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An article from BW received today, 18/06/2026, on the impact of the new inheritance tax rules on pensions that hold less liquid assets.

In the 2024 Autumn Budget, the Chancellor announced that unused pension savings and some death benefits would no longer be exempt from inheritance tax (IHT) from 6 April 2027. 

This change has significant implications for many SIPP and SSAS clients, particularly those who have considered pension assets as part of wider estate planning.

What has changed since the Budget announcement?

Finance Act 2026 states that liability for any IHT ultimately payable will fall on the deceased’s personal representatives. Where they expect IHT to be due on a pension fund, they can direct the pension scheme administrator to withhold up to 50% of the taxable benefits for up to 15 months from the date of the member’s death. The aim of any IHT due to then be paid directly from the pension scheme to HMRC.

These are helpful from an administration perspective. They mean responsibility for calculating and reporting any IHT sits with the personal representatives, while giving scheme trustees time to value and, where necessary, realise pension scheme assets.

Additionally, where death benefits are subject to both IHT and income tax, the Finance Act 2026 provides for income tax deductions to offset IHT paid, helping to prevent double taxation.

What assets does the pension scheme hold?

Following the death of a member, the pension scheme trustees will need to value the scheme assets and, where applicable, calculate the member’s fund split for the purpose of determining death benefits and reporting this to the member’s personal representatives. With this in mind, SIPP and SSAS members should consider:

• Whether the assets can easily be valued when the time comes. Cash holdings and quoted shares are usually straightforward to value, while unquoted shares and commercial property are likely to require input from professional third parties, such as qualified accountants and surveyors. Members may wish to explore this in advance.
• Whether the assets can be disposed of easily. If assets need to be sold to meet a tax liability, trustees should consider how long this could take.

Can the tax bill be estimated or mitigated?

As the timing of death is unknown, it is unlikely that any future IHT liability can be predicted with complete precision. However, with support from a regulated financial adviser, members may be able to estimate the potential tax position based on their wider wealth, how that wealth is structured, and the pension scheme assets.

This will also depend on whether any exemptions apply, such as where assets pass to a surviving spouse or civil partner.

A regulated financial adviser may also be able to help members consider steps to reduce a future IHT liability, such as making use of available IHT exemptions, making regular gifts from the estate, or updating their Will.

How will the tax be paid?

In some cases, an IHT bill on unused pension funds or death benefits may be unavoidable. Where this is likely, trustees should consider how any tax payable from the scheme would be funded.

For example:

• Can assets be sold to help meet the liability?
• Can the scheme borrow funds to cover the liability?
• Can the trustees take out suitable life cover to meet the liability?

Comment

For those of you with less liquid assets in your pensions, typically in full SIPPs or SSAS, you should start to consider your position.

One of your options is to build liquidity into your pension funds, typically by holding investment funds or shares tradeable on a stock market.  Seek advice.

Steve Speed

18/06/2026

Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 17/06/2026.

Is the end in sight for the Strait of Hormuz blockade?

The U.S. and Iran are close to a deal that could reopen the Strait of Hormuz and bring oil prices down.

Key highlights

• Geopolitical volatility: Markets experienced ‘whiplash’ as Middle East tensions escalated before a sudden ceasefire announcement.
• Central bank divergence: The European Central Bank (ECB) raised rates to combat inflation, while the U.S. Federal Reserve (the Fed) and Bank of England (BoE) are expected to hold steady.
• Asset class shifts: Treasury yields are drifting higher amid AI-driven demand, creating headwinds for gold despite its long-term appeal.

From escalation to “the war is over” – a week of whiplash

There’s been some drama in markets recently. As a reminder, investors began last week scarred by a sharp sell-off in technology stocks and fears that U.S.-Iran ceasefire negotiations seemed to have stalled.

In the week after the sharpest drop in NASDAQ this year, sentiment was weak but the trend that developed was one of progress towards a deal that could open the Strait of Hormuz. This would take some pressure off the very tight markets for energy and associated industrial chemicals. But it wasn’t without setbacks. Iran downed a U.S. helicopter, the U.S. launched retaliatory strikes, and Iran struck back. Both sides maintained, seemingly implausibly, that the ceasefire remained in place. Energy prices barely flinched.

