Landlords have been given fresh reasons to consider exiting the buy-to-let sector after a new round of tax increases were unveiled in the Autumn Budget.

Chancellor John Healey used his debut fiscal update to reveal that a planned income tax rise on rental income next year will be higher than expected.

It is the latest blow for landlords who have been dealing with the first months of new rules and regulations under the Renters’ Rights Act.

On top of this, landlords have been hit in recent years with restrictions on mortgage interest relief, extra stamp duty charges and the responsibility for ensuring the homes they rent out meet minimum energy efficiency standards.

Chris Norris, chief policy officer for the National Residential Landlords Association (NRLA), told MoneyWeek: “Landlords were already questioning whether they could afford to remain in the sector. This further tax rise risks pushing even more landlords towards the exit, deepening the gap between supply and demand and driving rents up.”

What did the Autumn Budget announce for landlords?

Previous chancellor Rachel Reeves had already unveiled plans in the 2025 Budget to raise income tax on rental income, as well as on savings interest, by two percentage points from April 2027 to 22%, 42% and 47% depending on the individual’s tax band.

While landlords were preparing for this, Healey announced a further two percentage point hike in the 2026 Budget.

This means that from April 2027, landlords will pay 24% for the basic rate, 44% for the higher rate and 49% for those who are additional rate taxpayers.

How will higher property taxes affect landlord returns?

Property services provider Connells Group has crunched the numbers on the tax impact for landlords, including mortgage interest relief and allowing for other expenses.

The average annual rental income received by landlords, according to the estate agency brand, is £16,478. It also assumes expenses of £5,108 per year.

Assuming a mortgage rate of 5.25% and a typical mortgage payment of £7,875 per year, Connells Group estimates that landlords would have an annual profit of £3,495.

Currently, a basic rate taxpayer would owe £699 in tax on that, but that will rise to £839 from April 2027.

Higher rate taxpayers will pay £3,113 in tax, up from £2,973. This also includes mortgage interest relief, which is a 20% tax credit, based on mortgage interest payments.

This will leave a landlord on the basic rate with £2,656 of annual profit from the £3,495 instead of £2,796. A higher rate taxpayer would be left with £382 instead of £522 over the year.

That £140 difference may not look like a lot on paper, but Connells Group research director Aneisha Beveridge says it is the impact on sentiment that is important.

She says: “On its own, this is unlikely to fundamentally change the investment case, but it comes on top of higher borrowing, maintenance and regulatory costs alongside broader tax changes that have already squeezed returns.

“The increase also widens the divide between landlords who own personally and those operating through limited companies, whose rental profits are subject to corporation tax rather than these higher personal tax rates.”

Source: Connells Group

Not all landlords will have mortgages though.

Separate analysis for MoneyWeek by estate agency brand Boydens looked at a mortgage-free property renting for £1,200 a month (equivalent to £14,400 a year), with £2,400 a year in allowable running expenses. That leaves £12,000 in taxable rental profit.

Currently, a landlord on the basic rate would pay £2,400 in tax on this income and retain £9,600 per year. The amount retained drops to £9,120 under the new rates from April 2027 as the amount of tax paid will rise to £2,880.

A higher rate taxpayer would pay £4,800 tax on the rental income, holding on to £7,200 of the annual profit currently. But that will fall to £6,720 in 2027/28 after a tax bill of £5,280.

In either example, the latest Budget adds £480 a year of tax compared with current rates.

For the higher-rate landlord, that is a reduction in profit of around 6.7%, even with rent and running costs unchanged.

Is buy-to-let still worth it?

Many will see Healey's Budget as a “vindictive raid on landlords”, says Norris, from the (NRLA).

He adds: “This lands on top of pressures that are already mounting. The Renters’ Rights Act has brought a range of new costs, including a new annual registration fee for every property, and expected Ombudsman membership.

“Separately, the removal of tax relief for legitimate business costs has driven viability down and rents up. If that were not enough, borrowing costs have added around £1,100 a year to a typical new buy-to-let mortgage and mandated energy efficiency upgrades will cost many up to £10,000 per property.”

Landlords have also been battling with lower rental demand and tepid rental growth.

Average UK rents increased by 3.8%, to £1,406 in the 12 months to September 2026, according to the latest Office for National Statistics data – unchanged from August.

Philip Boyden, managing director of Boydens Estate Agents, suggests landlords will be looking more closely at the figures and exploring the alternatives.

He says: “Another tax increase becomes part of that calculation. It may affect what someone is prepared to pay, which properties they consider or whether they expand their portfolio. It does not automatically mean they will decide against investing, but the property has to justify the commitment.”

Some landlords may consider selling.

Research by Property118, a website for landlords, found that two thirds of landlords intend to sell properties or exit the rental market over the next three years.

But this isn’t necessarily “a simple response,” warns Beveridge, from Connells Group.

The Renters’ Rights’ Act has introduced longer notice periods of four months and restrictions on re-letting if a sale falls through, which could make some landlords more hesitant to start the process, even if their returns come under pressure.

There will also be capital gains tax to pay on any profits from the sale, plus there is no guarantee you will get the price you want in the current buyers’ market.

Instead, Beveridge says many landlords have already opted for moving their portfolio into company ownership where you pay corporation tax rather than income tax.

She warns: “The upfront tax costs of transferring existing properties mean it is not a straightforward solution for everyone.”

Ultimately, Nouran Moustafa, practice principal at Roxton Wealth, some landlords will absorb the costs, some will reconsider expansion and others may sell.

She adds: “The irony is that making private renting less attractive to investors doesn't automatically make renting more affordable for tenants.Property can still be a worthwhile investment, but the days of assuming any buy-to-let will generate attractive returns are long gone.”

Two Premium Bonds holders have woken up millionaires after NS&I’s latest monthly prize draw.

The Treasury-backed bank has revealed who bagged the two £1 million prizes in November, and the first winner is from Shropshire.

They won with the bond 652GW962089, which they bought in November 2025. They hold the maximum total of £50,000 in Premium Bonds.

The second winner from London secured the top prize with bond 175WW854599 which was bought in December 2010. They hold a total of £30,000 in Premium Bonds.

It comes as NS&I celebrates 70 years since Premium Bonds first went on sale.

Andrew Westhead, NS&I retail director, said: “Seventy years ago in November 1956, the first Premium Bonds went on sale, marking the beginning of what has become one of the nation’s best-loved savings products.

"It’s fantastic to celebrate this milestone with two new millionaires and generations of savers who continue to enjoy the excitement of checking if they have won tax-free prizes each month."

How many prizes will be distributed in November's Premium Bonds prize draw?

Millions more smaller prizes will also be shared out by NS&I this month, including 96 £100,000 prizes.

Meanwhile, 192 £50,000 prizes will be issued, as well as 385 £25,000 prizes.

Here is the breakdown of all the prizes that will be paid out this month:

Source: NS&I

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

The two £1 million winners are notified in person by NS&I’s Agent Million each month.

Winners of the £100,000 and lower Premium Bonds prizes can check if they have won the day after the first working day of each month. For November 2026, that date is 3 November.

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

Make sure you have your bond number or NS&I number so you can access your account.

There is no time limit to claim an unclaimed Premium Bonds prize so you should check if you’ve won anything before and didn’t realise, even if you bought the Premium Bonds years ago.

NS&I reveals half-year results

NS&I unveiled its half-year results on 28 October.

They show that NS&I delivered £3 billion of net financing to the government in the three months to September 2026, bringing its half-year total to £4 billion.

NS&I’s target for the 2026/27 tax year is £15 billion, plus or minus £4 billion.

Sarah Coles, head of personal finance at investment platform AJ Bell, said NS&I was more likely than before to get close to its £15 billion target for 2026/27 due to two factors.

First, was a pick up in fundraising in the second quarter of 2026 following increases in interest rates across its savings accounts.

Second, was the four percentage point rise in savings tax taking effect from April 2027 making Premium Bonds more attractive for higher earners.

“For anyone paying tax on a chunk of their savings interest – particularly higher or additional rate taxpayers – the allure of Premium Bonds starts to make more sense, because of the tax-free status of the prizes,” Coles said.

“The relative attraction of Premium Bonds in this scenario could help boost the coffers of NS&I without it having to hike rates across its products again.”

Browse income funds in the specialist debt sector and you will find two investment trusts run by TwentyFour Asset Management, a fixed income specialist owned by the Swiss asset management group Vontobel that looks after £24 billion in assets under management.

TwentyFour specialises in asset-backed securities (ABS), so it is not surprising that the £1 billion TwentyFour Income Fund (LSE: TFIF) does exactly that. It invests in a diversified portfolio of securities, each of whose income comes from a pool of underlying assets (such as corporate loans and mortgages). The underlying assets are floating-rate – ie, payments vary with changes in interest rates. About 15% are investment grade, 52% sub-investment grade and 33% unrated.

TwentyFour Income Fund targeted a return of 6%-9% per year on the original 100p issue price, including a minimum annual dividend of 8p, paid quarterly. Its net asset value (NAV) total return has averaged just under 8% per year since inception in 2013.

Income funds taking advantage of premium yields

By contrast, TFIF's smaller stablemate TwentyFour Select Monthly Income Fund (LSE: SMIF) – worth £300 million – invests in a broader range of debt, with the aim of taking advantage of the “premium yields available in less liquid securities across the global credit markets”. That means Additional Tier 1 (AT1) capital securities issued by banks, payment-in-kind notes (often issued as part of private-equity transactions), and leveraged loans, as well as ABS and corporate bonds.

At the end of September, just under 40% of the portfolio was invested in AT1 securities, with about a third in ABS and 15% in securities issued by insurers. Roughly a third of the portfolio is rated BBB (the lowest investment grade rating), while most is sub-investment grade and 7% is unrated.

In some cases, the rating is more of a function of where the securities owned by the trust sit in a bank's capital structure than the borrower's quality. AT1 capital notes are specifically designed to absorb losses in the event of a bank failure and are generally graded three to five notches below each bank's senior capital.

Hence SMIF's second largest holding is Nationwide's 10.25% Core Capital Deferred Shares, which are similar to the AT1 debt issued by banks (building societies have different rules for what they can issue). Fitch Ratings puts Nationwide as a group at A (five notches away from its highest AAA rating), but has a BBB- rating on its AT1 capital (just above sub-investment grade).

