August 2025 Market Update

Overview

Global markets remained steady in August with rallies in most major stock markets tempered by a stronger Pound Sterling - and UK investors seeing a -0.2% total return as a result.

Inflation data was again in the spotlight, with accelerations seen in the UK and US. The debate centres on whether these recent rises are temporary adjustments due to tariffs, or whether tariffs are likely to lead to a more permanent rise in costs.

Unemployment appears to be rising again, albeit slowly, in the UK and US. This conflict with higher inflation is creating uncertainty around the likely path of interest rates, with Bond yields in the UK and US having taken divergent paths recently.

UK longer-term yields faced additional pressure during the month amid uncertainty over both the economy and the fiscal outlook.

Full update below…