UK equity markets continued their upward journey this week, with the FTSE 100 advancing 0.85% around the 9,100 level – a new record.
It’s been a historic month for the index, which breached the 9,000 mark for the first time ever just last week. Momentum has been largely driven by strong performances from energy and mining stocks this week.
Beneath the surface though, the picture for the UK economy remains mixed. The latest S&P Global PMI data showed that business activity has softened slightly, slipping to 51.0 – still in expansion territory, but slowing. Employment indicators continued to weaken too, with rising business costs (including the lingering impact of higher National Insurance contributions) appearing to weigh on company hiring plans.
The UK retail sector offered a glimmer of positivity as retail sales rebounded 0.9% in June, helped by warmer weather and increased spending on fuel and hospitality. Still, analysts warn that real wage pressures and elevated household costs may continue to weigh on consumer sentiment into the second half of the year.
Commodity markets
Over in the commodity space, Brent crude oil gained modestly to finish near $69.35 per barrel, buoyed by concerns over Russian supply disruptions and continued strength in global demand, particularly from the travel sector.
Meanwhile, Gold eased back slightly from recent highs, slipping to $3,340 per ounce at the time of writing, as better-than-expected US retail and employment data put the brakes on safe-haven buying.
Equity markets
Stateside, sentiment remained largely positive. Both the S&P 500 and Nasdaq logged fresh record highs midweek, supported by solid economic data and a rebound in consumer activity. However, political drama briefly rattled markets after President Trump hinted—then backtracked—on plans to dismiss Federal Reserve Chair Jerome Powell. The ensuing volatility in the US Dollar reminded investors how sensitive markets remain to political uncertainty.
At Thursday’s European Central Bank meeting, policymakers held interest rates steady at 2%. The ECB’s president, Christine Lagarde, said the eurozone was in “a good place” and that the cost-of-living crisis was in the past. “Our job is now to look at what is coming,” she added.
European stocks nudged higher as it was reported by the Financial Times that Brussels could agree to a 15% tariff to avoid the more punitive 30% tariff proposed by President Donald Trump due to come into force on the 1st of August 2025.
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