Then on Thursday evening, the tone shifted dramatically. President Trump declared the war over and suggested a deal could be signed as soon as the weekend. Iran was more cautious, noting that no conclusion had been reached and that the U.S. had raised new demands. By Friday morning, oil was at its lowest since April, bond yields had fallen sharply, and equities were firm across Europe following a strong U.S. session.

Source: LSEG

For portfolios, the implications cut both ways. Lower oil prices ease inflationary pressure globally and reduce input costs for businesses, but they create a headwind for the energy-heavy FTSE 100, which closed near 10,400. The domestically focused FTSE 250 traded cautiously all of last week, caught between the benefit of lower energy costs and the reality of sustained high borrowing rates. U.S. equities, particularly in technology and semiconductors, rallied hard as the geopolitical risk premium unwound and AI-related earnings momentum continued.

The ECB hikes – and it won’t be the last

The ECB became the first major central bank to raise rates in response to the oil shock, lifting its policy rate by 25 basis points to 2.25%. President Lagarde noted that the energy shock was broadening throughout the economy, with indirect costs now becoming evident. The ECB’s updated projections revised inflation higher and growth lower – but it’s clearly prioritising price stability, its sole mandate. The ECB now sees core Consumer Price Index (CPI) remaining above 2% at least through 2028.

Two further quarter-point hikes are priced into overnight index swaps, and there’s no obvious reason to think those odds are wrong. Eurozone unemployment remains near an all-time low, and household balance sheets remain resilient – the debt service ratio sits at its lowest since the late 1990s.

The ECB appears confident that moderate tightening won’t crush the economy. That said, growth momentum has clearly weakened relative to the U.S., and wage growth at just over 2% remains muted. Without a major re-acceleration in energy prices, aggressive hiking seems unlikely. The Fed and BoE both meet next week – neither is expected to hike, as their policy rates remain above neutral, unlike the ECB’s pre-meeting position. The UK is expected to raise rates this year but not until September.

Treasury yields – conditions still point towards higher yields

Several Fed officials have pushed back against the idea that AI-driven productivity gains justify rate cuts. New Chair Kevin Warsh’s view that AI is disinflationary appears to be a long-term thesis at best; in the near term, soaring demand for electricity, memory chips and the wealth effect from rising equity markets are all inflationary.

With growth momentum improving, the AI capex boom continuing, and bond supply increasing as government debt-to-GDP rises, yields are more likely to drift higher than lower – though many investors have already bet on higher yields, leaving limited room for further moves upward.

Gold loses its shine

Source: LSEG

The inverse correlation between gold and Treasury yields has reasserted itself, and with yields likely to drift higher, that’s a headwind.

Gold now trades as a very risk-on asset – its volatility exceeds that of the S&P 500 – leaving it vulnerable to outsized losses in any broader market sell-off. A rising oil price would strengthen the dollar, another negative for gold, and would pressure major importing nations like Türkiye and India to implement policies that weigh on aggregate demand for the metal. The technical picture has also deteriorated, with an emerging pattern of lower highs and lower lows. Interestingly the recent drop in oil has not helped the gold price much. Unlike other asset classes where lower valuations can entice new investors, with gold it seems sensible to moderate exposure until a more positive trend emerges.

This doesn’t represent a structurally negative view. The long-term case – central bank diversification away from Western assets, China’s reserves still below 10% in gold, and scope for dollar depreciation over time – remains intact. China has been making contrarian purchases during this period of gold price weakness. But tactically, the balance of risks no longer seems supportive.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

18/06/2026

Please see below the daily update article from EPIC Investment Partners, received this afternoon – 17/06/2026

In the complex theatre of global energy markets, the UAE is accelerating one of the most significant structural shifts in modern sovereign logistics: the deliberate reduction of its dependence on the Strait of Hormuz. Following renewed volatility in the Gulf and recurring disruption risks to one of the world’s strategically important maritime chokepoints, through which roughly one-fifth of global oil and LNG flows, the UAE is advancing a comprehensive “zero Hormuz dependency” strategy.

As UAE Minister of Foreign Trade Thani Al Zeyoudi has stated, the objective is explicit: to eliminate reliance on the Strait regardless of geopolitical conditions. This marks a clear strategic pivot from managing vulnerability to engineering structural independence.

At the heart of this transformation is a rapid expansion of eastern Gulf of Oman infrastructure, including the ports of Fujairah, Khor Fakkan, and Dibba, alongside plans for additional deepwater capacity. Positioned outside the Strait, these assets provide direct access to global shipping lanes and materially reduce exposure to maritime disruption risk.

