Weekly Market Review - 25-08-2025
- Eloise Bell
- Aug 25
- 2 min read
In the UK, inflation remains elevated while retailers warn of fresh challenges for households. Meanwhile, stronger US manufacturing data pointed to resilience despite rising costs, and Europe steadied on balanced price signals. We also look at commodities, ESG developments, and the geopolitical landscape shaping sentiment as markets move into September.
Market Recap.
UK equities held firm last week, supported by consumer and energy names, while US indices fluctuated as investors adjusted interest rate expectations. In Europe, equities steadied on balanced inflation readings, leaving sentiment caught between optimism over growth resilience and caution around persistent cost pressures.
News.
In the US, business activity accelerated this week, with manufacturing expanding at its fastest pace since 2022 despite tariff headwinds. In the UK, major retailers warned that proposed tax rises in the upcoming budget could weigh on household spending. Meanwhile, euro area trade data showed ongoing resilience in services, even as manufacturing output remained under pressure.
Inflation.
UK consumer price inflation rose to 3.8% in July, the highest in over a year. Services costs were the main driver, highlighting persistent domestic inflation pressures. With households already squeezed, the reading has tempered expectations that the Bank of England will move ahead with further interest rate cuts in the near term.
Central Banks.
European Central Bank policymakers signalled that conditions would need to shift materially before further rate cuts are considered in September. Having already halved rates to 2% since mid-2024, officials described risks as broadly balanced, citing resilient inflation alongside trade and geopolitical uncertainties.
Commodities.
Gold was the strongest performer, supported by safe-haven demand as inflationary pressures persisted. In contrast, oil prices slipped, with demand concerns outweighing earlier supply risks. The divergence underlined how commodities are responding differently to slowing global growth and geopolitical uncertainty.
ESG.
Swiss pharmaceutical company Sandoz signed a 10-year solar power agreement with Elawan Energy to supply nearly 90% of its European electricity needs. Covering 150 MW of new-build solar projects in Spain, the deal marks a major step in reducing operational emissions across its European footprint.
Geopolitics.
EU leaders pressed China for a “rebalancing” of trade ties during recent talks, underscoring concerns over industrial competitiveness and strategic dependence. The discussions highlighted Europe’s challenge of protecting its economy while managing wider geopolitical pressures.
Week Ahead.
US: Durable goods orders and consumer confidence data will test momentum in manufacturing and spending.
UK: No major economic data scheduled, leaving focus on market reaction to the latest inflation release.
EU: Final inflation and PMI readings are due, offering updated insight into euro area growth and price stability.
Sources.
Market recap Data sourced from FE FundInfo & Koyfin. ETFs quoted: iShares Core FTSE 100 UCITS ETF, iShares Core S&P 500 UCITS ETF, iShares Nasdaq 100 UCITS ETF (quoted in Pounds Sterling).
News: Reuters, 21/08/2025
Inflation: ONS / Reuters, 20/08/2025
Central Banks: Reuters, 21/08/2025
Commodities: TradingEconomics & Reuters, 21/08/2025
ESG: ESG Today, 14/08/2025
Geopolitics: Bloomberg, 22/08/2025
Week Ahead: Investing.com, 22/08/2025
