Markets remained cautious over the week as investors navigated persistent inflation concerns, mixed economic signals and restrained central bank messaging. UK and US equities moved modestly lower overall, though technology stocks outperformed. Commodities showed a clear split, with precious metals benefiting from safe-haven demand while energy prices stayed subdued. Geopolitical tensions and policy uncertainty continued to shape sentiment as markets look further into 2026.

Chancellor Rachel Reeves delivered the 2025 Budget, stating “We are rebuilding our economy.” The plan raises £26bn by 2029/30, expands fiscal headroom, and keeps Labour’s tax pledges. Forecasts show modest growth and falling inflation. Measures include frozen tax thresholds, ISA changes, higher wages, business incentives, housing investment, NHS upgrades, and new duties on vehicles, tobacco and gaming.

Markets saw a healthy pullback in November as AI momentum cooled, valuations reset, and the U.S. government shutdown delayed key data. Sticky inflation and a cautious Fed further weighed on sentiment. Despite global weakness, strong earnings, long-term AI investment, improving valuations, and supportive December seasonality suggest conditions may favor a year-end rebound and constructive outlook ahead.