This port expansion is being reinforced by a parallel build-out of midstream infrastructure. The UAE is scaling up pipeline capacity linking Abu Dhabi’s oil fields to its eastern coastline, including a second Habshan–Fujairah pipeline designed to significantly enhance crude export flexibility, with further expansion options under active consideration. Complementary investment in rail and road networks is also strengthening inland connectivity between production hubs and eastern export terminals.

The strategy extends beyond crude oil to LNG, petrochemicals, and refined products, although rerouting these flows at scale remains more complex. Existing LNG infrastructure within the Gulf continues to play a critical role, even as additional capacity is being developed to diversify export pathways.

The urgency of this programme has been underscored by recent geopolitical shocks, which have exposed the fragility of regional trade routes and highlighted the economic cost of disruption. While the UAE has partially mitigated constraints through increased utilisation of Fujairah and Khor Fakkan, alongside alternative logistics routes such as air freight and third-country transshipment hubs, these measures remain transitional responses to a structural challenge.

Ultimately, the UAE’s approach reflects a broader investment-grade principle: in an environment of persistent geopolitical uncertainty, supply chain resilience is sovereign policy. By embedding export redundancy into its energy architecture, the UAE is protecting its primary revenue base, reducing volatility in its credit profile, and strengthening long-term fiscal predictability.

This operational resilience is a key pillar underpinning Abu Dhabi’s strong sovereign credit standing. Supported by major sovereign investment platforms, including Mubadala and broader sovereign wealth structures, the emirate benefits from a fortress-like balance sheet and substantial net external asset position. Combined with disciplined fiscal management, this provides significant capacity to absorb external shocks.

As a result, Abu Dhabi has consistently maintained a high-grade sovereign AA rating since 2017. UAE sovereign and quasi-sovereign instruments continue to offer investors a compelling combination of yield, liquidity, and credit quality.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

17/06/2026

Chinese retail sales declined 0.6% in May from a year ago, posting a worse than expected drop, and the first decline since the reopening from COVID lockdowns. The decline was driven by the 16% decline in car sales. Autos account for some 8% of the CPI. Sales of home appliances, as well as construction and decoration materials, also contracted at a double-digit pace.

A grim read for those of us still hoping for a rebound in China consumption. The Middle East conflict, and higher energy prices, have been unhelpful while at a national level, property prices (both new and used) continue to decline month on month.

The services production index, which climbed 4.4%yoy, provided some comfort. Services have a higher correlation with GDP growth.

Tier 1 cities outperformed once again with investment in high-tech industries up 4.5%yoy. Capital expenditure on semiconductor and lithium battery makers rose 11% and 25%. Unsurprisingly AI related expenditure appears to be disproportionally focused within Tier I cities. High-tech manufacturing rose 15%yoy while the electronics industry output jumped 17%. Chips and computers contributed to about half the growth in both exports and imports and within exports, semiconductors jumped 111%yoy.

The expectation is that the stronger performance from Tier I cities will – at some point -broaden out across the Tier 2 and Tier 3 cities. This has happened in previous cycles but the high concentration of AI and chips in this cycle makes this a harder call.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alexander James Roberts

16^th June 2026

Please see the below article from Tatton Investment Management discussing market volatility, tariff risks and food security concerns, received this morning – 15/06/2026.

Stall, correction and rebound

Equities started poorly but finished strong last week. The Trump 80th birthday present of the reopening of the Strait of Hormuz has ensured that equity markets are starting this week 1-2% above last week’s close. Bonds are also rejoicing in the relief of some inflation pressure with Spot Brent moving below $83.

SpaceX’s $75bn IPO (at a $1.77tn valuation) attracted $350bn in demand and saw secondary trading well above the $135 per share offer price. Investors are frontrunning some of the forced buying from Nasdaq-tracking funds, but SpaceX won’t join the S&P 500 for a year and for the foreseeable future will make up no more than 0.5% of the Nasdaq or MSCI USA. The exposure in most UK multi-asset portfolios (such as Tatton’s range) will be negligible.

Trading liquidity was tight, leading into the biggest IPO in history, and we wondered if it might be badly timed – though that was partly a consequence of the US equity issuance glut itself (including Alphabet’s $85bn offering earlier in the week). Bitcoin’s failure to recover from recent falls is a sign that retail investors aren’t wholly confident. But the AI theme carries on, despite bubble fears. The key difference from the dotcom era is that many of today’s big spenders are already hugely profitable. Current AI spending increases the chances they will keep being profitable.

