserve (Fed) held interest rates steady, this was in spite of rising bond yields and inflation running higher than target at 3.7% in the year to September. Chairman Warsh said he wanted to gather more information before increasing rates again.
The decision to hold rates wasn’t unanimous with two members out of the 12 voting to increase rates by 0.25%.
Warsh has said it wasn’t a political decision to hold rates but going into the midterms and with President Trump calling for lower borrowing costs, how true this was is still up for debate.
Another rate hike is expected by the end of this year, with the next bank meeting taking place on 8th-9th December.
AI scare
Alphabet’s plunge spooked markets on Halloween week after its results missed forecasts. Currently AI companies are under a lot of scrutiny over capital expenditure - and Alphabet missed the mark. Search revenue growth missed forecasts by nearly 3% coming in at 12%, plus there was negative free cash flow of over $9bn for the third quarter, more than triple than what was expected.
It’s not just Alphabet though, Amazon has also seen recent falls following its results, again over capital expenditure. Its debt now stands at $173bn, up from $66bn last year. Meanwhile Microsoft rose in value following better than expected revenue of $92.3bn.
Anthropic is gearing up for its IPO soon and could be worth up to $1.75tn. Its filings show that it made a loss of over $80bn in the first half of the year, but this is partly a quirk of its bonds which can convert into stock, with revenue of over $16bn. It’s also committing to spend over $800bn in AI infrastructure, with up to $600bn spent by 2031 by some estimates. Its IPO success will be depending on whether investors see the value in it. It could be a broader critical test for AI companies across the market.
406 jump
406. That’s the number of stocks in the S&P 500 that rose on Thursday, even though the index as a whole actually fell by 0.3%.
A small number of shares make up a huge amount of returns, which is why we’ll keep banging the drum on diversification and asset allocation being key in portfolios.
Chart of the week:
Source: Bloomberg
Why’s this worth sharing?
With AI, oil prices and interest rates driving markets right now, it’s interesting to see what had the most impact on stock prices on Thursday. Here we can see that markets were more concerned about Microsoft and Alphabet’s results than the Fed’s update on interest rates.
The Markets
UK: On the back of the Budget the FTSE 100 and FTSE All-Share traded steadily upwards and the gilt market calmed.
US: A sharp AI sell-off for the end of the month for the S&P 500 and Nasdaq as disappointing tech earnings were announced.
Europe (ex UK): A volatile week but shares edged higher following the decision by the European Central Bank (ECB) to pause rates. Japan: Endured a highly volatile week of trading, driven by global tech jitters.
Emerging markets: Markets fell due to the AI tech-sell off and escalating energy shocks in the Middle East. Resilience in India and Latin America however helped to weather the shocks as these markets are less exposed to technology.
| Name | Weekly change | YTD change |
|---|---|---|
| FTSE Actuaries UK Conventional Gilts All Stocks | 0.53% | -0.93% |
| IA Sterling Corporate Bond | 0.31% | -0.49% |
| IA Global High Yield Bond | 0.48% | 0.09% |
| FTSE All Share | 0.43% | 11.06% |
| FTSE USA | -0.72% | 11.72% |
| FTSE World Europe ex UK | 1.15% | 6.16% |
| FTSE Japan | -0.41% | 17.17% |
| FTSE Asia Pacific ex Japan | 0.37% | 14.15% |
| FTSE Emerging | -1.80% | 4.50% |
Source: FE. GBP returns as at close of business on Friday 30th October 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.
