Weekly Market Review - 26-10-2026

2 days ago

5 min read

This week, equity markets moved lower overall, with technology stocks seeing the sharpest falls. UK inflation rose to 3.50%, while oil prices remained elevated and attention turned to a busy week ahead, with the UK Budget and interest-rate decisions from both the Federal Reserve and European Central Bank.

Market Recap.

Equity markets delivered a weaker performance overall, with US technology stocks recording the largest losses while the Dow Jones Industrial Average ETF managed a small gain.

The Dow Jones Industrial Average ETF rose 0.16%, making it the only one of the four markets to finish the week higher. UK equities moved lower, with the FTSE 100 ETF falling 0.71%.

Broader US equities also declined, with the S&P 500 ETF down 1.36%. Technology stocks experienced the sharpest fall, with the Nasdaq 100 ETF dropping 2.67%, significantly underperforming the wider US market.

News.

The UK Government has announced measures designed to reduce administrative and import costs for British businesses by almost £800 million a year.

The package includes more than £600 million of estimated annual savings from reducing regulatory administration. This includes streamlined company reporting and reduced duplicate reporting requirements for asset managers, which the Government estimates could save the sector £105 million annually.

Import tariff suspensions will also be extended on more than 250 products, potentially saving businesses up to £155 million a year. The measures were announced ahead of Wednesday's Budget, when further changes affecting businesses and the wider economy will be set out.

Inflation.

UK inflation increased in September, adding to the pressure facing households and the Bank of England ahead of its next interest-rate decision.

The Consumer Price Index rose 3.50% year-on-year, up from 3.10% in August, while prices increased 0.40% over the month. Transport costs, particularly motor fuels, made the largest upward contribution to the annual rate.

Underlying price pressures also strengthened. Core CPI, which excludes energy, food, alcohol and tobacco, increased to 2.80% from 2.60%, while services inflation rose from 3.40% to 3.70%. The Bank of England's next interest-rate decision is due on 5th November.

Central Banks.

Bank of England policymaker Megan Greene has warned that UK wage growth may prove more persistent than some headline figures suggest, increasing the risk that higher inflation becomes embedded in the economy.

Greene said forward-looking indicators suggest wage growth could stabilise closer to 3.50% than 3.00% over the coming year. She also argued that there may be less spare capacity in the labour market than previously thought.

Greene was one of three Monetary Policy Committee members who voted to raise Bank Rate from 3.75% to 4.00% in September. She said policymakers should proactively lean against the risk of second-round inflation effects rather than waiting for clearer evidence that they have taken hold.

Commodities.

Commodity markets remained volatile on Monday, with oil prices still above the levels quoted in last week's review despite falling back from Friday's highs.

Compared with last week's figures, WTI crude rose 3.77% to around $101.04 per barrel, while Brent increased 6.12% to approximately $114.46. Oil had risen sharply late last week as attacks in Saudi Arabia increased concerns about disruption to Middle Eastern energy supplies, before easing on Monday as diplomatic efforts continued.

Precious metals moved lower compared with last week's quoted levels. Gold fell 3.78% to around $4,017.67 per troy ounce, while silver declined 5.83% to approximately $54.30.

ESG.

The UK Government has announced a new £2 billion Energy Wealth Fund alongside approval for gas production from the licensed Jackdaw field in the North Sea.

The fund will use tax revenues generated from North Sea oil and gas to invest in renewable and low-carbon energy projects, beginning with an initial £2 billion injection of funding and with future North Sea revenues flowing into the fund over time.

Jackdaw is expected to increase UK domestic gas production by around 6% at its peak and could operate for up to 11 years, with gas supplies expected to begin as early as the end of October. The announcement combines near-term energy security with longer-term investment in the UK's energy transition.

Geopolitics.

Russia and Ukraine have agreed a local humanitarian ceasefire around the Russian-occupied town of Oleshky in southern Ukraine, allowing aid deliveries and civilian evacuations.

The ceasefire is due to begin on 27th October and is limited to the area required for the humanitarian operation rather than representing a wider halt to the conflict.

Separately, Ukrainian President Volodymyr Zelenskiy said negotiators from Ukraine, Russia and the United States had agreed to hold technical-level talks in the first half of November. Zelenskiy identified Abu Dhabi as the planned venue, although a US official said the meeting could ultimately take place there or in Switzerland. Significant differences between Russia and Ukraine remain despite the renewed diplomatic activity.

Week Ahead.

United States

The Federal Reserve will be the main focus in the United States, with the Federal Open Market Committee meeting on Tuesday 27th and Wednesday 28th October. Its interest-rate decision and press conference are scheduled for Wednesday.

Economic data then takes centre stage on Thursday 29th, when the advance estimate of third-quarter GDP is released alongside September's Personal Income and Outlays report, which includes the Federal Reserve's preferred PCE inflation measure. The Employment Cost Index for the third quarter follows on Friday 30th, providing a further indication of wage and labour-cost pressures.

United Kingdom The Budget will dominate the UK calendar this week. Chancellor John Healey will deliver his first Budget on Wednesday 28th October, alongside updated economic and public-finance forecasts from the Office for Budget Responsibility.

Markets will focus on changes affecting taxation, public spending, businesses and government borrowing. The ONS will also publish the 2026 edition of the UK National Accounts Blue Book on Friday 30th October, incorporating revisions to historical economic data. The Bank of England's next interest-rate decision follows on Thursday 5th November.

Eurozone

Monetary policy and economic growth will be the main focus across the Eurozone. The European Central Bank's latest interest-rate decision and press conference are scheduled for Thursday 29th October.

The European Commission's October Economic Sentiment Indicator is also due on Thursday, providing an update on confidence across businesses and consumers. On Friday 30th, Eurostat will publish its preliminary estimate of third-quarter Eurozone GDP alongside September unemployment figures, providing a broader picture of economic conditions across the currency bloc.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.