Rising rates

SMIF targeted a higher return of 8%-10% per year on the 100p issue price, comprising a 6p per share annual dividend paid in monthly instalments and a capital return of 2p to 4p. While the trust has consistently met its annual dividend target, capital growth has remained elusive. It has delivered a NAV total return of 6.4% per year since 2014, mostly from income. SMIF's performance has been weighed down by exposure to longer-duration securities, which underperform when rates rise. The Nationwide holding illustrates this. These securities, which mature in 2049, are very sensitive to interest rates. They have fallen about 10% in 2026 as interest rate expectations have risen. Since the beginning of 2022, the face value of the securities has fallen 35%.

More than half of SMIF's portfolio matures in five years or more. It has an interest rate duration of 3.5, implying the portfolio would fall by 3.5% if rates rise by 1%. Conversely TFIF holds floating-rate debt, so benefits from higher rates.

SMIF pays out 0.5p per month, plus a top-up at the end of its fiscal year in October. This year, a final payout of 0.912p brings the total to 6.66p per share, or 8.4% on the current share price, which looks tempting . However, with rates set to stay high and TFIF's portfolio generating an underlying yield of over 10%, it may remain the better choice.

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.

Biotechnology companies are seeing record levels of innovation. Approvals of new medicines have held up despite staff turnover at the US Food and Drug Administration (FDA) regulator and large pharmaceutical companies, facing patent expiries on many of their biggest products, are acquiring biotech companies to replenish their pipelines. The catch is that the sector rewards specialist knowledge more than most others: a single trial result can move a share price by half in a day. The Biotech Growth Trust gives investors focused exposure to this theme by investing primarily in biotechnology.

We invest from the bottom up, favouring biotechnology companies developing first-in-class or best-in-class medicines, with a tilt towards small and mid-sized companies where much of the sector's innovation now originates. Our high active share (meaning that our holdings significantly differ from the benchmark index) means that our best ideas populate the portfolio, which is essential for navigating biotech's fast-moving, event-driven landscape. Below are three examples of our holdings, illustrating the breadth of our approach.

Three smaller biotechnology companies to consider

United Therapeutics (Nasdaq: UTHR) is an established player built largely on treatments for pulmonary arterial hypertension, a rare form of high blood pressure in the lungs, and pulmonary hypertension associated with interstitial lung disease (PH-ILD). It remains one of the most profitable firms in biotech. The company is now expanding into the much broader fibrosis market. Its lead product, Tyvaso, succeeded in late-stage trials in idiopathic pulmonary fibrosis (IPF) and the firm is expecting a US regulatory decision in spring 2027. If approved, it would be the first inhaled anti-fibrotic treatment for the disease. A legal settlement requiring that a rival withdraw from the market clears the path for the Tyvaso franchise to resume growth ahead of the IPF launch. The IPF launch, a return to growth in the company's core franchise and continued strong cash generation should mark an important inflection point.

In October, Vaxcyte (Nasdaq: PCVX) reported positive Phase III trial results in adults for its pneumococcal vaccine VAX-31, which surpasses the current market leaders, Pfizer's Prevnar 20 and Merck's Capvaxive, in strain coverage. Historically, this is a winner-take-all market where breadth of coverage decides the winner. The next milestone is Phase II data for the vaccine in infants, expected in the first half of 2027. Positive results would open the door to the paediatric market, which makes up the majority of the market opportunity. There is therefore a clear trajectory towards leadership in a pneumococcal market valued at more than $8 billion annually. It would also be an attractive asset for a large pharmaceutical company looking for vaccine exposure.

Palvella Therapeutics (Nasdaq: PVLA) is developing a topical gel form of rapamycin, an established immunosuppressant, for microcystic lymphatic malformations (mLM), a rare, lifelong condition that can cause persistent leaking, bleeding and infection. With no currently approved therapies and an estimated US patient population of 30,000, Palvella is targeting a launch of the drug in the first half of 2027 if approved. Building on positive Phase II trial results, Palvella is also starting a Phase III trial in cutaneous venous malformations (cVM), with data expected in 2028. Palvella is a first mover in an untapped market with big potential.

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.

Diamonds – and diamond rings in particular – have long been a symbol of the marital bond. But as attitudes to marriage shifted over the centuries, and the institution was no longer primarily seen as an arrangement cementing family ties and assets, rings came to symbolise romance.

Diamonds emerged as the jewel of choice in the 20th century, a result of increasing affluence after World War II, booming diamond mines in South Africa and, crucially, shrewd marketing.

In 1947, American copywriter Frances Gerety coined the phrase “A diamond is forever”, for mining giant De Beers, connecting the jewel's durability with the hope of a long-lasting marriage. This was hailed by Advertising Age as the greatest advertising slogan of the 20th century and turbocharged De Beers, which has had a near-monopoly on diamond production for most of the past 100 years.

How diamonds infiltrated popular culture

The notion of a diamond's romantic permanence infiltrated popular culture. In the 1953 film Gentlemen Prefer Blondes, Marilyn Monroe declared that a “kiss on the hand might feel good”, but a “diamond tiara is forever”. Dripping in jewels, she sang that “diamonds are a girl's best friend”. Ian Fleming named a James Bond novel Diamonds are Forever; it transferred to film with the same title. In 2026, the British singer Raye demanded a “big and shiny diamond ring” in her hit song Where is My Husband!.

De Beers' marketing also successfully spread the idea that men should spend a certain portion of their salary on an engagement ring to show their devotion. Hoping to counteract a slump in sales during the Great Depression, the group suggested that one month's earnings should be spent on a diamond ring; by the 1980s, diamonds apparently required two months' salary. Today, some people say three months. Before World War II, only 10% of engagement rings in Western countries contained a diamond, but by the end of the century, 80% did.

Today, however, the diamond industry is at a crossroads. Natural diamonds' prices have dropped more than 50% over the past five years, falling from an average of $8,007 per carat in 2021 to $3,898 per carat last month, says CNBC. A carat is a unit that measures the weight of a gemstone, with 200 milligrams equaling one carat.

Meanwhile, the Diamond Standard index, which tracks the market value of investment-grade natural loose diamonds, hit an all-time low of around $2,490 in August. The index is now at $2,460. This decline has been driven by the popularity of laboratory-grown diamonds since the artificial-gem market's inception more than a decade ago.

Laboratory-grown diamonds look uncannily similar to the natural thing. They are more economical to produce and 60%-85% cheaper than natural ones, according to Queensmith, a jeweller. A 0.3 carat laboratory-grown diamond can cost £390, while a natural version can set you back £980. A 1.2-carat man-made diamond can go for about £1,630, compared with £8,000 for a natural one. Laboratory-grown diamonds accounted for 61% of engagement ring sales in the US in 2025, up 239% from 2020, according to a 2026 study by The Knot, a wedding platform.

Unlike natural diamonds, which are formed over billions of years in the Earth's mantle and require mining, laboratory-grown ones are created using extreme pressure and heat, mimicking the natural stone's geological development in a matter of weeks. Synthetic diamonds can give shoppers more options over size, cut, style and price, with consumers buying diamonds with 1.9 carats on average, compared with 1.6 carats for natural ones, says The Knot.

An ethical alternative to ‘blood diamonds’

The study also noted that 40% of US couples said it was important that their diamond was laboratory-grown, suggesting that ethical concerns about the transparency of supply chains are also in play. Consumers know the origin of a diamond produced in a laboratory, but a natural diamond's provenance can be murkier.

Diamonds can be mined in conflict zones, funding military action (these are often known as “blood diamonds”); production through forced labour, or the exploitation of indigenous people are further concerns. The rough diamond industry has also been hit by weak demand from Chinese consumers since Covid, reflecting the trend in the broader luxury market.

Supplies are also dwindling. Some major mines are closing or have already closed, such as the Argyle mine in Australia and Diavik in Canada. De Beers slashed production 12% in 2025 and has $2 billion worth of unsold diamond inventory, while its 50/50 joint venture with Botswana's government, Debswana, has cut output 40% since 2023. Russian miner Alrosa, the world's biggest producer of rough diamonds by volume, has been hit by sanctions and is also lowering production.

There have been some big discoveries, such as the 2,488.32-carat Motswedi diamond from the Karowe Mine in Botswana by Canadian mining company Lucara in 2024. But finding new mines is a slow and costly process, so supply remains under strain. “Natural diamonds still have appeal, especially rare and high-quality stones,” says Lale Akoner, global market strategist at trading platform etoro.

However, “better jewellery sales do not automatically translate into better prices or profits for miners. De Beers' rough-diamond prices were still under pressure in the first half of 2026”. Low supply should have bolstered prices, but the shift to laboratory-grown diamonds has thwarted a recovery.

De Beers tried to jump on the laboratory-grown gem bandwagon, launching its own brand, Lightbox, in 2018, but amid a freefall in prices in synthetic gems for jewellery, it closed it down in May 2025. Lightbox was impeded by fierce competition from budget laboratory-grown brands from India and China, such as Power Diamond, Huanghe Whirlwind, Yasheng, and Caraxy. Lightbox initially sold gems at $800 per carat, but prices fell 90% by 2025, according to De Beers.

Duncan Wanblad, chief executive of De Beers's parent company, Anglo American (LSE: AAL), recently admitted to the Financial Times that the company could “have been a little bit more aggressive on the signals we were getting” from the competition from laboratory-grown gems.

De Beers' sparkle is dimming

De Beers was once the dominant player in the diamond industry, controlling up to 90% of the world's supply of rough diamonds. The company was formed in 1888 in South Africa via the merger of British colonists Cecil Rhodes and Barney Barnato's companies, backed by the Rothschild family. De Beers Consolidated Mines was created to act as a cartel to control diamond production and prices.

It was later owned by the Oppenheimer family, and mining giant Anglo American took control of De Beers in 2011. De Beers is now 85% owned by Anglo American and 15% by Botswana, the world's second-largest producer. Today its market share is 25%, and it has lost about $7 billion in value since 2023 from consecutive write-downs. Last year, it reported an underlying loss (before interest and tax) of $787 million and revenue of $3.5 billion. Anglo American has been trying to offload the company since 2024. Recent reports suggest that Cartier's owner Richemont could join a consortium led by De Beers's former CEO Gareth Penny to bid for Anglo American's stake. It could be sold for as little as $1 billion.

Meanwhile, a struggling natural-diamond industry will hamper growth in diamond-producing countries such as Botswana, whose economy is largely dependent on them. Diamonds made up 80% of exports, 33% of fiscal revenues, and 25% of GDP in 2024, according to the International Monetary Fund.

Collect, don't invest

De Beers's advertising campaign convinced people that diamonds are forever, but they may not necessarily make for a great investment or resell for much. Diamonds lack liquidity, a tradable market, and a transparent spot price like other commodities, says Russ Mould, investment director at broker and investment platform AJ Bell. The cost of production varies so widely due to the vast array of unpredictable geological conditions and yields that it is virtually impossible to establish a minimum baseline figure, which is not the case for other raw materials.