The Middle East is on the path to a new normality. Trump announced the deal and it is clear that all the main leaderships have incentive to settle, but are still at risk of being destabilised by factional interests. China’s lower oil demand has quietly kept a lid on prices, with reduced import volumes preventing the $150 per barrel predictions from coming true. However, reserves are not limitless. That’s best seen in Europe, where natural gas storage is in its seasonal build phase but is close to the 2021 under-filling which added to the 2022-23 price shocks.

Speaking of factional politics, Defence Secretary Healey’s resignation over funding is a headache for the UK government. It’s also a risk for gilts, although Burnham calmed fears of higher interest rate costs by talking of higher defence spending funded by welfare reform. Global investors, meanwhile, are waiting for Kevin Warsh’s first meeting as Fed chair. Next week should at least give us something else to talk about.

Tariff trouble again

Markets barely reacted to the latest round of US tariffs: an extra 10% on allies including the UK and EU, and 12.5% on everyone else. They’re nominally to punish countries for insufficient forced labour protections, but the clear motivation is to replace revenues that Washington will lose once current tariffs expire. Most US trading partners will face roughly the same tariff levels they did last year.

Washington needs the money. Trump’s tax cuts have widened an already stretched budget deficit and bond markets are watching US debt nervously.

The new Section 301 tariffs take longer to implement and can’t be enacted by a Truth Social post. The payoff is that they’re more likely to survive legal challenges – having been used by multiple administrations. That provides clarity for businesses. American importers can live with a flat 10% far more easily than constantly changing rates. The current tariff levels have not disturbed global trade too much since Trump re-entered the White House (barring the “Liberation Day” market sell-off in April 2025), and bond markets appreciate the extra tax take.

That said, don’t mistake a calmer phase for a resolved one. The US Trade Representative’s anti-dumping investigation is ongoing and will almost certainly produce further Section 301 tariffs, particularly targeting China. Section 232 national security tariffs add another layer – and all the tariffs stack on top of each other.

What keeps markets relaxed for now is the feeling that Trump doesn’t want another Liberation Day. His recent summit with President Xi looked friendly, and with approval ratings on the economy in the doldrums, cost of living relief looks more politically attractive than protectionism ahead of November’s midterms. But with this administration, “for now” is always the operative phrase. US tariffs have moved into a less chaotic phase — but the potential for a nasty surprise hasn’t entirely gone away.

Super El Niño threatens food security

Japan’s Meteorological Agency confirmed that El Niño – persistently warmer-than-average Pacific Ocean temperatures, causing extreme weather across the world – has begun. Meteorologists are predicting a “Super El Niño”, an informal term for temperatures more than 2°C above the long-term average. That’s expected to push global temperatures to record highs in 2027.

The economic consequences of the El Niño-Southern Oscillation cycle (ENSO) are complex. Growth suffers in most regions, but the US and Europe can see short-term boosts. The clearest market impact is on commodity prices: ENSO shocks drive sharp volatility in soft commodities, hurting crop production across swathes of the world. La Niña variations can actually be worse for energy and agriculture, with effects lagged by six months to a year. Price volatility is worse for crops only grown in certain areas, or where only a small proportion of goods are sold internationally.

What makes this particularly concerning is that El Niño doesn’t operate in isolation. The Strait of Hormuz is already a major supply chain worry, and farmers struggled to secure adequate fertiliser supplies this spring. Extreme weather could compound those disruptions and make food shortages more likely into the end of 2026.

With climate change making ENSO shocks more likely, long-term food security requires diversification in global agricultural production. Individual crop sources are more likely to fail, but not all at once. Trade and variety increase resilience. Unfortunately, the prevailing trend in global trade runs the other way, towards localised production.

People often think about supply chain security in energy terms – where individual sources are generally reliable and the important factor is who controls them. But food security is different. All individual sources are vulnerable, regardless of who controls them. Climate change is making that an ever more pressing problem for the world economy.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

15^th June 2026

Please see the below article from Brooks Macdonald discussing the market relief rally as easing US-Iran tensions pushed oil prices lower and reduced inflation concerns — received this morning – 12/06/2026.

What has happened?

