Concerns over Autumn Budget hit gilt market

US technology stocks fell on Thursday, with the Nasdaq Composite down 2.3% in its worst session in more than a month, as investors retreated from high-growth names amid mounting concerns over stretched valuations and fading hopes for imminent rate cuts. Mega-cap tech companies including Nvidia, Apple and Alphabet led the declines, reflecting a broader reassessment of the artificial-intelligence-driven rally that has dominated markets this year. 

The sell-off was compounded by uncertainty over Federal Reserve policy after the longest-ever US government shutdown left key economic data missing, reducing the odds of a December rate cut. 

The FTSE 100 closed at all-time highs on Monday and Tuesday, before retreating. The new records were a result of optimism surrounding the end of the US government shutdown, as well as weak UK labour market data boosting hopes the Bank of England would cut interest rates. Shares in AstraZeneca hit an all-time high, with gains also driven by companies such as Diageo, shares in which surged after it named a new chief executive, and miners such as Fresnillo, which were supported by rising gold prices. However, prices retreated towards the end of the week following the sell-off in US technology names. 

The FTSE 100 was up 0.1% over the week by mid-session on Friday, with the more UK-focused FTSE 250 trading flat.

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Autumn Budget

UK government bonds sold off sharply following press reports that Chancellor Rachel Reeves will ditch plans to raise income tax in the Autumn Budget, reviving concerns over how Labour will plug a fiscal hole of up to £50bn without breaking its manifesto pledges. The yield on 10-year gilts jumped 13 basis points to 4.57%, the highest in four weeks, as traders priced in greater borrowing and trimmed expectations for Bank of England rate cuts. The move underscores investor unease over fiscal credibility ahead of the 26 November statement. Rising gilt yields could push up debt-servicing costs and complicate Ms Reeves’s efforts to balance the books. Markets are braced for volatility as the chancellor weighs smaller revenue measures and a possible rethink of wealth and partnership taxes amid cabinet divisions, the reports suggested. 

Earlier in the week, Ms Reeves warned that “each of us must do our bit” as she prepares to plug a fiscal hole of up to £50bn, signalling that sweeping tax rises are on the way. In a pre-Budget speech, Reeves declined to rule out breaking Labour’s manifesto pledge not to raise income tax, VAT or National Insurance, saying political expediency could no longer trump the national interest. Economists expect the Office for Budget Responsibility to downgrade productivity forecasts, adding pressure for broad-based tax hikes.

Britain’s housing market lost momentum in October as buyers and sellers hit pause amid mounting uncertainty over tax changes in the Autumn Budget, according to the Royal Institution of Chartered Surveyors (RICS). Its latest survey showed new buyer enquiries and agreed sales both slumped to a net balance of -24%, the weakest reading since April, while new instructions fell to -20%, marking a four-year low. House prices continued to soften, with a net balance of -19% reporting declines, particularly in London and the South East. RICS warned that speculation over stamp duty, capital gains and inheritance tax reforms is compounding a cautious mood already dampened by high inflation and rising unemployment. “Greater clarity over housing taxation policy may help stabilise sentiment, but if the measures announced add further pressure to activity, they risk deepening the current slowdown.”, said Tarrant Parsons, RICS head of market research. 

How to follow the Autumn Budget

Budget season can be noisy – we’re here to help you stay informed and make sense of the changes announced.

Stay ahead of the curve by visiting our Budget Insights page for the latest updates and expert analysis. You can also follow our X account (@_CharlesStanley) for live updates on 26 November.

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Donald Trump

President Donald Trump signed a funding bill late on Wednesday to end the longest government shutdown in US history, a 43-day standoff that froze federal services and rattled markets. The deal funds most agencies until 30 January but leaves healthcare subsidies unresolved, setting up another fight in December. In remarks made in the Oval Office, Mr Trump blasted Democrats for “inflicting massive harm” and urged voters to “remember this” at next year’s mid-term elections. However, markets remain in the dark due to the absence of some key economic data. The big release during the week was meant to be the US Consumer Price Index (CPI) for October, scheduled for 13 November, but the statement was postponed, leaving markets to trade on speculation. Traders braced for volatility as the CPI print is seen as pivotal for Fed rate-cut expectations in early 2026. 