Although diamonds can be easy for investors physically to store and insure, jewellery comes with a “hefty retailer's mark-up”, which is an “obstacle to anyone hoping to use diamond jewellery as an investment”, says Mould. With Anglo American suffering from “buyer's remorse” over its De Beers investment and now struggling to sell the business, “investors should take the hint”.

Despite being a commodity, diamonds cannot be used as a hedge against inflation and market volatility, as gold can. “From a portfolio perspective, the test of a hedge is whether I can value and sell it when markets are stressed,” says Akoner.

“Gold passes that test much more readily than an individual diamond. Diamonds differ substantially in quality, trade infrequently and have a wide gap between what a consumer pays and what they may receive on resale. I would not [see] them as an inflation or crisis hedge.”

Akoner says that for investors seeking broad commodity exposure, she favours a diversified fund and “would consider a diamond miner only with a clear view on that company's balance sheet and a much higher tolerance for risk”.

While laboratory-grown diamonds are good value for consumers, “as an investment, the economics work against the buyer” because supply can grow as production improves and wholesale prices continue to fall. “I would see the lower purchase price as the benefit, rather than expect to make money on resale,” adds Akoner. According to jeweller Queensmith, sellers of second-hand laboratory-grown or natural diamonds could receive 30%-40% less than the price they paid for them.

Nonetheless, diamonds could appeal to collectors, but at the very top end of the market and for stones such as the Motswedi diamond or the “azure blue” 32-carat diamond, which sold for $8.4 million at auction this June. Serious collectors buy rare-coloured diamonds or jewellery with a recognised maker and documented history, says Akoner. They are “betting that another collector will pay more for that rarity in the future”. But she cautions that a “headline auction result is not the return every owner will achieve”.

“I would see such pieces as a specialist investment for someone who already has a diversified portfolio, while treating ordinary diamond jewellery primarily as something to enjoy.” Square-cut or pear-shaped, diamonds are not an investor's best friend.

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.

In late 2021, Sea Limited (NYSE: SE) was worth almost $200 billion. Its shares had soared above $350 as investors bet that the Singapore-based company could dominate online shopping across southeast Asia and beyond. Within a year, more than 80% of its stock market value had vanished. The extraordinary rise and fall of Sea is also the story of how a computer game helped build a shopping empire.

Sea Limited began in 2009, when entrepreneur Forrest Li founded Garena to distribute computer games across southeast Asia. Few households had reliable broadband or personal computers, so Garena built relationships with cybercafes, installing its software on thousands of machines and giving customers access to popular online games.

The approach reflected Li's understanding of the region. Southeast Asia has hundreds of millions of consumers, but its geography, languages and uneven infrastructure make it difficult for businesses to operate across national borders. Garena succeeded by finding ways around these obstacles.

Li soon recognised a much larger opportunity in online shopping. In 2015, he launched Shopee, a website and app where independent sellers offer clothing, cosmetics, household goods and much more. Shopee initially concentrated on small sellers offering inexpensive everyday goods. Customers could chat directly with merchants, while promotions, games and rewards encouraged them to return. The approach proved popular, but attracting buyers and building the delivery infrastructure to serve them required enormous investment. Fortunately, Garena was about to produce a remarkable success. In 2017, it released Free Fire, a game designed to work on inexpensive smartphones and unreliable internet connections. It became hugely popular, eventually attracting more than 100 million daily players. The game was free, but players could buy virtual items. These generated substantial profits without the costs associated with producing and distributing physical goods. Free Fire gave Sea a valuable source of cash to invest in Shopee.

Ups and downs for Sea Limited

Then came the Covid pandemic. Lockdowns encouraged people to spend more time playing computer games and shopping online. Both businesses benefited enormously. Low interest rates encouraged investors to finance fast-growing tech companies, even when they were losing money.

Sea seized the opportunity. Shopee subsidised deliveries, offered incentives to merchants and spent heavily on advertising. It expanded into India, Europe and Latin America, while building its own delivery network. It raised billions from investors, including almost $6 billion through a share and bond issue in 2021. Flush with cash, Sea could pursue growth without worrying too much about profitability. By late 2021, investors expected Shopee to become dominant. Yet it all depended on access to funding and profits from gaming.

The reversal was brutal. As inflation surged in 2022, interest rates went up and investors became less willing to finance loss-making businesses. Gaming declined as pandemic restrictions ended. Worse, India banned Free Fire on national-security grounds, removing one of the game's largest markets.

Sea Limited faced weaker gaming profits, heavy losses from Shopee and a collapse in investor confidence. Spending heavily today in pursuit of profits tomorrow was no longer sustainable. Li responded decisively. Shopee abandoned much of its international expansion, thousands of jobs were cut, spending was reduced and subsidies scaled back. Sea concentrated on making its remaining operations profitable.

It worked. Sea reported its first quarterly net profit in early 2023. The turnaround was striking because Shopee had depended on large subsidies to attract buyers and merchants. The retreat exposed mistakes made during the pandemic, particularly entering markets where Shopee had little established advantage. Nevertheless, Li showed he was willing to abandon unsuccessful investments rather than throw good money after bad.

Sea is a different beast now

Today, Sea Limited is a different business. In 2025, group revenue rose 36% to $22.9 billion; net profit hit $1.6 billion. Shopee handled $127.4 billion of merchandise, nearly 27% more than the previous year. Its scale creates opportunities to raise earnings without repeating the mistake of the spending spree of the pandemic years. Merchants can pay to advertise their products on Shopee, while greater delivery volumes should help spread the costs of its logistics network. Both could allow profits to grow faster than sales. Online shopping still has room to expand across the region and Shopee's delivery network may be difficult for smaller rivals to match.

Sea's third business, Monee, grew from a payments service launched in 2014 to help gamers without bank accounts buy digital products. It now provides loans and other financial services to consumers and small businesses. Shopee knows how much its merchants sell and how regularly customers make purchases. That information could help Monee assess borrowers whom conventional banks struggle to serve.

There are risks. TikTok Shop and Lazada compete fiercely, while lending exposes Monee to borrowers who may fail to repay. Garena also remains heavily dependent on Free Fire, whose popularity cannot be guaranteed indefinitely. Nevertheless, Li has proved adaptable and built substantial businesses in markets that still have room to develop. The attraction now is that Sea may be able to earn much more from the customers and infrastructure it already has. If Li can maintain that discipline, Sea could enjoy years of profitable growth.

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.

First there was the whisky market binge. Prices for rare single malt whiskies soared during the low-interest rate era of the pandemic. Stuck at home, collectors and speculators splashed out on bottles they hoped would continue to appreciate in value. The market in rare whiskies had, after all, already had a great decade in the lead-up to Covid. From just before the first lockdown in March 2020 until the market peaked in May 2022, valuations climbed 58%, according to the Icon 100 index, compiled by market watchers Rare Whisky 101 to track valuations of 100 sought-after bottles.

Then came the hangover. Interest rates rose with the end of lockdowns and investors could get better returns from more conventional investments. The index fell 42% to reach a post-pandemic low last month. The headache continues. Yet, just like at the pub, where top-shelf prices are out of reach for most of us, prices for trophy bottles have held up much better.

This month, another of the auction-record-breaking Macallan 1926 bottles sold for £2.1m at the Macallan distillery at an auction held by Sotheby's. It is the second-highest price fetched for a bottle of whisky in sterling terms. Another from the same batch of 40 bottles drawn from the same sherry seasoned oak cask in 1986 fetched slightly more in 2023. That one had sported a label with artwork by Italian painter Valerio Adami (one of 12), while the bottle that sold this month was one of the 14 that features a “Macallan Fine & Rare” label, first released in 2002. (Another dozen bottles were given labels with artwork by British artist Peter Blake and the remaining two had been left unlabelled.)

How is the rare whisky market faring?

Over time, bottles get drunk – especially when valuations are falling – and some inevitably get dropped. One of the Adami Macallan 1986 is reported to have perished during an earthquake in Japan, according to BBC News. That helps to support prices for the rarest bottles.

More broadly, the Scotch whisky industry has had a torrid time of late. That has been mainly down to younger drinkers drinking less due to health reasons and cost pressures, as well as changing tastes, tariffs and, above all, a surfeit of new spirit that was put into casks in the 2010s and that is now reaching maturity at the worst possible time. Small, independent distilleries are struggling especially. Bottles from makers that have closed – so-called “ghost distilleries” – can be highly prized by collectors.

As anyone who has ever woken up with a hangover will know, the day can pass in a sort of a haze. In like fashion, the Rare Whisky 101 Icon 100 index has stumbled along year-to-date – not bouncing, certainly, but not falling over either. Could the bottom be in? Who knows? But there are still at least some buyers out there prepared to spend big money on a trophy bottle such as the Macallan 1926. And tomorrow is, after all, another day.

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 Luca de Meo arrived at Kering a year ago with a mandate to shake up the ailing French luxury group, his arrival caused quite a stir in the fashion world. Handsome and soigné, he certainly looked the part. It was the provenance of the Italian now charged with restoring the fortunes of couture legends Gucci, Saint Laurent, Balenciaga and Alexander McQueen that raised eyebrows. Having spent most of his career in the car industry, de Meo arrived directly from Renault. Fashionistas swiftly dubbed him “the car guy”.

Luca de Meo set about introducing a strategic blueprint for the group – which is controlled by the billionaire Pinault family through their holding company Artemis – which appeared lifted from the car industry. His plan was “to fuse the operations of Kering's independently managed brands into a more integrated industrial machine by standardising production and centralising decision-making”, says the Financial Times – anathema in the gilded luxury business where there is “a commitment to artisanal craftsmanship as a way of justifying the hefty price tags of its products”.

Luca de Meo started as he meant to go on in his “trademark direct way”. When asked which executive car he wished to be chauffeured around in, he “opted for an electric van” because it would give him and his team more space to work on the road. In February, he declared that “the level of bullshit has diminished enormously” within the company. “We say things as they are and we attack them one after the other.”

Luca de Meo's ‘reconKering’ experiment

If de Meo's iconoclastic streak ruffled feathers at the atelier, his self-styled “ReconKering” experiment was seized upon with relief by investors who had seen Kering's market value shoot from around €20 billion in 2013 to almost €100 billion at its 2021 peak – before plunging back to a low of €20 billion last year. True, the rout was an industry-wide phenomenon primarily down to retrenchment in luxury's key Chinese market. But, at Kering, the decline was exacerbated by the fall from grace of its main revenue engine, Gucci, which was being “ghosted by shoppers”, says Bloomberg. De Meo “made an incredibly strong start”. Within weeks, he'd strengthened Kering's balance sheet, streamlining assets and cutting borrowing. There were signs of improvement at Gucci, too. But last week, he reported that Gucci sales had gone backwards again. Shares plunged 17% – their steepest one-day decline in a decade. “Almost all the gain since De Meo's arrival has now been erased.”

