Two Premium Bonds holders have bagged the jackpot in the August National Savings & Investment prize draw - one of which only purchased their winning bond seven months ago.

The latest £1 million jackpot winners come from Kent and Hampshire and the Isle of Wight and won with bond numbers 664BF890888 and 491KF169443, respectively.

The Kent winner bought their bond in February 2026 and has a total holding of £21,000.

The winner from Hampshire and the Isle of Wight purchased their bond in March 2022 and holds £49,850 overall in Premium Bonds, close to the maximum of £50,000.

How many prizes will be issued in August’s draw?

Roughly 6.2 million tax-free prizes worth a total of £433 million will be paid to Premium Bond prize draw winners in the August draw.

This month, there were 136 billion £1 bonds eligible for the draw.

The total value of the prizes dished out since the first draw in June 1957 is £42.3 billion.

The table below shows the breakdown of prizes in August:

Credit: NS&I

How to check if you've won in August's prize draw

NS&I’s Agent Million will inform the £1 million jackpot winners in person.

Premium Bond holders can check if they have won the smaller prizes of £25 to £100,000 the day after the first working day of each month. For August 2026, the date you can check from is 4 August.

You can do this by using the Premium Bonds prize checker app, visiting the NS&I website or asking Alexa.

The prize checker app and website will show you prizes you’ve won that month, anything you’ve won in the previous six draws and any older prizes you haven’t claimed yet.

You will need your bond number or NS&I number to access your account.

As Premium Bonds do not expire, it’s worth checking if you have any prizes waiting for you even if you bought them years ago.

NS&I says over 99% of prizes have been paid to winners since draws began in 1957, but there are still 2.8 million left unclaimed.

We look at the alternatives to Premium Bonds in a separate piece.

Banking stocks are back. Towards the end of January 2026, Deutsche Bank (Frankfurt: DBK), the perennially struggling German lender, told investors it had booked record profits in 2025 and was trading ahead of management's long-term profitability targets.

This was a landmark not only for the company, but also for the wider global banking sector. Financial institutions generated a total shareholder return of 30.2% last year, according to the latest report from the Boston Consulting Group, ahead of information technology and all other major sectors. Yet most financial institutions still trade at roughly a 40% discount to the market.

If there's one bank that reflects the issues that have affected the sector for the past two decades, it's Deutsche Bank. The bank aggressively chased growth pre-2007 and became one of the world's most influential financial institutions, but quickly fell apart in the financial crisis. It initially avoided a direct German government bailout, but relied heavily on emergency loans from the US Federal Reserve to stay afloat.

As management boasted about not taking cash from any government, it had over the next 15 years to raise capital on four occasions for a collective total of more than €30 billion. The bank also paid approximately $10 billion to settle long-running investigations into its sales practices before the financial crisis. It has also been raided by the German authorities on multiple occasions due to tax probes and money laundering. The lender has paid around $20 billion in fines over the past two decades.

In many respects, it is amazing the bank is still around, but it has struggled on and this year's earnings release seemed to represent a high-water mark. The company reported a post-tax return on tangible equity – a key measure of banking profitability – of 10.3% with a profit before tax of €9.7 billion, up 84% year on year.

Costs fell across the business and it reported a strong rise in fees from its asset-management and private-bank arms. It has also started returning cash to investors. Management outlined plans to return up to €2.9 billion to shareholders in January, comprising a €1 per share dividend and a €1 billion share buyback authority.

Big banking stocks get a lift from tailwinds

Deutsche Bank isn't the only global lender that has reported a surge in profitability over the past couple of years. The entire banking sector is reporting some of the best profit and earnings figures since before the financial crisis and shareholders are reaping the benefits.

The UK's Metro Bank (LSE: MTRO) is another example. It came close to collapse in 2023 before securing a rescue refinancing and has spent the last three years refocusing the business. In the first quarter, it reported a record level of income, delivering a return on tangible equity of 6.4%; management wants to increase that to 18% by 2028.

Metro Bank and Deutsche Bank are two very different institutions, but they are benefiting from the same underlying trends that are acting as significant tailwinds for banking stocks. In its latest set of results, Metro reported a 22% rise in net interest income, as its net interest margin – a measure of lending profitability – came in at 3.17%. Lending to small businesses rose by 67% and the bank cut costs by 7%. All big financial institutions are making significant cost reductions as they embrace and adopt AI. According to US employment data, payrolls in the financial services and information technology sectors have declined by 28,000 per month on average in 2026 as AI adoption has accelerated.

US banks such as JPMorgan Chase (NYSE: JPM), Citigroup (NYSE: C) and Goldman Sachs (NYSE: GS) have all said they will use AI to help employees crunch more data, and that will lead to job losses. Standard Chartered (LSE: STAN) announced in May that it would cut more than 7,000 jobs over the next four years as the bank accelerates the use of AI. Morgan Stanley (NYSE: MS) has also said that it will cut 3% of its workforce as AI takes on more work.

Banks reap the benefits of higher interest rates

Falling costs are only part of the equation for banking stocks. They've also been able to take advantage of the stronger interest-rate environment over the past five years. At its core, banking is all about how much lenders can earn on the spread between deposits received from savers and the money they lend out either to businesses or consumers. This spread between the cost of capital and interest received is called net interest margin – one of the most significant metrics in banking. The global bank net interest margin was 1.65% in 2024 and 1.63% in 2025, according to McKinsey's 2026 Global Banking Annual Review. But while the global rate declined, the margin in the US rose by nine basis points, in Japan by seven and in the UK by six.

Banking stocks are still reaping the benefits of higher interest rates even as central banks the world over have started to bring rates down from the highs seen in the years immediately after the pandemic. Most banks borrow in the short-term lending market and then lend on a longer-term time horizon to consumers or businesses. This helps manage risk and means it can take time for interest-rate changes to filter through the system. Banks also make the most of so-called structural hedges, using stable low- or zero-rate customer deposits as long-term funding and executing interest-rate swaps to convert exposure to floating rates into fixed yields.

For example, Lloyds Bank (LSE: LLOY), the UK's largest mortgage lender, reported a net interest margin of 2.95% in 2024, 3.06% in 2025, and 3.17% in the first three months of 2026. The company has been able to earn more even as interest rates have fallen from a high of 5.25% in the first few months of 2024 to today's rate of 3.75%, as consumers have rolled off long-term fixed mortgages at low rates and have had to fix at a higher rate.

Costs and higher interest rates have helped banking stocks, but so has the economic environment. Despite concerns that higher rates globally would lead to an increase in defaults as companies struggled with a higher cost of debt, in reality the outcome has been very different. All six major US banks that have reported results so far reduced the amount of money they have set aside to cover bad loans. Goldman Sachs reported a 73% decline for the same period last year, Morgan Stanley cut its credit provisions by 50%, while Bank of America (NYSE: BAC), JPMorgan, Citigroup and Wells Fargo (NYSE: WFC) all reduced provisions by 9%-14%.

At the same time, demand for loans has increased. A strong economic recovery in the US has driven demand for business and consumer borrowing. Analysis of the major US lenders' results conducted by Fitch Ratings found that commercial loan growth has now exceeded 7% year on year for 14 straight weeks. All of the largest major lenders reported double-digit loan growth for the second quarter and some smaller banks have reported the strongest growth since 2012. In the UK, too, demand has picked up despite cost-of-living pressures. Across Europe, demand for loans and credit lines has increased in every quarter since the second quarter of 2024 (apart from the first quarter of 2026), according to data from the European Central Bank. In the second quarter of the year, the requirement for loans increased by 3% overall.

Record highs for stock trading and deals

Buoyant global equity markets have also helped the world's largest investment banks report a jump in trading revenue this year. Bank of America reported a record $3.6 billion dollars in equity trading revenue during the second quarter of 2026 (up 70%) and $3.5 billion in fixed-income trading revenue. Goldman Sachs reported a record $7.2 billion dollars in equity trading revenue for the quarter, up 72% from last year. JPMorgan Chase's equities traders posted an 86% gain to $6 billion.

These numbers follow a record 2025. Banks generated $271 billion of revenues from global markets last year, according to strategic benchmarking firm BCG Expand. That's $11 billion above their 2009 total – the highest level in recent memory. The big five US banks generated $134 billion of revenues from markets between them last year, 16% above 2024's levels.

As traders trade, deal makers are raking in cash for these financial behemoths as well. There have been about $1.7 trillion of deals announced so far this year, according to data compiled by Bloomberg, which excludes SpaceX's combination with xAI. That's the fastest pace since 2021, the high-water mark of the past few decades. Goldman Sachs has established a clear lead. The Wall Street bank has advised on more than $1 trillion of mergers and acquisitions this year already, according to data from Dealogic. Some of the deals the bank has helped advise on include Unilever's $44.8 billion sale of its food business to McCormick and Dominion Energy's $118 billion sale to NextEra Energy.

These Wall Street banks tend to eat the lion's share of revenue from global equity trading and investment banking, but European banks tend to be stronger in wealth management, which has also seen a significant increase in profitability, particularly among high-net-worth and ultra-high-net-worth individuals. Swiss bank UBS (Zurich: UBSG) reported an 80% increase in net profit for the first quarter of the year thanks to an increase in income from its investment bank and its Global Wealth Management arm. Net new assets in Global Wealth Management totalled $37.4 billion, equivalent to annualised growth of 3.1% in transaction-based income, and the bank's asset-management unit added $14 billion in net new money. Overall, UBS reported $7.1 billion in revenue from global wealth management for the first quarter of 2026, an 11% rise year-over-year. Group invested assets stood at $6.9 trillion at the end of the quarter.

Deutsche Bank, too, has reported a robust performance by its asset and wealth-management arm. The bank reported topline net revenue growth of 2% for the first three months of the year and a rise in profit before tax of 7%. Revenue at the asset-management arm rose by 10% and profit before tax was up 37% as assets under management increased €84 billion year on year, with further net inflows of €11 billion during the quarter. A near-4% rise in client assets at Deutsche's private bank also helped this division outperform. Profit before tax at the private bank rose 39% overall.

These two banks are both very Western-focused. HSBC (LSE: HSBA) and Standard Chartered, on the other hand, have a stronger reputation for wealth management and investment banking in emerging and developing markets, such as China and India.

Britain's banks have their own attractions

Unlike their counterparts on Wall Street and in Europe, UK banks don't tend to have large footprints in wealth management, private client and investment banking, or trading. This goes back to the financial crisis when banks such as Royal Bank of Scotland – now NatWest (LSE: NWG) – and Lloyds used to have large trading businesses and international operations. These were sold off in the aftermath of the financial crisis as the lenders doubled down on the core business of making loans and taking savers' money.

That said, lenders such as Barclays (LSE: BARC) and HSBC do have large trading arms, although they've never been able to compete in the same arena as the Wall Street giants. Still, despite their lack of exposure to the Wall Street world, UK banks have their own attractive qualities. According to analysts at Berenberg, banks' rolling structural hedges should guarantee around 50% of income for the sector through to the end of the decade, generating steady returns for the industry.

There's also plenty of scope for consumers and businesses in the UK to increase borrowing. Household and corporate debt ratios are at the lowest levels of the past 25 to 30 years, while UK banks' average loan-to-deposit ratios sit at 90%, giving the sector plenty of headroom to increase borrowing. UK banks are trading at just 7.5 times their two-year forward price-to-earnings (p/e) ratio, a level not seen since late 2021 and a 20% discount to the sector. There's a lot of political and economic uncertainty hanging over the market, but this discount seems unwarranted.

There's also plenty of cash to return to investors. Berenberg believes the average total yield of UK banks will rise to 10%-11% by 2028 compared with 7%-8% today, the total comprising a combination of dividends and share buybacks.

Berenberg likes Barclays, for its exposure to the US investment banking and trading world, and NatWest. Barclays has made substantial progress at its investment bank, improving profitability and keeping costs low. Investment banking and trading revenues have grown steadily since 2022, with the teams keeping up with peers at the Wall Street majors. Despite this progress, the bank trades at just 1.2 times tangible net asset value at the lower end of its European peer group. Berenberg estimates that, based on its return on tangible equity of 14.3%, it should be trading closer to 1.6 times net asset value, suggesting an upside of 40%. Earlier this year, the bank pledged to return £15 billion to shareholders as part of its growth plans.

NatWest, meanwhile, is trading at a 25% discount to the average in the European banking sector. The lender is earning a 20% return on tangible equity and is reporting strong organic capital generation. Organic capital generation is expected to exceed 200 basis points per annum over the next few years, which should help fund growth, distributions and potential bolt-on acquisitions. The shares are currently trading at a 2028 p/e of just 6.5 and offer a potential forward dividend yield of 7.5%. The recent acquisition of Evelyn Partners will also help the company expand its footprint in the lucrative wealth-management business.

The most promising global banking players

One of the more interesting global opportunities is Santander (LSE: BNC). This lender has a presence in the US, Europe, the UK and Southern and Central America, making it one of the few genuine global banking opportunities. The bank has 180 million customers around the world and wants to exceed 210 million by 2028. At the same time, it has laid out plans to generate €20 billion (growth of around 40%) in profit by 2028, to be helped by recent acquisitions such as Webster Financial in the US for $12 billion earlier this year and the TSB Bank in the UK. It expects all divisions, loans, wealth management and cross-border finance to contribute to this growth. Growth is just one part of the story. The other side is shareholder returns. The lender is nearing the end of a programme to return €10 billion through share buybacks for 2025 and 2026 and analysts believe it will rebuild this pipeline when the current authorisation has come to an end.

UBS is another global player that analysts believe is undervalued. Now the group has fully completed the merger of Credit Suisse and removed unnecessary costs, it can concentrate on executing its strategy, growing the wealth-management business and its private bank. According to analysts' consensus estimates compiled by UBS, the bank is expected to post $10.7 billion of net income for 2026, rising to $14.4 billion in 2028. The wealth-management arm is projected to increase assets under management by around $1 trillion and see profit before tax nearly double from $5 billion to $10 billion by 2028. Based on these estimates, the shares are trading at a 2028 forward p/e ratio of around 9.5. Analysts have also pencilled in a reduction in outstanding share capital of around 10% and expect the dividend per share to rise 40% to $1.58 over the same period.

A shower of cash for shareholders

Of the large US banks, the cheapest is Citigroup. Trading at 1.2 times book value, the bank has long struggled to live up to the lofty expectations of the market. Its peers, Goldman and Morgan Stanley, are trading at 2.8 and 3.3 times book value, respectively. Still, the bank is benefiting from many of the tailwinds helping its peers. Markets and equities trading revenues were up 17% and 45% respectively in the second quarter, while the group's cost-to-income ratio came in at 57.4% compared to a full-year target of 60%.

In the first half, Citi booked a 13% return on tangible capital employed and is saying it expects 10%-11% for the full year, which suggests it's around a third less profitable than major peers such as Goldman Sachs based on this measure. That deserves a lower valuation, but a discount of more than 50% seems too steep. With a solid Tier-1 capital ratio of 12%, the bank was able to declare a $30 billion multi-year share repurchase programme following the successful completion of the Federal Reserve's supervisory test earlier this year.

Citi's cash returns are emblematic of the sector. In the first quarter of this year, the eight largest US banks showered shareholders with $46 billion in dividends and buybacks, up a third from last year. European banks are expected to return €123 billion this year. It's time for investors to sit up and take notice.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Cameco (Toronto: CCO, or NYSE: CCJ) is a C$54 billion (£28.8 billion) nuclear-industry supplier covering the whole spectrum from uranium exploration, mining, refining, enrichment and fuel fabrication to designing, developing and servicing reactors.

The Iran war and resulting interruption of oil and gas supplies shows how geopolitical tensions can disrupt supply chains and affect share prices. Markets would drop precipitately should China invade Taiwan or Russia attack the Baltic states. Given these uncertainties, there is a strong case for investing in secure, reliable, zero-carbon baseload power. The construction of data centres for AI is also adding to demand for such power.

The renaissance in nuclear for zero-carbon baseload electricity meets these needs. There are already 436 nuclear reactors in the world with 70 new reactors under construction and another 115 planned. And 38 countries have signed a declaration to triple nuclear generating capacity by 2050.

Cameco's reserves of uranium are in Canada, Australia, the US and Kazakhstan, with the majority of its proven and probable reserves in Canada. In 2025, Cameco was the second-largest producer with 15% (Kazatomprom was the largest at 20%). Planned production is expected to fall below demand in 2033 and be only 50% of demand by 2041. Cameco's strategy is to build a portfolio of long-term supply contracts with utilities rather than to rely on the spot market. Current contracts run into the 2030s.

Cameco also has a 49% interest in Global Laser Enrichment (GLE) (and the option to attain 75% ownership); GLE has a worldwide exclusive licence on separation of isotopes by laser excitation (SILEX) – a third-generation enrichment technology.

Cameco's reactor design, development, construction and servicing activities are provided by Westinghouse Electric Company, which is a Cameco/ Brookfield Asset Management strategic partnership, with Cameco holding a 49% stake.

Cameco's four drivers of growth

Four factors are expected to drive growth. Firstly, the expected shortfall of supply from 2030-2031 onwards (rapidly increasing the shortfall from 2033), which will lead to stronger pricing and enable the firm to raise production from its reserves. Uranium prices are already rising. Cameco's fuel-manufacturing division enables it to capture more of the value added than it would as a miner.

Secondly, there's the growing global fleet of nuclear reactors that Westinghouse inspects, services and provides for. The third factor is the 185 new reactors planned or under construction. Westinghouse already has six of its AP1000 reactors in operation, another 30 under construction and 16 planned. The fourth is the potential of SILEX technology for the re-enrichment of depleted uranium and for making low-enriched fuel for future light-water reactors.

Cameco's 2025 results to the end of December showed revenue up 11% to $3.5 billion, adjusted EBITDA up 26% to C$1.93 billion and adjusted diluted earnings per share up 321% to C$1.44. First-quarter results show revenue up 7% and adjusted earnings per share up by more than 100% to $0.47. It says committed sales volumes for 2026 are 29 million pounds (mlbs) to 32mlbs of uranium compared to 33mlbs in 2025. But prices are rising, with an average price in the fourth quarter of 2025 of C$91.3 per pound compared with C$80.9 for same period in 2024. Long-term contract prices in 2026 are around C$131 and 2033 prices are anticipated to be in a range with a ceiling of C$200.

Cameco focuses on securing long-term contracts that anticipate increasing demand and shortfall of supply rather than serving the spot market. For example, in March 2026 Cameco signed a nine-year agreement with India to supply nearly 22 million pounds of uranium ore at market prices. This contract has an estimated value of C$2.6 billion.

Cameco's share price is on the rise

Cameco enjoys stability thanks to long-term contracts and growth potential in all divisions. With respect to the mining of uranium, it has large reserves in stable countries, most being in Canada. The fuel services division refines, converts and manufactures fuels, and benefits from the increasing demand for nuclear reactors to provide zero-carbon baseload electricity.

Cameco’s interest in GLE’s third-generation laser-enrichment technology and its option to take majority ownership provides an extra growth driver for this division. Then there is its 49% stake in Westinghouse (WH), which has the proven AP1000 and AP300 reactors, 30 more under construction and others planned. Westinghouse is also developing small modular reactors.

In October 2025, WH signed an agreement whereby the US government will facilitate the financing and building of new reactors in the US to the value of at least $80 billion to power AI-heavy data centres. This raises the prospect of a separate initial public offering (IPO) for WH that could value it at $15 billion-$35 billion or more (compared with the $8.2 billion Cameco/ Brookfield paid for it in 2023) and yield a capital gain. The UK government sold to Toshiba in 2006 for only $5.4 billion.

Cameco’s recent share price is C$123, with a one-year target of C$185, a forward yield of 0.19% and a strong balance sheet with net cash of C$0.2 billion. The forward price-earnings ratio is 46 for 2027 falling to 36.3 for 2028 and, over one year, the shares are up 13.6%. It is vertically integrated (mining to reactor construction and maintenance) and will be a key supplier in the renaissance of clean, reliable nuclear power. The rising price of uranium and new reactors planned globally suggest a long-term rising share price, with the possibility of a capital return from a Westinghouse initial public offering.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

When looking for Asian stocks, I look for good businesses run by competent management teams, available at a price that leaves a margin of safety. I focus on managing absolute risk and losing little money during market downturns, which should help compound returns at higher rates over the long term.

This discipline leads the portfolio away from popular thematic investments, start-ups, highly geared companies, cyclical businesses earning peak margins and stocks on high multiples to earnings.

As a result of this approach, the Fidelity Asian Values trust is primarily invested in mispriced small and medium-sized companies – the “winners of tomorrow”, before they become well known. Here are three examples.

Asian stocks to watch

Orion Corporation (Seoul: 271560) is a South Korean snacks and confectionery business that owns the well-known brand Choco Pie. It is a good-quality franchise with about a 25% market share in the domestic market as well as notable international revenues, supported by its production bases in China, India and Vietnam. Its international operations continue to grow and China makes a sizeable revenue contribution.

Choco Pie is its largest growing category, but Orion is using the recognisability of its brand to branch out into premium snacks as well as targeting a health-conscious demographic as a future driver of growth. Management has been focusing on enhancing shareholder value –it reported a 40% year-on-year rise in its dividend in 2025. The business is debt-free; the stock is valued at a 12-month forward price-earnings (p/e) ratio of nine times and offers a return on equity of more than 12%.

ManpowerGroup Greater China (Hong Kong: 2180) serves businesses that require workers for a limited time or a specific project, or those who wish to manage their own direct headcount. It also offers its clients headhunting and recruitment services, payroll outsourcing and training services. It is an asset-light business model and the company earns higher margins in its headhunting and recruitment division.

ManpowerGroup Greater China was spun off from ManpowerGroup, a world leader in its field, and therefore has the reliable operational processes of its erstwhile parent and retains a strong emphasis on risk management. Given the highly unorganised nature of the recruitment market in China, ManpowerGroup's scale and geographical spread is advantageous.

Our research on the ground indicates that the recruitment business in China is at its lowest ebb in the business cycle. The stock trades at a 2026 forward p/e of six times, offers a dividend yield of more than 7% and about 95% of its market capitalisation is in net cash on its balance sheet.

JW Life Science (Seoul: 234080) is the largest producer of intravenous (IV) fluids in South Korea, with a 45% market share. Demand for IV fluids is stable as the products are essential components in surgery, intensive care, hydration and patients' nutrition. The company faces competition from three to four players, but there are high barriers to entry given strict quality criteria, the need for strong brands and distribution capabilities, and for high levels of capital expenditure.

An ageing demographic in South Korea is supportive of revenue growth prospects for JW Life Science. The company has robust operating cash flows and a net cash balance sheet, a sustained mid-single-digit earnings growth profile, and offers a return on equity of an about 15%. It is valued at six times 2026 earnings.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

When looking to buy a debt fund, investment trusts are the perfect vehicle. Their closed-ended structure means they are ideal for owning complex and less-liquid debt. It gives them permanent capital, allowing them to hold assets that would be impossible for any open-ended fund that needs to be able to buy and sell quickly in response to inflows and redemptions.

There are a number of specialist trusts that allow UK private investors to access areas that would usually be available only to institutional and high-net-worth investors. What's more, shares in the trusts can be traded at any time regardless of the liquidity of the underlying assets. This means that investors are not subject to the risk of “gating” – limitation or suspension of withdrawals when redemption requests are high – that affects the vehicles these investors typically use.

Why debt funds are highly misunderstood

Despite these strengths, debt funds make up one of the most misunderstood segments of the investment trust sector. There are 16 trusts with total capitalisation of £5.2 billion, split across three sub-sectors: direct lending, loans and bonds, and structured finance.

The average dividend yield today sits in the region of 10%, which in part reflects the fact that the majority of trusts are trading at double-digit discounts to net asset value (NAV). This reflects a lack of awareness of these vehicles, as well as worries around the global private credit market.

For the most part, concerns about the impact of high-profile private credit wobbles are overdone, since most of these debt funds do not own the type of debt under scrutiny. Instead, they hold bonds, asset-backed securities (ABSs) and collateralised debt obligations (CDOs), and much of this is actually relatively liquid.

As an example, let's look at EJF Investments (LSE: EJFI), one of the more esoteric debt funds in the sector. It has a market value of just £76 million and trades at a 24% discount to NAV.

The trust's assets are mostly loans made to smaller banks and insurance companies in the US that have been packaged up as CDOs. It also invests in some other forms of bank debt and in credit-risk transfers (being paid to take on the credit risk on some of a bank's portfolio of loans). At the end of June, it also had around 23% invested in money-market funds and other cash-like instruments, giving it plenty of liquidity to take advantage of opportunities when they emerge.

EJF Investments also owns 50% of EJF CDO Manager, the firm that manages many of the transactions behind these CDOs. In a recent deal, the firm deployed $13.3 million (10% of NAV) into a CDO with the descriptive name of TFINS 2026-2, which is made up of debts issued by 64 US financial institutions. The estimated lifetime yield on the asset is 15%. Since EJF CDO Manager is one of the managers on the deal, it will receive 0.30% per year in fees on the $300 million total value of the CDO.

EJF – a debt fund with solid fundamentals

Broker Panmure Liberum thinks the best way to assess the health of EJF's portfolio is to look at the performance of the underlying issuers. US regional banks have performed well this year, with the KBW Nasdaq Regional Banking index up 19%.

Lenders are benefiting from improving balance sheets, a better regulatory environment and solid demand for borrowing, says analyst Shonil Chande, while rates are supportive. “Banks fund short and lend longer, and while policy rates have fallen from their 2025 peaks, lending rates remain higher further out on the curve.”

Smaller US lenders are also attracting bids from larger peers. Outstanding credits are usually redeemed in these transactions as the buyer can often refinance at lower rates. That reduces income from management fees, but delivers immediate capital gains when credits are called at a premium.

EJF is a specialist debt fund and it will not be suitable for all investors. What's more, fees are high. Investors are being asked to cough up 1.9% per year for access to this niche credit market. But with a yield of 8.5%, the shares look like an attractive income play trading at one of the deepest discounts in the sector.

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Andrew Van Sickle: Canada is always overshadowed by its larger neighbour, so your fund is rarely in the spotlight. Tell us a bit about it.

Greg Eckel: It's a general Canadian equity investment trust, North America's second-oldest closed-end fund. It was set up in 1930, and listed in London in 1995. Think of it as a one-stop shop for investing in Canada. Up to 25% of the trust's assets are allocated to the US (at present the figure is around 20%), typically to gain access to something you wouldn't find in the Canadian market, or for the added liquidity you can get from America.

Canadian General Investments is more diversified than the overall Canadian stock market, which skews heavily towards the financial sector. That contains solid businesses, but they aren't the fastest growers; we want to maintain our long record of beating the index (it's been more than 50 years now), so we look beyond the banks. Financials are 31% of the index; add energy and materials, and we're up to 70%.

AVS: I understand you adopt a largely bottom-up approach, but these are unusually fraught times geopolitically, with mercantilism on the rise and supply chains fracturing. How is Canada placed in this context, do you think, geopolitically and economically?

