25 August 2026
Last week, Bank of England policymakers faced expectations of rates holding at 3.75%, with nearly 90% of economists predicting “no change” despite market pricing for increases. Headline Consumer Price Index inflation accelerated to 2.9% in July from 2.6%, while core inflation held at 2.6%. Although food inflation eased to 2.1%, energy price caps are predicted to rise 4% in October, which could cause further pain for the average Brit navigating the cost of living. Elsewhere, UK economic activity surprised on the upside as the composite Purchasing Managers' Index ("PMI") reached a four-month high of 52.5, propelled by Services PMI rising to 52.8.
In equities, the FTSE 100 index finished the week up due to the faster than expected pickup in activity in UK private sector activity and soaring gold prices lifted mining stocks. However, the UK still faces economic challenges. The extreme summer weather has disrupted energy plans, pushing decisions on North Sea projects into the autumn, and the July public finance deficit reached £1.8 billion. This took the cumulative deficit to £56.7 billion, while 10-year gilt yields touched a high of 5.155%.
Across the Atlantic, geopolitics remained in consideration as tensions with Iran lingered. This heightened tension was further fuelled by continued attacks around the Strait of Hormuz. Hostilities ramped up further as the conflict shifted towards economic pressure, with President Donald Trump threatening severe consequences for countries maintaining commercial ties with Tehran. Such friction helped push West Texas Intermediate crude oil higher. Investors are currently pricing in roughly a 40% chance of a rate hike in September by the Federal Reserve.
In markets, major US equities finished modestly lower last week, with the S&P 500, Nasdaq and the Dow Jones all falling. Elevated Treasury yields, fears the U.S.-Iran conflict would keep oil prices high and rising global bond yields weighed on sentiment. Furthermore, semiconductor stocks performed poorly following notable volatility amid evolving concerns around AI capital expenditure financing.
The UK housing market continues to show ongoing weakness with no signs of an active recovery. According to the latest August Rightmove update, key metrics remain deep in negative territory, with monthly prices falling 2.0% and yearly rates down 1.0%. House price forecasts also remain completely subdued near 0%. Experts attribute this persistent stagnation primarily to volatile mortgage rates and geopolitical tensions.
Endeavour Mining is a leading UK-listed gold producer operating a portfolio of multi-asset gold mines primarily across West African jurisdictions. Last week, the company's stock surged 13.80%, closing at 4,680p at 21st August 2026. This strong performance was primarily driven by a broader macroeconomic rally in the gold sector, where surging bullion prices, fuelled by expectations of Federal Reserve interest rate cuts, a weaker US dollar, and persistent geopolitical tensions, significantly expanded the company's operating margins. The rally was further bolstered by lingering momentum from its highly positive first half 2026 earnings report, where investors cheered record free cash flow generation and management's aggressive return of capital to shareholders via robust dividends and share buybacks.
Fresnillo is the world's largest primary silver producer and a major gold miner, engaged in the exploration, extraction, and processing of precious metals. Last week, the company's stock rose 11.80%, closing at 3,219p at 21st August 2026. Similar to Endeavour, this strong weekly performance was primarily driven by the broader rally in gold and silver prices fuelled by safe-haven demand and geopolitical tensions, alongside continued investor momentum following the company's strong half-year financial results.
JD Sports Fashion is a UK-based sports and fashion retailer specialising in branded athletic footwear, apparel and outdoor gear. The company's shares fell 8.53% to 84.54p at 21st August 2026 after it issued a major profit warning, cutting its full-year pre-tax profit guidance to £700 million from an earlier £850 million forecast. The downgrade was driven by a 6.8% drop in North American sales, weakening demand for high heat footwear launches, and broader cost of living pressures that forced heavier promotional discounting across the sector. Management noted that traditional back to school shopping patterns had been unexpectedly deferred, adding to the squeeze on revenue.
Market Commentary prepared by Walker Crips Investment Management Limited.
This publication is intended to be Walker Crips Investment Management's own commentary on markets. It is not investment research and should not be construed as an offer or solicitation to buy, sell or trade in any of the investments, sectors or asset classes mentioned. The value of any investment and the income arising from it is not guaranteed and can fall as well as rise, so that you may not get back the amount you originally invested. Past performance is not a reliable indicator of future results. Movements in exchange rates can have an adverse effect on the value, price or income of any non-sterling denominated investment. Nothing in this document constitutes advice to undertake a transaction, and if you require professional advice you should contact your financial adviser or your usual contact at Walker Crips. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN:226344) and is a member of the London Stock Exchange. Registered office: 128 Queen Victoria Street, London, EC4V 4BJ. Registered in England and Wales number 4774117.
Important Note
No news or research content is a recommendation to deal. It is important to remember that the value of investments and the income from them can go down as well as up, so you could get back less than you invest. If you have any doubts about the suitability of any investment for your circumstances, you should contact your financial advisor.
The value of investments can fall as well as rise. Investors may get back less than invested. Past performance is not a reliable indicator of future results.
The value of investments can fall as well as rise. Investors may get back less than invested.