“As an Italian native, it's very easy for me to understand that Gucci is more than a brand. It's one of the most admired expressions of the culture of this country,” de Meo observed last year. Born in Milan in 1967, de Meo spent most of his childhood living abroad, says The Wall Street Journal. While living in Ivory Coast, the young Luca had an epiphany. He recalled “watching an Alfa Romeo tear through the Rallye Côte d'Ivoire”, igniting “a lifelong fascination with cars”. After graduating from Milan's Bocconi University in 1991 with a degree in business administration, he began a career that would take in most of Europe's leading carmakers – including Renault, where he cut his teeth, Fiat and Volkswagen. De Meo built his reputation “first as a marketer – credited with revitalising brands – and later as a turnaround specialist”.

‘Luca de Meo's honeymoon at Kering is over’

“The studio is the soul of a luxury house,” says de Meo. “There's an element of magic.” Can he reconjure it at Kering? It looks like a long battle ahead, says Bloomberg. Gucci – under creative director Demna Gvasalia – “is not yet firing on all cylinders” and the rest of Kering's fashion brands are all grappling with transitions. “Alexander McQueen and Balenciaga each look set to recruit their second couturier in three years.” It can take about 18 months for a designer to reach their full potential, pushing the results of de Meo's strategic blueprint further into the future.

De Meo may take these challenges in his stride. After all, he is used to dealing with the brutal competition and thin margins of the car industry. One thing is certain, however. “Luca de Meo's honeymoon at Kering is over.”

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.

In the last fortnight, stocks in the nuclear industry have seen their steepest decline for five years. Rising real yields have punished assets with a long duration whose value lies years away, and nuclear has been dragged down with the AI power trade it is now lumped in with.

The price of financing the AI build-out tells its own story. Anthropic is paying Blackstone a 10% coupon on a $60 billion chip financing, against 8.5% on a similar deal just four months ago and 7% for comparable credits in the public high-yield market. Lenders want a fatter premium for AI risk, and nuclear has been sold in sympathy. Yet that same deal pays for 1.5 gigawatts of new chips. Somebody has to power them.

Jim Reid at Deutsche Bank recently circulated a note that makes the point better than any argument. Over 80 years, power has become roughly 50 times cheaper. Computer chips got a hundred billion times cheaper in 60 years. AI has fallen some 200,000 times in barely five, the steepest cost curve ever recorded. Intelligence is now the fastest deflating good in history, and it runs on the slowest deflating input.

William Stanley Jevons taught us in 1865 that when a resource gets cheaper we don't use less of it; we find a thousand new uses and consume vastly more. Cheap intelligence won't shrink the power bill, it will explode it. Value migrates to whatever cannot be compressed, and nothing compresses less than firm, reliable power and the fuel that makes it. Whoever owns the electrons owns the toll road to superintelligence.

There is a second property of electricity that the market forgets in a panic. Demand for it is among the most price-inelastic of any good. Households and hospitals don't switch off when the bill rises, and a data centre training a frontier model will pay almost anything to keep running.

The same holds one link further up the chain. Uranium is a small fraction of the cost of running a nuclear reactor, so utilities will pay whatever it takes to keep their plants fuelled – 2006 and 2007 proved it. When the flooding of Cigar Lake knocked out expected supply, uranium rose sevenfold in six months. Consider the world in which that happened. Half of it was set against nuclear power. There was no iPhone in anyone's pocket, no AI and no data centres drawing a city's worth of power. Even then, with demand flat and politics hostile, a single supply shock was enough. When buyers cannot walk away, price is the only thing left to give, and it gave violently. Inelastic markets don't drift. They gap.

The nuclear industry has been hit by “gamified finance”

So why has the market priced the opposite for the nuclear industry? Look at who owns the shares. This rally was built by a new breed of investor. Finance has been gamified, put on a phone and turned into entertainment, with conviction sourced from Substack, StockTwits and X rather than from balance sheets.

The numbers are startling. Retail flows now account for roughly 20% of US equity volumes, and as much as 55% to 65% of daily turnover in South Korea and China. Seven in ten retail investors are under 45. In 2015 just 6% of 25-year-olds held an investment account; by 2024 it was 37%.

US exchange-traded funds (ETFs) took a record $1.5 trillion of net inflows in 2025. In Britain, retail equity and ETF flows reached £228 billion. This is a younger, less wealthy cohort with thin cushions against loss, and it has learned to borrow. Margin accounts, options and leveraged ETFs are now standard kit on trading apps.

Now the brokers are pulling the ladder away. Last week one of Europe's largest retail trading platforms asked for 110% collateral on positions. At that level, margin is no longer leverage at all, it is a demand for more than the position itself is worth. When the cost of carrying a position exceeds the position, holders don't sell because they have changed their minds. They sell because they have no choice. That is precisely what unravelled in 2008 and 2009. The leverage went first and prices followed, whatever sat underneath.

Which brings me to the nuclear industry trades I find most compelling. Lightbridge Corporation (Nasdaq: LTBR), ASP Isotopes (Nasdaq: ASPI) and Fermi America (Nasdaq: FRMI) are among a group of nuclear names now trading, in some instances, below the cash on their balance sheets: strip out the cash and the market is assigning the business itself a negative value. The technology, the enrichment capacity, the land, the permits, the people and years of regulatory work are being thrown in for less than nothing.

It's 2009 all over again

That price makes sense in only two ways. Either the board is about to set fire to the cash, or the seller doesn't care what he is selling. Any serious investor must ask how fast the money is being spent, what commitments sit against it and how much dilution lies ahead.

Here the answer is reassuring. None of these companies is burning cash at a reckless pace. Lightbridge spends $2 million a month, a modest sum against the cash it holds. When names across a whole sector slip below cash in the same fortnight, and none of them is squandering it, the explanation lies with the holders, not the businesses. The holders were forced.

That is the asymmetry. Buy below cash and the downside is cushioned by money already in the bank, while the upside is whatever the business turns out to be worth. In 2009 the market made that offer on housebuilders and miners that went on to multiply. Today it is making it on the companies building the fuel, enrichment and power that the age of cheap intelligence will depend on.

Nothing about nuclear reactors, fuel or enrichment has changed in a fortnight. What we are hearing is margin calls, momentum funds and macro traders crowding towards the same exit. I have heard that sound before. On that day in March 2009, it told me the equities business would be shut by the following day. It turned out to be the best buying opportunity of a generation.

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.

What are prediction markets?

Prediction markets are sites where users buy “yes” or “no” contracts on future real-world events. A contract pays $1 if it happens and $0 if not and its price is the implied probability.

Today, the biggest platforms are Kalshi and Polymarket. Both launched around the time of the pandemic but went mainstream during the 2024 US presidential race. In the week before that election, Kalshi processed around $750 million in trades.

Unlike a bookmaker, which sets the odds and takes the opposite side of every bet, prediction markets allow punters to trade against one another. You can bet on everything from the number of acres you think will get destroyed in wildfires and how often Donald Trump will say “Kamala” in a speech, to whether Jesus Christ will return this year.

Kalshi's valuation has quadrupled in under a year to £22 billion and has more than 10,000 live markets, although sport still makes up about 78% of volume.

Are prediction markets new?

The basic idea isn't. Americans have bet on elections since George Washington. However, the New York Stock Exchange banned such markets during Prohibition, when gambling flourished underground, and polling later replaced their use for predictive purposes. In 1988 the University of Iowa launched the first serious election market and developed a better record than Gallup at predicting future results. The non-profit PredictIt followed in 2014. Now polling is in crisis and the markets are back.

Who uses prediction markets?

Prediction markets are used by young men for the most part, says the BBC. According to Betterment, a US financial adviser, 52% of Gen Z investors diverted money intended for investment into sports betting last year. Firms target such investors through partnerships with celebrities and social-media accounts.

There have been attempts to court women too, considered more sceptical and risk-averse, by employing female “finfluencers”, hosting in-person events and offering bets on “female-friendly” topics such as pop culture. Kalshi told the BBC that women's share of its users rose from 13% to 26% between early 2025 and early this year.

It's not just a fad. Polymarket's boss, Shayne Coplan, calls his site a “global truth machine”, a nod to Friedrich Hayek's belief that markets aggregate dispersed, local and tacit knowledge better than any planner. Morgan Stanley found in August that Kalshi was more accurate at predicting CPI inflation than economist consensus forecasts compiled by Bloomberg.

This ability to harness the wisdom of crowds has seen Kalshi strike deals with CNBC, CNN and AP; Polymarket this year announced partnerships with Dow Jones and Substack.

Are people making money from prediction markets?

The founders pitch their platforms as being fairer than traditional bookies because there is no “house edge”. Polymarket and Kalshi together averaged some $1.6 billion of daily trading in August, up nearly 2,000% on a year earlier. Winning is another matter.

A study by the Centre for Economic Policy Research in June found that two-thirds of Polymarket users have lost money, with just 1% of profitable traders capturing more than three-quarters of profits, and 0.1% capturing half. The Wall Street Journal reported in May that nearly half a billion dollars went to fewer than 2,000 accounts, while the median loss last year was $94.

The reason is structural, says Jane McManus in The Guardian. The markets rely on “dumb money” users to supply the liquidity and mispriced odds that allow the “smart money” – professionals and increasingly AI tools – to take most of the profits.

Why do people still use prediction markets?

Ease is one reason. Prediction markets are always online, the financial commitment required is low, feedback is quick, positions are easily exited and – armed with AI tools – users can analyse markets themselves.

Other theories abound. Younger users have an underdeveloped pre-frontal cortex and a high appetite for risk. Other experts cite “financial nihilism”: the sense that the economy no longer rewards prudence or planning, and conventional pathways to wealth-building and stability have been cut off.

According to market researchers at The Harris Poll, nearly two-thirds of Gen Z and millennials think the only way to build wealth today is through gambling or crypto.

Aren't prediction markets illegal?

It's complicated. In the US, prediction markets are regulated not as gambling but as derivatives by the Commodity Futures Trading Commission (CFTC). That lets them sidestep state bans on sports wagering and means the influencers they pay needn't mention risk. Both Kalshi and Polymarket emerged after the Supreme Court lifted the ban on sports betting in 2018.