Greg Eckel: Canada has always had a reputation for geopolitical stability; we are considered pragmatic and centrist. Mark Carney appears to have reinforced this reputation at an important time, proving to be a key driver of trade initiatives and internal spending, which should improve our prospects and help gradually loosen our relationship with the US.

Andrew Van Sickle: What's the latest on trade?

Greg Eckel: We have been carrying on negotiations on what used to be NAFTA, the trade deal with Canada and Mexico. It is known as CUSMA, the Canada-United States-Mexico Agreement. This was supposed to protect around 90% of our goods from US tariffs, but the US recently threatened Canada with extra import levies. There is still considerable uncertainty and the issue hangs over the market like a cloud. About 75% of our exports still go to the US.

Andrew Van Sickle: A long-term plus point, however, is that Canada is amply endowed with raw materials.

Greg Eckel: We have critical minerals too, and currently own a company that refines and purifies them. It's still small, but it's a step towards tackling China's dominance in the field. We have huge deposits of potash, which the US doesn't have. The US, India and China buy nitrogen and phosphate, the other key ingredients in fertiliser, from us too.

Copper and gold are also promising thanks to the energy transition and central-bank buying, respectively, while a commodity we've certainly played to a great extent is uranium. The Athabasca Basin in Saskatchewan contains the highest-grade uranium deposits in the world, with ore concentrations between ten and 100 times the global average.

Uranium is looking especially promising thanks to the revival in demand for nuclear power. Canada's Cameco, a core holding, is the number-one player in this field. Uranium and fertiliser are available from Russia and eastern Europe too, but sanctions are playing havoc with supply chains, so it's easier for Western countries to buy it from us. We have a comprehensive supply chain, so it's easy to ship it around.

Then, of course, there's oil and gas. It's mostly in Alberta, not near the coasts, so we have traditionally shipped it to the US via pipelines. There is now a drive to construct pipelines to the coasts. Finally, we also have abundant soft commodities: fresh water, corn and maple syrup are some of the main ones. We can help feed the world.

Andrew Van Sickle: One of MoneyWeek's key concerns for the next decade or so is what we call “stagflation-lite”: lacklustre growth in the Western world and high prices. Canada seems set fair in this regard given that you have plenty of natural-resources companies; they will tend to have pricing power because raw materials are in everything. You also seem to have plenty of firms in other sectors with pricing power. You've mentioned Canadian Pacific Kansas City in this regard.

Greg Eckel: Yes, there are several companies this applies to. Canadian Pacific has a firm grip on supply chains, which provides the pricing power, and it connects Canada, the US and Mexico, so it is ideally placed to profit from the new trade agreement if it comes to fruition. The company boasts the best operating management team in the North American rail-company sphere.

Meanwhile, the Canadian National Railway Company connects the two Canadian coasts and the Gulf of Mexico. We also have a company among our top-ten holdings called TFI International. That's one of the largest trucking companies. So it's a different play on transportation, but it's been a good grower too. It has a huge US presence as well. So we have circled the wagons on transport, as it were. The US economy still looks strong, and we try to tap into it through these firms. That should bolster their pricing power.

Andrew Van Sickle: Are all these solid prospects fairly priced into the Canadian stockmarket? Is there still relative and absolute value?

Greg Eckel: The benchmark index, the TSX, has outstripped other major developed markets for much of this year. The energy and financial sectors have risen by a quarter. But the fundamentals remain solid. Earnings growth should reach the low teens this year. Inflation remains in check, interest rates are steady and employment is stable. Trouble on the trading front could cause a wobble, however.

Andrew Van Sickle: What sort of price-earnings ratio are we talking about?

Greg Eckel: A forward price-earnings ratio of around 16.4. The US is at 21.5. The spread between the two markets has rarely been this wide. Our dividend yield is around 2.1%, and America's is half that.

Andrew Van Sickle: You have said that the economy is still closely linked to its southern neighbour's, and the stock market presumably is too. There is always something of a “Wall Street leash effect” on other equity indices. Do you think that this could loosen now that Canada is becoming more self-sufficient?

Greg Eckel: Prime minister Carney is leading the charge to reduce Canada's dependence on the US, but this kind of thing takes time. It has taken decades for supply chains to become as integrated as they are, so disentangling them will be laborious.

But clearly, the initiative is there now that we have seen what disruption one person can create. With 75% of exports still going to the US, there is some way to go, of course. Consider too that the average car part can cross either the Canada-US border or the Mexico-US one seven times before finally being installed in a completed vehicle.

Andrew Van Sickle: Your second-biggest sector is IT. This is largely because of your holding in Nvidia, which you are dipping into the US market for – it's your second-biggest holding – and Celestica, your top stock position. Is Celestica Canadian?

Greg Eckel: Yes. We bought Celestica in 2024. We were quite lucky to find it at an early stage. It is a so-called electronics-manufacturing services (EMS) company. Until recently the business made pieces and parts for the likes of Nokia and Cisco.

However, it turns out that the company's products are very helpful for data centres, and so the Big Tech hyperscalers have come straight to Celestica and demanded more and more of the firm's networking switches and related offerings. When we bought the stock, it comprised about 1% of the portfolio. It has been worth 5% at various times in the past two years. We have taken profits on it.

Andrew Van Sickle: Your biggest sector is industrials. That includes the transport giants such as the railways, which will be the heavyweights. What else are you dabbling in?

Greg Eckel: Aerospace and defence is a subsector of industrials, and we found a company called MDA Space in 2024, a space robotics and infrastructure group. That has profited from the excitement about the space economy.

We also recently established a position in a business called Aecon Group, which is a large construction company. The firm builds bridges, water-treatment facilities and nuclear reactors, among many other things. Aecon is a key beneficiary of the drive variously to construct or rebuild nuclear reactors.

AtkinsRéalis is another company cashing in on the nuclear renaissance. It is an engineering group with the rights to the CANDU technology, the intellectual property covering the design and manufacture of nuclear reactors in Canada.

We have also long been impressed with Stantec, an engineering group with a presence in energy, water and transport. That means it is perfectly placed to profit from the drive towards boosting infrastructure across North America.

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Bending spoons is a parlour trick popularised in the 1970s by illusionist Uri Geller. It's also the name of Italy's most valuable technology firm, which earlier this summer staged a triumphant Wall Street initial public offering that saw its shares soar by 40% in a day – taking the value to $26 billion and “minting” the fortunes of its founders and a bevy of backers, ranging from US tech grandee Eric Schmidt and French telecoms billionaire Xavier Niel, to celebrities such as Andre Agassi.

The wider technology sell-off has since knocked around 20% off that valuation. But Bending Spoons's ascent is nonetheless remarkable, says the Financial Times. The Milan-based outfit, founded in 2013, has made a virtue of scouring “the digital graveyard” in search of “paranormal returns”.

Most American investors had never heard of it before its market debut, says The Street. But many use its products. Among the 50 struggling apps and dusty vintage names this polished scavenger has acquired to overhaul are Evernote, a once hyped note-taking app; the ticket-buying site Eventbrite; WeTransfer, Vimeo, and that old internet has-been AOL.

Bending Spoons has been described as a “hybrid” of a private-equity investor and a technology firm. Yet it “operates more like a conglomerate from the mid-1900s”, says The Wall Street Journal.

The outfit's driving force, CEO and co-founder Luca Ferrari, is no relation to the Italian car-making dynasty. But he has made no bones about his intention to go places, says The Economist. He wants to “shake up” Italy's business culture by building a company of “international calibre”.

Ferrari was born in 1985 and took an IT degree at Padua University before heading to Copenhagen to study telecommunications engineering. There he met two compatriots – Matteo Danieli and Francesco Patarnello. In 2010, the trio came up with an idea for a diary app. Dubbed Evertale, it raised $1 million, but folded within three years, notes the FT – a failure Ferrari describes as “liberating”.

Taking two Evertale stalwarts and their remaining $40,000 with them, they founded Bending Spoons. The name was suggested by Danieli who'd been inspired by the cult film The Matrix and its central idea that the mind can bend the apparent rules of reality. “We liked the silliness” of the name, says Ferrari – and it seemed apt.

How Bending Spoons found success

The firm's Nasdaq listing tops a decade of dealmaking and word-of-mouth exposure that eventually attracted institutional investors including Baillie Gifford and Fidelity. Bending Spoons's strategy hasn't changed: from the start, it sought to buy struggling firms, often using debt, before gutting and fixing them – and then ploughing the earnings into new acquisitions. “Our way to generate value is to buy companies where there's a core of greatness,” says Ferrari: whether it's a brand, customer base, a good product or a team.

But what has always singled this operation out, says The Economist, is “the quality of execution”. Its success is down to a 700-strong army of youthful “Spooners” who infiltrate acquisitions and inject new life into them. And the selection process, as The Wall Street Journal notes, is beyond thorough. Last year, it received 800,000 applications and hired just 286 – a 0.04% acceptance rate that makes getting into Harvard or a top Wall Street firm look easy. But these go-getting graduates – given top positions early in their careers – are the firm's heart blood. Critics may carp at the methods and “lack of financial disclosure”, says the FT. And one day all that debt might become a problem. But for now, Ferrari and his fellow Spooners are a European inspiration – and the toast of Wall Street.

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UK mid-cap stocks have a takeover problem – one that sums up the trouble with investing in anything from growth companies to turnaround plays in the UK stock market.

Take the bid by US firm Prologis for UK property company Segro. As a holder of both Prologis and Segro shares, I should not be too bothered. Yet in practice, this looks like a pretty rough deal for Segro shareholders who want to stay invested. They swap a focused UK and European logistics investor for part of a much larger group that has 84% of its business in the US, at a valuation that seems favourable to Prologis. To make it worse, the dividends – the key thing, since you buy a business like this for income – will then be subject to US withholding tax. Who gains here?

So we get the usual silly takeover dance as the target gets bullied into submission by short-term investors desperate for the sugar hit of a quick capital gain. The only thing more ludicrous than Prologis's faux-concern about Segro's ability to execute its ambitious growth plans is the way that an offer worth 993p is “highly opportunistic”, but one at 1,032p (not even 4% more) is something that the browbeaten board now “would be minded to recommend”.

The pool of opportunities is constantly shrinking, while the balance of risks and rewards get worse. Make the right call and you stand a good chance of seeing your winners bought out at a still-ungenerous valuation, capping your upside far lower than it should be. Meanwhile, the average quality of what remains behind is likely to decline – many of them will be stocks that do not attract buyers for good reasons.

The absence of good new listings coming to London is why this takeover wave is much more concerning than the one we saw in the mid-2000s, which I was relaxed about at the time. In hindsight, I should have been more concerned because that surely helped lay the foundations for what is happening today.

However, the real tipping point was the bewildering decision to allow SoftBank to buy Arm in 2016 – a call that almost no government anywhere else in the world would have made. That signalled everything was up for sale.

The true market for UK mid-cap stocks

This is a key reason why it is hard to be bullish on the FTSE 250, which has lagged the FTSE 100 for years after historically beating it. There are other factors, but the loss of roughly 150 mostly decent stocks (large, mid and small) from the UK market since 2023 must play a part.

The unhealthy combination of hollowing out and pitiful valuations means that while we think of the FTSE 250 as the benchmark for UK mid-cap stocks, it does not really look like one anymore. By modern size definitions, the true market for UK mid-cap stocks is roughly the bottom 40 of the FTSE 100 and the top 100 of the FTSE 250.

There are clearly opportunities in the UK. However, the best prospects lie with either an all-cap equity fund or specialist small-cap trusts such as Rockwood Strategic (LSE: RKW) instead of trying to earn any kind of intrinsic mid/small premium from such a neglected market.

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Cornwall is one of the poorest corners of northern Europe. Its output per head has sat at roughly two-thirds to three-quarters of the UK average for two decades. A typical full-time worker there earns around 84% of the national wage.

For 25 years the gap was cushioned by Europe. Cornwall and the Isles of Scilly took well over £1 billion in EU structural funds between 2000 and 2020, something like £100 million a year. That money has gone, its replacement is worth roughly half as much, and from April 2026 the successor to that replacement excludes Cornwall altogether.

But now something has changed the calculus entirely. That poor, peripheral region also happens to have hard-rock lithium and tin deposits, the largest tungsten resource in the West, Britain's first deep geothermal power station and a mineral-processing industry with two centuries of pedigree.

Forty miles away in Bridgwater, Somerset, Tata's Agratas is building a £4 billion, 40GWh factory that will be the largest in the country. Resources, low-carbon power, processing know-how and a battery end market, all in one economic-geographic area. Nowhere else in Britain has all four.

China accounts for about 80% of world tungsten mined production and an even larger share of the downstream conversion. From February 2025 it placed tungsten under export licensing on national security grounds and by late 2025 had restricted authorised exporters to around 15 firms for 2026 and 2027. Ammonium paratungstate, the key traded intermediate, went from roughly $300 to $940 per metric tonne unit in early 2025 to above $3,000 by this spring. That is why Devon's Hemerdon, the West's largest tungsten resource, and Cornwall's Redmoor, Europe's highest-grade undeveloped tungsten deposit, matter to people who have never heard of either.

The activity on the ground is real and, in places, world-leading. Cornish Lithium has sought regulatory permission to develop a former china clay pit at Trelavour and is pulling lithium from geothermal brine at Cross Lanes. Cornish Metals is developing South Crofty, closed since 1998, aiming at production in around 2028 and a company with an estimated net present value of nearly £500 million. Geothermal Engineering's plant at United Downs delivered the UK's first deep geothermal electricity in February this year, with lithium carbonate coming from the same well. Tungsten West at Hemerdon is hoping to start production by the end of this year.

This is not a thesis about the geology waiting to be proven – it has already been proved. What is missing is the next step, the chemistry that turns concentrate and brine into battery-grade or defence-grade material, and Britain is building most of that capacity at Teesside rather than in the region that actually holds the ore.

Cornwall's lithium project pipped at the post

Here is the part investors and ministers alike should pay attention to. In February this year, Imerys placed its St Austell lithium project on hold. It was not a bad project; it was simply not the project the company chose to go ahead with because the French state had just taken a €50 million stake in Imerys's rival venture in France, Emili. Capital did not leave because the geology failed. It left because a rival state turned up with a cheque and Britain did not. That single episode should worry anyone backing UK critical minerals more than any drilling result. Geology is necessary. It has never been sufficient.

Britain has the wherewithal. The National Wealth Fund has put £31 million into Cornish Lithium and £28million into Cornish Metals, real money into the right projects. But its remit now stretches from clean energy to defence to life sciences to the creative industries, and a fund asked to do everything risks losing focus.

France did something narrower and, I think, smarter: it took a direct stake in one named asset, through one named vehicle, and said plainly that this is the project the state has decided to back. The US has done similar. Britain's equivalent is, for now, an announcement of an up to £50 million fund and a set of sector programmes that may not add up to much.

The investment case follows from policy

None of this needs a white paper. It needs a decision. Back one properly scaled mid-stream processing hub in the South West rather than subsidising several plants that are too small to matter. Build a stockpile mechanism for defence-critical tungsten, given that Britain currently produces none and refines none. Speed up the permitting process that has seen

South Crofty take years to develop a mine before a tonne of tin comes out. And close the funding cliff-edge Cornwall now faces with an argument based on national security rather than regional deprivation, because the latter has manifestly not worked for 25 years and the former might.

The investment case follows from the policy case, not the other way round. Companies with permitted, de-risked, assets that have already been built, Cornish Metals and Tungsten West among them, are the ones best placed to benefit if Britain decides to act like it means what it says about supply-chain security.

The lesson from Imerys is that being right about the rock is not enough. Somebody, whether it's the government or private capital, has to be willing to be the anchor. Cornwall has spent 25 years waiting for a growth story. It's finally got one under its feet. The only question is whether Britain gets there before France, or Kazakhstan, or the next country willing to write the cheque.

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Indigo Point, Great Camanoe, British Virgin Islands

A modern estate with three properties surrounded by landscaped gardens. There are no corporate or personal income taxes, or capital gains or inheritance taxes to pay. 2-bedroom main villa, 1-bedroom owner’s cottage, 1-bedroom guest cottage, pool, 2 boat slips, 4.4 acres.

Price: $5.5m Hamptons 020-8618 4551

Bolivia Mount, The Dhoor, Lezayre, Isle of Man

A distinctive property built in 1820 and surrounded by formal gardens and woodland. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 6 bedrooms, 3 bathrooms, 3 receptions, 42.3 acres.

Price: £6.95m Knight Frank 020-7861 1065

Seaside Drive, Guana Cay, Abaco, Bahamas

An ocean-side residence featuring bright interiors with vaulted beamed ceilings, wood floors, floor-to -ceiling windows and an open-plan living area. The Bahamas operates a zero-tax jurisdiction with no personal or corporate income taxes, capital gains, wealth or inheritance taxes. 3 bedrooms, 3 bathrooms, gardens, tennis court, 2.1 acres.

Price: $4.8m Bahamas Sotheby’s International Realty +1 242 367 5046

Courtil Brock, St Peter Port, Guernsey

A fine Regency villa built in 1810, surrounded by landscaped gardens that include an English oak planted by the first owner in 1812. It has 12-foot high ceilings, grand fireplaces, shuttered sash windows, panelled walls and French doors leading onto the south-facing terrace. Guernsey levies a flat 20% personal income tax, and there are no corporate, capital gains, inheritance or wealth taxes to pay. 5 bedrooms, 6 bathrooms, 3 receptions, library, cinema.

Price: £4.9m Savills 01481-713463

Ordino, Andorra

A mountain home in Ordino in the Pyrenees. Although not strictly a tax haven, there are no wealth, inheritance or capital gains taxes to pay. The house has beamed ceilings and a partly covered terrace for outdoor dining. 4 bedrooms, 4 bathrooms, wine cellar.

Price: €3.15m Lucas Fox +376 775 077

Derry Farm, La Route Du Francfief, St Brelade, Jersey

A restored country house with modern bright interiors that retain original features, including marble fireplaces. The gardens include a stream and a swimming pool. Jersey imposes no capital gains, inheritance or corporate taxes, and has a fixed income-tax rate of 20%. 4 bedrooms, 3 bathrooms, 2 receptions, library, 2-bedroom self-contained cottage, 1-bedroom flat.

Price: £7.75m Knight Frank 01534-877977

Shoreview Point, West Bay, Cayman Islands

A renovated home in a gated community, with its own dock on a canal leading out to the ocean. The interiors have marble floors, large picture windows and French doors leading onto the garden and pool. The Cayman Islands has a “tax neutral” status and levies no corporate, income, capital gains or property taxes. 4 bedrooms, 4 bathrooms, reception.

Price: $3.75m Savills 020-7016 3740

Lorne House, Castletown, Isle of Man

A grand Georgian estate, which was originally the official residence of the island’s lieutenant governor. The property has landscaped gardens, orchards and paddocks and a restored walled garden overlooking Castle Rushen, a medieval coastal castle. The Isle of Man operates a low-tax regime with low fixed income-tax rates and no capital gains, inheritance or wealth taxes. 8 bedrooms, 5 bathrooms, 4 receptions, 6.5 acres.

Price: £6.85m The London Broker 020-7193 9969

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Investors had an exciting April and May this year, when America's S&P 500 stock market index rose 19.5%. But June was a quiet month, with the index losing 1%. The third quarter is likely to be similarly quiet as earnings catch up with the market, and the fourth quarter might be too. Market analyst Ed Yardeni is still targeting a year-end level of 8,250, representing a forward multiple of 22 on his forecast of $375 of earnings per share in 2027.

That earnings forecast is well below the consensus, now standing above $400, but leaves room for continued growth thereafter. If the index makes no further progress this year, it will have de-rated to a forward multiple of 20, which would be reasonable even if ten-year US Treasury yields rose to 5% and would leave room for a further market advance in 2027.

Opportunities for investors in US stocks

The end-of-the-world crowd continue to believe the US stock market is overvalued. Dire warnings focus on the supposed bubble in AI-related stocks, including semiconductors. Christopher Watling at Longview Economics points out that food retailers Costco and Walmart trade on prospective multiples of 40, Caterpillar on 35 and GE Aerospace on 47. These multiples certainly look too high. This is definitely an argument for caution from investors and for modest expectations, but there are pockets of opportunity.

Discounts on investment trusts should continue to fall as rising interest in investment meets a net shrinkage of capital. Particularly attractive are the private equity, infrastructure and property sub-sectors, where generous discounts to net asset value and often attractive yields combine with an improving outlook.

The increase in flotations is giving private-equity funds an exit, freeing capital for new deals. Rising construction costs have increased the replacement cost of existing buildings, while rental demand is picking up. Infrastructure funds continue to deliver and even renewable energy is on an uptrend, thanks to asset sales, share buybacks and takeovers.

Among trusts investing in equities, discounts are often low, but those of RIT Capital, Hansa Trust and Pershing Square have scope to fall. The healthcare sector, notably Worldwide Healthcare Trust, is picking up as, at last, may the performance of Finsbury Growth Trust. Nervousness about the technology sector means that the two specialists, Allianz Technology and Polar Capital, trade on near-0% discounts, while the lagging performance of small caps has left attractive discounts in most regions.

Japanese government bonds look good value

The UK government would love people to buy more of the bonds they are issuing in huge volume, but market analyst Charles Gave points instead to the good value of Japanese government bonds, trading on a yield close to 3% for ten years and more than 4% for 30 years. As he argues, a structural growth rate of nominal GDP of 2.4% makes these yields attractive and the devaluation of the yen has made Japan highly competitive. A high national debt is matched by high domestic savings and the hugely successful government policy of investing in equities when the market was much lower.

The cheapness of the yen offers the prospect of currency gain, but for equities there is a risk that a rising yen would slow earnings growth. Japan still looks reasonable value, but a 30% advance in the last year is enough for now. Emerging markets, led by exposure to the Far Eastern technology giants, are up around 50%, which also looks far enough. The UK and Europe are up “only” 20% and appear good value, but are bedevilled by slow growth.

Cautiously bullish on the oil and gas sector

The pause in America's Gulf war has led to the oil price plummeting again, and the oil and gas sector losing a good deal of the first quarter's gain. The war has been far from a triumph for Iran. It is militarily crippled, diplomatically isolated and economically savaged, with its hope for regional hegemony shattered. The closure of the Strait of Hormuz led to the oil price going above $100 a barrel, but not to the $150-$200 that the doomsayers predicted.

As oil and gas increasingly bypass the strait, alternative sources are opened up and the rest of the world follows China in stock-building, future closures of the strait will be even less effective.

This may not be bullish for the prices of oil and gas, but it is bullish for the sector. Governments will want to encourage domestic supply and energy self-sufficiency. This means hands off the sector in terms of taxation, licensing and regulation. Governments will be equally keen to encourage the replacement of fossil fuels with renewable energy, as the Chinese have done. Buying into the recent sector setback looks an attractive option.

The best strategy for the rest of the year is to continue to ignore the bears and use the period of consolidation in markets to invest for the next market advance. That is far easier than chasing it when it again has upward momentum.

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Brazil remains a good old-fashioned emerging market play, while volatile semiconductor manufacturers distort Asian stock indices. Financials make up 40% of the MSCI Brazil stock market index, with energy and materials combined accounting for nearly 30%. The Ibovespa index enjoyed a thrilling spring as global investors looked for a hedge against surging commodity prices.

While Brazil does import some refined oil products, it is a net exporter of crude oil, say Alex Nae and Tae Yoon Kim for FTSE Russell Insights. The FTSE Brazil stock market index returned 47.2% last year. It rallied at the start of 2026, but remains attractively valued on a 12-month forward price/earnings ratio of 9.5, compared with an average of 12.6 in the wider FTSE Emerging index.

Foreign investors dump Brazilian stocks

Since a peak in April at the height of the Iran war, the Ibovespa has fallen 11%, but remains up 10% this year. Foreign investors pulled 14.9 billion reais (£2.2 billion) from local shares in May alone, the fastest pace in six years, say Raphael Almeida and Leda Alvim on Bloomberg. Foreign capital plays an outsized role in São Paulo, accounting for 60% of trading in Brazilian equities, the highest level in any emerging market.

The slump reflects two factors. Firstly, the AI trade has distracted investors from commodity plays. Secondly, expectations of higher inflation and interest rates act like a wet blanket on emerging-market equities. Brazil's benchmark Selic interest rate stands at 14.25%. With east Asian semiconductor firms surging, Brazil's longstanding pattern of underperformance has re-emerged. The MSCI Brazil stock market index has returned an average of 7.5% annually over the past decade, compared with an emerging-markets average of 10%.

All eyes are on general elections scheduled for 4 October. Incumbent president Luiz Inácio Lula da Silva enjoys a narrow polling lead over Flávio Bolsonaro, the son of former president Jair Bolsonaro. Lula can point to “record low” unemployment and strong annual growth, which at around 3% has “outpaced expectations for three years”, says The Economist. The catch? Brazilian debt is “unsustainable on its current path”, with gross public debt forecast to hit 99% of GDP in 2030. The nominal deficit – “composed almost entirely of interest payments” – stands at a “whopping” 8.1%.

Lavish, constitutionally mandated spending on pensions is to blame. Until that is reformed, “the market will never trust Brazilian fiscal rectitude”. Stronger growth does ease the situation, says Gustavo Medeiros in the Financial Times. But it may take a market panic to persuade politicians that a credible fiscal plan is needed. Still, given Brazil’s “humbling valuations”, it wouldn’t take much good news to make the country a “compelling opportunity”.

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Andy Burnham has taken power with remarkably little scrutiny – no general election, no contest for the leadership of his party, and no form of questioning in Parliament. A few sound bites aside, we have very little idea of what his plans are. Instead, over his first week, he made a series of small announcements, all of them to be financed by some form of creative accounting or financial conjuring trick.

On his first day, for example, Andy Burnham announced a plan to end rough sleeping, at an estimated cost of £340 million over five years. Where is the money to come from? Apparently from some “uncommitted” funds in the housing department – in other words, they found some cash down the back of the sofa.

Then the new PM announced a plan to cut VAT on electricity at an estimated cost of £840 million. This time, the money was found by scrapping the digital ID scheme. The only trouble is that the ID plan was never funded in the first place. In effect, one form of imaginary money was being replaced with another.

Then came a £2 cap on bus fares, reversing the decision taken by his predecessor to raise them. The cost is £500 million and the money to be found by replacing “grants” for international climate projects with “loans”, which might shift it to another part of the balance sheet, but won't make any difference to the amount of money that has to be spent over the next few years.

There is a common thread here. Each of the policies involves some clever-clever financial tricks. With a deft sleight of hand, money is shifted around, redesignated and reallocated. That might seem clever to a politician, but if it were happening at a listed firm, the shares would have crashed and the board would have been charged with fraud.

Financial trickery is the reddest of red flags. It may not matter for now because the sums are tiny. Andy Burnham's policies mean a commitment of slightly more than £1.6 billion of extra spending. Given that the government spends £1.3 trillion a year, that is a drop in the ocean. But it is the thought that counts. Andy Burnham has made it clear that he is happy to play games with the public finances if he thinks he can get away with it.