Markets rallied as hopes of a US-Iran agreement eased concerns about a prolonged energy shock. Brent crude fell towards a three-month low of around $88/bbl after reports that planned US strikes had been cancelled and that talks with Iran had progressed. The prospect of the Strait of Hormuz reopening helped pull the oil futures curve lower and reduced fears of another inflationary shock. The improvement in sentiment was broad-based. The US rose +2.2%, with technology, semiconductors and small caps rebounding strongly, while Asian markets also advanced overnight. Government bonds rallied as investors pared back expectations for rapid further rate hikes, with US Treasury yields falling across the curve. Elsewhere, the ECB raised rates by 25bps to 2.25%, while US PPI inflation came in stronger than expected at the headline level.

Oil repricing drives the relief rally.

Oil remains the key variable for markets. Recent fears centred on the risk that escalation around Iran and the Strait of Hormuz could create a stagflationary backdrop of higher inflation and weaker growth. The latest headlines have reduced that risk, at least for now, helping both equities and bonds rally. However, the speed of the reversal also highlights how sensitive markets remain to geopolitical newsflow. If a deal is delayed or proves less durable than hoped, volatility could quickly return.

What does Brooks Macdonald think?

The fall in oil prices is helpful for markets, as it reduces the immediate risk of an energy-led inflation shock and gives central banks more room to avoid a more aggressive policy response. Our short-duration fixed income positioning remains important in this environment, helping to limit sensitivity to renewed volatility in bond yields if oil prices or inflation expectations were to rise again. Overall, the recent rally is welcome, but the speed of the reversal reinforces the need for balanced portfolios that can participate in improving sentiment while remaining resilient if the geopolitical backdrop deteriorates again.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Marcus Blenkinsop

12^th June 2026

Please see below the daily update article from Brooks Macdonald, received this morning – 11/06/2026

What has happened?

Markets sold off sharply as US-Iran tensions escalated, with the US launching a fresh wave of strikes against Iran for a second consecutive day. Brent crude rose after Trump warned the US would “hit them hard” and said Iran “will have to pay the price” for stalled negotiations. Iran’s response broadened beyond the Strait, with Press TV reporting drone strikes on the US Fifth Fleet in Bahrain and further strikes on Kuwait and Jordan. The S&P 500 and Nasdaq fell, with tech leading declines in a rotation into defensives, and Asian equities followed lower this morning. On Polymarket, the probability of the Strait reopening by end-July fell to just 26%. Adding to AI-capex unease, Oracle shares fell after hours on capex of $55.7bn, around $5bn above expectations, and plans to raise a further ~$40bn. Results beat, but the capex overshoot dominated. All eyes now turn to the ECB today, where a 25bp hike to 2.25% is widely expected, the first since 2023.

The CPI relief was drowned out

In any other week, the May US CPI print would have been the main story. Core CPI came in softer than expected at 0.2% month-on-month, taking the annual rate to 2.9%, which helped dial back some speculation about a near-term Fed hike, though swaps continued to price a hike by December. The relief was completely outweighed by geopolitical headlines and rising oil, with Treasuries initially rallying before reversing to end with yields higher. This captures the current dynamic well, with the Strait of Hormuz the master variable, even encouraging inflation data struggles to move the needle while oil is rising and the conflict escalating.

What does Brooks Macdonald think?

The renewed escalation is a stark reminder of how fragile the situation remains, and how quickly the narrative can flip from deal optimism to stagflation fears. With the probability of a near-term Strait reopening collapsing, markets are repricing the risk of a more prolonged conflict, and with it, the stagflationary scenario of higher oil, sticky inflation and weaker growth. The soft core CPI print suggests underlying disinflation remains intact beneath the energy shock, but it is for now a secondary consideration. Today’s ECB decision is unlikely to surprise on the hike itself but the key will be whether Lagarde keeps further tightening on the table or signals a more cautious path given the weak growth backdrop. We continue to favour diversified positioning and remain short duration.

Please continue to check our blog content for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Cherise Lancaster

11/06/2026

Please see this week’s Markets in a Minute update below from Brewin Dolphin, received yesterday afternoon – 09/06/2026.

Equity markets split as AI trade stalls

The AI trade, while powerful, is not immune to gravity and the broadening of market leadership is beginning to materialise.

