22 September 2026
The Bank of England ("BoE") held the base interest rate at 3.75% last Thursday by a six to three vote, the dissenters favouring an immediate increase, and warned that rates may need to rise if the energy shock feeds into more persistent inflation. It also slowed balance sheet reduction, giving gilt markets relief and leaving the 10-year yield five basis points lower at 5.29%. The decision followed consumer price index ("CPI") inflation of 3.1% for the year to August, up from 2.9% on higher motor fuel costs, though Core CPI (which excludes energy, food, alcohol and tobacco) held at 2.6% and CPI services at 3.4%. Unemployment held at 4.9% in the three months to July against the 5% expected.
Elsewhere, rising energy costs remain an area of concern, with producer input prices rising 6.1% for the year to August on a 27% annual increase in crude, and factory gate prices up 3.7%. Domestic demand held up better than anticipated, with retail sales volumes rising 0.5% in August against an expected 0.2% fall. Elsewhere, in UK equities the FTSE 100 was broadly flat while the more domestically weighted FTSE 250 rose, supported by the slower pace of quantitative tightening. Retailer Next raised full-year ("FY") guidance again at half-year ("HY") results, and IT infrastructure and services provider Softcat raised £354 million of equity to part fund a $1.05 billion acquisition.
Across the Atlantic, the Federal Reserve ("Fed") raised the federal funds target range by 25 basis points to between 3.75% and 4%, its first rise since 2023. The unanimous vote was something of a surprise, with several observers having expected dissents in favour of a hold. Projections point to one further rise by the end of 2026 and none in 2027, and Chair Kevin Warsh said policy could not yet be called restrictive. The 10-year Treasury yield touched 5.04%, its highest since 2007, before settling at 5%, and the 2-year rose 12 basis points to 4.75%. Equity markets were mixed rather than weak; the S&P 500 was little changed and the Nasdaq Composite was higher, while smaller companies fell. Artificial intelligence ("AI") related shares sold off on Monday after Anthropic's chief executive urged slower development of advanced models, before recovering.
Meanwhile, oil was front and centre during the week on both sides of the Atlantic. Attacks on Saudi energy infrastructure and a pipeline closure lifted crude early on, before West Texas Intermediate ("WTI") fell more than 3% on Wednesday, its largest daily fall in six weeks, on reports the damage was less severe than feared. Eurozone inflation was confirmed at 3.2% for the year to August, from 2.9%, core at 2.4%. Continental equity markets fell as that move weighed on industrial and consumer-facing stocks. Conversely, Germany fared better, with the Federation of German Industries lifting its 2026 growth forecast to 1% from 0.6%.
The Bank of Japan ("BoJ") raised its policy rate by 25 basis points to 1.25%, its highest since 1995, on a seven to two vote. Governor Kazuo Ueda said underlying inflation was approaching the 2% target, while stressing decisions would be taken meeting by meeting. The yen weakened past 157 to the dollar from 153 despite the increase, the split vote and absence of guidance prompting a reassessment of the pace of tightening. The weaker currency supported exporters and lifted both the Nikkei 225 and TOPIX indices.
Barratt Redrow is the UK's largest residential property developer, building homes across the country under its prominent Barratt Homes, David Wilson and Redrow brands. Over the past two weeks, the company's shares listed in London climbed 7.08% to close at 305.7p on Friday. This solid performance was primarily driven by a strong FY 2026 earnings report that surpassed profit expectations and highlighted the successful, ahead of schedule cost synergies from the recent Redrow merger. The earnings report showcased a 6.6% rise in total revenue to £6.06 billion. The stock's upward momentum was further amplified by management's announcement of a massive £386 million share buyback program and a broader UK housebuilding sector upgrade from the equity research team at Berenberg, a private bank
AstraZeneca is a leading UK-based global biopharmaceutical company that discovers, develops and commercialises prescription medicines, primarily in oncology, cardiovascular and rare diseases. The company's shares rose 6.76%, ending the week at 12,500p, driven by breakthrough clinical trial results, strong executive insider buying and positive analyst upgrades. During the week, AstraZeneca presented landmark Phase III ADAURA trial data at the World Conference on Lung Cancer showing an unprecedented 74% eight-year survival rate for Tagrisso in early-stage Epidermal Growth Factor Receptor ("EGFR") mutated lung cancer. EGFR is a protein on cell surfaces that helps regulate normal cell growth and division.
Airtel Africa, a leading provider of telecommunications and mobile money services across 14 countries in Africa, experienced an 8.29% decline in its stock price this past week, closing at 316.4p. The drop was largely driven by a selloff on Friday following reports that the company is scaling back the size and valuation of the planned London initial public offering ("IPO") for its Airtel Money division. After receiving feedback from investors, the mobile money arm slashed its fundraising target from an initial $2 billion down to $800 million and lowered its targeted valuation from $10 billion to between $8 billion and $9 billion.
Market Commentary prepared by Walker Crips Investment Management Limited.
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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.