Andy Burnham's policies are making bond markets suspicious

That matters. There are two big problems. First, Britain's debts are already precarious. The government is set to borrow more than £140 billion a year, and the interest due on all the money we already owe has climbed over £120 billion a year. Yields on ten-year gilts have spiked past 5% and are rising faster than for any other major developed country. The bond markets are already treating the UK with well-justified suspicion.

Next, the government is going to have to borrow vast sums, not just to finance ambitious plans for taking utilities into public ownership or building more council houses, but simply to cover day-to-day spending. With the welfare bill spiralling out of control and with defence spending set to rise, Andy Burnham's policies will need more and more money every year, while a stagnant economy means that tax revenues will flatline at best, and may soon start to fall.

Add the two together and Andy Burnham's government is going to have to borrow £300 billion or more over the rest of its term, as well as persuading the markets to roll over all the existing debt. It was always going to be a tough sell, even with plenty of goodwill from investors. Now the markets have, in effect, been warned not to trust the government's figures.

It could have been more straightforward – finding the £1.6 billion needed by making serious savings elsewhere, for example. The completely pointless National Wealth Fund would have been an easy place to start. Instead, Burnham simply tried to pretend he could magic the money out of nowhere. At some point over the next year, the government may well have to spend some serious money. It might be for the debts of the newly nationalised British Steel, the collapse of several of the water companies, a spike in energy prices, or something else that no one is thinking about right now. Whatever it is, the government will need to tap the bond markets. And yet it has already thrown away the support of the markets by treating investors like idiots. A crash now looks all but certain – and it will be very messy when it happens.

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Semiconductors are the world's most valuable manufactured good. These tiny, intricately engineered pieces of silicon can perform more calculations in a second than a single person could complete in 30,000 years. This year has brought a semiconductor boom for the ages. The US PHLX chip index has nearly doubled over the past 12 months. Investors, noticing that big US tech firms are planning nearly $1 trillion in spending on AI data centres next year, followed the money to the chip stocks that provide AI hardware.

The global semiconductor supply chain is very concentrated. A handful of manufacturers and designers – Taiwan's TSMC, South Korea's Samsung and SK Hynix, America's Nvidia – capture the lion's share of profits. Yet expectations have run ahead of reality. This week, SK Hynix reported a 557% surge in operating profit, with margins of more than 80%. That Midas-like profitability still wasn't good enough for investors in Korea, who sent the shares tumbling 19%. The Korean Kospi slumped 11% on Tuesday and a further 6% on Wednesday. America's Nasdaq 100 technology index has fallen 9.7% from its peak, says Eva Roytburg for Fortune.

The immediate trigger was talk of new competition from China, where chipmaker CXMT listed on Monday. Those fears are probably overdone – China still doesn't have access to the cutting-edge extreme ultraviolet lithography machines required to make the world's best chips. But the chip stock selloff isn't irrational; for months, the “going trade” has been to sell the hyperscalers – firms such as Microsoft and Meta that appear to be overspending on data centres – and “buy the semis”, companies such as Samsung that are profiting from Silicon Valley's profligacy. Now investors have realised the obvious contradiction: if Big Tech's AI investments really are as wasteful as they think, then at some point that spending will be cut, which would be a disaster for chip stocks, too.

The semiconductor boom is based on very real profits, says Moses Sternstein for a16Z. Rising earnings have come alongside falling valuations – an unusual symptom for an alleged bubble. Micron, whose earnings are poised to rise 60% year on year, trades on a mere six times forward earnings. The wider US semiconductor complex trades on about 21 times forward earnings, a slight discount to the five-year average of 23.8.

The semiconductor industry is infamously cyclical

So are semiconductors cheap? In one sense, yes, but the industry is infamously cyclical. An acute shortage during the pandemic turned into a big bust in 2023 as demand returned to normal levels. “Investors are wondering whether semis can keep it up” this time. As laptop buyers will be well aware, dynamic random-access memory (DRAM), which is used for computer memory, is in acute shortage this year.

Samsung and SK Hynix have joint plans to invest as much as $1.5 trillion to double Korea's DRAM output within five years, say Song Jung-a and Michael Acton in the Financial Times. Yet there are risks of the chip cycle turning again. Should AI demand disappoint or Chinese supply surge, there could be a glut as soon as 2028.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Inheritance tax (IHT) has long been dubbed Britain’s most-hated tax, despite only affecting a small chunk of the population. That’s changing though – more people are on track to be hit by the 40% levy in coming years.

Rising house prices and frozen inheritance tax thresholds mean more families have and will be brought into the IHT net each year, known as fiscal drag.

The issue is set to worsen when pensions are included in the estate for inheritance tax from April 2027.

In the tax year 2023/24, 4.72% of UK deaths resulted in an inheritance tax charge, acording to latest HMRC data – an increase of 0.10 percentage points to the previous year. The proportion of estates paying inheritance tax is now the highest it has been since 2006 to 2007, when it was 5.96%.

A total of 30,400 deaths in the UK led to an IHT charge, with the average bill for IHT-paying estates standing at £231,000. Inheritance tax receipts in that period reached £7 billion, up 5% compared to the previous year.

Inheritance tax raised £8.4 billion in 2024/25 for the taxman, the Office for Budget Responsibility (OBR) said and expects this to increase to £14.7 billion in 2030/21 due to factors such as the fiscal drag, the £2.5 million cap on 100% agricultural property relief and business property relief which came in in April 2026, and making pensions as part of an estate.

With more people facing inheritance tax in the future, here's how can you plan ahead now.

Can you make use of gifting allowances?

The standard inheritance tax threshold is £325,000, and this can be raised to £500,000 if you give your home to your children or grandchildren – provided your estate is worth less than £2 million. There are ways to reduce an inheritance tax bill though, such as through lifetime gifting.

Giving gifts can reduce inheritance tax liabilities as, if done right, they won’t be included in the estate. There are a number of allowances, such as the annual exemption, which lets you give a total of £3,000 of gifts each year without them being added to the value of your estate. You can give the whole £3,000 to one person, or divide it among different people. If this allowance wasn’t used in the tax year, it can be carried forward to the next – but only for one tax year. There are also gift allowances for weddings and civil partnerships.

Significantly larger gifts given during your lifetime could also potentially be exempt from inheritance tax. Known as the seven year rule, if you live for seven years after giving a gift, no IHT is due on it – unless the gift is part of a trust. The inheritance tax rate tapers off after three years – so even if you die within those seven years, the rate your loved one has to pay on the gift could be less than full whack (40%). The problem with the seven year rule is you likely won’t know your life expectancy, nor how much money you will need in the future, for example to pay for care.

You can also give away £250 per year to as many people as you like, known as the small gifts exemption, as long as the recipient hasn’t already benefited from the annual exemption that year.

Other gifting allowances also apply – you can give as much away as you’d like in regular payments to another person as long as you do not leave yourself short and the money is from monthly income.

If you can afford to, gifting during your lifetime could mean less of your money is subject to inheritance tax in the future. Plus, it could mean you get to see how your hard-earned money makes a difference to your loved one’s life. Though, it could be worth getting advice, as there are nuances to rules to be careful about.

Don’t avoid the inheritance conversation

Avoid talking about money, politics and religion at the dinner table, that’s how the unwritten rule goes. Conversations about inheritance may feel uncomfortable, but having these discussions are crucial.

Speaking about your plans for your estate while you’re alive means you can communicate your wishes to loved ones directly and address any concerns.

You can prepare a side letter explaining how you have arranged your will, which could help avoid disappointment or disputes after your death. It can reduce the risk of any nasty financial surprises while they’re grieving, and give them the opportunity to understand your decisions.

Make sure you keep the paperwork

Keeping a paper trail is important when it comes to inheritance tax.

If you’re in the position to give away your money, then make sure you keep a record – and put it in a safe place. Planning ahead is all well and good, but if HMRC comes knocking, your loved ones may need to show evidence.

At the same time, keeping a record of financial and personal details for after you’re gone could be incredibly useful for your loved ones after you die. Royal London has put together a “when I’m gone list” which covers where friends or family can find important documents, as well as your funeral wishes. Make sure you let your loved ones know it exists and where you keep it.

NS&I has hiked interest rates on its fixed-rate savings products for the third consecutive time this year, making them some of the best on the market.

The government-backed bank has increased the interest rates on new issues of its one, two, three, and five-year savings accounts, called British Savings Bonds.

It brings NS&I’s top interest rate to 4.75% for the new five-year guaranteed growth bond, or 4.72% for the new one-year guaranteed growth bond.

Andrew Westhead, retail director at NS&I, said: “Today’s increases mean savers can now choose from improved fixed-term rates across our one, two, three and five-year British Savings Bonds, with the certainty of knowing exactly what return they will receive over their chosen term.”

What are the new rates?

NS&I has increased rates on eight of its fixed-rate accounts, but the size of the hike differs depending on the term and type of each account.

There are two types of British Savings Bonds – guaranteed income and guaranteed growth bonds.

Guaranteed growth bonds are lump sum investments that earn a fixed rate of interest over a set period of time and are designed to be held for the full term.

Meanwhile, guaranteed income bonds pay out monthly income at a fixed rate of interest over a set period of time based on the size of your lump sum investment.

The table below shows the new and old rates for each savings account.

Source: NS&I, 31 July

Are NS&I British Savings Bonds any good?

With increased rates, new issues of NS&I’s British Savings Bonds are a lot more attractive for savers looking for high rates.

However, the accounts do not provide the absolutely highest interest rates available on the market.

NS&I’s one year fixed rate growth bond pays 4.72% interest. This is well above the market average of 4.27%, according to Moneyfacts, but still lower than the top one-year fixed rate saver from GB Bank that pays 4.92%.

Even with the new increased interest rates, you can currently find alternative accounts with stronger interest rates across all term lengths.

The table below compares the interest rate on the top fixed-term account on the market to the interest rate offered for the same term by NS&I.

Source: Moneyfacts, NS&I, 31 July

Caitlyn Eastell, personal finance analyst at Moneyfacts, said: “NS&I’s decision to increase rates on its British Savings Bonds is a welcome boost for savers and makes them a far more competitive option in the current fixed-rate savings market.”

She added: “While the market-leading fixed bonds are now paying 5%, some savers may be willing to sacrifice the extra interest for the peace of mind NS&I offers, especially those with large deposits.

“Unlike traditional savings accounts, every pound held with NS&I is backed by HM Treasury, giving savers an unlimited government guarantee rather than the £120,000 FSCS protection available with banks and building societies.”

Three years ago, Chanel chose Manchester over London for its Métiers D'Art fashion show. Soho House opened its doors in November on the site of the former Granada Studios. And for the first time, the Brit Awards ventured beyond the capital for their star-studded ceremony earlier this year. For a city with industry at its heart, Manchester is certainly holding its own in the glamour and style stakes.

As you approach 100 King Street – the address of The Rex, Edwin Lutyens's white Portland stone Art-Deco masterpiece, opposite a Vivienne Westwood boutique – you know you're in for a treat.

The Grade II*-listed building that once housed Midland Bank's Manchester headquarters isn't nicknamed “The King of King Street” for nothing. Once among the city's tallest buildings, it still stands proud and majestic. The Rex is now a five-star luxury hotel and private members' club, formerly known as Hotel Gotham, having opened in April after a refurbishment.

No feature feels accidental, from period details to quirky eclectic touches that nod to the building's history. There is, for example, a ceiling of umbrellas hanging upside down in the foyer, a tongue-in-cheek reference to the Manchester weather. You're greeted on the fifth-floor reception by “Albert”, a life-size cardboard sculpture created by artist James Lake (and now the hotel's mascot). Elsewhere, vintage typewriters adorn a wall in one of the dining areas, having been discovered in the building's bank vaults during the renovation.

We sat down to afternoon tea (£35 per person), while a piano played in the background. The pretty wildflower and butterfly-patterned tea service was a bright and uplifting diversion from the overcast Sunday outside. From a 12-strong Ceylon tea menu, I chose a refreshing yet subtly distinctive white tea called “Silver Tips”, tempted as I was by “Planters' Mistress”, “a scandalous take on a much-cherished aristocratic classic”.

Walking down the hotel's iconic stairwell (which is as popular with bridal photographers as TV and film location scouts), you'll spot the initials “MB” for “Midland Bank” in the original ironwork – a stylish reminder of the building's origins.

As a lifelong Smiths fan, I couldn't help but smile on seeing that my room was called “The Morrissey”. Other rooms were called “The Burgess” and “The Sumner” – all named for iconic Mancunians who shaped the city's cultural scene. These rooms have toiletries by Urban Apothecary, retro-inspired Roberts radios and handmade biscuits, chocolate-covered strawberries and truffles from Slattery, a local, family-run chocolatier.

Deep in the foundations of the building are two rather special event spaces. “Treasury” is a sophisticated area, hidden in the former bank vaults, complete with a stage, a bar and its original tiling. It lends an air of exclusivity and character to any occasion. You can hire the former counting room for a private screening or cabaret performance, party or conference with a twist. The “Strongroom” is the other gem, secreted away behind the bank's original vault doors. The centrepiece of this playfully stylish interior is a dining table that seats 20 people and converts into a full-size snooker table.

Sample gin from the Western Isles

A highlight of my stay was the gin tasting, showcasing the sustainable practices and focus on craft that defines North Uist Distillery, a three-time Scottish Gin Distillery of the Year winner, based in the Outer Hebrides. Sara, our “ambassador”, explained the founders Jonny Ingledew and Kate Macdonald's philosophy as she talked us through their Downpour range of gins.

We sampled the Scottish Dry, featuring wild Hebridean heather that islanders forage and exchange for gin via the team's barter system. We tried the more citrus Coast & Croft, which relies on hand-gathered pepper-dulse seaweed to give it an umami flavour (great in a dirty martini). We also tasted a pink-grapefruit option and a delicious sloe gin, ideal for Christmas, or a negroni – or a drizzly Sunday evening.

Our evening feast still awaited us – a five-course tasting menu at Reign, The Rex's two-AA Rosette fine-dining restaurant (£65 per person, food only). Standout dishes included the Argentinian prawn with white crab and spicy Kewpie (Japanese mayonnaise), served with a delicious La Marimorena albariño wine from Galicia in northwest Spain; and a gorgeous lamb cannon on spinach, with barbecued grapes. Never really “a dessert person”, I was converted by the Fabergé yoghurt mousse, covered in finely sliced kumquat, with a delicate crushed almond crumb and red-berry coulis.

Upon waking up to a brighter morning, I took some fresh air on one of the three heated roof terraces. Each extends out from Reserve, a sixth-floor private members' club, and offers a different vantage point over the city. Ours looked out to the rolling hills of the Peak District.

The Rex is conveniently located, irrespective of your reason for visiting Manchester. Many high-end boutiques and jewellers are on the doorstep, with the high street a few blocks away. If business draws you here, the financial district in Spinningfields is just around the corner. If you want to visit the boutiques of the Northern Quarter, or the trendy coffee shops and bars of Ancoats, or the various cultural must-sees, you can easily take a short walk to get there – 15 minutes or so – and you will arrive at one of the city centre's distinctive neighbourhoods.

Sam was a guest of The Rex. Private club membership starts from £900 a year. Nightly rates start from £179 on a B&B basis, visit rexhotel.co.uk.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Income investors have enjoyed a strong quarter with UK companies paying out their all-time highest levels of dividend payments, according to industry research.

The latest Computershare UK Dividend Monitor – a quarterly report produced by the financial administration company, which tracks share registers of limited companies, including how they return money to shareholders – said regular dividends were the driving force behind the regular payments.

In total, companies paid out £35.3 billion in the second quarter of 2026, with £34.8 billion in regular dividends – an increase of 7.4%.

Banks and mining companies were the strongest sectors. Over the three months from April to June, banking stocks paid a record £11.1 billion in dividends, up 20.6% on last year’s equivalent and contributing four fifths of the aggregate dividend growth over the period.

Strong balance sheets, persistently high interest rates and low loan book losses – leading to near-record profitability – are supporting the sector’s performance.

While a year ago, it seemed likely that interest rates would continue to fall, reducing net interest margins for banks and the interest income paid on all reserves held at the Bank of England, the picture has changed.

The report pointed to persistent inflation, which has limited the Bank of England’s ability to cut rates, in turn sustaining higher bank earnings.

“The sector’s balance sheets are very strong and this, combined with high profitability has enabled significant dividend growth,” it said.

HSBC was the biggest driver, raising its end-of-year dividend by 25%, funded partly by a suspension of its share buyback programme.

Elsewhere NatWest and Standard Chartered raised payouts by 53% and 75% respectively, while Lloyds increased its own payouts by 14%.

The top sectors that fared well on dividends

The mining sector showed a strong recovery, with dividends from miners 27.5% higher than last year’s cyclical low.

Booming copper, silver and gold prices boosted dividend increases from Antofagasta, Fresnillo and Endeavour respectively, according to the paper.

The report also said that despite slightly lower profits as a result of falling iron ore prices, strong cash flow and a robust balance sheet enabled giant Rio Tinto to increase its final payout for the year by 13%.

Overall mining sector payouts rose 27.5% on a headline basis, up £917 million year-on-year.

Healthcare payouts rose by 6.1%, led by GSK, with the same level of increase (6.1%) shown across broader financials, with London Stock Exchange Group the highest payer in that space.

Which sectors struggled with dividend payouts in Q2?

At the weaker end was the food, drink and tobacco sector, which reported a 15.9% fall, largely due to Diageo, whose earnings have faced a couple of headwinds.

The report said weaker demand for spirits as consumers rein in discretionary spending and distributors work through their excess inventories. The company halved its dividend in response.

In industrials, the report flagged “pockets of weakness”, naming packaging and paper manufacturer Mondi and recruiter Robert Walters as contributing to the 7.9% dip in the sector overall.

Broadly, 11 sectors posted an increase while nine posted a decline in their dividend levels.

What is the outlook for income investors?

As expected, the larger companies saw significantly higher dividend growth than their mid-cap counterparts, with growth levels 7.7% for the top 100 and 4.6% for the mid 250.

Special dividends remain highly unpredictable, reporting a 76% decline over the quarter to £465 million, weighing on the overall headline growth rate.

But these figures are from a high base. For context, Q2 special dividends have averaged £2.2bn over the last five years – even bigger before the pandemic. There has also been an increase in share buybacks in recent months, which might be a factor. The paper notes that this is a mere notable correlation not a proven cause.

While dividend growth is expected to slow in the second half of the year, the strength of the payments in Q2 have led the business to increase its forecast from 3.1% to 3.4%.

UK equities look set for a yield of 3.2% over the next 12 months, while volatile bond markets amid geopolitical uncertainty are underpinning ‘best-buy’ cash savings rates of 4.2% for an average easy access account.

The average asking price of a home with a sea-view has increased by 27% since 2019, outpacing the national average (22%), new data shows.

A sea-view property in the UK now commands an asking price of £298,810 on average, up from £235,635 in 2019, Rightmove says.

The region with the highest growth in asking price among sea-view homes is the south east of England, where the average asking price for these properties is £416,375, up 24% since 2019.

Meanwhile, the regions with the fastest asking price growth for homes with sea-views are the East Midlands and Yorkshire & The Humber, where prices have surged by over 50% in the last seven years.

Colleen Babcock, property expert at Rightmove, said: “A sea-view has long been seen as one of the most desirable features a home can offer, and our latest analysis shows buyers are willing to pay a significant premium for one.”

She added that while the most sought-after coastal locations in the country still command high prices, there is strong growth in more affordable seaside areas, suggesting homes with sea-views are becoming "increasingly valuable across the wider market".

Which regions are seeing the strongest price growth for sea-view homes?

The East Midlands has seen the largest surge in asking prices for homes with sea-views, as prices have risen by 55% since 2019.

The region’s seaside towns include Skegness, Mablethorpe, and Cleethorpes.

The average home that overlooks the ocean in the region commands an average asking price of £352,789 today, up from £228,083 in 2019.

Yorkshire and the Humber is in close second place for strong asking price growth among sea-view properties. The average asking price for a sea-view home in the region has soared by 53% in the last seven years from £160,771 to £245,119.

The region includes popular seaside locations like Scarborough, Whitby, Bridlington and Redcar.

While these regions have seen strong growth, performance is not the same across the country.

Sea-view homes in Scotland have seen their average asking price rise by just 4% since 2019, increasing from £159,938 to £166,068.

Although sea-view homes in the South East command the highest asking prices overall of £416,375, growth has been slower than most regions of the country, increasing by just 16% in the last seven years.

Source: Rightmove, 29 July

The towns where the sea-view premium is highest

The coastal town which has been the biggest beneficiary of surging asking prices for homes with a sea-view is West Mersea in Essex.

Homes in the seaside town command a sea-view premium of £222,294. Average asking prices in the town are £433,185 but surge by 51% to £655,479 when you can see the sea from your window.

The second-highest premium in the country can be found in Frinton-on-Sea, also in Essex, where there is a £130,699 (36%) difference between the average asking price in the town and the average asking price for a home with a sea-view.

The table below shows the top 10 locations with the largest sea-view premiums.

Source: 29 July

• The Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates at 3.75% today.
• Though a majority of the nine-person committee voted to keep hold rates, a growing number are now voting for rates to rise.
• The latest decision is a continuation of the MPC’s ‘wait and see’ approach to setting rates, holding off on a hike or cut until we see concrete evidence of how the war is affecting the UK.
• Inflation is expected to peak at 3.2% in the final quarter of 2026, according to the Bank’s latest forecast.

When will interest rates fall further? | Is the UK heading for stagflation? | MPC meeting dates | UK inflation forecast |

Hello and welcome to MoneyWeek’s live coverage of tomorrow’s interest rates decision.

Follow our reporting on this page for the latest commentary, analysis and breaking news ahead of the Bank of England’s Monetary Policy Committee announcing their interest rates decision tomorrow afternoon.

What is the Monetary Policy Committee (MPC) and what happens at their meetings?

The Monetary Policy Committee (MPC) is a group of nine experts appointed by the Bank of England responsible for setting interest rates.

The committee is made up of five senior Bank of England staffers and four external experts who are directly appointed by the chancellor.

The MPC members from the Bank include governor Andrew Bailey, deputy governors Dave Ramsden, Clare Lombardelli, Sarah Breeden, and the Bank’s chief economist Huw Pill.

The external experts are selected to ensure the Bank benefits from outside expertise from academia and industry. They include Alan Taylor, Catherine L Mann, Megan Greene, and Swati Dhingra.

A representative from the Treasury is also present. They are allowed to speak about policy ideas, but are not allowed to vote.

The MPC meets every six weeks to vote on whether to cut, hold, or raise interest rates and each vote has equal weight. The governor of the Bank votes last and has the deciding vote in the case of a tie.

Interest rate decisions are usually announced on a Thursday, though the meeting itself typically takes place on the day before the announcement.

At their last meeting, the MPC voted to hold rates at 3.75%, with the motion passing by seven votes to two.

Where have interest rates gone recently?

In the last six years, interest rates have gone from being as low as 0.1% to as high as 5.25%. Much of this period is dominated by the covid-19 pandemic and its consequences.

When the pandemic first hit, the MPC decided to push rates down to 0.1% to help stimulate economic activity.

Then, when the economy opened back up and the cost of living crisis began to be felt, interest rates were repeatedly hiked to combat rising inflation.

More recently, the Bank of England started to cut interest rates. Between August 2024 and December 2025, the MPC voted to cut interest rates six times, each time by 0.25 percentage points.

This gradually brought the Bank rate down to 3.75% in the last MPC meeting of 2025.

At the end of 2025, most experts believed that interest rates would be brought down by another 0.5 percentage points by the end of 2026, settling at around 3.25%.

However, the Iran war made the MPC change course. Since the war began on 28 February, the MPC has kept rates on ice at 3.75%, adopting a “wait and see” approach to future rate movements.

What should you expect from tomorrow’s MPC meeting?

Most experts agree that the MPC is most likely to hold interest rates at 3.75% tomorrow as the impact of the Iran war on the UK economy is still uncertain.

The current economic data is inconclusive about the long-term impact of the Iran war on the UK. Although inflation figures have been lower than expected so far, inflation is still forecast to rise in the final quarter of the year.

This makes it very difficult to justify lowering interest rates, as a cut would likely mean fuel a rise in inflation, when it is already forecast to increase..

On the other hand, raising interest rates presents its own challenges. A rate hike would hamper economic activity as borrowing becomes more expensive.

With the lack of conclusive economic evidence about how the UK is being affected by the Iran war, the Bank of England believes a ‘wait and see’ approach is the best one. The MPC is awaiting concrete data with which they can confidently assess the impact of interest rate changes before they bring any in.

This is why most experts believe the MPC will hold interest rates at 3.75% tomorrow – there isn’t enough data to justify a rate hike or cut at the moment.

Where is inflation, and where will it go this year?

Inflation is one of the key economic metrics used by the MPC to help decide whether to move interest rates.

The Bank of England has a mandate to keep inflation at 2% in the medium term, so when inflation is too high, rates tend to be hiked. When inflation is too low, rates tend to be lowered.

Inflation in the UK has been mostly above the 2% target since July 2021, though at points it has briefly been at or below the target.

The most recent set of inflation data shows inflation dipped to 2.6% in the year to June, down 0.2 percentage points from the previous month.

Price growth has broadly been falling since September 2025, but the Iran war has meant most forecasters expect it to rise in the final quarter of this year.

Estimates by the Bank of England, published on 18 June, shows inflation is expected to stay just under 3% for most of 2026 before rising to a “little over” 3.25% in the final quarter of the year.

The Bank of England is set to release a new inflation forecast tomorrow.

What is the economic background of this month’s decision?

Alongside inflation, the MPC also looks at other economic metrics to help inform their decisions. One key measurement is the state of the labour market.

In the orthodox view of economics, a poorly-performing labour market pushes down inflation as higher unemployment and slow wage growth means people have less money to spend. With lower demand, prices fall.

The latest labour market data, published on 21 July, showed unemployment remained at 4.9% in the three months to May for the second month in a row, the highest level it has been for six years.

Meanwhile, regular wage growth also remained at a six-year low. Regular earnings held at 3.4% in the three months to May, rising to 4.3% when including bonuses.

The UK economy is also growing very slowly. GDP growth in the month to May was just 0.1%, reversing a 0.1% drop in GDP in the month prior.

Deutsche Bank: MPC expected to vote to hold rates by 7 to 2

Interest rates are set to stay at 3.75% at tomorrow’s interest rates announcement, according to predictions from Deutsche Bank.

The bank expects that, despite worries of second-round inflation effects from energy price hikes, the MPC will keep the Bank rate unchanged.

They expect the MPC to keep rates at 3.75%, with seven members voting to hold and two voting to raise rates.

The two dissenters are expected to be BoE chief economist Huw Pill and external member Megan Greene – the same two who voted to hike rates at the last MPC meeting.

Sanjay Raja, chief UK economist at Deutsche Bank, said: “We expect the Bank of England to remain on the sidelines for the rest of the year. But there are clear risks to our call.

“A second energy wave will likely amplify uncertainty around the inflation path and the risk of second-round effects. We see upside risks to the interest rate outlook in the near term, with much dependent on the duration of the unfolding energy shock.”