Under Donald Trump, the CFTC has gone from “watchdog to cheerleader”, says The Economist. Trump wants prediction markets to thrive; his son Donald Jr advises Polymarket and holds stakes in both platforms. Europe is less welcoming. Across the continent, the platforms remain largely unauthorised and the EU's markets regulator has warned of significant risks and insider trading.

And in the UK?

Since 2019, the Financial Conduct Authority (FCA) regulator has barred the kind of binary options offered by Kalshi and Polymarket for UK customers and regulates prediction markets covering financial or certain climatic events.

Political and sporting outcomes fall to the Gambling Commission, which says they are “akin to” betting exchanges, a model Britain has allowed since 2000. Betfair, Matchbook and Smarkets are the legal versions.

Savvy Britons determined to bypass regulation are using VPNs to access Kalshi and Polymarket to place binary bets on such things as by-elections. But the situation may change. The platforms have begun a “lobbying blitz”, says the Financial Times, and hope soon to be regulated as financial services. The FCA is considering reforming its rules.

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.

The Brexit debate was bitter and divisive – it is hard to believe that anyone has fond memories of it, or the even more furious arguments that dominated politics for the five years after the referendum. Families were split and friendships put at risk. Most of us are probably relieved it is now firmly in the past.

But not, it seems, the prime minister, Andy Burnham.

He has promised a “debate” on Britain's EU membership, opening up the possibility that we might well rejoin. Indeed, another referendum, or a straightforward promise to sign up for full membership if re-elected, may well be included in the next Labour manifesto.

It is not hard to see what Burnham is up to. A promise to reverse Brexit and rejoin the EU will unite the centre-left vote. With the right vote split between the Conservatives and Reform, if the PM can unite the left, he can probably secure an election victory. Less cynically, he probably believes that rejoining the EU is important, both for the economy and for national security. The polls suggest that most people now agree with him.

Brexit uncertainty will hurt the British economy

The trouble is, that is the last thing the British economy needs right now. There will be plenty of people in business, and especially in the City, who would like to rejoin.

Most of the business community never wanted to leave the EU in the first place. They believe it has damaged trade and hurt investment and confidence. Indeed, we are already witnessing the start of a campaign to rejoin, with Goldman Sachs putting out a report earlier this month predicting a 6% boost to growth if it happens.

It won't be long before the pro-EU think tanks are getting big donations to push their case. All the familiar arguments about jobs and trade will be rehashed, along with plenty of suspiciously precise statistics.

But a long debate over rejoining the EU is not going to help the economy. To start with, the EU is likely to demand stiff terms. We will certainly have to allow freedom of movement. We will have to rip up the trade agreements we have signed since we left. We will have to impose lots of new regulations introduced over the last few years, even in sectors such as AI, where Britain has been doing well precisely because we do not need to comply with Brussels. We may well have to join the euro. And we will have to start making large budget contributions, with little chance of reclaiming the Thatcher-era rebate. Perhaps most seriously of all, we will have to accept our share of the massive borrowing the EU took on to finance the Covid Recovery Fund, even though we did not benefit from any of it.

Next, revisiting the Brexit debate is going to create uncertainty. Leaving might have been painful, but that disruption is now in the past. Supply chains have reconfigured, exporters have figured out how to cope with the paperwork, and even the City, despite the dire warnings of collapse, has retained its status as Europe's main financial centre.

But a renewed debate will mean businesses have no idea what trading regime they will face in five or ten years' time. Worse, by the time we finally reach a deal, it may well be vetoed by France, or even by Germany if the AfD has taken power by then.

We spent much of the 1960s debating membership of what was then the Common Market, only to be told we were not allowed to join. The whole circus could easily be replayed in the 2030s. With rising taxes and sky-high energy prices, there is little incentive to invest in the UK. Burnham is about to make that even worse.

A huge distraction

In reality, the EU is just a distraction from the real issues. There is a growing consensus around what needs to be done. Planning rules have to be relaxed to let us build more homes. We need to restore energy independence, instead of always prioritising net-zero targets. We need to reform a bloated welfare system so that people are encouraged back into work. And we have to simplify a tax system that destroys incentives.

None of those have anything to do with the EU. Another decade spent arguing over membership will only keep us from focusing on what really matter.

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.

Chancellor John Healey’s first Budget was characterised by tweaks around the edges of policy, rather than big bang announcements. This was true for pensions too. But even the relatively small changes could have a big impact on your retirement income.

Giving Britain financial ‘breathing space’ was the theme of Labour’s 2026 Autumn Budget. Yet for pensioners relying on savings and rental income, there were some surprise tax hikes that will likely be unwelcome after similar raises last year.

Matthew Phillips, director of wealth planning at wealth manager Canaccord Wealth, said there was “relatively little in the Budget that should require people to fundamentally reconsider their financial plans”, from a wealth planning perspective.

“After several years of change, that relative stability is no bad thing,” he said.

“However, a fairly quiet Budget does not mean there is nothing for savers and investors to consider.”

Here’s all the key Budget changes for pensioners, the likely impact and what to do next.

Pension tax allowance

A new pension tax allowance is being introduced for low-earning pensioners, equal to the 2027/28 full new state pension rate of £13,037 per year.

This ensures pensioners won’t be dragged into paying income tax purely because the state pension will rise by 3.9% next April, in line with the triple lock guarantee, (which they otherwise would because that exceeds the frozen personal allowance of £12,570).

The pension tax allowance will gradually reduce as pensioners’ income increases. For every £3 of income above £13,037 (the full level of the new state pension), the pension tax allowance will reduce by £1.

So those whose total income is above £13,319 lose the pension tax allowance altogether.

Becky O’Connor, head of pensions at PensionBee, said: “Sparing pensioners the hassle of being chased by HMRC for small tax bills is welcome.

“But the pension tax allowance is worth around £93 in its first year and is withdrawn as soon as someone has a modest private pension or a bit of savings interest, so people who saved a little extra could really end up feeling penalised for it.”

Savings tax increase

Savings tax rates were due to increase, but the government is going further by adding an additional two percentage points of tax from April 2027, above what was planned. For pensioners, who often keep substantial cash balances on hand for day-to-day expenses, this will likely be unwelcome news.

The savings tax hike means that for basic rate taxpayers in receipt of more than £1,000 of savings interest, every extra pound of interest will be taxed at 24% rather than 20%.

Similarly, for higher rate taxpayers whose personal savings allowance is £500, any additional savings interest will be taxed at 44% rather than 40%.

For additional rate taxpayers the change is particularly painful, as every pound of savings interest is taxable but at 49% rather than 45%.

Neil Jones, tax and wealth planning specialist at Standard Life, said: “For those with significant cash balances or regular savings, the incentives have edged further towards ensuring money is directed towards an ISA.

“However, against a backdrop of inflation, it’s important those affected look carefully at whether their money is keeping pace with inflation and consider whether it would be better invested where there is the potential for higher returns, albeit without guarantees.”

Ways to avoid being hit by the savings tax trap include:

• Make the most of your £20,000 ISA allowance
• Transfer savings to your spouse
• Consider Premium Bonds
• Invest in low-coupon short-dated gilts

State pension triple lock

The Budget confirmed the adjustment to the triple lock from 2030. Rather than applying the highest of CPI inflation, 2.5% or average weekly earnings each year, the government will review increases over time to ensure the state pension keeps pace overall.

Claire Trott, head of advice at St. James’s Place, said: “This should smooth increases and potentially deliver significant savings for the Treasury. It also addresses the cumulative ‘ratchet effect’ seen during Covid, when a year of sharp earnings growth compounded with increases in subsequent years.”

Rental income tax increase

Many pensioners partly rely on income from buy-to-let property to help pay for their retirement. But like savings, it was announced in the Budget the rate of tax on income from property is being increased from April 2027 by two percentage points across each marginal tax band; to 24% for basic rate payers, 44% for higher rate taxpayers and 49% for additional rate payers.

Alex Pugh, financial planner and partner at wealth management firm Saltus, said the increase “lands on a group that already feels overtaxed, with 43% of high net worth individuals telling us they pay too much tax, and 56% concerned about higher taxes on investment property”.

“For many of our clients, savings and rental income are a key part of their retirement plans, so this isn’t a small change. Using ISA and pension allowances in full is now more important than ever, and anyone with significant savings interest or rental income should review how those assets are held before April 2027.”

Definition of terminal illness for pension access

Changes are being made to provide greater flexibility in the medical evidence requirements for serious ill-health pension lump sums, with the government deciding to change the definition of terminal illness to make pension savings easier to access.

Under the new rules a lump sum may be paid where the pension scheme member can be reasonably expected to die within 12 months and the supporting medical evidence may be provided additionally by a member’s medical practitioner based outside the UK.

Jon Greer, head of retirement policy at Quilter, said: “Prognoses are inherently uncertain. The revised definition needs to recognise that uncertainty and give patients, medical practitioners and pension providers a clear, workable test.

“The announcement does not yet specify the new wording or confirm whether it will align with the test used for DWP benefits, so the detail will be important.”

Pension death benefits

Pensioners, such as surviving spouses, will also benefit from the government decision to remove the requirement that pension scheme administrators must pay tax-free death benefits to beneficiaries within two years of learning of the death of a member aged under 75 (the ‘two-year rule’).

Under the change, a pension lump sum death benefit paid to a beneficiary more than two years after the pension scheme became aware of the member’s death will no longer be subject to an income tax charge.

The two-year limit is also being removed where beneficiary annuities are paid from the deceased member’s drawdown funds and where funds are designated for a UK resident under a pension scheme outside the UK.

O’Connor from PensionBee said: “Removing the two-year rule is a welcome fix: families shouldn’t face a tax bill simply because a pension payout was delayed by probate or paperwork outside their control.

“Greater certainty on how tax is collected when the lump sum death benefit allowance is exceeded should also make a difficult process less daunting for beneficiaries. In the run-up to pensions being included in estates for inheritance tax purposes, these changes are even more important.”

The annual MoneyWeek Wealth Summit takes place on Friday 6 November in central London. Our theme is The Age of Change: investing in a world of technological, political and financial revolutions. We look forward to meeting many of you there to discuss the implications.

The agenda gets underway with historian and geopolitical expert Peter Frankopan, professor of global history at Oxford University and best-selling author of The Silk Roads, The New Silk Roads and The World Transformed. He will sit down with MoneyWeek's Andrew Van Sickle to discuss how rising tensions between America, China, Russia and other powers will shape the new world order.

MoneyWeek's long-standing view is that we are heading into an era of less cooperation and more competition, and those tensions will only get worse. What does that mean for investors? There are reasons to be optimistic, but also reasons to be very cautious about anything that depends on the type of environment that prevailed a few years ago.