Key highlights

• The polarity of equity markets: AI stocks, which rallied sharply in May, hit a speed bump last week on the back of disappointing tech industry earnings results.
• The wait in the Strait: Progress towards reopening the Strait of Hormuz stalled as Iran made an Israel-Lebanon ceasefire a condition for continuing negotiations.
• U.S. jobs growth beats expectations: The number of new jobs created in May was double expert estimates.

The polarity of equity markets

The first week of June was shaped by two forces pulling in different directions: a frozen geopolitical standoff that refused to thaw, and a sharp rotation within U.S. equity markets that reminded us how quickly sentiment can shift beneath the surface of headline indices.

The impact of high oil prices on the economy, and concerns that this could continue, have left investors struggling with where to allocate their savings, pensions, dividends and corporate buyback capital. The area of the equity market least affected has been AI stocks, which rallied sharply during May – creating a divided market.

Last week, that trend hit a speed bump. Stocks were already looking extended on Wednesday evening, when Broadcom reported results that were strong in absolute terms but merely met rather than beat expectations.

In a market that has been leaning heavily on the AI narrative, that disappointment was enough to trigger weakness across the Nasdaq. Capital rotated into healthcare and financials, nudging the Dow Jones, which is rich in those sectors, to a new record closing high. It was a useful reminder that the AI trade, while powerful, is not immune to gravity – and that the broadening of market leadership we’ve been hoping for is beginning to materialise.

Source: RBC Brewin Dolphin estimates

It also serves as a reminder that capital markets can be fickle, which is relevant as work continues on the blockbuster initial public offerings (IPO) planned for this year.

Perhaps opportunistically, Alphabet (which owns Google) used the accommodative market conditions to raise $85 billion of new equity. It’s a mere 2% of its $4 trillion market valuation, but enough to eclipse the mega IPOs still to come. Alphabet is specifically sneaking in ahead of other flotations over the coming weeks, taking advantage of the abundant liquidity environment.

Not everyone believes that environment will remain all year. Databricks confirmed that it won’t IPO this year because of the anticipated congestion from already planned issues.

One source of demand for these issues will come from tracker funds once they’re included within indices. S&P surprised the world by deciding not to update its index inclusion methodology. Nasdaq, by contrast, has fast-tracked inclusion and adopted an enhanced weighting to partially compensate for the low free float these companies will have at IPO.

The wait in the Strait

On the diplomatic front, progress towards reopening the Strait of Hormuz has stalled with the closure now approaching its hundredth day.

Iran pulled out of direct negotiations early last week, insisting on a resolution between Israel and Lebanon as a precondition. The U.S. duly brokered a ceasefire with Beirut, but Hezbollah rejected it, leaving the process stuck. By last Friday, there were no signs of meaningful progress.

What’s notable is how little this has moved markets. Brent crude oil held steady near $97.60 per barrel, and the broader ‘Gulf risk-off’ trade – higher oil, higher yields, weaker gold – flickered on and off through the week without gaining real momentum.

During the geopolitical stalemate, oil prices have settled into a predictable, elevated range of $90 to $100 per barrel. This is likely proving more uncomfortable for the 20,000 seafarers trapped in the Persian Gulf than it has been for investors. The high energy prices are unwelcome but no longer panic-inducing. Maintaining that level has been partly driven by the release of strategic reserves, and partly by economic measures that have been undertaken, particularly in emerging markets.

The other notable feature of the week’s Gulf inactivity is that President Donald Trump had a reportedly terse call with Israeli Prime Minister Benjamin Netanyahu. The call was in response to Iran’s demand that any reopening of the Strait of Hormuz would be conditional upon a ceasefire in Lebanon. Iran would seem to be a relatively tough negotiating partner.

U.S. jobs growth almost doubles the forecast

Investors may be more focused on AI and geopolitics, but the economy is typically the most critical factor determining investment returns.

Expectations were modest for U.S. jobs growth given that consumers, who make up the largest share of economic growth, are under pressure from rising energy costs. An additional consideration is the larger structural risk to jobs stemming from AI. Thursday’s Challenger Jobs Report showed an accelerating trend of layoffs associated with AI.

Source: Bloomberg

As far as May was concerned, new jobs growth seems to have been very robust, coming in at 172,000 new jobs – almost double the consensus forecast. April’s jobs growth was also revised higher.

While there was no additional concern on wage growth, it still places pressure on the Federal Reserve (the Fed) to raise interest rates. There are two reasons for this: inflation remaining above target, and the robust labour market.