Hold tomorrow may be ‘calm before storm’ with potential rate hikes later this year

While most experts agree that rates are unlikely to change tomorrow, where they go next is less certain.

The market is currently pricing in rate hikes later this year as the Bank deals with the economic fallout from the Iran war.

Hikes would hurt borrowers as the cost of credit, like loans and mortgages, will become higher.

Harriet Guevara, chief savings officer at Nottingham Building Society, said: “The Bank is almost certainly going to hold at 3.75% on Thursday, but that should not lull anyone into thinking the hard decisions are behind us.

“Inflation remains above the Bank's 2% target, energy bills went up 13% at the start of July, and the conflict in the Middle East continues to push up oil and gas prices. Put all of that together, and markets are now pricing in one to two rate rises before the end of the year, meaning that a hold this month could be the calm before the storm.”

She added that while higher rates will mean mortgage rates are likely to rise, the silver lining is that savers will be able to enjoy higher interest rates on their savings – so long as they make sure they are getting the best rate.

Thank you for following our live report today.

Come back tomorrow morning for the latest news, analysis, and commentary on the MPC's interest rates decision.

Good morning and welcome back to our live coverage of today’s interest rates decision.

The Bank of England’s Monetary Policy Committee will announce whether they have voted to raise, lower, or hold interest rates at 12pm today.

Follow this page for the latest news, analysis and commentary.

RECAP: What are we expecting today?

The MPC will reveal their interest rates decision at midday today, and it is almost certainly going to be a hold.

Most experts believe keeping interest rates at 3.75% will buy time for the MPC to properly assess where rates should go in response to the economic shock of the Iran war.

Though inflation has slowed or stayed the same since March, the Bank of England estimates that price growth will accelerate in the final quarter of this year, meaning interest rate cuts are very unlikely.

When the decision is revealed, the Bank will publish the minutes from the MPC meeting and a monetary policy report which includes detailed models for where the UK economy is going next.

What would it take for the MPC to raise interest rates?

Although the MPC is widely expected to keep rates on ice today, analysts have warned that we may see rate hikes later this year, largely because of the UK’s inflationary outlook.

Inflation is likely to rise in the last quarter of 2026, with the Bank of England estimating in June that it could reach 3.25% by the end of the year. New forecasts will be published today.

In particular, experts have warned that energy inflation will be one of the most important metrics to look out for.

The UK is especially vulnerable to energy price shocks because it is a net importer of energy. This means that households are mostly at the mercy of the market – as can be seen in the past few months when fuel prices soared because of the war in Iran.

Although economists at Deutsche Bank expect the Bank rate will remain at 3.75% for the rest of this year, they do see a risk of a hike if the energy price shock is more persistent than currently forecast.

Sanjay Raja, chief UK economist at the bank, said: “A second energy wave will likely amplify uncertainty around the inflation path and the risk of second-round effects. We see upside risks to the interest rate outlook in the near term, with much dependent on the duration of the unfolding energy shock.”

The BoE’s three central inflation forecasts

At the MPC’s April meeting, the Bank of England outlined three central scenarios for where they think inflation could go next in the wake of the Iran war.

In scenario A, the Bank forecast inflation would peak at 3.6% this year. This scenario assumed oil and gas prices would rise, following the implied paths of the market in the 15 days to 22 April, and did not expect second-round inflationary effects.

The assumptions behind scenario B were not much different, only adjusting the length that energy prices will be elevated. Second-round effects were assumed to be modest, pushing up their prediction to 3.7%.

The worst-case scenario C set out in April was much more dramatic. It expected a sharp and prolonged rise in energy prices that would lead to much stronger second-round effects than the ones modelled in scenario B.

In this scenario, inflation would peak at 6.2% at the start of 2027 before starting to fall again.

Inflation has, so far, thankfully surprised to the downside, meaning that the risk of scenario C is low, but MPC member Dave Ramsden said in June that he still thinks scenarios A and B could materialise after the summer.

What do interest rates mean for your finances?

What the MPC decides will have an impact on your personal finances.

Falling interest rates could mean you have more money in your pocket each month, while rising rates could add more pressure to your household budget.

The Bank of England’s base rate (or Bank rate) is the core interest rate in the UK, and is the rate of interest the BoE pays to financial institutions that hold money with the central bank.

When interest rates are lowered, savings accounts offered to customers typically become less competitive, but loans become cheaper. And when rates are hiked, loans become more expensive, but savings accounts pay higher interest.

These movements do not necessarily all happen at once – lenders tend to change their interest rates in anticipation of the MPC’s next decision.

For example, since the start of the Iran war, average savings rates have increased despite no movements in the Bank rate. They are an average of 3.59% today, up from 3.32% a day before the war broke out.

Bank of England to announce rates decision in 10 minutes

The MPC’s latest interest rates decision will be announced at midday, in about 10 minutes.

Stay tuned on this page for the breaking news and key insights from the meeting’s minutes and Monetary Policy Report.

BREAKING: Interest rates held at 3.75%

Interest rates have been held at 3.75% after the Bank of England revealed the MPC’s latest decision.

It is the fifth consecutive meeting where rates were kept on ice.

MPC voted 6 to 3 in favour of holding rates

The Monetary Policy Committee held rates at 3.75% with six members voting to hold and three members voting to hike rates by 0.25 percentage points to 4%.

The three dissenting members of the committee were external members Megan Greene, Catherine L Mann, and the BoE’s chief economist Huw Pill.

Meanwhile, members who voted to keep rates at 3.75% were governor Andrew Bailey, deputy governors Sarah Breeden, Dave Ramsden, Clare Lombardelli, and external members Alan Taylor, and Swati Dhingra.

Bank of England MPC: Energy prices set to push inflation up this year

High energy prices due to the Iran war are set to push inflation up this year, according to the Bank of England’s latest forecast.

The Bank’s central projection now expects inflation to peak at around 3.2% in the final quarter of 2026, slightly lower than their previous estimates.

The minutes of the latest MPC meeting said: “CPI inflation has fallen to 2.6% since the previous meeting, although it is expected to rise later this year as the effects of higher energy prices continue to pass through.

“The risk of material second-round effects in price and wage-setting, against which policy needs to lean, is greater the longer higher energy prices persist. There is little evidence so far to suggest such effects, and there have continued to be clear signs of underlying disinflation in recent data."

Inflation outlook remains dominated by Iran war

Where inflation will go next remains contingent on the war in Iran, according to the minutes of the MPC’s latest meeting.

It said: “The conflict in the Middle East, and its impact on energy prices and the UK economy, remained the dominant source of uncertainty for the inflation outlook.”

The minutes added: “Policy would need to guard particularly against second-round effects that created inflation persistence, while considering any trade-off with weaker economic activity. The risk of material second-round effects would depend on the scale and duration of the energy shock, which remained uncertain.”

Andrew Bailey: Rates were held due to conflict in Middle East

Andrew Bailey, the governor of the Bank of England, has explained the key reasons why the MPC decided to hold rates today.

He said: “Today we’ve held [the] Bank Rate at 3.75%. Inflation has fallen faster than we’d expected, but the conflict in the Middle East continues to mean high and volatile energy prices. That will cause inflation to rise again later this year.

“However the conflict unfolds, our job is to make sure any increase in inflation is temporary and that it comes back to our 2% target.”

Other global factors also pose an inflation risk

Though the energy shock is one of the most important factors in the expected increase in global inflation, there are other headwinds.

The MPC meeting minutes said: “Global factors pointed to an economic environment that risked being more inflationary in future.”

These included the strong demand for AI-related components (like semiconductors and data centres) that have created sector-specific price pressures and the impact of the El Niño climate phenomenon on global food prices.

The minutes added: “While these risks might not materialise, or occur at the same time, the Committee noted that some could interact with one another and with commodity price developments in potentially inflationary ways.”

Future interest rates decisions could need to react before conclusive inflation data

The MPC indicated that their future interest rates decisions may need to be more preemptive if the inflation forecast worsens.

The minutes said: “Members noted that monetary policy could need to react before the risks around inflation persistence materialised conclusively.

“There were two dimensions in considering the appropriate policy stance: the level of current monetary policy restrictiveness, and the degree to which policy should guard pre-emptively against the possibility of worse outcomes. Both considerations involved balancing the costs of leaning too little against inflation persistence against costs to economic activity by leaning too much.”

Why three MPC members voted to hike rates

Today’s MPC decision was more split than any vote since the start of the Iran war. Three members voted to hike rates to 4% instead of holding them.

In the previous meeting, two members voted for a hike, and in the meeting before that only one voted to raise rates.

The growing split indicates that there is increasing pressure within the MPC to hike rates in order to deal with rising inflation.

Catherine L Mann, who voted for a hike for the first time since the war began today, justified her vote by saying: “The key change in the environment for my decision is the collapse of the US-Iran Memorandum of Understanding, the widening of the Middle East conflict, and the associated volatility in energy prices. This ‘sporadic continuance’ of the conflict that I hypothesised last month appears to be the state of play.”

Megan Greene justified her vote to raise rates by saying: “As in June, there is significant uncertainty about which projection or scenario is most likely and I believe a risk management strategy is appropriate

“Staff analysis illustrates that setting policy as if there are stronger second-round effects and course correcting if they prove to be smaller is less costly than vice versa. Furthermore, a proactive hike in Bank Rate may reduce the probability that second-round effects set in.”

Finally, Huw Pill said he voted to hike rates because: “While energy prices remain volatile, risks to achieving the inflation target lie firmly to the upside.”

He added that he was concerned about the possibility of second-round effects “driven by catch-up dynamics in wage and price setting.

“While these may be slower to emerge, they could prove more lasting and create greater intrinsic inflation persistence.”

He called for the MPC to raise rates in order to “offer a clear and unambiguous signal of our willingness and ability to address upside risks to inflation stemming from events in the Gulf. This would place us in the best position to manage risks to the inflation target as they emerge.”

Rates decision was “fully expected” but uncertainty among members is increasing

Ed Hutchings, head of rates at Aviva Investors, said that while today’s interest rates decision was fully expected, “going forward it remains apparent that a lot of uncertainty amongst MPC members exists.

“How this plays out is far from clear and although recent employment and inflation data has been of some comfort, investor attention and the Committee’s focus is likely to be on risks around the outlook ahead, and particularly so from an inflation standpoint.”

He added that he expects the MPC to remain in ‘wait-and-see’ mode to assess the impact of the Iran war, and noted that markets are now pricing in a 0.6 percentage point hike in interest rates.

“Yet, even if the BoE do hike, the question will be how much further this can go and with gilt yields around 5%, it’s arguable that over the medium-term value is being created.”

Rate hold slows cash ISA price war

News that interest rates have been held at 3.75% have cooled a price war among several fintechs who increased savings rates in expectation that rates would rise today.

Kate Steere, personal finance expert at Finder, said: “The expectation ahead of last week’s inflation figures was that the Bank of England could raise rates, prompting several fintech providers to battle it out in a cash ISA rate war.

“However, with inflation coming in lower than expected and today’s decision from the Bank to hold the base rate, those rates have settled and edged back down.”

She noted that while this may be disappointing for savers trying to get the best rates, they “shouldn’t miss the bigger picture: real returns are back.

“With inflation at 2.6%, market-leading cash ISAs are offering returns nearly 2% above inflation. That means cash value isn't just being protected from inflation - it's actively growing.

"With rates already dropping slightly, now is the time to take advantage before these strong offers slip away."

Recap: Where interest rates have been in the last 10 years

Today’s interest rates decision marked the fifth consecutive time the MPC voted to hold the Bank rate at 3.75%.

Though the base rate is high compared to where interest rates were between 2008 and 2022, a rate of 3.75% is actually the lowest since early 2023.

Rates started to rise once the economy opened up after the covid-19 pandemic when inflation started to rise during the cost of living crisis.

They stayed high, peaking at 5.25% before starting to fall in November 2024.

BoE: UK economy set to remain subdued this year, but accelerate in 2028

The energy shock is set to keep the UK economy “subdued” for the rest of 2026 and early 2027, the Bank of England has said.

New forecasts from the Bank’s quarterly Monetary Policy Report show annual UK GDP is set to rise by 1.1% in the third quarter of 2026 and 2027, and increase by 1.7% in the third quarter of 2028.

Santander: Tracker mortgages becoming more popular as customers hope for rate cuts

“Cautious optimism” is entering the mortgage market as an increasing number of borrowers are choosing tracker mortgages as they hope for future interest rate cuts, according to Santander.

Tracker mortgages track the Bank of England’s base rate (the rate is usually set a little above this benchmark) and can change during the mortgage term. They are different to fixed-rate mortgages where borrowers lock into a certain rate for a fixed period of time.

Frances Haque, chief economist at Santander UK, said: “Although both global and domestic challenges remain, there certainly seems to be signs of cautious optimism trickling into the mortgage market.

“More borrowers are choosing to play the waiting game, with growing interest in tracker mortgages as customers hope to benefit from any future reductions in borrowing costs.”

Mortgage rates not set to fall any time soon

Although interest rates have been held at today’s meeting, the market is still expecting rates to rise later this year, meaning mortgages are not set to become cheaper any time soon.

Adam French, head of consumer finance at Moneyfacts, said: “Mortgage costs were already on the up before today’s decision to hold the Base Rate at 3.75%, with more than 30 lenders increasing rates in recent weeks.

“While the initial market reaction has been fairly muted, it remains to be seen whether the slightly more hawkish tone struck by the MPC fires the starting gun on a fresh wave of mortgage rate hikes.”

French added: “Unless the economic backdrop improves significantly, borrowers should not expect mortgage rates to fall much anytime soon.

“Anyone planning to take out a mortgage within the next six months should consider securing a deal sooner rather than later to protect themselves against further increases. If rates do fall before their mortgage completes, they can usually switch to a cheaper deal.”

Deutsche Bank: Unexpectedly slow inflation is helping buy the MPC time

With inflation surprising to the downside for the last few months, the MPC has been given more time to assess whether or not hiking rates is the right decision, Deutsche Bank says.

Sanjay Raja, chief UK economist at Deutsche Bank, said: “It’s clear that recent inflation and wage outturns have given the broader MPC confidence that underlying disinflation has continued.

“Multiple members pointed to a loose labour market, target-consistent private-sector pay growth and the absence of evidence that inflation expectations, wage settlements or firms' pricing behaviour are generating meaningful second-round effects. This, in and of itself, buys the MPC more time.”

He added that pressure to hike rates has also been relieved as markets have already priced in higher shorter-term and longer-term interest rates, because of the subdued labour market.

Deutsche Bank’s prediction remains that the Bank rate will stay at 3.75% for the rest of the year, but their forecast is highly dependent on what happens in the Middle East.

Raja said: "The longer tensions in the Middle East continue, the higher the risk of a policy shift in the coming months. Indeed, should energy prices drift further, extending the duration of the price shock across energy futures, the balance of risks could quickly shift towards a tightening cycle as opposed to a protracted pause.”

Rate hold leaves property market in “limbo”

The poorly-performing UK property market is unlikely to be given a boost following today’s interest rates announcement as lower mortgage rates are off the table.

Ryan Etchells, chief commercial officer at property lender Together, said: “Another hold by the Bank of England – the fifth in a row – leaves the property market in limbo for now.

“For UK mortgage borrowers, the context of the hold is somewhat more negative than at the last. Reignited tensions in the Middle East have raised expectations of a rise in inflation, which could lead to at least one Bank of England rate hike this year.”

Etchells added that the possibility that rates may rise this year could incentivise buyers to lock in rates now before they become less attractive, but warned many will also decide to wait and see if the situation improves in the short term before going ahead with securing a home loan.

Oxford Economics: Rates to stay at 3.75% until at least the start of 2027

Interest rates are unlikely to change for at least the rest of this year, Oxford Economics has reiterated following today’s MPC meeting.

The economics advisory firm has stuck with its forecast that rates will remain on ice until at least early 2027, noting that there is no evidence yet of second-round effects from elevated energy prices.

Andrew Goodwin, chief UK economist at the firm, said: “Members pointed out that this isn’t guaranteed to remain the case, but provided forward-looking indicators are benign, the majority think policy is already sufficiently restrictive.

“The MPC downplayed the extent to which the rising path in market rates implies tightening is likely, arguing that it mainly reflects risk premia rather than expectations that Bank Rate will rise.”

This being said, Goodwin warned: “The conflict in the Middle East is still the wildcard that could trigger a change of view. Several members suggested a sustained period of higher energy prices would raise the chances that second-round effects would develop.”

Thank you for joining our live coverage of today’s interest rates decisions.

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The number of millionaires living in Britain has hit the lowest level since the financial crisis, new research suggests.

Analysis by think tank the Adam Smith Institute (ASI) shows high taxes and slowing house price growth are among a range of factors that have hit people’s wealth.

The latest records from its Millionaire Tracker show that there were 442,000 sterling millionaires in Britain last year, down by 7% since 2024.

This has been blamed on falling real asset prices, a low household savings rate and the emigration of high net-worth individuals (HNWIs) amid the abolition of non-dom status and fears of a wealth tax.

To reverse this trend, the ASI is calling on the government to make the tax environment more welcoming to wealth creators. In particular, they've suggested the abolition of inheritance tax, cuts to capital gains tax and an international competitiveness assessment on the UK’s tax and regulatory treatment of non-doms and HNWIs.

Mitchell Palmer, economist at the Adam Smith Institute, said: “The decline in millionaires may be greeted as a success by some on the left, but it should instead be viewed as a warning signal. Every millionaire that leaves means less capital for British businesses, fewer international connections, and weaker entrepreneurial spirit in the economy.”

Why is the number of UK millionaires falling?

The ASI uses Office for National Statistics data to estimate the number of constant-price sterling millionaires.

Its definition of a constant-price sterling millionaire is an adult British resident who has at least £1 million in individual net worth, across all real and financial asset classes, including pensions and property, measured in constant 2025 prices.

The figure of 442,000 is the lowest level since the 2008 financial crisis .

A range of factors have pushed this figure down.

The ASI said: “Higher interest rates, as well as a lack of confidence in the British economy, have mechanically reduced the inflation-adjusted values of pension pots and high-end London property.

“Moreover, Britain’s low savings rate has reduced the pace at which households make themselves millionaires. Finally, and perhaps most concerningly, there has been a well-documented trend of high net-worth individuals either leaving Britain or no longer choosing to move here.”

Millionaires are leaving the country for a number of reasons, the ASI said, including the abolition of non-dom tax status, high levels of general taxation, and a hostile culture for wealth creators.

The think tank also warns that calls for a wealth tax are misguided.

It said: “France, Austria, and the Netherlands all abandoned theirs after seeing vast outflows of millionaires or other avoidance behaviour. Given Britain is already haemorrhaging wealth, we could only expect similar results here.

“Every millionaire that leaves is a loss to the country. Both foreign- and British-origin millionaires bring jobs, capital, connections, and ideas to this country, which can create substantial wealth for other Brits.”

The think tank argues that millionaires already pay a disproportionate share of tax, with the top 1% of earners paying 29.1% of income tax.

Palmer added: “Recently mooted anti-wealth proposals, such as a wealth tax or equalising the capital gains tax rate with income tax, will only make this problem worse.

“Instead, the government should focus on making Britain an attractive place for ambitious people to build and keep their wealth. This includes cutting or abolishing inheritance tax and capital gains tax.”

How can you protect your wealth?

Many wealthy people may be concerned about calls for a wealth tax or higher taxes.

Nouran Moustafa, practice principal at Roxton Wealth, said she is seeing more high-net-worth clients ask how they can protect or diversify wealth outside Britain, with some considering leaving.

She said: “Those worried about preserving wealth should avoid panic. They should review diversification, tax wrappers, pensions, liquidity and estate planning, while keeping their strategy flexible enough to withstand future policy changes.”

Paul Denley, chief executive at Oakham Wealth Management, added: “For those staying, the answer isn’t panic but planning: diversify globally, use every available tax allowance, review estate and succession planning, and avoid irreversible decisions based on short-term headlines. Wealth is usually lost gradually through poor decisions, not overnight.”

Asian small companies are often overlooked – but they shouldn’t be, Gabriel Sacks, manager of the Aberdeen Asia Focus fund says.

Speaking to Cris Sholto Heaton on the MoneyWeek Talks podcast which is now available on all podcast platforms and our YouTube channel, Sacks says Asia is the largest economic region in the world, and it acts as the engine of growth for the global economy.

“Asia is delivering over 50% of global growth. So a lot of people will look at Asia small caps as being niche but actually in my view it should be really core to people's portfolios because you get away from some of the mega caps and get access to really the engine of domestic and global growth.”

With the region being so large both geographically and economically, there are many opportunities for investors to find real returns.

Sacks says his fund is able to get broad access to Asian markets and look at the opportunities presented by all the different countries in the region and the thousands of listed firms.

That being said, there is a need to narrow it down to just the most exciting ones, but the low amount of research available presents a challenge. Sacks says that this is partially caused by the fact that the Asian small caps market changes very rapidly and the research struggles to keep up.

“One of the differences I think with Asia and emerging markets is that the universe is changing very quickly. It's a very dynamic region. If you look at places like Latin America or EMEA there's a narrower set of opportunities and you can buy these companies and they're great businesses.

“In Asia you need to refresh your views quite frequently.”

He adds that the quality of research available “has probably got worse throughout my career. Things like MiFID (Markets in Financial Instruments Directive) and a passive focus has meant the focus has been on large caps.”

Though Sacks says a passive focus also presents an opportunity for active fund managers to take initiative and make the most of the fast-changing market.

Artificial intelligence is part of the story, but not all of it

Although the broader Asian small caps market encompasses many diverse firms, the current focus of much of the market is, unsurprisingly, artificial intelligence (AI).

While historically the Asia focus fund has been most heavily weighted towards the domestic-oriented India market, the AI boom has shifted the focus to export-oriented Taiwan and Korean markets.

This is a function of good performance coming from firms in that sector, particularly in the semiconductor supply chain.

Sacks said the other factor to consider is that “the market has actually rewarded that part [Taiwan and Korean] of the market much more than other parts. So the index and our portfolio weights have drifted upwards.

“I think we've been taking profit from our AI winners for at least the last 6 months and the weight has still crept up. So we've had some fantastic stocks in that space.”

The performance of some of these firms, like TSMC, Samsung, and SK Hynix, has been boosted by the fact there are very high barriers to entry in the supply chain and the firms who already occupy the area are able to profit from the huge boom in AI.

“There's a lot of money being thrown at AI at the moment, driven by the US, and the Asia supply chains really earn this profit up front because they develop the chips [needed for AI]. They're the ones doing the cooling, they're the ones doing the testing and the services side.”

Sacks adds that the fund is also looking at the firms that are benefiting from the AI boom too.

“We increasingly find second or third order derivative plays on AI which are just emerging. Those businesses that are part of the AI-driven part of the [market] weren't there before. These are very leveraged plays on AI. So many of these names have actually done better than TSMC which again I think goes to show that you don't need to necessarily buy TSMC or large cap to get that AI and tech exposure.

“The nice thing in our space is that it can be more diversified than a single stock, and actually within our portfolio tech is not as high as it is in a large cap portfolio.”

For more on the opportunities in Asian small caps, the tech supply chain, and the consumer sector, you can listen to or watch the full episode of MoneyWeek Talks wherever you get your podcasts.

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MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick and Andrew Van Sickle are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

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Technology giants with an edge in artificial intelligence (AI) have dominated equity market returns in recent years, but enthusiasm is slowing down with chip stocks looking jittery as competition heats up.

There have also been warnings of a potential AI bubble, but as yet, the jury remains out over which companies will emerge the longer-term winners or losers. A recent survey by fund management group Natixis Investment Managers revealed that despite a number of global headwinds – ongoing US-Iran conflict, volatile energy markets and persistent inflation – 91% of the 33 strategists interviewed were optimistic that AI will be a driving force behind market performance in the second half of the year. It also found 88% expect the AI sector to accelerate with just 12% believing its bubble will burst in the second half of the year.

But should investors be seeing that disruption as an opportunity?

How to invest in AI beyond ‘big tech’

There are two distinct strategies the AI wave opens up. One is to aim to capture the growth potential of AI but without limiting yourself to the big names, such as the ‘Magnificent 7’ – Apple (NASDAQ:AAPL), Microsoft, Amazon, Alphabet (NASDAQ:GOOGL), Meta, Nvidia (NASDAQ:NVDA) and Tesla.

BlackRock’s Helen Jewell, international chief investment officer of fundamental equities, believes by looking at the AI story through a wider lens, investors could discover more upside with less of the volatility that comes with high valuations and market concentration.

One route is to look at infrastructure and the power investment needed to facilitate the AI boom and the broader shift towards electrification it has helped accelerate. Jewell said this trend is being “turbocharged” by governments focusing on energy independence.

“These sectors may offer exposure to structural growth trends while potentially providing more diversified return streams, attractive valuations and lower concentration risk than some of the most highly valued areas of the market,” she added.

Where are the next big opportunities in global equities?

In 2025, a handful of sectors led market gains – namely banks, aerospace and defence, and industrials.

All three areas are expected to continue to perform positively, as valuations are increasing. European banks in particular look promising; BlackRock's Jewell said they’ve shown resilient earnings despite interest rates calming down from recent highs.

She added that banks are increasingly adopting AI to modernise their own systems. Better integration across the European banking and capital markets system, alongside consolidation indicates a more profitable sector and, therefore, better likely returns for shareholders.

How to invest in contrast to AI

Another way to play the AI theme is in reverse. Concentration risk presents a problem if too high a share of your overall investments are gathered in one stock, region or sector – hence the ‘don’t have all your eggs in one basket’ analogy.

If there’s a correction in AI, and share prices fall (or the supposed bubble bursts), being exposed to different areas of the market that aren’t correlated will offer investors a degree of ballast to their portfolio.

Jewell cited healthcare as a strong diversification play, though it is also a sector that can benfit from AI. The sector has historically traded at a premium to the market but is now at a 15% discount, with earnings growth that has been second only to technology.

Elsewhere, she likes Latin America, which also has a low correlation to the AI trade. It’s trading at lower valuations than historical average, and while it makes up just 0.8% of the MSCI All Country World Index (ACWI), it accounts for 7% of global GDP.

In the UK, the FTSE 100 index has outperformed global stocks on a total return basis, without any direct AI exposure. Broadly, rising interest rates over the past five years and higher energy prices have boosted banks and oil companies, while defence has also returned to prominence amid the ongoing conflicts around the world.

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New prime minister Andy Burnham has distanced himself from rumours that he was actively looking at proposals to replace council tax and stamp duty with alternatives that reflect a property’s current value.

It comes after The i Paper reported he was looking at ways to replace the current property taxation system with either a proportional property tax or a land value tax.

However, Number 10 has denied Burnham is considering scrapping council tax and stamp duty.

A spokesperson told MoneyWeek that rumours the prime minister is considering replacing stamp duty and council tax with either a proportional property tax or a land value tax are “not true”.

They added: "As has always been the case, decisions on tax are a matter for the chancellor to set out at fiscal events.”