Our panel of Dominic Scriven (Dragon Capital and Vietnam Enterprise Investments), Jasmine Yeo (Ruffer) and Stephanie Kelly (Lombard Odier) will consider the implications for energy, security, inflation, interest rates, stocks, bonds, global trade, emerging markets and more.

Profit from top growth stories

Then we break for coffee and a chance to question Rory Stokes (Janus Henderson and European Smaller Companies) about the outlook for Europe. How does he find growth stocks in a region that is often criticised for lacking dynamism?

After that, it's time to get stuck into the big themes in today's markets. Richard Clode (Janus Henderson and Bankers Investment Trust) will consider the broader investment implications of the AI boom, which looks very different to past technology cycles. What are the opportunities and risks of this potential multi-decade investment trend?

Steady income can be a good anchor in changing markets. Martin Connaghan (Aberdeen and Murray International) runs one of the few trusts that invests in both developed and emerging markets. He'll be outlining his views on finding diversified, global income with growth.

Higher defence spending is sadly a reality in an unstable world. Investors need to face reality. So Tom Bailey (HANetf) is joining us to explain how technological changes and geopolitical threats will determine which companies benefit the most.

The new commodity supercycle seems to be under way, with prices of critical metals rising. Olivia Markham (BlackRock and BlackRock World Mining) will examine why supply is set to struggle to keep up with new sources of demand that range from AI data centres to electric vehicles.

We're stopping for lunch, but the ideas will keep coming. Our exchange-traded fund (ETF) masterclass will examine key trends in these products – which are no longer simply cheap trackers for major stock markets – and discuss how investors can best employ them in portfolios. Our expert guests for this session are Natali Monardo (IncomeShares), Dan Gold (Stratiphy) and Jamie Gordon (VettaFi).

Take a hard look at Britain

After lunch, we focus on the outlook for the UK for a few sessions. We will be recording a discussion about the implications of this week's Budget live episode of our MoneyWeek Talks podcast, hosted by MoneyWeek's Kalpana Fitzpatrick.

Independent economist Julian Jessop, multi-asset manager Emma Moriarty (Capital Gearing) and adviser Lisa Conway-Hughes (LCH Wealth) will discuss the prospects for “good growth in every postcode”, what the bond market makes of the government's spending plans, and the key implications for our own financial planning.

The UK stock market remains perennially unfashionable, yet the large-cap end of the market has performed relatively well in recent years. Ian Lance (Redwheel and Temple Bar) will examine how a focus on unfashionable value stocks of the type that now make up much of the UK offer valuable diversification from a global index increasingly driven by tech and growth, as well as giving some protection against geopolitical uncertainty.

The UK investment trust sector has been through difficult times, with discounts widening and activist investors putting pressure on boards. The trend now seems to be changing as trusts focus on improving performance, but share prices continue to lag in some parts of the market.

Tom Treanor and Charlotte Cuthbertson (Asset Value Investors and MIGO Opportunities) will discuss whether these offer value, and why investors should focus on situations where there is a catalyst for extracting value.

Our focus on Britain will continue into the afternoon coffee break, with a Q&A session for Ben Ritchie (Aberdeen and Dunedin Income Growth). We'll be asking him about foreign buyers snapping up UK firms on the cheap, and how investors should respond.

Invest for lift-off

The final session of the day focuses on ideas that are – in one way or another – looking for lift-off. We begin with a look at venture capital trusts (VCT) with Shane Gallwey (Guinness Ventures). These funds play a key role in providing capital for early-stage firms to scale up and grow. How will the changes to tax relief on VCT subscriptions affect demand from investors?

After that, it's time to discuss cryptocurrency tokenisation and related matters, with regular MoneyWeek contributor Charlie Morris (ByteTree) and early sceptic turned partial convert Izabella Kaminska (The Blind Spot). Are digital assets set to revolutionise the financial system? Or are they at most a new form of plumbing, like the switch from paper records and forms to electronic transactions that took place decades ago?

We wrap up the main agenda with a trip above and beyond. Space is one of the very few areas that can compete with AI for excitement right now. However, this is not simply a technology story – it's also about geopolitics and security, with countries that lack space capability set to lose strategic autonomy. Rob Desborough (Seraphim Space) will set out the opportunities and risks this poses for investors.

That wraps the main agenda, but not the event. We're holding an evening drinks reception to talk over the themes of the day with fellow attendees, MoneyWeek contributors and guests. Drinks are included in the ticket price, along with breakfast, coffee and lunch.

Book your place and join us at this year's venue, Together at 88 Wood Street in the City of London. Tickets are £219 for MoneyWeek subscribers and £299 for non-subscribers.

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.

Consumer brands used to be dependable outperformers. But quality companies that have consistently and reliably delivered compounding growth in value for shareholders over the long term – companies such as Diageo, Unilever and Reckitt Benckiser – have all struggled in recent years.

Their global consumer brands, including Johnnie Walker (Diageo), Dove (Unilever) and Dettol (Reckitt), generate the bulk of their sales outside the UK, so they can even benefit from a weak pound. But their international diversification and high gross margins have failed to deliver for investors, catching out high-profile professional fund managers such as Nick Train and Terry Smith.

In the period that saw the internet bubble bursting a quarter of a century ago and the financial crisis of 2007-2009, Unilever's share price quadrupled, Diageo was up six times and Reckitt Benckiser by almost 11 times from 2000 to 2020. That might sound pedestrian for investors in US technology stocks, but consider that the FTSE 100 trod water over those two decades, a time when blue-chip shares such as Lloyds Bank or Vodafone fell by between 75% and 95%.

Warren Buffett and the economics of consumer brands

Berkshire Hathaway's investment in See's Candies illustrates the economics of consumer brands. In the 1970s Warren Buffett received a phone call asking if he was prepared to pay three times book value to buy See's Candies, an unheard-of multiple for a value investor from the Benjamin Graham school, who would normally look to buy tangible assets with a “margin of safety” of 50p in the pound. Buffett almost dismissed the opportunity as too richly priced, but upon reflection he returned the phone call to do the deal.

The experience worked out well and taught the then middle-aged Sage of Omaha that much of a company's brand value is not recorded on the balance sheet. For a technology or pharmaceutical group, research and development (R&D) costs can be capitalised and recorded as “intangible assets”. Marketing costs, a key investment for consumer brands that often make up between 12% and 18% of revenue, are expensed as they are incurred through the income statement. Accountants take a cautious view of advertising expenses, assuming the costs are effectively wasted, or at least should not be counted as assets.

Analysts can add back marketing spending and capitalise it as an asset on the balance sheet, the same accounting treatment as for R&D. However, they would then need to form a view on the lifespan of that asset, when in reality cherished brands such as Diageo's Guinness maintain their value through the decades. Brands can wither, losing their appeal through lack of care, despite continued marketing spending. Tango, the fizzy drink famous for edgy, award-winning marketing, outselling Coca-Cola's Fanta two-to-one in the 1990s, is an example of the latter. Although Britvic continued to pour large sums of money into marketing, the brand failed to refresh. Organically generated brand value, such as that deriving from Diageo's Guinness, does not therefore feature on the balance sheet, whereas acquired brands and trademarks can be recorded as intangible assets. Examples for Unilever include Horlicks (€2.3 billion), Knorr (€1.8 billion) and Hellmann's (€1.2 billion). The latter two brands have been sold on to US food group McCormick in a $44 billion deal, announced in March this year, to create a group with $20 billion of revenue and an operating margin target of 23%-25%. Unilever's shareholders retain 55% ownership of the combined group and the shares will have a secondary listing in London, while Unilever itself will keep 9.9%.

Just how significant intangible assets can be is illustrated by Diageo's acquisition of the “super premium” Don Papa rum brand for £294 million in early 2023. Only £1 /millionof that was represented by property, plant and equipment, and £6 million by inventory. The brand was valued at £293 million. Just two years later, Diageo wrote down the value of the brand by $287 million. (Diageo had in the interim changed its reporting currency from pounds to dollars.) That write-down is dwarfed in comparison with Kraft Heinz, which announced a $15.4 billion write-down of its best-known brands in 2019, following a deal backed by Buffett and private-equity firm 3G five years earlier.

Unsurprisingly, many investors take a sceptical view of intangible assets because the value can disappear from the balance sheet at the stroke of a pen and management can be slow to write down the value of acquired brands. Casamigos, the tequila brand acquired by Diageo from George Clooney and others for $1 billion, saw an organic sales decline of 25% this year, but so far there has been no write-down. Yet the power of some brands to keep generating cash flows was demonstrated by this year's 12% sales growth of Guinness.

Struggling to keep pace with price rises

Around the time of his See's Candies deal, Buffett had a headache with his original Berkshire Hathaway acquisition. While See's was demonstrating pricing power in an inflationary environment, Berkshire itself, the textile factory based in Berkshire County, Massachusetts, had tangible assets such as machinery that were obsolete. To continue to generate cash flow, Buffett had to keep funding capital expenditure (capex) in new equipment, despite knowing he'd fail to achieve an acceptable return. It's all very well owning factory assets as inflation rises, but at some point the machines need to be replaced at a price greater than the original cost. Depreciation policies, which assume a finite useful life, implicitly assume that replacement costs don't increase with inflation. Thus Berkshire's tangible assets were a drag on returns, while the intangible assets, the See's Candies brand, unrecognised by the bean counters, was paying for itself many times over.

A second attraction of consumer brands is that they tend to report high gross margins (more than 60% in the case of Reckitt Benckiser and Diageo, just below 50% in the case of Unilever). A buttress against rising inflation is a relatively low cost of goods sold (CoGS) – making things for 40 and selling at 100 – meaning that a 10% rise in CoGS has much less impact than upon a group with lower margins. All three groups have been reporting stable gross margins, passing on rising input costs to consumers. The trouble has been revenue growth that has struggled to keep pace with inflation.

By contrast, supermarket groups Tesco and Sainsbury's, with gross margins below 10%, have seen their share prices do unexpectedly well in response to inflation. Although low margin, they have been able to pass on the rising cost of essential items to shoppers, with many consumers favouring supermarkets' own brands. In the 1970s these own brands were synonymous with low quality and cheapness, but recently supermarkets have become more sophisticated at marketing their own-label alternatives. Across the largest six markets in Europe, supermarket own-label brands are growing faster and have reached a 50% share of the grocery market.

The supermarkets have been winners since Russia's invasion of Ukraine, with Sainsbury's up by a third and Tesco up by 90%. By contrast, Diageo has halved in value over the same time period, as other global spirits groups such as Brown-Forman, Pernod and Rémy Cointreau have all struggled. Reckitt and Unilever, which sell everyday items, have also struggled to match the performance of the food retailers.