Earlier in the week, President Trump issued pardons to Rudy Giuliani, Mark Meadows and other allies tied to efforts to overturn the 2020 election, a move critics called “symbolic” given ongoing state prosecutions. He also faced renewed scrutiny over Jeffrey Epstein after Democrats released thousands of emails alleging Trump “knew about the girls” and spent time at Epstein’s home. Trump dismissed the claims as a “hoax” and pressured Republican Party rebels to abandon a House petition forcing a vote on releasing Epstein case files.

COP30

The COP30 climate summit in Belém, Brazil, kicked off with a clear call to turn promises into action, as leaders warned the era of half-measures was over. More than 110 countries submitted updated climate plans, covering nearly 70% of global emissions, but United Nations’ (UN) analysis shows they still fall short of the 1.5°C target. Finance dominated early talks, with developed nations urged to finalise a new climate funding goal to replace the $100bn pledge, while Brazil launched the Tropical Forests Forever Facility, securing $5.5bn in commitments to pay countries for preserving rainforests. The long-awaited Loss and Damage Fund was operationalised, issuing its first call for proposals, and multilateral banks pledged $26bn for adaptation. Technology and resilience also featured, with a $2.8bn package for climate-smart agriculture and the debut of an open-source AI model to help 100 million farmers by 2028. Civil society groups pressed for stronger action on fossil fuel phase-out and gender equality, while the summit spotlighted just transition partnerships and Indigenous rights as core to climate justice. Despite progress, UN agencies warned current pledges still put the world on track for 2.3–2.5°C of warming, underscoring the urgency of deeper cuts and faster delivery.

COP30 is being billed as the “COP of implementation”, where rhetoric must give way to results. But what impact will the absence of US representatives from the proceedings have over the long term? COP30 and the absence of the USA.

Energy

The International Energy Agency has sounded the alarm over a mounting oversupply of crude oil, forecasting a global surplus of 4.09 million barrels per day in 2026 – its highest estimate yet. In its November report, the Paris-based watchdog lifted demand growth projections slightly, but said supply is rising far faster. Inventories have ballooned by 313 million barrels so far this year, while crude prices have slid to around $62 a barrel amid fears of a glut. The agency noted risks from US sanctions on Russia and lingering economic uncertainty but warned that “market balances are looking increasingly lopsided” as OPEC+ and non-OPEC producers ramp up output. The short-term warning contrasts with the IEA’s annual outlook, which now assumes oil demand could keep growing until mid-century under current policies, marking a sharp shift from its previous peak-oil narrative. 

Economics

UK GDP figures this week confirmed the economy barely grew in the third quarter, expanding just 0.1% between July and September – down from 0.3% in the second quarter and missing forecasts of 0.2%. Annual growth came in at 1.3%, but September saw a 0.1% monthly contraction as manufacturing slumped, with car output plunging nearly 29% after a cyberattack halted production at Jaguar Land Rover. Services eked out a 0.2% rise and construction added 0.1%, while production fell 0.5%, underscoring a fragile backdrop ahead of the Autumn Budget, where fresh tax hikes could further weigh on activity. 

Eurozone industrial production edged higher. Eurostat data showed industrial output up 0.2% month-on-month in September and 1.2% year-on-year, reversing August’s decline. Gains in energy and capital goods offset weakness in consumer goods, hinting at tentative manufacturing recovery.

China inflation returned to positive territory. CPI rose 0.2% year-on-year in October, beating expectations and ending a two-month decline, while core inflation hit a 20-month high at 1.2%. However, producer prices fell 2.1%, easing from September’s 2.3% drop, suggesting deflationary pressures persist despite policy support.