Burnham has previously said it is unfair that households in affluent parts of London (like Wandsworth or Westminster) are paying far less in council tax than households in poorer areas where house prices are much lower.

In an interview with the BBC on 26 July, Burnham said: “There are people here in Manchester who pay a much higher council tax than people living in much larger homes in London.

“[Former Labour chancellor] Rachel Reeves was right to start to reform council tax to create some fairness there in relation to people in homes that are of much greater value who haven’t seen their council tax go up over the years because of the failure to revalue the banding.”

A proportional property tax would mean higher taxes for people in expensive homes

It had been rumoured that Burnham was considering removing council tax and stamp duty and replacing it with a flat 0.48% annual charge on a home’s current value, although Number 10 has since said this is “not true”.

This proportional property tax method would greatly reduce the amount of council tax people in areas with lower house prices pay while increasing the amount people in more expensive areas pay.

For example, a property in the North East (the area in England where house prices are lowest) cost an average of £181,133 in June, according to Lloyds.

Assuming the tax is levied at a flat 0.48%, the typical household would have to pay £869 a year. This is far lower than the Band D council tax rate in Newcastle of £2,540.

On the other hand, the average house in London, which costs £534,831 according to Lloyds, would pay £2,567 a year. This is far more than a Band D property would pay in all London boroughs.

The most expensive London borough for council tax is Kingston upon Thames where Band D costs £2,050 a year – a household here would pay around £500 more annually under the proportional property tax proposal.

Meanwhile, the borough with the lowest council tax rate is Westminster, where a Band D property pays just £935 a year in council tax – over £1,500 less than the proposed proportional property tax for the average London house.

However, properties in Westminster are far more expensive than in the rest of London – they cost £836,000 on average, according to the ONS.

As the proportional property tax proposal is a flat annual levy on a home’s current value, the more expensive your home is, the more you will have to pay. For example, a home worth £1.3 million would have to pay £6,240 a year.

Could a land value tax be introduced?

Reports from The i Paper also suggested Burnham’s team was looking at a land value tax (LVT) as an alternative to stamp duty and council tax.

A land value tax is paid on the value of the land that a property sits on, rather than the value of the property itself.

This means that, theoretically, a large five-bedroom house in a remote and unappealing area of the country would pay far less in tax than a similar house in the middle of London.

Research by Tax Policy Associates suggests that if land value tax was introduced, households in almost all parts of the country would pay much less tax, whereas those who live close to large cities would generally pay much more.

Could the ‘mansion tax’ threshold be lowered?

In the 2025 Autumn Budget, then-chancellor Rachel Reeves announced a new tax on expensive homes. The High Value Council Tax Surcharge will take effect in April 2027, based on 2026 property values.

Dubbed the ‘mansion tax’, it means households who live in properties worth more than £2 million will have to pay an additional council tax surcharge of between £2,500 and £7,500 a year depending on the value of their home.

The resident is usually liable to pay council tax, but the mansion tax applies to homeowners, rather than occupiers, meaning tenants wouldn’t be responsible for paying the surcharge.

Before Burnham became prime minister, the Mail of Sunday reported he was looking at lowering the mansion tax threshold to £1.5 million, potentially pulling 150,000 additional households into paying the tax.

Would you pay more tax under the proposals?

The biggest winners of a proportional property tax or a land tax would be people who live in inexpensive homes in parts of the country where property is cheap. With low house prices, a 0.48% annual charge would likely be far less than current council tax rates.

They would also pay less under a land value tax, assuming their property is not in a major city or the south east of England.

On the other hand, the biggest losers would be people who live in expensive houses in expensive parts of the country – especially people living in parts of London where council tax is currently low.

The broadcasting industry has had an eventful time of it recently, having been "disrupted" by upstart streaming platforms. Just a few years ago, the wars for audiences and dominance between the streamers had triggered a production boom, and people were talking about a “golden era” of “peak TV”.

Yet just five years on, the future for the streaming industry looks a lot less rosy. The predicted imminent demise of traditional broadcasting failed to materialise and streaming shows signs of plateauing.

People are wondering if the wider broadcasting format can survive at all in the face of competition from social media – let alone from the seemingly relentless rise of artificial intelligence. Still, the evidence seems to suggest that, although people may be changing what they watch on the TV screen, “they are not abandoning it”, as Mark Browning, CEO of Zinc Media Group, puts it. The industry may have fallen out of fashion, agrees Matthew Dolgin, a senior equity analyst at Morningstar, but “things should generally get better” for the sector in the future.

Don't write off legacy broadcasting firms

There is no doubt that what is known as the “legacy media” – the traditional terrestrial broadcasting companies in the UK and the networks and cable companies in the US – is under pressure, from both streaming services and social media, especially YouTube and TikTok.

Indeed, the legacy broadcasters have gone through the five stages of grief, says Ben Barringer, head of technology research at Quilter Cheviot. First, they denied that the new formats posed a threat (denial), then blamed other factors such as sales strategies, the macroeconomic environment and regulatory moves for their woes (anger and blame). Then they started their own on-demand services (bargaining) or merged with competitors (depression). But managers proved to be too invested in a dying industry and lacked agility. Now we're at the final stage (acceptance): investors may have to be content with the companies being gradually run down while raking in what remains of the cash flows.

Others aren't quite so ready to write off the legacy broadcasters. The core business of the main TV and cable companies “is producing good content”, says Srinivasan (Srini) KA, co-founder and president of Global Business at Amagi, and although the way in which that is delivered may be changing, the underlying demand for it is not. So, provided broadcast companies are willing to evolve and embrace new methods, they should have a good future. ITV in the UK and NBC in the US have already changed how they distribute their content, says Srini, and have a strong presence on social media.

Such efforts are already having an impact, says Browning. Ofcom's sixth annual Media Nations report suggested that traditional broadcast television viewing fell by 4% in 2024, but the introduction of on-demand content through digital platforms has largely managed to stem the losses. Legacy media (that is, live channels plus broadcaster on-demand services) still accounted for 56% of all measured in-home viewing in 2024, only slightly down from 57% in 2023. The broadcasters that have a future are the ones with the “most developed on-demand platforms and with a highly diversified audience”, he says.

Streaming services know their audiences

Streaming services should also do better than people might expect. They may increase their revenue at a slower rate than the breakneck expansion they have experienced in the last decade, says Dolgin, and “the biggest services have become somewhat saturated in their biggest markets when it comes to subscribers”, but they nevertheless “definitely have room to grow” thanks to opportunities in international markets in Asia, Latin America, Africa or the Middle East.

As well as adding more subscribers, the big streamers can also boost their revenue by simply increasing prices. They have to date managed to do this without losing customers or hurting the bottom line. Advertising is of course another potentially lucrative source of revenue. Netflix has had a lot of success with its advertising-supported service. At the same time, the streamers should be able to raise profits higher than revenue by pushing down costs, by exploiting the scale they have achieved and by “being a little bit more disciplined”.

Streamers have one big advantage when it comes to advertising, says Sonia Baschez, founder of Bend Growth Co, a marketing consultancy for start-ups. They have developed advertising platforms that make it far easier for them to get to know much more precisely just who is watching each show, thus enabling advertisers to precisely target particular demographics in a way that legacy television companies weren't able to do. With the exception of large events such the World Cup or awards ceremonies, which still tend to attract high numbers across the board, Baschez's clients are increasingly spending their budgets with streaming services.

Cinemas are back

The cinema industry may still have some life left in it, too. It has obviously struggled in recent years, not least because the window of exclusivity (between films appearing on cinema and then on TV) has narrowed, as Randeep Somel, deputy fund manager at M&G Investments, points out. You can now get pretty much any film that you want on demand in the comfort of your own home without having to be tied down by the cinema's timings. Making the trek to the local cinema also looks less attractive during a cost-of-living crisis, and the decline of large American shopping centres mean that parents no longer leave their children at the cinema while they do their shopping.

Still, it's undeniable that you cannot get the same experience at home as you can on the big screen, and many cinemas have begun to recognise that they are now basically in the hospitality as much as the show business. The quality of the experience has thus improved, from better seats to cleaner venues. How we view films may have changed, but going to the cinema can still be a very good experience.

Indeed, “as our lives become more entrenched in the digital world, people are starting to crave that human interaction a bit more, and there's still something very magical about the cinema experience that a lot of people still really connect with”, says Matt Celia, co-founder and creative director of Light Sail VR. Cinema chains could draw a lot of inspiration (and comfort) from the growing popularity of music concerts and experiences such as the Las Vegas Sphere. If cinema chains are going to survive and thrive, then there must also be something worth going to see, of course. It's not up to audiences to save cinemas, but to the studios to make films that people want to watch, and it's becoming increasingly obvious that producing superhero films with special effects and big bangs is not going to be enough on its own going forward. Still, there are a lot of people who love cinema, as shown by the box office success of many independent films, and you can still find cinemas that have long queues of people waiting to watch classic films. Cinema has a future if it can get its offering right.

Some of the biggest streaming services are also able to leverage their technology to maximise the appeal of their in-house content, says Baschez. Apple, for example, spent around $300 million to make F1: The Movie, then made large sums selling advertising space on the cars in the film. Similarly, Amazon has used its knowledge of book sales to spot authors who are popular “and then directly approach them to see whether they would be willing to turn their bestsellers into a movie or TV series”.

The rise of AI

The big elephant in the room is the rise of artificial intelligence (AI). Some argue that it is already radically reshaping the film and television industry, especially at the lower end. Producers are already using AI to create all the backgrounds, says Amir Ahmed, operations manager at Sugarland, a London-based film and video equipment rental company. Film shoots that would once have cost a fortune in design, location permits, travel days and much more can now be done faster and cheaper with AI.

The technology has some way to go before it threatens the wider industry, however. M&G's Somel points out that AI in a broad sense has been around a long time. Pixar has been using CGI technology to replace animation in films such as Toy Story for many years already, without really taking away from the role of studios. That probably won't change. As Somel argues, would Sky have been willing to pay such a premium for ITV if it thought that the future was one of AI-generated content?

Evan Bogart, the CEO of Seeker Music, is similarly optimistic about the continued need for content that is professionally created by humans. His experience in the music industry, seen by many as the canary in the coal mine for television and film, says that, although AI can now produce music that is “quite good”, he has “never heard an AI-created track that has genuinely made me cry”. Given that he helped create award-winning hits for artists including Beyoncé, Rihanna and Eminem, he should know what he's talking about. The younger generation are also increasingly anti-AI and are saying that they don't want their music created by a computer. The future is bright.

The music and film industries learned from what happened with Napster and illegal downloads in the 2000s and are quickly working out how to deal with the disruption threatened by AI, says Bogart. This will involve defensive measures, such as “putting a stop to the bad actors and making sure that regulations and guardrails are in place and that artists and producers are protected”.

In the longer run, however, it will also involve striking agreements and partnerships with AI companies so that the technology can be channelled into areas where it can genuinely boost productivity.

Intellectual property will become more, not less, important in an AI-driven world, says Browning, especially if the property in question is in a format that is hard to copy. Brands will become more important, including those of the platform and production company. Companies with “strong and recognisable intellectual property” will be in a particularly strong position “to dictate the future of how AI is used within the entertainment industry”, agrees Beringer.

The death of the TV may have been exaggerated

So it seems that talk that we have passed through the era of “peak TV” into a period of managed decline is premature. “For the last 30 years people have predicted the death of television,” says Pat Murphy, founder and CEO of advertising firm Murphy Cobb & Associates. It would be more accurate to say that what happened is that video has won – it's video that is “everywhere on every screen and in every format”. We may have passed “peak channels”, but “we've not reached peak content and certainly not peak demand”. Indeed, people are consuming more video content today than they ever have before “and that's just going to keep on growing”.

People are in “constant search of community, and when the community building is real, the medium almost doesn't matter”, says Willie Roberson, managing director at FGS Global, which advises some of the world's leading media, entertainment and financial institutions. Broadcast sports, for example, continue to set new TV viewership records. So although the media landscape may be more “fragmented” than it used to be, this means that companies will just have to pursue a multi-channel approach, one which includes television. Overall, the companies that win “won't just have the biggest budgets, but will know how to build and sustain community no matter where it goes”.

The best investments to buy into now

We look at some of the best bets for investors in this sector.

Netflix (Nasdaq: NFLX) is not only one of the big winners in the television industry, or the broader entertainment sector, but is seen as a technology stock, part of the “FAANG” (Facebook, Apple, Amazon, Netflix and Google) phenomenon. Its shares have fallen by around a half over the last year, says Ben Barringer, head of Technology Research at Quilter Cheviot, but Netflix is “now a scaled player with a broad and strong content slate” which bodes well for the future. Netflix is “exploring new markets at the same time – such as sports, gaming and merchandise” – so there should be “further scope for Netflix to expand its subscriber base internationally”. Despite double-digit revenue growth, Netflix still trades at only 19 times projected 2027 earnings.

Disney (NYSE: DIS) has a huge amount of intellectual property, but is not a pure play media company, making around 40% of its money from theme parks and the like. It also owns a large number of channels, including its own streaming service, Disney+. The stock looks undervalued, says Matthew Dolgin, senior equity analyst at Morningstar, given that its parks business “is worth nearly as much as the market is pricing in for the entire company”. Disney's media and entertainment side of the business should also deliver much better growth than many people are expecting. Disney currently trades at 12.8 times expected 2027 earnings.

Dolgin also likes Fox Corporation (Nasdaq: FOXA). Until recently the company has been highly dependent on pay TV and traditional programming, both of which are in structural decline. Its decision to buy streaming service Roku caused the shares to plunge over concerns that it overpaid, but Dolgin thinks that the deal not only gives Fox access to a “great business”, but also diversifies Fox's revenue stream, while giving it a platform for distributing its broadcasting once pay TV is no longer economical. Fox trades at 9.6 times 2027 earnings and on a dividend yield of 1.1%.

Dolgin also likes Fox Corporation (Nasdaq: FOXA). Until recently the company has been highly dependent on pay TV and traditional programming, both of which are in structural decline. Its decision to buy streaming service Roku caused the shares to plunge over concerns that it overpaid, but Dolgin thinks that the deal not only gives Fox access to a “great business”, but also diversifies Fox's revenue stream, while giving it a platform for distributing its broadcasting once pay TV is no longer economical. Fox trades at 9.6 times 2027 earnings and on a dividend yield of 1.1%.

Another conglomerate worth considering is Comcast Corporation (Nasdaq: CMCSA). Comcast provides broadband, but also owns a media and entertainment business, including film studios, theme parks and various television companies, including Sky. Last month it announced plans to split the company into two separate firms: Comcast and NBCUniversal. This is a “logical move”, says Randeep Somel of M&G Investments, which could unlock value for shareholders, as the broadband business “has been seen as a drag on the rest of the company”. Even though Comcast's revenue has continued to grow, the shares trade at a bargain-basement 6.5 times 2027 earnings, and offer a dividend yield of 5.83%.

Film lovers' enthusiasm for spectacular films will be good for IMAX (NYSE: IMAX). It specialises in large, immersive cinema screens, appearing in 1,798 multiplex locations in 91 territories. Revenue has been growing at a strong rate of around 13% a year since 2021, and is expected to keep on growing thanks to the release of films such as Chris Nolan's The Odyssey, which was shot on an IMAX camera. After a rocky few years in the aftermath of the pandemic, IMAX is now profitable and trades at 19.7 times expected 2027 earnings.

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The three income stocks picked below demonstrate the diversity of opportunities in the Aberdeen Equity Income Trust portfolio and the combination of income and capital growth that we look for.

The trust takes a deliberately index-agnostic approach, searching for companies undergoing change that the market under-appreciates. The idea is simple: the most compelling opportunities are often found in overlooked or under-researched areas. This leads to a portfolio that looks very different from other traditional UK equity income strategies.

With no sector constraints and a flexible approach to size, the trust can access a broader universe of income stocks, many offering attractive yields and the prospect of dividend growth. As the businesses gain wider recognition, valuation re-ratings can follow, supporting capital appreciation. With the macro backdrop starting to improve and investor attention moving beyond the FTSE 100, this approach is increasingly relevant.

Three income stocks to consider

We have held Chesnara (LSE: CSN) since 2014, reflecting our long-standing confidence in its business model. It operates as a disciplined acquirer of legacy life insurance assets, completing £440 million of acquisitions over the past five years. As large financial institutions streamline operations and dispose of non-core assets (often at attractive discounts) and private equity focuses elsewhere, Chesnara has carved out a niche by pursuing overlooked deals and refusing to overpay. This disciplined approach has built a strong record of earnings-accretive transactions. At the same time, the steady flow of acquisitions replenishes the book as older policies run off. Scale has increased meaningfully, with assets under administration rising from £8.5 billion to more than £20 billion, alongside expansion into Europe. With more than £100 million of available firepower, management sees further opportunities ahead. Chesnara generates cash through efficient management of existing books and delivers investment returns above the risk-free assumptions embedded in its actuarial models.

GTT (Paris: GTT) is a global leader in containment systems for liquefied natural gas (LNG), a market set for structural growth. Demand for LNG is expected to rise by around 60% between 2025 and 2040 as economies transition away from coal, driving the need for additional tanker capacity. GTT's membrane technology is critical to the safe transport of LNG, and decades of research and development have secured it a dominant market position. Barriers to entry are high, with shipowners and insurers reluctant to risk unproven suppliers, thus supporting pricing power and consistently high margins. Core growth should benefit from increasingly global LNG flows and a replacement cycle for an ageing tanker fleet. GTT is also building a digital services platform, with technology already installed on more than 15,000 vessels. This creates a valuable opportunity to cross-sell software and consulting services – an area that remains under-monetised, but offers high returns. A new CEO may accelerate this focus, while robust cash generation underpins both dividends and reinvestment.

The sharp correction in software stocks in early 2026 created an opening for investors hunting for income. UK IT reseller Softcat (LSE: SCT) plays a key role in connecting businesses with complex IT, partnering with more than 200 global technology providers. It has delivered consistent organic growth, expanding market share and securing a highly loyal customer base – 95% of revenues come from repeat business. The rapid adoption of AI is driving demand for processing power, storage, networking and security infrastructure – areas where Softcat is well positioned. This structural tailwind is expected to support continued earnings growth for the business, resulting in rising dividends.

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Homebuyers could save up to 47% on the price of their prospective home by looking for properties in neighbouring postcodes, according to new analysis from Lloyds.

Those looking to buy a home in some of the UK’s most attractive postcodes are stuck paying a premium for location – but by looking at properties just beyond the boundaries, you could potentially spend hundreds of thousands of pounds less.

On average, properties in postcodes next to the most sought-after locations are 28% cheaper than their counterparts, and in many places this discount is higher, the research shows.

For example, buyers in the North East can find the biggest savings. House prices in the seaside town of Whitley Bay are £304,022 on average, but ones in the neighbouring port town of Blyth are just £162,075 on average – a saving of 47%, or £141,947.

Amanda Bryden, head of mortgages at Lloyds, said: “It’s easy to focus on the ‘must -have’ locations when you’re searching for a home, but this research highlights just how much value can sit right next door.”

While these homes are in less sought-after areas, they have the benefit of being significantly cheaper, making them much more affordable while still being close to prestige areas. This can be helpful, especially for those trying to get onto the property ladder.

Byden added: “Of course, neighbouring areas aren't always directly comparable and each will have its own distinctive character, housing stock and local appeal. But in many parts of the country, looking just beyond the most sought-after postcodes can reveal more affordable options while still keeping buyers close to jobs, transport links, amenities and the communities that matter to them.”

Where in your region has the biggest postcode discount?

Discounts can be found by looking in neighbouring postcodes all across the country.

While the biggest example by percentage is the gap between Whitley Bay and Blyth, you can still find sizable discounts elsewhere in the UK.

For example, people who buy in South Luton and surrounding areas in Eastern England rather than the pricier Harpenden could, on average, save the most amount of money, by changing postcodes.

The average home in Harpenden costs £587,884, while it’s £351,742 in the South Luton LU1 postcode area. This means there’s a postcode price gap of £236,142, or 40%.

Likewise in Greater London, buyers could save £232,419 (30%) by moving to Cricklewood in the capital’s NW2 postcode, rather than NW3, which covers Hampstead, Belsize Park and surrounding areas.

On the other hand, the smallest savings are seen in Northern Ireland. The largest postcode gap is between the BT4 postcode that encompasses East Belfast and the BT16 postcode that covers Dundonald and the surrounding areas.

The average house price in the BT4 postcode is £278,143, compared to £247,068 in the BT16 postcode – a potential saving of £31,075 or 11%.

The table below shows the neighbouring postcodes where buyers can find the biggest savings in each region of the UK.

Source: Lloyds, 27 July

Ten years ago, the directors of JPMorgan Global Growth & Income (LSE: JGGI) – then called the JPMorgan Overseas Investment Trust – adopted a new strategy to address the fund's persistent discount to net asset value (NAV). The trust would invest globally without regard to income but pay an annual dividend of at least 4% of net assets. The idea was to give investors an attractive income via an approach that wasn't held back by the hunt for yield.

The renamed fund was an instant success. Performance improved, and the discount to NAV disappeared. The trust grew – by absorbing two other trusts in 2021 and 2025 and by issuing new shares for cash – and achieved greater economies of scale. Today, JPMorgan Global Growth & Income has £3.4 billion of assets – up from £200 million a decade ago – and operating costs of just 0.42%.

JPMorgan Global Growth & Income's spell of weak returns

However, the shares returned to a discount amid the wider market setback for investment trusts in 2022 and the directors had to start buying back shares again. The discount shrank, but in August 2024, performance began to flag. A NAV return of 16.7% over one year and 50.9% over three lags the benchmark (the MSCI AC World index) by 11% and 13.4% respectively. However, manager James Cook points out that it is still nearly 2% per year (net of fees) ahead since the change of strategy.

“We have seen many similar drawdowns over the last 30 years for our style,” he says. “On average, they last a year and cost performance 9%.” The latest one has lasted longer and cost more, which reflects market trends. “It has been a market strongly based on momentum rather than on the long-term valuations and earnings growth, but a return to normal will be very good for fundamental investors, as it has been after previous such phases.”

Cook and his team look for firms with high-quality earnings that are growing 2% faster than average but valued similarly to the market based on free cash flow. “Less than 3% out of 2,500 stocks in the investment universe offer all three.”

Manager James Cook backs AI winners

Cook has been reducing exposure to “low growth cyclicals” and buying AI-related semiconductor stocks such as Nvidia, which is 6.3% of the portfolio. “It is back at a trough-level multiple, yet the AI market keeps accelerating, and its newest Rubin chip is five times more powerful than the Blackwell chip.”

AI “is bigger than the internet in 2000, with long duration growth. Semi-conductor manufacturers are booked out for years.” Hence TSMC is also in the top five holdings. “It is really attractive on valuation while producing over 90% of the world's leading-edge chips.”

Overall, the technology sector makes up 25% of the portfolio (excluding Alphabet and Amazon, which are classified elsewhere). Cook has also been buying payments network Mastercard – “widely regarded as an AI loser but the fraud detection and identity verification services it provides are increasingly important”.

Insurer Tokyo Marine was added for its “strong earnings growth” shortly before Berkshire Hathaway acquired a stake and pushed the share price up 30%. Vesta, a provider of assisted living in the US, is “the beneficiary of demographic change in a market with a structural supply shortage”. Oil major Shell has been bought on “a really attractive valuation”.

Few of these are high-yielding. Sizeable positions in Alphabet, Amazon, Apple, Microsoft, Nvidia and TSMC would be impossible if the 4% yield were paid solely from income, showing the flexibility of this strategy. Most of JPMorgan's other trusts and some other firms have followed JPMorgan Global Growth & Income's lead in paying an enhanced dividend out of capital, reducing its competitive advantage. But for yield-hungry investors unwilling to sacrifice capital returns for extra income, it is attractive, while Cook's case for the period of dull returns being near the end is compelling.

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The market in Old Masters paintings has been given a new lease of life. In the first half of this year, Christie's made $183 million from the sale of paintings created before 1850 – a 232% year-on-year increase after a long period of declining sales.

That's partly thanks to a new, younger cohort of collectors. Of the new clients of Christie's attending all sales in the first six months of 2026, the auction house described 47% as “millennial/Gen Z”, up from 45% a year earlier. At rivals Phillips, “nearly one-third” of new buyers were “millennial and Gen Z collectors”.

Earlier this month, Old Master artworks sold for a combined £51.3 million at Sotheby's in London, including £8 million for a rare, early Rembrandt. The “results represent a resounding endorsement of the power of Old Masters to captivate collectors across generations”, said Elisabeth Lobkowicz, head of Old Masters at Sotheby's.

Until recently, Old Masters paintings had been a “backwater for scholarly private collectors and institutions seeking to fill gaps”, says Emma Crichton-Miller in the Financial Times. Most of the “best pictures by all the best artists” had already been snapped up by museums and the market entered a lull due to the dearth of exciting, big-name artworks. Younger buyers are helping to solve that problem, because they are, as Crichton-Miller puts it, “untrammelled by tradition”. They are often seeking works by lesser-known or overlooked Old Masters, such as the 17th-century female painter Artemisia Gentileschi.

Why are Old Masters so popular?

Another attraction is that many of these artworks are relatively more affordable compared with modern and contemporary art. “For $250,000, you can buy a painting that could hang in the Louvre, but $10 million gets you a bad Picasso,” Patrick Williams, a gallerist in New York, tells The Economist. “Portraits and figurative art [in particular] are in vogue, because they are Instagrammable,” notes the paper. “People spend so much time looking at pictures of other people on social media that they are primed to connect to painted ones.” These younger buyers are attracted to the authenticity and simplicity of a bygone age – notwithstanding the “revolutions, plagues and awful dentistry”.

As for desired themes, religious and, as the FT puts it, examples of “Dutch Protestant domesticity” are out; the weird and wonderful are in – “‘difficult subjects' such as beheadings or martyrdoms,” for instance. On 30 June, a 17th-century Dutch painting by an unknown artist of two skulls sold for £431,000 with Christie's in London – 440% more than the low pre-sale estimate. Many wealthy younger collectors made their money in the ever-changing world of technology, and they have shown a propensity to mix and match eras and styles. As art advisor Evan Beard tells Margaret Carrigan on Artnet, “I can see the skull painting very at home in a collection with some [modern skull paintings by Gerhard Richter]”.

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This interview is an excerpt from Andrew’s recent filmed MoneyWeek Talks podcast episode with Jeremy, available on all podcast platforms and YouTube.

Jeremy Grantham, originally from Yorkshire, is the co-founder and long-term investment strategist of asset management group GMO, based in Boston. Jeremy’s reputation is based on his long-standing ability to spot bubbles. He called the Japanese bubble in the late 1980s, and rightly refused to rush into the tech bubble in the late 1990s, a strategy that earned him notoriety as a permabear. But he also turned bullish in March 2009, just as the market bottomed after the crisis.

These episodes, and a great deal else, are chronicled in his memoir, The Making of a PermaBear: The Perils of Long-Term Investing in a Short-Term World, published earlier this year.

