The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- UK inflation falls to 2.8% – lower gas and electricity prices before the war in Iran were behind a bigger than expected drop to inflation in the year to April, down from 3.3% in the year to March. However, inflation is expected to rise over the rest of the year.
- Petrol hits highest price since the start of the Iran War – the average price of unleaded petrol has risen to 158.52p a litre according to the RAC. In response, Keir Starmer announced plans to scrap fuel duty increases and provide a vehicle tax break for the haulage industry, aimed at easing pressure on households and businesses.
- UK Government borrowing higher than expected – UK government borrowing rose to £24.3bn last month, £4.9bn higher than last year according to the Office for National Statistics. The increase was driven by higher debt interest costs, alongside inflation-linked benefits payments and the earnings-linked rise in the state pension, highlighting the continued pressure on public finances.
- SpaceX ready to launch – SpaceX filed for its stock market debut this week. Seeking to raise $75bn, it could be the largest floatation on record and make Elon Musk the first trillionaire. The company bundles SpaceX’s rockets, Starlink, and xAI (containing what was formerly Twitter) into one company which they value at a whopping $1.25tn.
- Nvidia’s record earnings fail to wow – Nvidia reported another record quarter, with both sales and profits beating expectations. Revenue was up 85% on the year to $81.6bn, while net income more than tripled to $58.3bn. Despite remaining the world’s most valuable company, shares fell on the news. Seeming to show that investors expect more than stellar results, and have concerns about growing competition.
What this means for financial advisers and clients
In the UK, we’re starting to see more of the impact of the war in Iran hit home.
While inflation has eased, it is expected to edge higher again in the coming months. Fuel prices are rising, and there are also signs of softening in the labour market, with unemployment reportedly ticking up to 5% – potentially an early indication of broader economic strain linked to the conflict and its impact on global trade routes. Until there’s peace, and shipping starts moving again, we will continue to see the impact in the news.
SpaceX’s stock market debut won’t be the only one coming. Anthropic, and Open AI are expected to announce later this year and also request some punchy numbers, all likely to end up in the top 10 of an already very top-heavy S&P 500.
For SpaceX, the ambition is increasingly framed as turning science fiction into science fact. Elon Musk for example will receive extra shares if he establishes a permanent settler colony on Mars with over one million inhabitants. There are also plans to create orbital datacentres, develop more AI capabilities, and increase the availability of Starlink, it’s internet connectivity business.
There are big numbers here, but it does ask the question, when will the AI boom run out of fuel? And what happens then?
Chart of the week - Parmenion Passive Growth performance
Source: Parmenion, Morningstar
Why’s this worth sharing?
The chart above plots five-year performance data for all passive MPS models sourced from Morningstar’s database, with the ten risk grades from the Parmenion Passive Growth solution highlighted in red.
Over this period, Parmenion’s risk-focused and well-diversified approach to asset allocation has helped deliver competitive returns at lower levels of risk compared with the majority of peers. While markets often move in tandem in response to global events, there are still meaningful periods where regions and asset classes diverge, particularly during times of heightened uncertainty.
Maintaining an appropriate balance across asset classes can help smooth the path of returns – helping to reduce volatility while still delivering expected outcomes over time.
Considering volatility alongside returns is becoming increasingly important as global indices become more concentrated, increasing the likelihood of more pronounced drawdowns and less diversified sources of return if portfolios aren’t carefully constructed.
The Markets
UK – The FTSE 100 and FTSE 250 both grew this week. Gilt yields fell slightly, in response to favourable commentary around fiscal policy and borrowing commitments under a potential Andy Burnham-led Government.
US – The S&P 500 has been fairly flat this week, but the NASDAQ has pushed higher with continued momentum behind the AI-trade.
Oil – Oil prices have fallen over the week but remain high. Markets are still poised waiting for any changes to the situation in the Strait of Hormuz.
Japan & Emerging Markets – Both have been fairly flat this week following a few weeks of volatility around supply chain disruption and AI technology. There have been worries around Samsung, where workers have threatened to go on strike over bonus pay. As one of the largest producers of memory chips globally, any sustained interruption to output could have meaningful implications for AI infrastructure and global technology supply chains.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 1.25% | 6.81% |
| FTSE 250 | 1.56% | 3.62% |
| S&P 500 | 0.46% | 9.44% |
| NASDAQ | 1.14% | 16.92% |
| FTSE Developed Europe Ex-UK | 1.24% | 4.8% |
| FTSE Emerging Markets | -0.42% | 8.06% |
| FTSE Japan | 0.49% | 13.19% |
| Brent Crude | -4.34% | 28.25% |
| Gold Spot | -0.5% | 5.62% |
| UK 10yr Gilt yield | -11bps | +48bps |
| US 10yr Treasury yield | -4bps | +43bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 21st May 2026.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