Geopolitics

China temporarily lifted export controls on rare-earth elements and other critical minerals, granting a one-year reprieve to global manufacturers reliant on these materials for electric vehicles, semiconductors and defence systems. The suspension, which follows trade talks between Xi Jinping and Donald Trump, covers metals such as gallium, germanium, antimony, tungsten and graphite, and replaces case-by-case approvals with a general licence regime. Markets welcomed the move as a sign of easing US-China tensions, but analysts stress it is a tactical pause rather than a policy reversal: Beijing retains the ability to reinstate restrictions and still controls over 90% of rare-earth processing capacity. The decision underscores China’s enduring leverage in high-tech supply chains and gives the West a narrow window to accelerate diversification efforts. What is Washington doing to secure future supply of these essential metals?

Colombia suspended intelligence sharing with the US in protest over a series of US missile strikes on boats in the Caribbean and eastern Pacific, which Bogotá says amount to extrajudicial killings. President Gustavo Petro announced the halt, ordering all security agencies to cut communications with US counterparts “as long as the attacks continue.” At least 75 people have been killed in 19 strikes since September, according to US figures, with Washington claiming the vessels were smuggling narcotics for cartels designated as terrorist groups. Mr Petro, a long-time critic of US drug policy, argues the campaign violates human rights and has called for President Trump to be investigated for war crimes, citing the death of a Colombian fisherman in one strike. 

Companies

SoftBank cashed out of Nvidia in a dramatic pivot toward artificial intelligence (AI), selling its entire 32.1m-share stake in the US chipmaker for $5.83bn. The Japanese tech investor confirmed the October sale alongside its earnings update, saying the proceeds will help bankroll a $22.5bn investment in OpenAI and fund the $500bn Stargate data centre project. Nvidia shares dipped about 2% on the news, which stoked fresh debate over whether the AI boom is peaking after the chipmaker’s meteoric rise to a $5 trillion valuation. SoftBank insisted the move was not a vote of no confidence in Nvidia but a strategic reallocation from hardware to AI platforms. Is AI a financial bubble?

Warren Buffett’s decision to “go quiet” marks the end of one of corporate America’s most distinctive traditions. In his final letter as Berkshire Hathaway chief executive, the 95-year-old investing icon said he will stop writing the annual shareholder letters and step back from his high-profile role at meetings after nearly six decades at the helm. 

Burberry reported a sharp drop in first-half profits as weak demand in China and Europe weighed on sales, underscoring the challenges facing the British luxury brand. Adjusted operating profit fell 34% to £152m for the six months to September, while revenue slipped 7% to £1.3bn, hit by softer spending among high-end shoppers and currency headwinds. The company said full-year earnings will likely come in at the lower end of guidance if current trends persist. Chief executive Jonathan Akeroyd pointed to “a challenging macro environment” but reaffirmed Burberry’s commitment to its brand elevation strategy, despite near-term pressures.

Rolls-Royce reaffirmed its full-year guidance after reporting a “strong performance” across its divisions, despite persistent supply chain pressures. The aero-engine maker said it remains on track to deliver underlying operating profit of £3.1bn–£3.2bn and free cash flow of up to £3.1bn, buoyed by robust demand in civil aerospace, where large engine flying hours rose 8% year-on-year to 109% of 2019 levels. Power Systems also saw strong growth, driven by data centre demand, as Rolls-Royce advanced testing of next-generation engines and its small modular reactor programme. 

BAE Systems delivered a strong third-quarter update, reaffirming its upgraded full-year guidance and highlighting robust operational performance against a backdrop of rising global defence spending. The group has secured more than £27bn in orders so far this year, including major deals for Typhoon aircraft with Turkey and Type 26 frigates for Norway, bolstering its long-term growth pipeline. Trading remains in line with expectations.

Diageo ended months of uncertainty by naming Sir Dave Lewis as its next chief executive, effective 1 January 2026. The former Tesco boss, credited with steering the supermarket giant through a major turnaround, takes the helm at the Guinness and Johnnie Walker owner as it battles slowing sales and shifting consumer tastes. Diageo’s chair Sir John Manzoni said Lewis brings “extensive CEO experience and proven leadership skills” at a time when the drinks group faces headwinds but “significant opportunities”. 