Andrew Van Sickle: Jeremy, we learn in your book that you weren't always a patient value investor. I enjoyed the section about the late 1960s. You say you became a “gunslinging nitwit” in an expensive market, but you came a cropper with a couple of stocks. Will you tell us a bit about that episode and how it became a formative moment?

Jeremy Grantham: Just after I got my first job in the investment business, I came up to Boston and joined this lunch club of gunslinging kids, fresh out of business school. Every time we met, someone would have a hot story. And typically these stocks would go up and come down very quickly. One was American Raceways, a motor-sports group that had Stirling Moss on the board. It was going to introduce Formula One to the US. I thought it would work. It seemed desperately American: power, noise, blood and death.

American Raceways bought one track in the middle of the country and everyone showed up. Expecting the races to catch on nationwide, I bought 300 shares at $7. I went to England and Germany for three weeks to get married; we came back and the stock was at $21. So I like to say that I did what any good value manager would do. I sold everything else I had and tripled up. I had 900 shares, a lot of them on borrowed money, at $21. And fate always teases you and wants to get you fully committed to a bull market, so the price was $100 by Christmas. All I had to do was sell and run. While my wife and were deciding whether to make a higher bid on a house we had our eye on, the market started to break and pretty soon American Raceways was slumping. And I scrambled out and got into another company equally far ahead of its time (Formula One is now doing well in the US).

This company was going to put a monitor on everyone's desk, which back then was hugely high-tech. And on this little screen they were going to have the option price of individual stocks. But the idea, a forerunner of Bloomberg terminals and the internet, didn't catch on at that stage, and the company never took off. It went belly up and I was lucky to scramble out with enough money to pay the banks back. From then on I thought I'd better revert to my Yorkshire instincts and be a cheapskate and a value manager.

Andrew Van Sickle: Having had your fingers quite badly burnt, you decided to take a very thorough look at stock market history and how human nature always ended up in these situations. And you constructed by hand, as part of your research, the first index for small-cap stocks?

Jeremy Grantham: Yes. We had to go back into the archives and put together an index going back to 1925. And what we saw were long periods of small-cap domination and long periods of large-cap domination. They ebbed and flowed in these multi-year cycles. And the interesting thing to me was that we were in a big “nifty-fifty” blue-chip cycle and small stocks' valuations had become extremely depressed relative to the rest of the market. And so we put 100% of our money into small caps, which was so original as to be totally unique back in the day. Institutions didn't dabble in small caps back then. They were beneath contempt.

And so we had a very strange portfolio that was difficult to sell. There were 99 rivals selling Coca Cola and there was one of us selling companies that no one had ever heard of. So it was at least entertaining. It amused the clients rather than anything else.

Andrew Van Sickle: So the idea was to seek out investments that people had overlooked, and you clearly enjoyed the number crunching – later your asset management group was one of the first to use a computer to keep doing so, wasn't it?

Jeremy Grantham: Yes, it was painfully expensive, filled the whole room and created a lot of heat. But it did give us a little advantage for a year or two. And what we found, by the way, was that the numbers we'd hand-crunched were pretty accurate. And what was nice about hand-crunching numbers was that no one else did it. Whereas once we got a computer, everybody else did. Pretty soon, a computer was simply a cost of doing business.

And no one made a killing by having one, you just had to have it and pay for it, whether you liked it or not. This is, incidentally, getting ahead of myself, very analogous to AI. In five or ten years AI will be a cost of doing business. But it won't be a way you get ahead. It will be a case of falling irretrievably behind rivals if you don't use it. New technologies confer an advantage on the early adopters. And when it's clear that they have an edge, everyone copies them and it goes away. But we'll come to AI later.

Andrew Van Sickle: The notion of an early lead being eroded brings us to the issue of mean reversion, one of the principal themes to emerge from your research. What goes up must come down. This applies to corporate profits, which get competed away. Similarly, asset markets get euphoric, human nature being what it is; we overdo things on the way up and on the way down.

Bubbles blow up and burst, but one can never really tell when things will revert to the mean. What did it feel like in late Japan and late 1990s America, knowing that you were right to be bearish – because mean reversion is something unavoidable – but standing practically alone for years on end?

Jeremy Grantham: Well, it gave you lots of time to do more research, particularly in 1998 and 1999. We didn't start to lighten up on US stocks until the end of 1997, when the trailing price/earnings (p/e) ratio reached 21, the same as at the peak in 1929. So it was an emotional point to reach. By the end of 1998, we were as light as we could get. And the p/e went all the way up to 35 by the peak. Japan was even worse, of course: the mother and father of all bubbles. The p/e had never eclipsed 25, and in 1989 it soared to 65.

Of course 35 wasn't 65, thank heavens, or we would definitely have gone out of business. But conveniently at 35 the market beat a magnificent retreat and we were positioned for it, having doubled and redoubled our ante until there was nothing left to do, and we actually made good money.

To give you an example of how much of a bargain value stocks were around the market peak, consider real estate investment trusts (REITs). Properties were selling at a discount to replacement cost, and Reits were yielding 9.1%. The overall S&P 500 yielded just 1.5%, a record low. When the overall market slumped, Reits jumped by 30% amid a flight to safety and value.

Andrew Van Sickle: For your business it sounds like a race against time, with clients no doubt increasingly frustrated that you were sitting out the big technology-led gains of 1998 and 1999. They would have had the same perspective as Chuck Prince, CEO of Citigroup, in the credit bubble in 2007: “[As] long as the music is playing, you've got to get up and dance.” Do you think that if the bubble had burst a year later, you would have gone bust?

Jeremy Grantham: Yes, I think so. Incidentally, coming back to Mr Prince, George Soros' take was that “Actually, the music had stopped, he just hadn't noticed,” which was typically cruel.

Andrew Van Sickle: Did lots of people you spoke to at the time think it was a bubble, too, but just didn't want to say so publicly?

Jeremy Grantham: That's exactly right. We were a purely institutional firm dealing with lots of big pension funds. The hired guns in the pension funds usually had a lively understanding of how risky the market was. But their committees – made up of private equity and VC investors, and all manner of people who'd made lots of money and were very, very confident – insisted on going with the flow, and that anyone who didn't was stuck in the past and should be fired.

The upshot is that the uncertainty surrounding the timing of bubbles is greater than the typical client's patience. And that is all you need to know about institutional investing. Most of the engine-room players saw the bubble. It's just that the marketing people and the bosses realised that scepticism was not a good business strategy.

If you are a big firm, you simply mustn't bet on the bursting of a bubble. You have to go with everybody else, you have to be willing to run off the cliff, and you have to be willing to be professional and slick and quick, saving some money on the way down and redeploying it. If you do that, you will thrive. If you try to fight the bubble, well, you may get lucky, you may win one. We, in a sense, won the great financial crash. We explained it in quarterly letters. We prepared for it and we got out in a timely fashion and everything worked well. But if you get it wrong, watch out.

Keynes, just about my solitary hero in the economics business, said the key to investment life is never be wrong on your own. So you can be wrong in company and you don't lose your job. Even being right on your own, he said, was dangerous in that they would pat you on the head if you won, but then describe you as an eccentric when you'd left the room. That's not a great reputation to have. And he said that if you're wrong on the downside, if the market doesn't break and you were positioned for a bear market, “you will not receive much mercy”.

Andrew Van Sickle: Turning to the bubble of the moment, what is your take on AI and the market's view of it?

Jeremy Grantham: In 100 years they'll be writing about this point in stock market history as they write about the South Sea bubble. It is simply magnificent. The SpaceX prospectus was of the order of the famous South Sea bubble equivalent: “An undertaking of such profound importance but cannot at this time be revealed.” Just give us your money.

Andrew Van Sickle: I was horrified to read that Isaac Newton went for the South Sea bubble. He should really have known that what goes up comes down.

Jeremy Grantham: He said something along the lines of: “I know a lot about the movements of heavenly bodies but nothing about human nature.” The SpaceX prospectus is unbelievable – mining asteroids and colonies on Mars and moving through space and a projection of revenue streams, 90% of which seem to relate to AI. And it's not clear, of course, that SpaceX's version of AI, which is at the moment having its bottom kicked around the block by Anthropic and the rest of the boys, is going to be around in the long term. Talk about tulips.

Andrew Van Sickle: You've said that you think excitement over the advent of AI essentially stopped the bubble of late 2021 deflating fully.

Jeremy Grantham: Yes, December 2021 met all the conditions of a bubble, we thought, and there was a slump in 2022. But for the first time in history, halfway through a bubble breaking, you come out with an idea that is so colossal and accompanied by so much capital expenditure that you change the game.

On that infamous day in late 2022, ChatGPT appeared and someone rang the bell and said: “All change.” And the rest of the market didn't believe it for ten months, drifting down a bit. But by then the Magnificent Seven had doubled, and it dragged the rest of the market up.

I used ChatGPT, telling it to please summarise War and Peace in ten points, and then do it in German. And that was enough to make me realise that this was going to be impressive. It's clearly better than anything else other than the railroads.

People don't realise that the more obvious and important the idea, the more likely you are to attract too much capital and have a capital bust and a market bust. The railroads transformed our lives, they added enormous productivity, and yet they were so obviously going to do that, that everyone built too many railroads, and everybody lost their money. And that will happen in AI.

At present there are seven companies plus another 15 snapping at their heels. All are aiming at the same market, AI. The one that gets there first, they believe, has a licence to make more money than you could shake a stick at. More than anyone has ever made on anything. And they are all saying the main risk is not spending enough. We will spend our vast cash flows, they are saying.

They're going to fight until someone survives. This could be the most vicious fight to the end that we have ever seen, starting now. In that sort of fight, they do not make lots of money and the stocks get crushed. And then they emerge out of the wreckage. Like the internet. Amazon declined 92% in the tech slump. And yet it then rose and inherited the Earth. The railroads rose from the ashes. And this will rise from the ashes.

Andrew Van Sickle: While investors take bets on who might survive, where are you finding value outside the US?

Jeremy Grantham: That was an easier question to answer at the beginning of last year. At that stage, valuations looked unremarkable and therefore priced to make a decent return. Since then, the S&P has gone up another 23% but that is nothing like the rest of the world, led by emerging markets. Emerging markets are up 60%. And value in Europe is up 45%. And these are very big gains over the S&P. The rest of the world now begins to look a tad overpriced, while the US has moved into “read all about it in 100 years” territory.

Andrew Van Sickle: We get the impression that Japan is certainly no longer cheap, although it's probably reasonable.

Jeremy Grantham: Yes, reasonable, and it's done very well. And again, it has handsomely beaten the S&P since the start of last year. The main thing that impresses a lot of people, however, is that even though the S&P may have been at the back of the pack in the last 18 months, it still went up handsomely, and so it's created the impression that, therefore, it defies the pull of gravity.

And this feeling that it will go on forever is, of course, absolutely classic. That's exactly how people wrote and thought in 1929 and how they wrote and thought in 2000. This time is not different.

Of course, people hate you if you say this. They are so involved in making money they loathe the notion that the whole thing is a mass delusion. Perhaps they hated me more in 2000, but it's getting close. In the comment section of a recent podcast, three people said that my ears were big. And of course they are big. It's just that people don't usually say so after the age of seven or eight.

Andrew Van Sickle: I don't suppose the boy pointing out the emperor was naked was very popular either.

Jeremy Grantham: I don't know. The episode wasn't recorded.

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Lionel Messi may have failed to win a second World Cup, but his legend seems destined to endure. He'll go down as a global star in the tradition of Pelé, Maradona and Ronaldo, but also as an Argentinian national icon. He's also done very well financially from the sport.

Argentina's football fan culture is especially famous for its “creative chants that evolve from one tournament to the next”, the Spanish magazine Hola informed its readers halfway through the World Cup. This year's La Cuarta Estrella (The Fourth Star) included the rousing line Por Malvinas, por el Diego, por la última de Leo – referencing the Falklands, the country's footballing patron saint Maradona, and Lionel Messi's last World Cup. The anthem gained “global traction” when the team was filmed “passionately singing it in the dressing room during their tournament run”, says the Buenos Aires Herald.

When Messi was 13, his father signed a contract with FC Barcelona on a napkin, says the Financial Times. It covered the family's move from Rosario in Argentina to Spain. The Messis, who were joining the diaspora fleeing Argentina's long economic decline, “wept in the taxi to the airport”.

Lionel Messi, now 39, has never lived in his country since: after 20 years in Barcelona, he now plays for Inter Miami. “Yet this émigré has become the face of Argentina.” It may be because, like many émigrés, “he identifies with the place he left”. Spain wooed him to play for youth teams, but “the kid with the flowerpot haircut” only wanted to play for Argentina. He was raised in Spain by Argentinians – eventually marrying a girl he knew from childhood.

Always something of an outsider, Messi is “a taciturn introvert” who lacks the “wild poetry” that Maradona had off the field, but has nonetheless gained an emotional hold on his homeland. “Crucially for his legend, he has learnt to express emotion” – often crying on the field out of joy or disappointment.

The key point, though, is that “his brilliance was unmissable”. He was what Argentines call a “pibe” – a natural dribbler whose “preternatural anticipation and short steps allowed him to change direction faster than opponents”. Messi sees everything. “He spends almost the entire game walking and scanning. When he breaks into a run, his teammates know he has seen an opening. They play to serve him.”

What is Lionel Messi's net worth?

Over the years, the hero worship has translated into big profits, says Forbes. Now a billionaire, Messi is one of just four athletes to have joined “the three-comma club” while still active in their sport. Much of Messi's estimated $1.1 billion net worth stems from “cash accumulation and appreciation” of earnings throughout his career – in his last years with Barcelona, he had a four-year contract worth $675 million. He earned “a massive salary” at Paris Saint-Germain (PSG) and now reportedly pulls in an estimated $70 million-$80 million annually with Inter Miami – “plus an option to acquire an equity stake” in the club when he retires.

Off the pitch, Lionel Messi has made more than $600 million from corporate sponsorships. His most notable deal is a lifetime contract with Adidas (signed in 2017), along with longstanding partnerships with brands such as Mastercard, Michelob Ultra and Lay's.

A measure of Messi's legend is the prices commanded by his memorabilia. In 2023, a set of six shirts he wore during Argentina's winning World Cup run in 2022 fetched $7.8 million at a Sotheby's auction – making them “the second most valuable football jerseys ever auctioned”.

Things haven't always gone smoothly for Messi, says Sky Sports. In 2016, he was found guilty, along with his father Jorge, of defrauding the Spanish government of €4.2 million between 2007 and 2009 over income earned from image rights. But resilience and patience are his watchwords, noted The Profile in 2021. For Messi, who has been playing football every single day since he was five years old, “the overnight success story” is a myth. “I start early and I stay late, day after day, year after year,” he once observed. “It took me 17 years and 114 days to be an overnight success.”

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Two oil stocks are among the cheapest equities on the London market today. Harbour Energy (LSE: HBR) and Serica Energy (LSE: SQZ) are trading at price-to-earnings (p/e) ratios of 5.3 and 2.7, respectively, for 2026 based on figures compiled by Peel Hunt. On a cash flow basis, the companies look even cheaper. The shares are trading at free cash flow yields of 35% and 29.9%, respectively, and a large chunk of this cash is flowing right back to investors. Harbour is trading with a forward dividend yield of 9.9%, rising to 15.4% next year, and Serica is expected to yield 7% for 2026 and 2027 at the current share price, according to Peel Hunt.

It's clear why investors are steering clear of these businesses. Both are UK-focused oil and gas companies, and they're highly exposed to the country's unhinged energy and tax policies. But in the words of billionaire distressed-debt investor Howard Marks, there are no bad assets, only bad prices, and at current prices, the market is valuing these oil stocks at such a deep discount that it's going to be hard for the market to continue to ignore them.

Investors should buy these oil stocks together

I view Harbour and Serica as a deeply discounted pair that should be acquired together rather than individually. While both are cheap (Serica is half the price of Harbour), buying the two helps spread management execution risk. Harbour Energy is the largest London-listed independent oil and gas company. It used to be entirely UK-focused, but after a series of deals it now has a global presence, with assets in the UK, Norway, Germany, North Africa and the Americas. It also holds a 15% stake in Southern Energy SA, Argentina's first large-scale floating liquefied natural gas (FLNG) export project.

The group started the year with production of 506,000 barrels of oil equivalent per day (boepd) in the first quarter, thanks to higher output from the recently acquired US LLOG assets in the Gulf of Mexico. Its Norwegian assets also helped boost output and, combined with new wells, management is now looking for between 480,000 and 500,000 boepd for the rest of the year, with average operating costs of $14.5 per boe.

Based on these costs, the company is modelling free cash flow generation of $1.4 billion for 2026, up from $600 million at the beginning of the year, assuming an average oil price of $80 and $13 for gas. These numbers don't look too outrageous for the rest of the year. While the Brent benchmark trended down to the low $70s per barrel at the beginning of July, when it looked as if the US and Iran would sign a lasting peace agreement and the Strait of Hormuz would reopen, the recommencement of hostilities has sent oil back up to $88 at the time of writing.

Analysts at Canaccord Genuity have modelled Brent averaging $83 in 2026 and $75 in 2027 before falling to $70 in 2028. Based on these estimates, they have Harbour generating free cash flow of $1.9 billion in 2026, $0.7 billion in 2027 and $1.1 billion in 2028. Analysts at Zeus are a bit more cautious, forecasting a Brent price of $75 for the rest of the year.

Even on this lower target, based on Harbour's goal to pay out 45% to 75% of free cash flow to shareholders every year, the analysts believe the company will return in the region of $500 million to shareholders at the low end of this target, giving a dividend yield of 6.9%. Canaccord has pencilled in a yield of 8.3%, and Peel Hunt's is the most optimistic at 9.9%. The yield will probably land somewhere in the middle, but whichever way you look at it, it's clear Harbour is cheap and throwing off cash.

Serica's valuation is a bargain

Serica's production profile is predominantly UK-based, and the company is listed on the Aim market, which goes some way to explaining its bargain-basement valuation. The first point it can't do much about, but on the second point, Serica is working to remove some of the uncertainty by moving to the main market in the third quarter of 2026.

Despite its UK focus, Serica's management believes the company can maintain production at over 50,000 boed into the 2030s (it aims to exit 2026 with production in the 65,000 boed range) based on its existing portfolio with well-executed capital spending.

Capital spending is expected to rise through to the end of the decade, which will crimp free cash flow. Still, management has outlined plans to pay out 30% of cash flow from operations over the coming years, which, Berenberg estimates, delivers a dividend yield of 11% in 2027 and then averages 7% through to 2030 based on an average oil price of $75.

Unlike Harbour, which has accumulated a large pile of debt following a series of mergers and acquisitions, Serica is expected to move from a net debt position of –$203 million in 2025 to +$91 million in 2026 and +$192 million by 2027. This, analysts at Berenberg believe, will allow management to begin considering bolt-on acquisitions of increasing size. Last year, it completed mergers with Prax, One Dyas and Spirit Energy, which added production from 25 fields in the North Sea.

As other companies have decided to flee the UK-owned section of the North Sea, Serica has been able to step in as a buyer of last resort. These deals were done at between $2 and $4 per barrel of reserves. By comparison, Harbour paid around $12 for the US LLOG assets at the end of last year. When it comes to further deals, Serica is following Harbour's lead and looking for deals outside of the UK. In conversations with analysts, Serica has highlighted Southeast Asia as a region of potential interest.

As the company moves forward with these growth plans, it may only be a matter of time before the market catches on and re-rates the stock.

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What is a land value tax?

A land value tax is an annual levy paid on the value of the land upon which a property – or no property – sits, rather than a tax on the property itself. The basic idea is that land gets its value from location, rather than the calibre of the development that sits on it. And what gives a location value is what is going on around it. Is it close to the centre of a city? Is it in an area with great transport links, good schools, beautiful parks, hospitals and so on? Generations of taxpayers paid for all that civic infrastructure and a land value tax is a fair and efficient way of taxing what economists have called the “unearned betterment” part of the value of a property – that is, the rise in value that has nothing to do with the owner's efforts and everything to do with the state and community.

Is a land value tax a new idea?

Not at all. Land value taxes have their roots in the ancient principle that people enclosing common land for agricultural use had a duty to share some of the resulting crops. In Anglo-Saxon England, the unit of land measurement called the hide (around 120 acres) was used to assess people's liabilities and obligations for such things as the maintenance and repair of bridges, fortifications and manpower for the army. A thousand years later, in The Wealth of Nations (Book V, chapter 2), Adam Smith argued in favour of a land tax on the grounds that it would fall on the owner of the land and not harm other economic activity. “Nothing could be more reasonable,” he concluded. David Ricardo, too, was a strong advocate. More recently, the most famous proponent of a land value tax was the late 19th-century US journalist and free-trade campaigner Henry George. Winston Churchill was a big fan, too.

Why is a land value tax so popular?

It's one of those interesting ideas (such as universal basic income or congestion pricing) that attracts support from a strikingly broad range of voices. Left-wingers are attracted to land value taxes because they capture unearned rents and reduce inequality from land ownership. Free-market liberals are keen because land value taxes are seen as highly efficient and tax a fixed resource without discouraging work or investment. The key point in favour is that such a tax “allows us to raise more money from the unproductive rich without disincentivising the productive rich”, says David Goodhart on Substack. Andy Burnham, during his first bid for the Labour leadership in 2010, backed the policy as “aspirational socialism”. Milton Friedman – guru of the “neoliberalism” so disdained by the new PM – also supported it as the “least bad tax”.

Why did Milton Friedman call it the 'least bad tax'?

Because if states must tax – and they must – then it's best that they do as little damage as possible to incentives that promote growth and enterprise. Income taxes disincentivise employment. Taxes on profits make businesses invest and trade less. But the supply of land is fixed: no tax increase will result in there being less of it. And “even the most tax-shy landlords cannot take their acres offshore or dodge the tax with legal jiggery-pokery”, says Edward Lucas in The Times. Moreover, a land value tax “stimulates growth by penalising inactivity. Landlords pay the tax anyway, so they had better make use of their land, or sell it, dropping the price if necessary” – and selling to more productive owners. Land value tax, in other words, helps tackle “grey belt” decay and discourages land hoarding and speculation, smoothing out booms and busts.

How high should the land value tax be?

Another proponent is Dan Neidle, the City lawyer turned tax reform campaigner. He supports scrapping stamp duty (which harms growth and labour flexibility by discouraging people from moving house); council tax (out of date, unfair and under-taxes the very rich); and business rates (arbitrary, stifle growth and stoke perverse incentives). To replace the £100 billion these three dreadfully designed property taxes bring in, Neidle's Tax Policy Associates think tank proposes a land value tax set at around 1.3%. Other groups have proposed models at between 0.48% and 1%. Stamp duty and council tax between them account for roughly £57 billion. At the 1.3% rate, at least 63% of people would be better off immediately (compared with council-tax payments), and in the long run the boost to the economy would make it a win-win for all.

What would a land value tax mean for homeowners?

In the short run, millions of homeowners in southern England would be looking at gigantic new annual tax bills. And that's not the only reason why land value taxes are a tough sell, politically. Initial implementation is tough, since the scope for disputes and legal challenges against a levy on a hypothetical value is clear. And opponents worry the tax would be unfair on asset-rich but low-income homeowners, especially the elderly. Without some kind of lengthy phasing in, a land value tax would constitute a one-off windfall tax on the current generation of land owners, since once they are introduced, land values would fall to reflect future tax liabilities. And letting cash-poor pensioners pay the land value tax from their estates risks turning it into a disguised inheritance tax.

Will Britain get a land value tax?

This week Andy Burnham appeared to back away from a far milder form of tax reform that he espoused as recently as last week – a big rise in the personal allowance to take more low earners out of income tax. So it's highly unlikely he would have the political capital – or mandate – to push through such a radical move this side of a general election. But it may be an idea whose time has come. An early attempt at a land value tax in Britain – under Lloyd George's Liberals – collapsed under the weight of the administrative burden involved and trenchant opposition from landowners. But today's technologies mean the task is not insurmountable, given the political will. Versions of a land value tax have been introduced in jurisdictions including Australia, Canada, Denmark, Estonia, Singapore and Taiwan. “Burnham has been right about this for 16 years,” says Neidle in The Sunday Times. “The question is whether he's willing to be right today.”

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Barton Olivers, Burton Bradstock, Bridport, Dorset

A Victorian villa with uninterrupted views over the sea and a garden with a gate opening onto the coastal path. It has open fireplaces and a kitchen with French doors leading onto a terrace. 5 bedrooms, 5 bathrooms, 2 receptions, indoor swimming pool, 2.96 acres.

Price: £3m Knight Frank 01935-810064

Harbour Island, Crinan, Lochgilphead, Argyll & Bute

A renovated, contemporary house and cabin on a private island off the coast of Lochgilphead. It has floor-to-ceiling windows, an open-plan dining kitchen and a raised deck. 3 bedrooms, 3 bathrooms, office, 2 receptions, conservatory, 9.7 acres.

Price: £1.25m+ Savills 0141-222 5875

Mount Severn, Freshwater East, Pembrokeshire

A modernist house situated in the woods above Freshwater East Beach. It has floor-to-ceiling windows, wood-burning stoves, an open-plan dining kitchen and living area with bi-fold doors leading onto a terrace and a two-bedroomroom apartment. 4 bedrooms, 4 bathrooms, receptiontion, office, garden room, studio, heated swimming pool.

Price: £1.5m Country Living Group 01437-616101

Rosebank, Dartmouth, Devon

A renovated house in a commanding position on the banks of the River Dart. It comes with its own boat house. The house has vaulted, beamed ceilings, arched sash windows, wood floors, period fireplace and a sun room with far-reaching views over the Dart Estuary. The gardens include a terrace and a decked area. 3 bedrooms, 2 bathrooms, dining kitchen/living area, sun room, porch, balcony, boat house, terraces, gardens.

Price: £1.75m Savills 01548-800462

Malindi, Eastcliff, Cornwall

An energy-efficient house surrounded by gardens that include steps leading down to Porthtowan Beach. It has floor-to-ceiling windows, bi-fold doors, polished concrete floors and an open-plan kitchen. 2 bedrooms, bathroom, dressing room.

Price: £1.55m The Modern House 020-3795 5920

Aline Estate, Isle of Lewis, Outer Hebrides

An 18th-century lodge on a sporting estate overlooking Loch Seaforth and the Isle of Skye. It comes with its own island, fishing rights and red-deer stalking. 6 bedrooms, 5 bathrooms, 2 receptions, study, staff bedroom, kitchen, sunroom, 3 cottages, cottage occupied by the estate gamekeeper, outbuildings, boathouse and slipway, industrial pier, woodland, 8,202 acres.

Price: £4m+ Strutt & Parker 0131-226 2500

King Street, Aldeburgh, Suffolk

A renovated, four-storey townhouse situated on the seafront overlooking the beach. It has exposed brickwork, arched windows, period fireplaces, modern wood-burning stoves, a plywood staircase, bespoke kitchen and a balcony on the top floor that commands wide-ranging views over the North Sea. 2 bedrooms, bathroom, receptiontion, dining kitchen, study.