Some of that performance reflects the starting point, with investors in Reckitt, Unilever and Diageo prepared to pay 20 to 30 times earnings, a premium valuation. Brands are long-duration assets. Arthur Guinness began selling beer in 1759. Before the pandemic, investors were prepared to accept low dividend yields as the discount rate for long-lived assets was low. When “risk-free” UK ten-year gilt yields rose from around 1% five years ago to approach 5.5%, the low dividend yields of consumer staples groups lost their relative appeal.

In an inflationary environment, consumer brands should be able to raise dividends in line with nominal growth. Yet Diageo halved its dividend at the group's December half year to give management more financial flexibility as it struggled with falling sales and a 26% drop in reported earnings per share while burdened with $22 billion of net debt, equivalent to 3.4 times Ebitda.

This points to an essential difference between 1970s inflation and the 2020s version. Although the cause of the inflation was remarkably similar – energy-price shocks from conflict – the level of indebtedness has proved more significant for share-price performance. The corporates themselves are carrying more net debt: Diageo's interest costs have risen 2.3 times from 2022 to 2026. Customers who buy brands are more heavily mortgaged than in previous decades. Unlike in the 1970s, middle-class professionals have faced a severe wage squeeze relative to inflation and many carry far more household debt relative to disposable income. Following the financial crisis, real wages have stagnated in the UK, but those earning close to the minimum wage have seen their earnings outpace those earning the median – the so called “K-shaped recovery”, with the top 10% and the bottom 10% seeing gains, while workers in the middle of the pay distribution have been going backwards in real terms.

Thus, despite the expectation that consumer-brand groups would protect investors from inflation, the groups have lost market share and struggled to grow revenue. At €50.5 billion, Unilever's turnover remains below the €51.3 billion that the group reported in 2012. There are signs of recovery. At the first-half results in June, the group reported 4.8% underlying sales growth, and at £49 per share the group trades on a price/earnings (P/E) ratio of 16.9 times December 2027 forward earnings and an EV/Ebitda of 12 times the same year. That includes the food brands, with the McCormick deal expected to complete next year.

Some consumer brands groups have ‘lost the plot’

Some of the consumer-brands groups have also become unfocused and inefficient. Dave Lewis, the new CEO of Diageo, is targeting $1 billion (or 12% of administrative expenses) of annual savings and is aiming to reduce waste, duplication and inefficiency. In his 2021 letter to investors, Terry Smith questioned whether Unilever had “lost the plot” as management pondered the broader purpose of Hellmann's mayonnaise, trying to convince us that buying the condiment was a step towards sustainability and environmental friendliness.

Unilever responded to the criticism by restructuring its portfolio. First it demerged Magnum Ice Cream into a £9 billion spin-off, then combined its food brands with McCormick in the US. At its first half results in June, Magnum reported organic sales growth of 4.7%. The group trades on a P/E ratio of 16 times December 2027 forward earnings and an EV/Ebitda of 9.2 times.

Brands, by their nature, attempt to create a feeling of association, that they stand for values consumers identify with. This association should mean a brand occupies a place in the collective consciousness so a shopper feels good choosing their ice cream on criteria other than price. Yet as brands become more global and management fear offending anyone, they become anodyne. Reckitt Benckiser defines its purpose as being to “protect, heal and nurture in pursuit of a cleaner, healthier world”. Diageo says its purpose is celebrating life. Perhaps they're losing their edge?

Aside from existential angst over purpose, consumer brands have also created their own problems, not least with poor-value acquisitions. Reckitt is facing legal problems in the US over its infant formula feed. In March 2024, an Illinois state court jury awarded $60 million to a plaintiff. In June this year, the court overturned this verdict and ordered a re-trial. It remains unclear what the final liabilities will be. Management impaired £5 billion of goodwill from the Mead Johnson Nutrition acquisition in its 2019 fiscal year, primarily due to increased competition in China and weaker Chinese market growth, followed by further large impairments in 2023 and 2024 related to the infant formula specifically. Reckitt's acquisition of Mead Johnson for $16.6 billion (at the time £13 billion) in 2017 was an “unforced error” and represents one of the worst UK corporate acquisitions since Royal Bank of Scotland's bid for ABN Amro.

Investors must tread carefully

Investors have long accepted that hubristic bank management can make foolish acquisitions at the wrong point in the cycle. However, consumer-brand groups that sell household products and over-the-counter treatments such as Strepsils and Nurofen should not be causing investors headaches. Reckitt's first-half results in June 2026 showed that goodwill and intangible assets on the balance sheet stood at £15.9 billion, almost three times the group's shareholders' equity of £5.7 billion. Net debt stood at £9.4 billion (2.5 times adjusted Ebitda). Reckitt reported like-for-like revenue growth of 2.6% at its first-half results in June, below the level of inflation. The shares trade on a 15.2 times P/E based on 2027 forward earnings, or 11 times the same year's EV/ Ebita. Unlike Buffett's purchase of See's Candies in the 1970s, it has been the “goodwill” from the acquisition of Mead Johnson that has caused problems. That said, even Kraft-Heinz, backed by Buffett a decade ago, has seen its shares fall 70% since 2017. Investing in consumer brands can trip up even the best investors.

The case for buying Diageo

Diageo, owner of the Johnnie Walker whisky, Smirnoff vodka and Guinness brands, as well as of around 200 others, has seen its rating go from above 30 times P/E during the pandemic to 13 times now. Some of the exuberance five years ago was driven by a rise in demand from households stuck at home, which saw sales jump around 40% to £15.5 billion in the two years of the pandemic to the June 2022 financial year.

This was not sustainable, and sales are now forecast to remain below the $20 billion (£15 billion) level until the June 2029 financial year. Some of the derating has been driven by fears that GLP-1 weight-loss drugs will also reduce alcohol consumption. However, Diageo’s stalling revenue growth predates the advent of these drugs. Between 2013 and 2018, sales flat-lined. Management responded by suggesting that although alcohol consumption was on the decline, drinkers would pay up for quality – the trend towards so-called “premiumisation”.

Certainly, “Generation Z”, those born between 1997 and 2010, are drinking less. Yet premiumisation was a strategy that might have appealed to management and high-earning fund managers, but not to middle-class customers. Perhaps those who sit in the top half of the “K-shaped recovery” are out of touch with the challenges that consumer-brands groups’ customers have faced.

Effectively, the investment case in Diageo has shifted from being that of a “quality compounder” to becoming a classic turnaround story, with the new chief executive “kitchen sinking” his first set of results. In November last year, Diageo announced that Dave Lewis, former boss of Unilever and well regarded for his turnaround of Tesco, would become CEO from the start of this year. Lewis has wasted no time, first cutting the dividend in February, then hosting a Capital Markets Day (CMD) in August. At the CMD, management presented targeted cost savings of $1 billion per annum from group overheads, back-office operations ($850 million) and supply-chain efficiencies ($150 million). Results for the financial year to June showed that organic sales were down 2% across the group, and down 8% in North America. Management expects that negative trend to continue in North America, but the medium-term group target is for low single-digit organic sales growth.

Management hopes that its ready-to-drink (RTD) offerings – that is, pre-mixed gin and tonics and the like – could deliver growth and appeal more to younger generations. It is also walking back from the premiumisation strategy and will now put a greater emphasis on value brands to remain relevant to customers who are feeling squeezed.

Diageo’s shares are trading on a 13.3 times P/E based on June 2028 forward earnings or ten times EV/Ebitda the same year, well below historic averages. The yield is 2.5% as the dividend was cut to $0.50 (or 37p) in February, although the full-year dividend is now covered three times. The shares are down 60% from their peak in 2022, but have begun to recover this year. They are a buy.

Bruce owns shares in Diageo

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.

Equinix (Nasdaq: EQIX) is a real-estate investment trust that invests in data centres in order to rent them out to technology companies. It has amassed an impressive portfolio of 282 AI-ready data centres in more than 70 countries and has partnership agreements in place with a large number of tech giants, including Nvidia, Oracle, Amazon Web Services, Dell and Google.

AI is clearly a transformative technology. However, rather than opt for companies working on AI, many investors have adopted the indirect approach of buying firms facilitating the boom, notably those operating data centres. Data centres are used to store vast amounts of information collected by technology companies, which need the data to train their AI models.

At present, there is a huge demand from Big Tech, which is trying to build out capacity as quickly as possible. However, just because an industry is doing well doesn't mean that all the shares in it are worthwhile investments.

Equinix's shares seem to have lost momentum

All this sounds positive, but there are a few notable problems to bear in mind. All the tech companies have been expanding data-centre capacity on the assumption that the demand for them will continue to grow at a high rate. This supposition may be overoptimistic, especially given the mixed impact of AI on real-world productivity that many firms have experienced. Several major studies have highlighted a high failure rate of AI projects.

There has also been growing interest in AI models developed by technology firms in Asia that potentially require much less computing power and therefore need fewer data centres. Furthermore, a backlash against data centres – which are unsightly, noisy and wasteful as they consume a great deal of water and energy – has affected some projects that Equinix has been involved in (such as one in South Africa). The upshot is that demand could slow down, or even reverse.

However, even if appetite for data centres continues to grow, Equinix's extremely high valuation looks likely to hamper the stock's progress. The firm is expected to grow revenue at under 10% a year over the next few years, a solid but not spectacular pace, and it achieves a return on capital employed (ROCE) of only 6%. Yet the stock trades at 50 times estimated 2027 earnings, and nearly ten times current sales. While other data-centre firms also have high valuations, some of them are more modestly valued. Iron Mountain, for instance, is a similar business selling for a more modest (but still high) 40 times 2027 earnings.

From a technical perspective, moreover, Equinix's shares seem to have lost momentum. They have drifted downwards over the past six months and are trading below both their 50- and 200-day moving averages. I would therefore suggest shorting Equinix at the current price of $953 at £3 per $1. I would cover them if they hit $1,283, which gives you a total downside of £990.

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.

Life on a Caribbean island moves as fast as its resident population. On the island of Canouan in The Grenadines, that population mostly consists of tortoises. There are thousands of them. Not for nothing is Canouan known as “Turtle Island”.

Why “turtle” and not “tortoise”? I'm guessing that might have something to do with the island's history. Canouan, today part of Saint Vincent and The Grenadines, where King Charles is the head of state, was settled in the 18th century by the French before the British later wrested it off them. In French, they use the same word for both “tortoise” and “turtle” – tortue. I once asked a French friend why that was. They shrugged and said, “what's the difference?” The difference, I replied, is in what happens when you throw the wrong one back into the sea.