This pushed interest rate expectations higher, prompting a significant rotation away from the market’s former AI-related winners and back towards some of the previous laggards. The sell off seemed to be mostly a function of over-extended positioning rather than an obvious market top. We believe equity markets would be more susceptible to weak labour markets indicating weaker equity flows, than strong equity markets indicating higher interest rates.

Please continue to check our blog content for advice, planning issues and the latest investment market and economic updates from leading investment houses.

Charlotte Clarke

10/06/2026

Please see below, an article from EPIC Investment Partners examining the recent increase in global logistics costs and the resulting risks to inflation and consumer demand, received today – 09/06/2026

The sharp rise in global logistics costs is reigniting fears of a fresh inflationary wave, but the bigger risk may ultimately be a further squeeze on consumers and a slowdown in demand.

According to the latest Logistics Managers’ Index (LMI), aggregate logistics costs have surged to their highest level since March 2022, driven primarily by record transportation prices following disruptions to global energy supplies, including the closure of the Strait of Hormuz. Transportation prices have reached an unprecedented reading of 96.0, the highest level recorded in the history of the survey. Historically, such spikes have been associated with periods of elevated inflation as businesses pass higher freight, warehousing and inventory costs on to consumers.

The pressure is not limited to transportation. Upstream firms have been pulling inventories forward to guard against future shortages, pushing inventory costs to their fastest rate of expansion in four years. While this activity has supported freight volumes and transport demand, it also reflects growing concern about future supply availability and costs.

At first glance, the outlook appears inflationary. Higher fuel prices increase the cost of moving goods, while rising inventory and warehousing expenses add further pressure to supply chains. Businesses facing shrinking margins are often forced to raise prices, creating another round of inflationary pressure.

However, there is another side to the story.

Consumers are already showing signs of strain. The University of Michigan Consumer Sentiment Index recently fell to a record low, with a majority of households reporting that higher prices are eroding their finances. Spending patterns are also shifting, with more income being allocated to essentials such as food, energy and housing, leaving less available for discretionary purchases.

Evidence of this behavioural shift is emerging across consumer sectors. Vehicle sales, for example, are expected to remain well below pre-pandemic norms as households delay replacing older cars, while elevated mortgage rates continue to constrain housing affordability.

This is where the inflation narrative begins to collide with reality. While supply shocks push prices higher, they also reduce purchasing power. Over time, weaker demand can limit businesses’ ability to continue raising prices. Consumers delay replacing cars, cut back on large purchases and become more selective with spending.

The result is an uncomfortable mix of elevated costs and weakening economic momentum.

For now, freight markets remain underpinned by industrial demand from sectors such as AI infrastructure, energy investment and defence spending. Indeed, freight data often acts as a leading indicator, reflecting economic activity months before goods reach consumers. The resilience of transport markets therefore suggests that supply-side pressures have not yet fully worked their way through the economy.

Yet if household budgets continue to tighten, today’s inflationary supply shock could ultimately become tomorrow’s disinflationary demand shock.

The key question for investors is not whether costs are rising today, but whether consumers can absorb them. Increasingly, the evidence suggests that may become one of the defining economic challenges of the next 12–18 months.

Please continue to check our blog content for the latest advice and planning issues from leading investment management firms.

Alexander James Roberts

9^th June 2026

Please see the below article from Tatton Investment Management discussing softer markets, May asset returns and housing affordability pressures, received this morning – 08/06/2026.

Markets decelerate

A mostly quiet week ended with a jolt, after May’s stronger-than-expected US jobs report sent bond yields higher and equity markets lower. Investors had been rotating out of tech, but the jobs number shifted focus to potential rate rises, rather than growth. The US session accelerated downwards with the S&P 500 lower on the day by 2.6%. Subsequently Asian stocks are sharply lower, with South Korea’s KOSPI down a stunning 8%.

Leading up to the weakness, the AI-led rally had already been running out of steam. Micron shares dropped 7% on Thursday after Broadcom’s weak sales projections, a reminder that chipmaking remains a cyclical business. Alphabet’s $80bn equity raising plan triggered a sell-off in the ‘Magnificent Seven’. With trillion-dollar US tech IPOs looming, investors fear there might be too much equity issuance for the market to swallow. Last year’s debt issuance was one thing, but equity issuance demands fresh capital of a different dimension, potentially from sales elsewhere. That also explains last week’s rotation.