Price: £775,000 The Modern House 020-3795 5920

Sea Road, Westgate-on-Sea, Kent

A four-storey, New England-style house situated on the seafront on the North Kent coast in the centre of West Bay, overlooking the sandy beach. The house has a central oak staircase, a large dining kitchen and a south-facing garden with a heated swimming pool and pool house with bi-fold doors and a kitchen area. 6 bedrooms, 4 bathrooms, 3 receptions, cinema room, laundry, gym, double garage, terraces, heated swimming pool.

Price: £1.75m Miles & Barr 01843-844899

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Travel firm Expedia has experienced the rough and the smooth of recent turbulence in the travel industry.

America’s war on Iran has raised the price of jet fuel, and higher prices at the pumps have compounded a cost-of-living crisis that has prompted many to wonder whether they can even afford to take a holiday.

More broadly, however, the industry continues to enjoy a post-pandemic boom, while a further tailwind is the increasing propensity (among younger people in particular) to prioritise experiences over possessions.

Expedia (Nasdaq: EXPE) has two main businesses. Around two-thirds of the group's revenues come from a range of consumer-facing websites that help customers book hotel rooms and car rentals, including Expedia.com, Hotels.com, Vrbo.com and CarRentals.com. However, in recent years, a growing proportion of its revenue has come from supplying the technical infrastructure that allows hotels, car-hire companies and other firms to manage their bookings.

Expedia isn't threatened by AI

After tripling in three years, Expedia's shares swooned at the start of this year. Markets were buffeted by the current conflict in the Gulf and concerned that AI could carry out much of Expedia's work automatically. In the worst-case scenario, developments in “agentic AI” would allow people to type a few prompts into a chatbot, which would then automatically book a holiday with the best prices, completely bypassing the need for comparison websites such as the one Expedia runs.

However, such fears seem overblown. While an increasing number of people seem willing to rely on chatbots to provide advice about what to see, few would trust it enough to allow it to book hotel rooms on their behalf, even if such software merged. Large companies are even less likely to trust a chatbot to oversee the distribution of hotel rooms and flights for their staff. At the same time, Expedia's exclusivity agreements with several hotel chains and airlines such as no-frills carrier Allegiant Travel provide a degree of security. Expedia is also examining how it can use AI to enhance its own operations.

The group has a strong record, with profits more than quadrupling since 2022. Expedia also has strong operating margins, with a return on capital employed of more than 30%, allowing it to raise dividends and buy back $5 billion of shares while growing sales at a double-digit pace. Despite this fast growth, Expedia appears relatively cheap, with the shares on only 12 times 2027 earnings.

Investors' confidence in Expedia seems to have recovered: the stock is up 33% from its low of early 2026, and is now close to its 52-week high. It is are also above both its 50-and 200-day moving averages. I would therefore go long on Expedia at the current price of $268 at £9 per $1. Put the stop-loss at $168, giving you a total downside of £900.

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Andy Burnham has appointed John Healey, the former defence secretary, as chancellor. It was certainly a surprise. Home secretary Shabana Mahmood had been seen as a certainty for the job at No. 11, but at the last moment The incoming prime minister, appointed Healey instead. The markets were relieved. Given that the potential alternatives were Ed Miliband or Angela Rayner, that is not saying very much.

Still, at defence, and as a former minister in Gordon Brown's Treasury, John Healey carved out a reputation as a tough and effective minister. For now investors will trust him to stick to the fiscal rules and at least make some efforts to control the huge rise in public spending. The choice is better than could have been hoped for a few weeks ago.

The trouble is, Rachel Reeves has left behind a dismal inheritance. After less than two years in office, growth has stagnated, real wages are stuck, investment has been crushed, retail, hospitality and manufacturing have been suffocated by higher taxes, and unemployment has begun to steadily rise. Meanwhile, borrowing is starting to run out of control, overshooting even the £70 billion increase planned in Reeves's first Budget, and the cost is rising all the time, with the country now spending £125 billion a year on debt interest alone.

If Healey is to have any hope of fixing that and saving the government from a financial crisis, he will have to make it clear he is making some decisive changes and is willing to make them right away. It won't be easy. But here are three places he could start.

1. Schedule an early Budget

To begin with, he should schedule a Budget for early September. Parliament can always be recalled for a few days if necessary. One of the worst mistakes Reeves made was to allow months of speculation about which taxes might go up. It will be even worse under Burnham, who is at his happiest when pandering to the free-spending wing of his party. A wealth tax? A steep rise in capital gains tax? A lower threshold for the mansion tax? A land value tax? Each time one or other option is floated in the media, assets are sold or reorganised to try and minimise the impact. It damages the economy, and you don't even raise any revenue. The best thing John Healey could do is to set out what his plans are as quickly as possible. At least that way, all the damaging speculation would be brought to an end.

2. Stop battering businesses

Next, John Healey should call off the war on wealth creators. He should make a big speech within the next few weeks praising entrepreneurs, start-ups and small businesses. Another big mistake Reeves made was to relentlessly batter businesses, and new small businesses in particular, with an endless series of levies, charges and new rules. She made them feel that their staying in business was not worth the effort, and increasingly that feeling was unfortunately justified. Apart from the increase in employers' national insurance, none of them raised very much money, and they all crushed the life out of companies. Instead, Healey should offer one major concession such as restoring the 10% rate of CGT for entrepreneurs or exempting family businesses from inheritance tax. It would hardly cost anything and would send out a signal that enterprise was back in favour.

3. Reform welfare spending

Finally, John Healey must start making serious cuts to welfare spending. We don't have any real idea what Burnham's plans are, but they will be expensive. A lot more money will have to be found from somewhere – not least for defence given Healey's previous stand on this issue – at a time when the government is already breaking through its borrowing limits. Welfare spending is already projected by the Office for Budget Responsibility to go above £400 billion by 2030, and given the rate at which it is rising, may well go much higher.

Unless that can be controlled, the country faces endless tax rises, with no improvement in services and with no money left to do anything else. Welfare will simply consume every spare penny. At defence, John Healey showed he is capable of tough decisions and doesn't mind confronting his party. He will have to do the same as chancellor – he had better make a start from the very first week.

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The ‘active versus passive’ debate is one that has raged for over two decades, with one investment style broadly dominating the other at any given time.

Active fund management relies on a skilled stock picker to select the investments for the portfolio. These carry higher fees and, in theory, ought to deliver better returns than simply tracking an index. But the ongoing trend of passive fund outperformance is calling this into question.

The spirit of diversification suggests rather than an either/or approach, a blend of the two is sensible, bringing together passive (or index-tracking) strategies to perform one job in a wider portfolio complemented by a few actively managed investments performing their own specialist roles.

Yet recent research by AJ Bell suggests the case for active management is increasingly hard to support.

The research, published in the investing platform's latest Manager vs Machine report, found that just 42% of active funds outperformed a passive alternative during the first half of the year.

Which active funds struggle to keep pace?

Some bright spots emerged over the six-month period, appearing to divide developed and emerging markets.

While only 22% of global active funds beat their average passive equivalent, UK-focused actively managed funds fared even worse; just 19% beat their passive peers in the first half of 2026.

“Fund managers with a global equity remit have a vast universe from which to find the best opportunities. Sadly, it looks like many were fishing in the wrong places,” said Dan Coatsworth, head of markets at AJ Bell.

He said the handful of global equity managers that outperformed did so by a significant margin but overall the data was a “huge embarrassment for the active fund management industry”.

Global trackers, according to Coatsworth, have become the default choice for first-time investors. “Low costs and broad exposure to companies around the world make them easy-to-understand investment products. For some people, that’s all they need.”

The issue wasn’t just a short-term concern. He said the five and 10-year data suggests persistent underperformance of active global equity funds.

“Part of the problem is down to market concentration, with global indices heavily driven by a handful of stocks dominated by the technology sector. Any manager with less exposure to these blockbuster names than the global benchmark might have struggled to outperform.”

The MSCI World index, for example, has more than 1,200 constituents but the top 10 account for more than 25%.

How have other active fund sectors fared?

Conversely, almost two-thirds of active funds from the Asia Pacific ex-Japan (65%) and Global Emerging Markets (63%) sectors beat their passive counterparts.

With 42% of active funds outperforming in the first half of 2026 – the same reading as a year earlier – it’s no wonder passive funds are grabbing investors’ attention, said Coatsworth.

“We’ve had yet another six-month period where a large chunk of professional stock pickers failed to deliver the outperformance they’re being paid to do.”

Several factors are often at play.

In the report, Coatsworth flagged how certain sectors – such as gold mining, defence, pharmaceuticals and biotechnology – that were stronger in 2025 lost momentum in the first half of 2026. “Active managers might have been caught out by the rotation and didn’t move fast enough, or they were simply parked in the wrong sectors to beat their passive counterparts,” he said.

Dan Cartridge, fund manager at Hawksmoor Fund Managers, cited an academic paper that shows average active fund management performance started to decline after 2010, when passive funds grew from 19% market share to 50% market share.

He described how declining fund manager performance wasn’t necessarily down to declining skill.

The paper, by Hannah Unterberg of University of California’s business school, suggests that hefty flows away from active management into passive are contributing to the underperformance of the actively managed funds, causing a significant ‘headwind’ for active managers.

Picture it like this: if money moves out of an active fund into a passive one, the manager of the active fund needs to sell some holdings to honour those withdrawals. The likelihood is that the holdings they’re selling will be their favoured (but less popular) stocks. These will likely be the same stocks that gave them an ‘edge’ previously, in terms of performance.

Irrespective of whether you invest passively or actively, Cartridge said it was about understanding what you own and the risks you’re taking.

His team’s flagship multi-asset fund, Hawksmoor Vanbrugh, launched in 2009 and has beaten a typical 60/40 equity/bond passive mix since inception, despite the “apparent structural headwind”.

Cartridge added: “We champion a blended approach. No one has solved investment, and styles and approaches come in and out of favour.

“Despite the 15-odd years where passive has performed well, that doesn’t mean it will continue indefinitely. There have been long windows over the past 15 years where active funds have performed well.”

Does the asset class matter, when choosing active or passive?

When it comes to fixed income, specialist consultancy Fairview Investing only really uses passive for US Treasury investments. Ben Yearsley, investment director, said: “I don’t really believe in passive management for corporate bonds because you’re basically just rewarding the biggest debtors. I typically believe in active for corporate bonds, complemented by passive for government bonds.”

In equities, certain markets generally lend themselves better to index investing. The larger, more liquid, more widely researched a market is, the less chance an active manager has to discover price discrepancies or hidden gems that aren’t widely known by their peer group.

Active managers typically struggle to beat a US large-cap index, whereas smaller and mid-cap stocks tend to offer a better hunting ground for active stock pickers – in any market, not just the US.

Elsewhere, he says Europe is a better landscape for active stock selection, given its national diversity; by industry, economics, regulation and corporate culture.

Fairview takes a blended view, typically using a passive core, with more specialist active satellite positions.

Cartridge concurs, saying the point of adding active positions is to do something you’re not already getting exposure to in your passive investments, otherwise you’re just doubling down and duplicating positions.

Investors in Japanese stocks – like investors everywhere – need to be alert to concentrated exposure to the AI story. Over the past few months, it has gone from important to indispensable.

Wherever you look, the stocks that are doing best are linked to AI demand, while those that are AI-agnostic or an “AI loser” are mostly lagging. The emerging markets index is now trading like an AI play, due to TSMC, Samsung Electronics and SK Hynix, but this is by no means the only example.

Among Japanese stocks, the top performers are firms such as Kioxia, a chipmaker that soared from ¥1,455 when it floated in December 2024 to a high of ¥112,700 in June. Other big hitters include tech conglomerate Softbank and firms involved in chipmaking and testing such as Advantest, Murata Manufacturing and Tokyo Electron.

Implausible-sounding companies such as food-seasonings firm Ajinomoto and toilet manufacturer Toto have also been carried along: their core businesses make them leaders in materials that play a role in the chip-supply chain.

Japanese stocks have made a strong start to the year

“The result has been an unusually narrow, yet powerful market,” note Alex Bowles and Brett Moshal of the Japan equity team at asset manager Orbis. As of the end of June, the Topix index has made a strong start to the year (up 19%), yet only a third of Japanese stocks have beaten the benchmark. A basket of 67 AI companies accounts for 14 percentage points of that return.

This has been a headwind for any investors underexposed to AI, although Bowles and Moshal argue that it is also creating contrarian opportunities. They point to Nintendo, which has halved amid fears of a memory crunch hurting hardware sales in the short term, but also the threat that AI poses to its competitive advantage in game development. This is overdone given the strength of Nintendo's intellectual property, they argue.

Foreign investors held back by a weak yen

Diversification between regions may not be much protection if the AI boom ends badly. That said, for now, the market is still doing well, and the drag for foreigners is the currency.

The yen keeps weakening and now stands at ¥163 to the US dollar and ¥218 to the pound. There has been little sign of this bottoming out, notwithstanding talk of “appropriate and bold action” by the finance minister this week. The result is that Japan has become one of the cheapest developed-market countries to live in, note Jim Reid and his team at Deutsche Bank. In purchasing power parity terms, with price levels measured on the basis that the US is 100, Japan now comes in at 60; in 2012 it was at 125.

In theory, the yen is deeply undervalued. Yet this has been near-consensus and it keeps sliding. Our exchange-traded fund (ETF) portfolio is invested in Japan through Vanguard FTSE Japan (LSE: VJPN) and this has done fine, but clearly a currency-hedged ETF would have done better. We are sticking with the unhedged position since we expect the yen to rally eventually – but iShares MSCI Japan GBP Hedged (LSE: IJPH) or UBS Core MSCI Japan hGBP (LSE: UB0D) are other options to cut the risk it falls further.

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“These mountains to the right are the northern tip of the Alps, and they are actually in Germany. And over there is the Eagle's Nest, a chalet perched on a mountaintop, which was Hitler's 50th birthday present.” We are getting a history and geography lesson from our taxi driver as we set off from Salzburg airport. Our children, aged seven and nine, have never seen the Alps before or visited Austria or Germany, so this is a triple whammy of excitement. The scenery and clean mountain air as our people carrier climbs ever higher is a welcome break from the London heatwave we have escaped.

Our destination is Moar Gut, a family resort an hour from Salzburg, set against the breathtaking backdrop of the Hohe Tauern National Park. It's early summer, and my husband and I take in the big blue sky, lush green mountains, traditional chalets, the sound of cow bells as livestock wander around, and pretty wildflowers. Look closer and you'll spot ponies, tractors, rivers and waterfalls – a rural idyll if you will.

The hotel continues this theme with its swimming lake, riding stable and organic farm. Family-run by the Kendlbacher family since 1995, Moar Gut is a ten-hectare, car-free resort, blending luxury with nature. It offers activities all year round. In the warmer months, that means swimming, cycling, hiking, archery, horse riding and tennis.

We check into our stylish suite, which has a Scandinavian feel with wooden ceiling and floor, and a kids' bedroom with bunk beds. And then, we're off to explore. First, a swim. We jump into the lake. It's certainly refreshing. Our daughter spots tadpoles, and I take a moment to admire the yellow irises, woodland geraniums and sea thrifts growing nearby.

To warm up, there are two heated pools – one inside and one outside. Our son enjoys the family sauna and the steep, metal wasserrutsche – a pure adrenaline rush of a water slide. Later, we sign the kids up for archery, and my husband and I relax in the adults-only spa, switching between the whirlpool and steam room.

Family friendly fun at Moar Gut

There's plenty to do here, and the resort feels friendly and safe, meaning our children wander off to pet the rabbits, play basketball or hang out in the teenagers' den with video games. There's trampolining too, and a gym plus yoga and reformer pilates classes for the grown-ups.

Moar Gut aims to be perfect for intergenerational families and we meet one from southeast England with three generations ranging in age from five to 85. It is their third visit. It has got busier each time, they tell me, and now there are more British families (the secret is out, perhaps!), but they still love it.

It is our first time, and I think it feels exclusive with impeccable service. There are 46 family rooms and two double rooms and 110 staff. This means whether you want to ask someone about the best hiking routes, find out whether there's peanut in the dessert (our daughter has an allergy), or order an Austrian sparkling wine or even a cigar in the evening, you can always ask.

The resort is full-board with breakfast and lunch buffets, and a gourmet à la carte dinner for the adults (the kids get a buffet). Guests can order extras at a price, such as escargots, oysters and fondue.

At lunch we try traditional fare such as mushroom goulash and beef broth. Our son loved the beetroot dumplings with pesto and goat's cheese, while our daughter had second helpings of the farmhouse doughnuts with apricot jam. There's also fish fingers and pizza, which should suit the fussier kids, and a baby bar with freshly prepared purées.

The childcare is excellent. The kids' club is open from 9am to 9pm for those ranging from 30 days' old to teenagers. Our kids make some friends on an afternoon picnic for those aged seven and up, and meet up again the next evening for a mocktail-making session.

There's enough to do in Moar Gut, but we were keen to see more of the national park (Austria's oldest and biggest), so we headed out on a 1.5-hour guided waterfall hike. My smartphone quickly filled up as I took dozens of photos of the eye-popping scenery. If our holiday had been a film, it would surely be The Sound of Music with a dash of James Bond. The hills were, indeed, alive, and very beautiful. But inside Moar Gut there were 007 moments, such as the underground labyrinth connecting the buildings and some of the interior design. Think masculine luxury with sweeping curves, charcoal walls and expansive floor-to-ceiling glass. The car park full of black Audis added a certain Bond villain touch too.

Our stay was drawing to a close, and we all felt well-rested and well-fed, but also energised by the magic of Moar Gut and its extraordinary Alpine setting. If you're looking for somewhere a bit fresher this summer, a respite from hot, sticky cities and sweltering beaches, this is a first-class choice for a family holiday.

Ruth was a guest of Moar Gut. From €630 for a double room and €2,800 for a luxury suite, including full board and childcare. Visit moargut.com.

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Could Andy Burnham’s leadership mark a shift in tone and pace for the UK’s beleaguered economy?

Business leaders hope so. Gregor Paterson, fund manager in the UK team at fund management group Amati Global Investors, highlights that the new prime minister ought to have the expertise on hand to do so.

“Burnham himself has a lot of experience, and has a pretty heavyweight team of advisers around him,” says Paterson. “He must be aware – as we all are – of how much Keir Starmer’s team struggled to get the economy moving, and you’d hope that he has a plan.”

The sense of urgency is critical. One key frustration with the previous government was the lack of clarity around policy direction, especially around the Budget.

“Businesses weren’t able to hire, expand or build because they didn’t know what was coming,” Paterson says, pointing out successive delays around fiscal events, whereas Burnham already looks to be moving at pace.

“It looks like he’s putting his team in place and keen to get things moving much more quickly than might have been the case if there had been a messy leadership battle.”

To the business community, speed and clarity are essential for planning – not merely political virtues. There is a deeply felt need for a credible and ambitious growth strategy.

Anna Leach, chief economist at business leaders’ professional body the Institute of Directors (IoD), says some elements of the previous government’s approach were well-intended but overshadowed by uncertainty.

“We need a better industrial strategy and it all needs to be done a bit more quickly and at a grander scale,” she says.

Infrastructure is a key area of focus

Leach would welcome a clearer long-term framework that gives companies the confidence to commit capital, hire staff and expand their operations.

Planning reform and infrastructure investment should form two central pillars of a growth strategy and she supports Burnham’s ambitions for a more balanced economy.

“A regional growth agenda and devolution are really good ideas. There’s strong economic evidence that – if well-designed – these can deliver strong growth and help draw in private sector investment,” she adds.

But execution will be key.

“It does come down to design because while Manchester looks like it has been successful, I don’t think one could look at Wales and Scotland and say that devolution has unleashed any animal spirits in those two regions.”

Job market dynamics are another area of concern. Cost pressures have intensified, the jobs market has cooled, hiring is declining and vacancies are falling. This all raises questions over how to meet conflicting priorities.

“We want to see how we shape the labour market in a way that balances everybody’s needs… because at the moment things are looking a little bit risky, particularly when you layer in artificial intelligence,” says Leach.

All eyes on Burnham’s tax policies

Given the £3 trillion debt burden, the key question is one of tax. For many in the business community, their immediate wish is not further reform but stability, with uncertainty particularly acute around the non-domicile regime.

“The constant speculation about what tax increases should fall on wealth creators, following big tax increases on businesses themselves, is all detrimental to private sector investment,” adds Leach.

She also highlights the cumulative effect as the business tax burden has been creeping up in successive budgets.

“In the near term… more certainty and a lack of vilification of business would be pretty pleasant to start with.”

Darius McDermott, managing director of investment platform Chelsea Financial Services agrees; he’s a clear believer that if you overtax the wealthy, they will leave the country, shrinking future potential tax revenues.

“If additional rate taxpayers face a 1% increase, I don’t expect you’d see a huge outcry. But if it goes up to 60% over a certain number, then I think you’d see a lot of unhappy wealthy people,” he says.

Markets rely on confidence as well as policy

From a market perspective, the challenge is not just policy design but sentiment.

According to Anna Macdonald, investment strategy director at Hargreaves Lansdown, the UK needs a “credible, investment-friendly plan for economic growth, alongside clarity and stability on tax”, otherwise investors will remain hesitant.

“Constant speculation, including around capital gains tax, risks making people more cautious about moving their money from cash into long-term investments, at precisely the moment when the UK needs more people to invest for their future.”

Critics of Starmer say that Labour was voted in on the promise of growth and change, but it soon emerged he didn’t have a clear plan to achieve it.

“What markets want to see is how we're going to start to grow the economy and grow productivity. We thought the answer to that previously was going to be in housebuilding but that didn’t really materialise,” adds Paterson.

“When you have such high levels of debt, you have to grow your economy. And I think neither people nor businesses feel confident enough to invest – hire people, build factories and expand.”

It’s early days, but if Burnham can shift the mindset, his impact could be significant.

“If he can inject some confidence back into the system, then people and businesses will hopefully start to react,” adds Paterson.

One move that would encourage investors towards UK companies is if the new administration were to lower the rate of stamp duty reserve tax on most UK-listed stocks and shares.

Currently investors directly purchasing more than £1,000 of UK-listed shares, unless they were newly listed or traded on the Alternative Investment Market (AIM) – even inside an ISA – would need to pay 0.5% stamp duty.

“If you were to buy Tesco shares to put in your ISA, you’ll pay half a percent tax when you buy those shares, but if you buy Walmart shares, you won't pay any tax,” Paterson says.

Scaled up, those amounts soon mount up. He says as well as eroding returns, the UK could be putting itself at a disadvantage compared to other markets.

“It’s something most markets don’t have. The French do, but it's only 0.3% and it’s only on the very largest companies. So we're a bit of an outlier in charging people to participate in our stock market.”

Which investments could benefit under Burnham’s government?

John Healey being named chancellor was the big announcement many of us were waiting for.

He stood down as defence secretary on 11 June in protest over insufficient funding of the country’s defence strategy; he’d been calling for a defence budget of 3% of GDP by 2030.

Healey’s appointment saw a bounce in some defence names. Babcock International Group (LON:BAB) jumped roughly 7% following the news and BAE Systems (LON:BA.) was also up around 3% the following day. Both share prices climbed further over the next few days.

While it remains to be seen which defence companies are the specific longer-term beneficiaries, the sector as a whole will be a clear structural winner, according to McDermott.

He says: “The increase in spend isn’t over one year; it’s a multi-year increase. We may see the investment into companies from other countries, the US or elsewhere, but I think European defence, of which we’re obviously a subsector, is likely to see a decent amount of growth over the next decade.”

As always, individual investors should try to avoid overreacting to political headlines or any market noise as the new government sets out its plans.

“Changing a long-term investment strategy in response to a change of chancellor can easily do more harm than good. Staying invested and focused on long-term goals remains the most sensible approach,” says Macdonald.

Inheritance tax planning is becoming increasingly important as pensions will fall into estates for inheritance tax (IHT) purposes from April 2027.

As the government looks to cut off a typical avenue for transferring wealth, an estate planning tactic could boost your loved one’s pension pot while reducing inheritance tax liabilities.

You could make use of several gifting allowances, but gifts of any size made to someone through “surplus income” are also exempt from IHT, even if you die within seven years of making them.

Sarah Coles, head of personal finance at investment platform AJ Bell, said: “If you’re taking an income from a pension, regular income payments, including those from annuities or drawdown arrangements, are generally considered income, so can be given away under this rule.”

This means you could withdraw money from your pension and regularly gift money to your child or another loved one to add into their pension.

The added bonus is that the person receiving the money can then claim pension tax relief when putting it into their pension pot.

You may have to pay income tax on the pension withdrawals, but it could save your loved ones from a larger inheritance tax bill, and possibly income tax, down the line, particularly when pensions fall into an estate for inheritance tax purposes from April 2027.

Financial adviser Lisa Conway-Hughes said this is a way of building a family inheritance tax plan and “moving the pension down the generations”.

What gifting out of ‘surplus income’ is – and how to get it right

You have to meet three conditions for a gift to be classed as having come out of surplus income:

• The gifts must be part of normal expenditure (you need to establish a clear, regular pattern of gifts)
• You have to be able to maintain a normal standard of living after making the gift (and avoid dipping into savings or investments to pay for it)
• The gift has to come from “normal” income. This includes pension, rental and dividend income.

Coles said you may not even need to have gifted regularly to qualify for the surplus income exemption.

She explained: “As long as your intention to give this money regularly is clear, and you’re giving it to the same people, for the same purpose, you don’t need to have established a long history of frequent, regular gifts.”

In any case, it’s worth keeping detailed records of any gifts you’ve made, including those out of surplus income, to make it easier for the executors of your will, also known as personal representatives, to administer your estate.

Coles said: “It’s useful to complete HMRC’s IHT403 form as you go, so your personal representative dealing with your estate has the information they need.”

When giving away money from your pension, bear in mind the gifts out of surplus income exemption will only apply to money from regular income, such as regular pension withdrawals.

Ian Dyall, head of estate planning at wealth manager Evelyn Partners, said: “The funds must come out of regular pension withdrawals – and not, for instance, from taking 25% tax-free cash as a lump sum.”

It may be worth speaking to a financial adviser about estate planning strategies.

They will be able to help you calculate what you can afford to give away without leaving you short in the future and whether the tax savings are worth it.

Coles warned: “You need to take care not to withdraw too much from your pension, too soon, in order to make gifts: there’s no point beating inheritance tax and then running out of money in retirement.”

How an annuity could lower your inheritance tax bill

Another way to lower the value of your estate from April 2027 is to buy an annuity with part of your pension and use it to fund a whole of life policy written in trust, which can cover the cost of the IHT bill upon your death.

Dyall, from Evelyn Partners, said: “The annuity payments are liable to income tax, but after age 75 income tax on the pension is pretty much inevitable, it’s just whether you pay it or the beneficiaries.

“The life assurance premiums are usually immediately exempt from IHT due to the normal expenditure exemption.

“The criticism of annuities is that if you die young the money is wasted, but here if you die young, although the annuity is in some sense ‘wasted’, the life assurance pays out after only a few premiums, so you effectively win either way.”