3i Group shares fell by as much as 15% after its interim results, despite posting a strong rise in profits and net asset value, as investors zeroed in on a cautious outlook and signs of slowing momentum at its star asset, Dutch-based discount retailer Action. Chief executive Simon Borrows warned that deal-making would remain “challenging” into the second half and flagged softer like-for-like sales at Action in October, particularly in France, raising doubts over its ability to hit full-year growth targets. The sell-off also reflected concerns over 3i’s heavy reliance on Action, which now accounts for about 70% of portfolio value, and a rich valuation premium that left little room for disappointment. 

Vodafone delivered a solid first-half performance, posting a 7.3% rise in revenue to €19.6bn and service revenue growth of 8.1%, driven by strong momentum in the UK, Turkey and Africa, as well as a return to growth in Germany. However, operating profit fell 9.2% to €2.2bn due to higher depreciation and amortisation cost following the merger with Three UK. The group raised its full-year outlook to the upper end of guidance and unveiled its first dividend increase in eight years.

Insurer Aviva posted a solid third-quarter update, with general insurance premiums up 12% to £10bn and wealth net flows of £8.3bn, leaving the group on track to hit its 2026 financial goals a year early. Operating profit for 2025 is now expected at £2.2bn, including a £150m boost from Direct Line, while cost synergy ambitions from the deal have been raised to £225m and capital benefits to £500m. The insurer also pledged to resume share buybacks next year and set fresh medium-term goals, including 11% annual EPS growth through 2028 and a return on equity above 20%. But shares fell around 4% as investors judged the new targets underwhelming.

Land Securities reported a solid first-half performance, with a 5.2% rise in like-for-like net rental income and a 6% cut in overheads. The UK property group lifted its interim dividend by 2.2% to 19p and raised guidance for rental income growth to 4%-5% for the full year. Occupancy climbed to 97.7%, the highest in nearly a decade, while rental uplifts on renewals hit 10%. Despite £644m of asset disposals leading to a £67m loss on sale, the company reaffirmed its medium-term EPS target of 62p by 2030, implying 4%-4.5% annual growth. 

Engineer Melrose Industries posted a strong trading update for the four months to 31 October, with revenue up 14% year-on-year led by a 28% surge in its Engines division. Original equipment sales jumped 35% on the back of robust demand across narrowbody and widebody-aircraft platforms, while aftermarket revenue rose 22% as repairs business returned to growth. The Structures division delivered a 5% increase, and defence saw solid gains amid rising global military spending. Adjusted operating profit was “significantly higher” than last year and in line with expectations, prompting the aerospace group to reaffirm full-year guidance for revenue of £3.425bn–£3.575bn and operating profit of £620m–£650m. 

Publishing and exhibitions group Informa delivered a confident 10-month trading update, reporting underlying revenue growth of 6.6% and reaffirming full-year guidance for around £4bn in revenue and double-digit adjusted earnings-per-share growth. Chief executive Stephen Carter said the company is “delivering further revenue, profit and earnings growth this year and with continuing momentum into next year”. 

Experian reported a strong first-half performance and raised its full-year guidance. Revenue was up 12% year-on-year at constant exchange rates and 13% at actual rates to $4.06bn, driven by 8% organic growth across all regions. Consumer Services grew 9% organically, supported by an expanding base of 208 million free members, and Business-to-Business revenue rose 8% on robust demand for data and analytics. 

Spirax Group reaffirmed its full-year outlook despite warning of “continued weakness” in key industrial markets, as global production growth slowed to 1.6% from 1.7% in the first half. The thermal energy and fluid technology specialist said organic sales and margins for the ten months to October were ahead of the first half, helped by strong growth in its Electric Thermal Solutions and Watson-Marlow divisions, while Steam Thermal Solutions remained flat as large projects stalled. Demand for semiconductor equipment and biopharma pumps offset softer conditions in Europe and the US, and a more moderate decline in China signalled stabilisation. 