The Trump administration’s “Section 301” tariffs, supposedly targeting forced labour violations, allow the US to reclaim the revenues it will lose when the 10% universal tariff expires. They therefore won’t move prices and probably won’t engender reciprocal tariffs, but other forms of protectionism are already planned. China will restrict outbound tech investment from next month (just ahead of blockbuster IPOs), we suspect partly to redirect its savings pile inwards.

Liquidity could tighten further if new Fed chair Warsh pushes forward his plan to reduce central bank liquidity provision. His plan is to shift the burden of money creation back on to bank lending – which could improve growth, but is bad news for asset valuations (particularly for speculative assets, shown in Bitcoin’s 20% monthly fall).

The Fed won’t move at this month’s meeting – though it could send a hawkish signal, given labour market strength. The same is true for the BoE, but the ECB and the BoJ are likely to hike. Warsh’s balance sheet reduction will likely come up at his Jackson Hole address in August. Markets will watch the conference closer than usual.

May asset returns review

Global stocks shrugged off Middle East concerns to rise 6% in sterling terms last month, while bonds – after a wild ride down, managed to edge up 0.6% by the end of the month.

Much was expected of the Trump-Xi summit in mid-May, but it produced little substance. It did at least quell fears that the US-Iran conflict is really a proxy war against China. Markets’ geopolitical concerns eased further after a US-Iran ceasefire extension. There’s still no clear path to resolving the energy crisis, but oil finished just over $90 per barrel, 16.8% lower in sterling terms.
Inflation fears weren’t just about oil. Copper, lithium and microchip prices all jumped sharply — a knock-on from the AI infrastructure boom. However, flat iron prices suggest companies are stockpiling datacentre materials without yet building them. That chip-buying frenzy propelled US tech stocks (+9.3%) and emerging markets (+10.6%), the latter dominated by TSMC, Samsung and SK Hynix. Markets without big tech presence lagged: Europe and the UK gained 4.3% and 0.7% respectively.

Core inflation came in softer than feared towards month-end, due to weaker than expected consumption. That calmed bond markets after a sharp mid-month spike in yields — driven, oddly, by long-term real yields, which suggests investors are worried about government borrowing, not just near-term inflation.

UK gilts were at the centre of that panic. 10-year yields briefly touching 5.2% amid Labour leadership drama, but we maintain that gilts’ inflation sensitivity is more about imbalanced issuance than politics per se. That sensitivity meant that gilts were actually the best performing bonds through the month – up 1.8%. They fall hardest when markets panic and recover sharpest when calm returns. Fiscal fears have receded rather than disappeared. That goes for all bond markets.

Market liquidity could tighten from here. Planned US tech IPOs will require an estimated $210bn in fresh equity investment this year, and fund managers started putting capital aside last month.

Affordability weighs down house prices

Canada’s tumbling house prices are emblematic of the affordability problem facing developed market housing. From a peak in early 2022, Canadian house prices have dropped around 20%, and more than 30% in some cities.

Even so, homes remain deeply unaffordable: ownership costs still eat up 88.4% of household income, according to Canadian bank RBC. Tellingly, a majority of Canadians — including homeowners — want prices to fall further.

Canada’s rate cuts haven’t helped much. Interest rates have fallen to 2.25%, but cheaper mortgages alone can’t fix a structural affordability problem decades in the making. Supply is part of the story too — not just the quantity of homes, but their quality — prompting the government to cut sales taxes and development costs to encourage building.

Lighter regulation can help, but the main problem for housebuilders is an inability to sell. We see this in the UK, where dealmaking fell last year despite new homes coming on the market. Housebuilder Vistry’s share price has collapsed this year, thanks to higher costs from the US-Iran war and weaker demand. Savills now forecasts a 2% fall in UK prices this year, having predicted a 2% rise before the war. Even in the resilient US, house prices aren’t keeping up with inflation.

Developed market housing reached peak unaffordability after the pandemic, and price-to-wage ratios have been slowly falling since. Absent a recession (and we haven’t had a real one for nearly two decades), prices can’t fall sharply; they just stagnate while wages slowly catch up.

For buyers, the gains are incremental. For sellers, it feels like loss. As an investment, property valuations remain stretched, offering returns that simply don’t justify the price tag. With higher returns available elsewhere, you can’t keep stretching valuations forever.

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Marcus Blenkinsop

8^th June 2026