Andy Burnham, the UK’s new prime minister, is never going to be popular with everyone – but this may well be his hardest lesson.

It’s clear he wants to be a superhero prime minister – the hero of UK politics who speaks without a lectern (signifying no barriers) and someone who wants to give power to local authorities rather than just the Number 10 powerhouse. In his words, he “wants to bring back hope” as he attempts to fix the broken political system and the UK economy.

And as such, welfare appears to be at the core of what Burnham wants to achieve by putting an end to rough sleeping, introducing more council homes, and providing more help for young people to end the growing NEET (Not in Employment, Education or Training) crisis. In recognising the cost of living pressures, he pledged breathing space, which has included axing the 5% VAT from electricity bills from October and capping bus fares outside the capital at £2. He’s also announced a 20% cut in business rates for pubs, clubs and music venues from April, though not all hospitality venues are included.

But are his moves bold enough? Removing VAT on electricity bills is estimated to save families around £45 a year, but amounts to a 12p saving per day. The reality is most people will not feel the benefit, especially as average household energy bills are around £2,000 per year.

The bus fare cap is useful for regular bus users, saving around a third off single journeys for many. But households that rely on their own transport are still subject to high prices at the pumps – petrol prices have shot up from around 133p at the start of this year to 151p on average now, the RAC Foundation shows. In the meantime, there is uproar over the £26.2 billion in profits made by energy companies since the start of 2026, according to the End Fuel Poverty Coalition.

You’d be forgiven for calling these measures tokenism, and perhaps that’s all it really is as he figures out how to tackle the bigger problem of reducing government debt, improving the economy and making Britain a great place for investors once again.

But what can we expect to see, and can he, alongside his new chancellor John Healey, deliver on the big issues?

What can Burnham do to boost the UK economy?

Tackling labour productivity would be key. UK productivity has been at a low since 2008, but it is the foundation of economic growth and can improve living standards as it promotes stronger wage growth, too.

Hear more about the UK's growth problem as economist Julian Jessop talks to MoneyWeek’s Andrew Van Sickle about the UK's productivity problem in our latest podcast.

Related to productivity and growth is the burgeoning NEETs issue. We cannot afford to let the young generation become a lost generation. Financial advice and wealth management firm St James’s Place estimates that youth unemployment costs the government £125 billion. It is an area Burnham must absolutely focus on. Plus, let’s not forget, without young people in the work system, there is no one funding future state pension payments – today's workers pay for today's pensions.

Speaking of pensions, there are also heavy calls for Burnham to scrap the changes to salary sacrifice pension rules. As of next year, only the first £2,000 of salary sacrifice contributions per employee will be exempt from National Insurance contributions.

That, plus changes to inheritance tax (IHT) rules which will bring pensions into an estate for IHT purposes from April 6, 2027, do little to encourage pension saving.

Age UK claims 1.9 million pensions live in relative poverty and is estimated to cost the government around £10-£15 billion, according to Pensions UK. Simplifying pensions and encouraging savings will be vital, rather than adding barriers that undermine retirement savings.

Care should also be on his mind as an ageing population is also looming and quite possibly the next big crisis to face the UK.

Taxes

While Burnham has ruled against making any changes to the frozen tax allowance, which has stood at £12,570 since 2021, there are calls for the new chancellor to address this in the Autumn Budget.

A £500 increase in the personal allowance would cut income tax bills by £100 for basic rate taxpayers, and could cost the government £5 billion, AJ Bell estimates. Resoring it to £16,000, which is where it could be without the freeze, would cost the government around £35 billion, the investment platform says.

Could a cut to the National Insurance rate be a better alternative to take the pressure off household finances? Employees currently pay 8% in National Insurance on earnings between £12,570 and £50,270 (the rate is 6% for self-employed profits) and the rate is 2% above the upper earnings limit.

AJ Bell says that cutting each main rate by 1% would cost the government £5.8 billion, but would give workers more breathing space and it would certainly not be seen as just a token gesture; someone earning £35,000 a year could save around £225, compared with a £100 tax saving from a £500 increase in the personal allowance.

Backing British

Former chancellor Rachel Reeves was incredibly keen to get investors backing British companies, so much so, she reduced the cash ISA allowance to £12,000 for under 65s in a bid to shift savers into investing instead. This limit, taking effect in April 2027, will only apply to cash ISAs – and the overall £20,000 ISA allowance remains. Reeves even decided that cash holdings of any kind, such as money market funds, could not be part of a stocks and shares ISA. If any cash is parked in a stocks and shares ISA, interest earned will be taxed.

While in government in the past, the Conservatives proposed a British ISA, an idea that never truly came to fruition.

I don’t think either of these policies would encourage savers to suddenly invest more and in British companies specifically. So, what will Burnham do? Can he save the UK stock market?

I think policies that undermine saving, instead of encouraging it, are bound for failure.

Addressing speculation about hikes to capital gains tax is needed if he is to encourage investors, and if he can also restore political stability, there is a chance the UK stock market could thrive. But to do this, he will have to find a fine balance between public spending and fiscal policies.

Can he do it? It is early days as we wait to see his final 10 year plan. That and Healey’s Autumn Budget will be ones to watch closely as this could really be Labour’s final opportunity to show it can change fortunes, fix politics and bring back stability to the UK.

Technology, and its ever-present subsector artificial intelligence (AI), are perhaps the hottest topics in investment – and have been for several years.

Information technology officially accounts for 32% of the MSCI ACWI Index. Yet in reality, what we’d all intuitively think of as ‘tech’ companies account for a greater proportion of this, since MSCI officially designates companies like Alphabet, Amazon, Meta and Tesla into industry sectors other than information technology.

This concentration brings risks with it. Passive tracker funds act to condense stock markets into the biggest names, and investors therefore run the risk of being over-exposed to the sector – which can exhibit volatility when times get tough.

There is also the intensely competitive nature of tech growth to contend with. Nascent, disruptive technologies like AI can create as many losers as winners, if not more. Knowing which stocks to invest in can be difficult, even for the professionals.

An investment trust – which is by definition actively managed – has the potential to mitigate some of these risks, and the vehicles offer some structural advantages too.

“The closed-ended nature of investment trusts makes them well-suited to technology investing,” said Alex Trett, investment trust research analyst at Winterflood Securities.

“The permanent capital allows managers to take a genuinely long-term approach, supporting investments in private companies and giving them the patience to see investment theses play out over time.

“The structure can also facilitate exposure to smaller-cap technology businesses, where liquidity can be a constraint for other investment vehicles. In addition, it enables managers to build concentrated, high-conviction portfolios, allowing them to express their strongest investment ideas.”

Here’s six of the best-known investment trusts that can offer you exposure to some of the world’s most innovative technology companies.

Scottish Mortgage

Just as many ‘big tech’ companies aren’t designated tech, one of the biggest investment trusts that many people think of as ‘tech-focused’ isn’t actually a technology trust.

Scottish Mortgage (LON:SMT) aims to own “the world’s most exceptional public and private growth companies”. As it happens, a lot of these are tech companies, but the trust emphasises that its focus is on long-term growth potential, whatever sector that may be in.

Still, buy Scottish Mortgage now and you’ll get a lot of tech. As of 30 June, SpaceX accounted for over 25% of the portfolio, followed by Taiwan Semiconductor (6.4%), Nvidia (5.0%) and TikTok’s owner Bytedance (4.2%).

ByteDance and, until recently, SpaceX have exemplified part of the appeal of SMT: its ability to hold private companies alongside publicly listed ones, tapping into the future growth potential they offer. The heavy weighting towards SpaceX is largely a consequence of this and its recent initial public offering (IPO); Trett expects the position to be trimmed once lock-up periods permit.

^{Source: Association of Investment Companies, as of 21/07/26.}

Polar Capital Technology

Polar Capital (LON:PCT) has focused its approach on the hardware and infrastructure underpinning the buildout of artificial intelligence (AI).

“The managers believe these areas offer greater earnings visibility and forecastability, with semiconductors representing the largest exposure at 44% of the portfolio, followed by equipment, components and storage including Advanced Micro Devices and LAM Research,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

Allianz Technology Trust

All of these trusts are listed in the UK, but Allianz Technology (LON:ATT) is distinctive in having its management team based in San Francisco, giving it close access to many of the companies in its portfolio – approximately 90% of which is allocated to North America, as of 30 June.

“The portfolio provides broad exposure across the technology and AI ecosystem,” said Trett.

“The managers have highlighted the role of technology in creating differentiation across a wide range of industries [and] believe the AI opportunity is continuing to broaden beyond the initial infrastructure buildout, supporting a more diversified and durable phase of growth across the technology sector”.

^{Source: Association of Investment Companies, as of 21/07/26.}

Schiehallion

Like Scottish Mortgage, Schiehallion (LON:MNTN) is managed by Baillie Gifford and, depending on how pedantic you’re feeling, isn’t technically a technology investment trust.

But it has an interesting focus on early-stage companies – even more so than SMT, given that it invests in later-stage private companies.

“While not a dedicated technology fund, technology represents around 47% of the portfolio, with holdings including Anthropic, Bending Spoons, SpaceX, ByteDance and Databricks,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

Herald Investment Trust

Again, Herald Investment Trust (LON:HRI) technically belongs in the Global Smaller Companies category, but it has a strong focus on technology and communications companies.

It was the subject of a bid from Saba Capital Management to displace its board, which led to a tender offer and for the trust to become part of Aberdeen.

Trett picks out Super Micro Computer, BE Semiconductor Industries, Celestica and Fabrinet as among its key holdings.

^{Source: Association of Investment Companies, as of 21/07/26.}

Manchester and London

Some people use investment trusts to diversify away from big tech concentration. Manchester & London (LON:MNL) is an investment trust for people that want to lean into it.

The fund takes a concentrated approach to investing and predominantly holds large-cap stocks, with AI a high-conviction play for the managers.

“The fund’s concentrated portfolio allows it to hold significant positions in its preferred ideas; Nvidia represented 43.6% of net assets in January before being subsequently reduced to 9.0% as at 30 June,” said Trett.

^{Source: Association of Investment Companies, as of 21/07/26.}

High street banks and building societies have been battling it out with challenger banks such as Monzo and Starling, but Nationwide is fighting back by leveraging traditional roots with more presence on the high street as it pledges to open more branches with customer facing services.

Plus, its attractive Fairer Share scheme, which has consistently paid a £100 bonus to loyal customers for four years and shares profits with members, is popular.

You’ve more than likely seen the Nationwide adverts of Dominic West playing the pompous and out-of-touch chief executive of A.N.Y. Bank.

But behind the light-hearted campaign, Nationwide is winning the hearts of current account holders, bagging 65,000 new customers in the first quarter of this year, according to the latest available figures from the Current Account Switch Service.

In comparison, Barclays, which plans to close 166 branches in 2026 and 2027, bagged 18,500 new customers. Lloyds netted just 12,000 new customers; it has closed 397 branches since March 2022.

At its annual general meeting earlier this month, Dame Debbie Crosbie, chief executive officer of Nationwide, said the building society was “thinking carefully about whether there are any spots where it would make sense for us to open new branches”.

“I can say that it's currently under review, and there may be a few locations that we identify the need for a new branch,” she said.

Tom Riley, group director of retail products at Nationwide added that customers were deciding to switch because “they can see the difference a large-scale mutual is making”.

Nationwide’s £175 switching sweetener, paid to eligible new customers when they move current accounts, has also helped the bank gain new customers.

Nationwide’s pledge to keep bank branches open

Banks have justified closures saying customers are increasingly carrying out transactions online, but charities have warned they risk leaving the elderly and those living in rural communities in danger of financial exclusion.

Nationwide is bucking this trend and through its “Branch Promise” has pledged to not close any more branches until 2030 at the earliest.

The building society had initially committed to keeping its nearly 700 branches open until 2028, but extended the pledge in November 2025.

Martyn James, personal finance and consumer rights expert, said Nationwide’s commitment to the high street was an “astute move”.

He said: “Vast numbers of people need an actual branch to go into, including the millions of carers for vulnerable people, small businesses that take cash, people with specific needs or vulnerabilities and people who just don't like online services.”

How other building societies and banks are pledging to keep branches open

Other building societies are also following Nationwide’s ambitions.

Newcastle Building Society is growing its branch network, opening a new site in Guisborough, North Yorkshire, in April.

The building society says it has invested more than £12 million to grow and improve its network of branches since 2015.

In July, Cumberland Building Society pledged to keep all its 31 branches open as it looks to prevent the decline in the high street.

Andrew Gall, head of savings, consumer and insight at the Building Society Association, said: “Building society branches continue to play an important role because they offer something many customers still value: trusted, face-to-face support alongside digital and telephone services.”

In recent months, major banks have also made pledges to keep bank branches open and invest in their existing branch networks, recognising that customers possibly value it more than previously thought.

In July, Santander, which owns TSB, announced it would not close any more of its 480 branches before 2028 at the earliest.

In December 2025, HSBC promised to keep all its remaining sites open until at least 2027.

Fairer Share payment

Nationwide paid over four million customers a £100 “Fairer Share” payment in June this year – the fourth consecutive year it had made the payment since 2023.

When the building society launched it for the first time four years ago, Crosbie said it was “part of our enduring commitment to rewarding our members”.

Vicky Reynal, financial psychotherapist and recent guest on the MoneyWeek Talks Podcast, said the appeal behind the Fairer Share payment was the surprise element, but also that it makes customers feel like they are part of something bigger in an “increasingly lonely and disconnected world”.

Reynal said: “The financial services industry has often suffered a perception from customers that their interests are with shareholders rather than account holders, so this handout feels to customers like a different positioning, like a bank that cares about its account holders.”

Biotech is one of the most innovative and fast-changing sectors of the stock market, with lots of areas where investors can find value.

It can be a tricky sector to define as the term is so broad. Biotech initially referred to firms using what we know about biology to help treat diseases. But now it's expanded into a more capital markets definition where many emerging, developmental stage companies that combine tech and biology are lumped together.

Biotech firms have long laboured under the unfair characterisation that they are all small, risky, unprofitable, and always going under.

But in the latest episode of the MoneyWeek Talks podcast, Ailsa Craig, fund manager of Schroders’ International Biotechnology Trust, tells Andrew Van Sickle, editor-in-chief of MoneyWeek, that this is far from the truth.

Craig suggests this prejudice may come from a time when many biotech firms were listed in London and failed. However, across the pond in the US, many of these firms have been great successes and some are even larger than well-known pharmaceutical companies.

“For example, Gliead and Amgen, are hundreds of billions in market cap. Glauco is $100 billion. So they are very much in the ‘big pharma’ pack, but are still named and classified as biotech for legacy reasons. So over in the US they have matured.”

“Many companies are still in clinical development – which we would call ‘white coat’ biotech – but many companies are mature, cash flow generating, high growth healthcare companies.”

At the same time as many biotech firms are now maturing, big pharma firms are also finding that patents for their drugs are running out. As the larger pharmaceutical companies are scared of losing revenue, they need to find new drugs to sell. This presents a tailwind for biotech.

Craig said: “Pharma is facing a wave of patent expiries much larger than we've seen before. Hundreds of billions of dollars in sales are going off patent in the next two to five years.

“They've got a problem – their internal R&D [research and development] productivity isn't great, so they're looking to biotech companies to fill that void of sales.”

For more on biotech, the future of weight-loss drugs, and how AI can impact the sector, listen to or watch the full episode of MoneyWeek Talks wherever you get your podcasts.

About the podcast

MoneyWeek Talks is a podcast that helps you unlock the secrets to financial success. Editors Kalpana Fitzpatrick and Andrew Van Sickle are joined by influential guests – from CEOs and entrepreneurs to economists and policymakers – to share their top tips on managing money, investing wisely and building wealth.

Subscribe to the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence.

• The Office for National Statistics (ONS) has released the latest UK Consumer Prices Index (CPI) measure of inflation data today (22 July).
• CPI inflation rose by 2.6% in the 12 months to June 2026
• This is a drop from 2.8% in May and April
• Ratesetters at the Bank of England will be watching closely to help inform its decision on whether to lower interest rates from 3.75%.

| UK inflation forecast | What is inflation? | When will interest rates fall further? | CPI release dates | MPC meeting dates |

Good afternoon. Welcome to our live coverage ahead of the Office for National Statistics releasing its latest monthly Consumer Prices Index (CPI) inflation data tomorrow (22 July).

The war in Iran had stoked fears inflation would rise, but it has trended downwards in recent months and held below 3% in April and May. What can we expect from the June data?

Stay with us as we bring you rolling build up commentary, as well as reaction and analysis after it is published.

What is the current rate of inflation?

The most recently-published data from the Office for National Statistics revealed prices rose by 2.8% in the 12 months to May 2026.

This was the same increase as in the 12 months to April 2026 and a fall from 3.3% in the year to March 2026, when the onset of the Iran war pushed up prices.

What could the June inflation data be?

Economists at research firm Pantheon Macroeconomics predict Consumer Prices Index inflation will slide to 2.6% in June.

Meanwhile, Deutsche Bank expects the CPI measure to slow to 2.7%, before rising after.

When is UK inflation data announced?

UK inflation data for the 12 months to June 2026 will be announced at 7am.

We will bring you live analysis and reaction to the ONS data tomorrow morning following its release.

What is inflation?

You’ll see the term inflation bandied about a lot, but not everyone knows what it means.

A third of Brits can’t give a definition of the word, according to recent research carried out by investing platform XTB.

So, what is inflation? Put simply, it’s a measure of how much prices have risen over a given time period.

For example, if you bought something for £1 and it was worth £1.05 a year later, the rate of inflation will have been 5%.

While prices going up sounds bad – and above a certain level it is – economists generally agree that a small amount of inflation is healthy for an economy.

This is why the Bank of England, like most central banks, targets an inflation rate of 2%.

What do you think inflation will be?

It’s time to get your predictions in. What do you think the inflation data tomorrow will look like?

Where has inflation been?

The CPI measure of inflation has trended downwards from a high of 11.1% in October 2022.

Back then, soaring energy and fuel prices caused by Russia’s invasion of Ukraine and a surge in demand for consumer goods as economies across the globe emerged from the Covid-19 pandemic contributed to much higher inflation rates.

The CPI measure of inflation fell to 1.7% in September 2024, but has remained over 2% since.

What does the Consumer Prices Index track?

The Consumer Prices Index of inflation tracks price changes across a basket of roughly 760 goods and services.

This basket is updated once a year to keep up with consumer trends. In 2026, houmous and WiFi light bulbs were added while premium bottled lager and Euro Tunnel fares were ditched.

The basket of goods and services is designed to reflect what the average consumer buys and uses in day-to-day life.

CPI is just one measure of inflation. For example, the Office for National Statistics also has a Retail Price Index.

We’re going to end our coverage for today, but join us again first thing tomorrow when we’ll bring you live coverage of the ONS data release and, of course, reaction and analysis on what it means for you.

Good morning and welcome back to our live coverage of the latest Consumer Prices Index inflation data.

The Office for National Statistics will be releasing the data at 7am, so stay with us and we'll bring you everything as and when it happens.

BREAKING: UK inflation fell to 2.6% in June

Lower fuel prices drive fall in UK inflation

UK inflation fell to 2.6% in June, from 2.8% in May, with falling petrol prices one of the significant contributors.

“A fall in motor fuel prices, particularly diesel, helped ease inflation in June,” said the ONS chief economist Grant Fitzner.

“Food prices fell this month, driven by products including chocolate, margarine and beef,” he added. “Clothing prices also fell with the start of summer sales, with bigger discounts than last year.”

Core CPI remains unchanged at 2.6%

Core CPI, which strips out energy, food, alcohol and tobacco prices (which are often more volatile than other categories), remained at 2.6% in the 12 months to June.

Meanwhile, the CPI including owner occupiers’ housing (CPIH) rose by 2.8% in the 12 months to June, down from 3% in the 12 months to May.

CPI inflation at its lowest level since March 2025

The CPI measure of inflation slowing to 2.6% puts it at its lowest level since March 2025.

It has stayed around the 3% mark since then, but economists believe it will rise over the coming months due to rising energy prices.

Sanjay Raja, chief UK economist at Deutsche Bank, said: “Expect a bumpy path with energy prices back on the rise. While we're nowhere close to the peaks seen during the height of the Iran conflict, the energy disinflation path remains uncertain.”

A deeper dive into the June figures

One of the largest contributors to the CPI measure of inflation slowing to 2.6% in June was a fall in the price of fuel, particularly diesel.

The average price of unleaded petrol, including VAT, fell from 159.48p per litre on 29 May to 155.89p on 15 June, according to the RAC.

The average price of diesel, including VAT, fell from 191.54p on 15 April to 176.77p on 15 June.

Grant Fitzner, chief economist at the ONS, said the cost of raw materials dipped for the first time since January, mainly due to the lower price of Crude oil.

Food and non-alcoholic drink price growth slowed to 1.7% in the 12 months to June also, down from 2.2% in May. The annual rate in June was its lowest since August 2024.

New chancellor John Healey still facing ‘notable’ inflation headache

Today’s figures, on the face of it, are positive, with inflation closer to the Bank of England’s government-set 2% target.

Suren Thiru, chief economist at the Institute of Chartered Accountants in England and Wales (ICAEW), however, has warned the July data could be more negative, in part due to a rise in energy bills.

The Ofgem price cap rose by 13% on 1 July, covering the July to September period, with the average dual-fuel household on a standard tariff seeing their bills rise to £1,862 a year.

Thiru said: “June’s slowdown is a false dawn as it may have already been reversed this month with higher energy bills, following Ofgem’s energy price cap rise, likely to have lifted inflation above 3%.

“Though stubborn services and core inflation suggest that the UK remains exposed to the inflationary fallout from the Iran war, weaker wage growth and a sluggish economy will help blunt any second‑round effects."

Thiru added: "Elevated inflation will likely become a more notable economic headache for the new chancellor in the coming months by deepening the cost‑of‑living crunch, while also squeezing his fiscal headroom, raising borrowing costs, and increasing financial market volatility."

What does inflation mean for your money?

Inflation figures published by the Office for National Statistics are backward-looking and reflect what people across the economy spend on everyday goods and services.

If the rate of inflation is rising, it means these goods and services have become more expensive.

It also means the value of your money is gradually being eroded in real terms as the same amount of money is worth less and less.

Why it’s worth looking past the headline UK inflation figure

Because the Consumer Prices Index measure of inflation is based on price rises across a basket of 760 goods and services, it’s worth looking past the headline figure to find out how inflation is affecting you personally.

Your experience of inflation will be different to someone else who buys different goods and uses different services.

For example, this month’s figures show a large drop in the price of diesel – if you’re someone who drives a diesel car a lot, you’ll notice a bigger change in your cost of living than someone who doesn’t.

The June figures show inflation across the restaurant and hotels sector rose to 4.4%, from 4.2% in May – if you’re someone who eats out a lot or travels across the UK a lot for work, you will have noticed a bigger dent in your budget relative to the average consumer.

What does the latest UK inflation data mean for interest rates?

The Bank of England’s Monetary Policy Committee (MPC) will be watching today’s inflation figures closely ahead of announcing its latest base rate decision on 30 July.

A drop in the pace of inflation in June would suggest the MPC is more likely to lower interest rates next week, however with fears inflation could rise in July, the MPC may decide to take a more hawkish approach.

Jeremy Batstone-Carr, European strategist at Raymond James Wealth Management, said the recent re-escalation in hostilities between the US and Iran will also “likely be on the Bank of England’s mind”, with upward pressure expected on prices over the coming months.

However, he added that the MPC would be wary of stimulating growth in the UK economy, with the latest figures showing GDP rose by just 0.1% in May.

A quick recap

If you’re just joining us, the key takeaway from this morning is that the Consumer Prices Index measure of inflation slowed to 2.6% in the 12 months to June, from 2.8% in May.

One of the main downward pressures on prices was a drop in the price of fuel, particularly diesel.

However, the drop is expected to be short-lived, with economists and experts warning inflation could tick upwards in July, partly due to a 13% rise in the Ofgem price cap.

What savers need to do now

It’s worth checking if you’re getting the best rate on your savings account – anything below the 2.6% rate of inflation and you’re losing money in real terms.

There are currently 1,960 savings accounts that beat inflation, according to data firm Moneyfactscompare, including 284 easy-access accounts.

If you’ve got emergency savings sitting in an account paying less than 2.6%, you should move them into one paying a higher rate.

Adam French, head of consumer finance at Moneyfactscompare, said: “For many savers, what matters most isn't whether savings rates rise or fall in isolation, but whether they stay ahead of inflation, and as things stand, they are doing just that and allowing many households to preserve or grow their purchasing power.”

Mortgage rates ‘likely’ to rise further despite lower inflation

David Hollingworth, associate director at mortgage broker L&C Mortgages, said recent rises in mortgage rates aren’t likely to abate despite today’s positive inflation data.

Mortgage rates have started increasing, in part, due to renewed tensions between Iran and the US, pushing up lenders’ wholesale funding costs.

Hollingworth said the June inflation data would be welcome news for borrowers and the fall could take some pressure off the Bank of England to raise interest rates in the near-term, but it is “likely” mortgage rates will continue to rise.

He added: “Borrowers shouldn't feel they have to panic, but they also shouldn't delay reviewing their options. Mortgage rates can move quickly, as we have seen over the past week, so anyone approaching the end of their current deal or planning to buy a home should consider securing a competitive rate sooner rather than later.

“Most lenders will still allow borrowers to switch to a cheaper deal before completion if rates ease again, giving them certainty now and flexibility if the market moves in their favour later down the line."

Do you think CPI inflation will rise in July?

Why prices are still rising despite inflation slowing

Despite the June data showing inflation slowing to 2.6% from 2.8% in May, prices are still rising, just at a slower pace.

And while the rate of inflation has dropped from highs of 11.1% in 2022, households will likely still be feeling the impact of higher costs built up since then.

Take one look at how much the price of the weekly grocery shop has gone up, for example. According to the ONS, cumulatively, food prices rose by 38.6% between November 2020 and November 2025.

How does the UK’s CPI rate of inflation compare to other countries?

The UK CPI inflation rate in June was lower than the EU’s, but higher than Germany’s and France’s.

France’s June inflation data gave a reading of 2% while in Germany CPI inflation stood at 2.4%. Across the EU, inflation was 2.9% in June, down from 3.3% in May.

Inflation above 2% target ‘deeply concerning’ for families, says Mel Stride

The shadow chancellor, Mel Stride, has said inflation remaining above the Bank of England’s 2% target is “deeply concerning” for families.

He said: "Labour's tax hikes and reckless borrowing stoked inflation, and Andy Burnham has already made billions of pounds of spending commitments without any plan to pay for them.

“[The] Conservatives are the only party that have set out a credible plan to cut spending, cut taxes and get Britain working again.”

When will the next inflation data be published?

The ONS publishes inflation data each month for the preceding month – that’s why the data released today covers the month of June.

The ONS will release inflation data for July on 19 August.

You can find out when the ONS is set to release inflation, GDP and wages data on its website.

We're going to end our inflation coverage here for today. Thank you for following, and visit our homepage for all the latest personal finance and investing news.

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