Kier Group kicked off its new financial year on a solid footing, reporting trading in line with expectations and an order book of £11.6bn, up from £11bn at the end of June. The construction and infrastructure specialist said 94% of revenue for the current year was already secured, giving “a high degree of visibility” as performance remains weighted to the second half. 

Convatec shares jumped after the medical products group reported broad-based growth and reaffirmed its full-year targets, despite tariff headwinds and regulatory uncertainty around its InnovaMatrix wound-care line. Organic revenue rose 6.3% in the ten months to October, excluding InnovaMatrix, with strong demand for new launches such as ConvaFoam dressings and GentleCath Air catheters. 

Persimmon shrugged off a softening housing market to post a solid third-quarter update, with forward sales up 15% to £2.79bn and weekly private sales rates rising 9% year-on-year to 0.76 per outlet. The FTSE 100 housebuilder said 83% of this year’s expected private completions are already exchanged or completed, while the average selling price in its order book edged up to £295,150. Chief executive Dean Finch said the group remains on track to meet full-year targets despite consumer confidence being dented by looming tax changes in the Autumn Budget. 

United Utilities posted a sharp rise in interim earnings as higher bills and regulatory adjustments boosted revenue by 21% to £1.31bn in the six months to 30 September. Operating profit surged 68% to £561.5m, while pre-tax profit more than doubled to £325.3m, leaving the FTSE 100 water group on track to meet full-year targets. 

SSE posted interim results broadly in line with expectations and unveiled a £33bn five-year investment plan to accelerate the UK’s energy transition. Adjusted operating profit fell 24% to £655m and adjusted earnings per share dropped 29% to 36.1p, reflecting seasonal factors and prior-period one-offs, while reported profit before tax slid 28% to £521.5m. Capital investment surged 22% to £1.57bn, driven by SSEN Transmission projects, which saw operating profit nearly double as network spending ramps up. Renewables delivered new capacity but faced weaker weather and lower hedged prices, trimming profits by 18%. 

Taylor Wimpey delivered a resilient trading update despite tougher market conditions, with demand softening since summer as affordability pressures and uncertainty ahead of the UK Budget weighed on buyers. The net private sales rate fell to 0.63 per outlet per week from 0.71 a year earlier, while the order book slipped to 7,253 homes worth about £2.1bn. Pricing remained broadly flat and build cost inflation stayed at low single digits, helping the housebuilder maintain its full-year guidance for 10,400–10,800 completions and around £424m in operating profit. 

Germany’s Siemens closed its financial year on a high note, reporting fourth-quarter revenue up 6% to €21.4bn, even as orders slipped 4% year-on-year following a tough comparison with last year’s bumper Mobility contracts. Industrial business profit edged 2% higher to €3.2bn, delivering a margin of 15.3%, while net income fell 13% to €1.8bn, hit by costs linked to Altair and Dotmatics acquisitions. 

Taiwan-listed Foxconn posted record third-quarter revenue of about $67.7bn, up 11% year-on-year, as surging demand for AI servers and cloud infrastructure offset weakness in consumer electronics. Net profit jumped 17% to NT$57.7bn, beating forecasts, with management highlighting Nvidia-linked server racks as the company’s new growth engine. The shift marks a strategic pivot away from lower-margin smartphones (the company manufactures roughly 40% of all Apple iPhones) toward high-value AI hardware, supported by plans to deploy humanoid robots on production lines and expand global smart factories. 

Disney posted mixed fourth-quarter numbers, with strong streaming and theme park performance offset by weakness in traditional TV and film. Revenue came in flat at $22.5bn, missing Wall Street estimates, while adjusted earnings per share dipped 3% to $1.11 – still? ahead of forecasts. Net income more than doubled to $1.44bn, helped by cost controls and higher margins in direct-to-consumer, where Disney+ and Hulu added 12.4m subscribers and swung to a combined operating profit of $352m. Parks and experiences delivered record quarterly income of $1.9bn, up 13%, but linear networks slumped 21% and theatrical releases underwhelmed after last year’s blockbuster slate. Management, however, was confident and predicted double-digit EPS growth over the next two years and doubled its share buyback target to $7bn.