Suffice it to say, no tortoises were harmed during my stay on Canouan – at least not by me. So careful are the people who live on the island of the animals that they will actually stop their cars, buses and vans to scoop them up from the middle of the road and cart them off to the side. Slow-moving sleeping policemen, they are not. But it also means it can take a little longer than you might have expected to get anywhere, which brings me back to my initial observation – life on Canouan is slow. And that is exactly the point. You come to Canouan to relax.

Silver Turtle: a residence for a prince

My room at the six-bedroom Silver Turtle residence, part of Canouan Estate Resort & Villas, is set just down the hill from the villa proper. I come to think of it as a cosy annex, tucked away within its own little secret garden. I have a large bathroom with a shower and sleeping is comfortable beneath the mosquito net.

On the grass outside my door, a gang of tortoises loiter. They must have been there for quite some time – possibly longer than the villa has been standing – because some of them have two humps on their shells. This, it is explained to me, means they are very old. You could be forgiven for wondering why they even need shells given the lack of threats on Canouan. There isn't much to worry them – and that goes for human visitors too. Most tortoises retract their heads as you walk past. The more cantankerous among them may give a little hiss, but the chase is over before it has begun. I've made the short hop up the hill to the infinity pool, which overlooks the barrier reef and the Caribbean Sea.

The residence could be described as colonial in style – dark-wood floors in the bedrooms, ceiling fans and cane furniture. It's also big. There is a proper kitchen and a living room with a huge telly. On the wall is a framed letter from Prince Harry thanking the owners for letting him stay there in 2016. But you don't come to the Caribbean to sit inside watching the box. Outside, beyond the sliding doors, is a large seating area and a dining table, both under cover. The estate has four of these palatial residences and there are various smaller villas and suites, suitable for families and groups of all sizes.

On the estate, you will find an 18-hole golf course designed by the legendary Tom Fazio, along with tennis courts, a children's club and a spa and gym. Close by, there is also the 17th-century Anglican “Estate Chapel”. If its Norman architecture looks out of place among the Bougainvillea and palm trees, that's because it is. The chapel was actually built in England and shipped over to Canouan stone by stone. It is still used by the local community, but it is also a popular place for weddings and it's not hard to see why.

While on Canouan, you also have the choice of staying at the Mandarin Oriental and Soho Beach House hotels. All three properties operate an “invisible key” scheme that gives you the option of using the facilities at each. The island is sufficiently petite that you can fly between the various properties by the seat of your golf buggy, swerving for tortoises, of course. That's particularly handy when you get a bit peckish in your residence and you don't feel like cooking.

Mandarin Oriental Canouan: laid-back luxury

At the Mandarin Oriental, for instance, there's the Lagoon Café for a relaxed bite and the Tides Bar + Grill for fine-dining. That there is a Mandarin out here at all, in the Caribbean, is marvellous. It's certainly the most far-flung of the upmarket chain that I've visited, including the flagship hotel in Hong Kong. And yet, the brand has made the island its home. The decor has, for example, certain Asian influences which blend in with the tropical flowers beside the swimming pools and other Caribbean flourishes. Hong Kong can be pretty hot and steamy, too, after all.

That said, Canouan is certainly no stranger to well-heeled visitors. The island is home to the fancy Sandy Lane Yacht Club and there is an airstrip big enough to accommodate private jets. Most British visitors to Canouan will arrive by air via a short 45-minute hop from Barbados.

While everyone has heard of Mustique, which is also in The Grenadines, to the north, it's a wonder Canouan isn't better known. Maybe that has always been on purpose. Those who know want to keep it a secret. So much for that!

Soho Beach Hotel Canouan: a lost outpost

The Mandarin Oriental, Canouan, sits on beautiful Godahl Beach on the Atlantic side of the island. Over on the west-facing Caribbean side, you have Soho Beach Hotel Canouan – another “lost” outpost, this time of the popular London-based chain of private members' clubs.

You don't, however, need to be a member to enjoy its laid-back atmosphere. Anyone can stay at this pocket-sized boutique resort. Much like Soho House's members, the interior design in the rooms has that carefully curated air of not really trying down to a tee. The desk, tables and chest of drawers in my room have that lived-in quality and the wardrobe is an imposing, almost Gothic dark-wood edifice. It all feels very Sohoboho. There is a wide balcony and the room is flooded with golden light through the white window slats, especially in the evenings when the sun sets over the sea, making silhouettes of the yachts.

In the living room, there are arty coffee-table books parked here and there and a bar with a proper selection of English teas and freshly baked biscuits. In the bathroom, there is a very wide selection of bathroom products from fashionable, Somerset-based Cowshed. The idea that you might make do with refillable plastic bottles of shampoo and shower gel, screwed to the wall, is laughable at Soho Beach House Canouan. You have a choice of each depending on your mood. Similar products can be found in the Cowshed spa, just down the beach from your room.

The original Soho House on Greek Street was famously the club for “creative types” and here, on Canouan, the first Soho House in the Caribbean, you can give new meaning to the term “remote working”. I would be happy to call this corner of Canouan my office. Then, when it's time for the sundowners to come out at the bar, housed in a large open-sided thatched structure known as a palapa, it's also time for the laptops to get put away. House rules. The restaurant menu is a list of local favourites, including baked snapper from the clay oven.

From the jetty the next morning after breakfast, we take a yacht around some of the southern Grenadine islands and enjoy a lobster lunch on Union Island, which, like Canouan, is thankfully now recovering from Hurricane Beryl. The storm did terrible damage to the southern Grenadines in 2024. And we also stop off at Tobago Cays for a spot of snorkelling with our hard-shell friends – the turtles are fleet of flipper this time and most definitely not lumbering land tortoises, no matter what the French may tell you.

Chris was a guest of Canouan Estate Resort & Villas (Silver Turtle costs from $14,000 a night, canouanestateresortandvillas.com), Mandarin Oriental Canouan (from $1,400 per night for a one-bedroom suite, including breakfast, mandarinoriental.com/en) and Soho Beach House Canouan (from $815 a night, sohohouse.com).

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.

Brazilian stocks and its currency have suffered a “Black Monday” following the surprise re-election of Luiz Inacio Lula da Silva in the second round of presidential elections. The veteran left-winger's promise of a fiscal splurge is not going down well with investors, who sent the benchmark Ibovespa share index plunging nearly 14% on Monday, with the real currency selling off 8% against the dollar for its largest daily drop since 2002. That double-whammy sent the MSCI Brazil index, which is priced in dollars, down nearly 25%, a sell-off on the scale of the 1987 Black Monday crash on Wall Street, says John Authers on Bloomberg.

What does Lula's victory mean for Brazilian stocks?

Lula entered the second-round vote as the underdog after coming second in the first round behind Flavio Bolsonaro, his right-wing opponent. But polls always showed that the vote was close. The scale of the sell-off of Brazilian stocks says more about the political biases of stock and bond investors – who had priced in a 100% chance of victory for Bolsonaro – than it does about the scale of the electoral upset. Latin American markets have a persistent tendency to “freak out” whenever a left-winger wins, but this creates distortions and “buying opportunities” for the more dispassionate.

Lula's victory is “one of the most remarkable comebacks” in recent Brazilian history, says Viktor Szabo of Aberdeen Investments. Since the return to democracy in the 1980s, no candidate who trailed in the first-round has gone on to win in the second.

The victory was bought at the cost of a raft of populist economic promises, including a 15% rise in family benefits, a federal fuel tax holiday, a new monthly stipend for low-income university students, free public transport at weekends and a reduction in the maximum working week from 44 to 40 hours with no fall in pay.

Brazil has little room to pay for it all. Gross public debt stands at 83% – a high level for an emerging economy – and the deficit is close to 10% of GDP. The country also pays “one of the highest real interest rates in the world”. Interest payments in Brazil “eat up” roughly 35% of all current government revenue, Thierry Larose of Vontobel Asset Management tells Barron's.

Still, history suggests that investors are overreacting, says Sebastian Pellejero on Breakingviews. Lula has a pragmatic streak and his record is impressive. The economy grew more than 4% a year during his first two terms in the 2000s. And the Ibovespa remains 57% higher since he returned to office in 2023, even following the latest sell-off.

Lula faces a right-leaning Congress that will block some of his spending plans. And in an era of commodity inflation, Brazil's vast energy and agricultural reserves are driving rising trade surpluses. “For all its problems, there's... always some sun in Brazil.”

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.

The latest battery pack from Chinese company CATL promises to put range anxiety to bed for good, with the potential for 1,500km on a single charge. When they finally come to top up, electric car drivers can add 520km of range in just five minutes. Chinese car maker BYD has introduced a vehicle-mounted drone platform. In theory, the average Chinese electric car driver could drive from Beijing to Shanghai on a single charge, receiving food deliveries on the way.

This is just one way Chinese manufacturers are reshaping industries and a clear sign of China’s extraordinary innovation impulse. China is leading the way on patents, currently submitting around 4x the level of patents as the US. It is a global leader in areas such as robotics, clean energy technology and electric vehicles (EVs), and is increasingly competitive with the US on artificial intelligence (AI).

Yet many conventional economic indicators for China look depressing. Retail sales, for example, have barely grown over the last 12 months. The housing market, long a drag on household wealth, continues to go backwards. Deflation is a spectre looming over the economy. There is huge over-supply in certain industries thanks to inefficient government subsidies and difficulties in key export markets, such as the US.

Potential investors in China must deal with these competing realities. The Chinese stock market has real breadth and encompasses the good and bad of its economy. On the one hand are innovation powerhouses, on the other are sclerotic state-owned enterprises run for the good of the country rather than the good of shareholders.

Shifting sources of growth

For Will Mackintosh-Whyte, fund manager of asset manager Rathbones’ multi-asset portfolios, this is the sign of an economy in transition.

“We believe that the growth model in China is changing,” he says. “Property and infrastructure are no longer doing the heavy lifting they once did. Increasingly advanced manufacturing – semiconductors, automation, robotics, machine tools, EVs, batteries – and increasingly sophisticated capital goods, technology and AI… are the new growth drivers.

“China's manufacturing competitiveness remains an important source of support to the economy, and is likely to be a bigger driver of growth than the consumer,” he added. Domestic consumption, by contrast, “while strategically important, is currently weaker, weighed down by the continuing softness in property impacting consumer confidence”.

This dual-speed economy is evident in funds investing in the region. While returns from the Chinese stock market have, as a whole, been pretty miserable over the last 12 months, some funds have delivered excellent returns. The gap between the top and bottom performing funds in the IA China sector is 64% over three years. Top-performing funds such as the T. Rowe Price China Evolution Equity Fund or JPM Greater China Fund have risen more than 50% over that period, but the weakest funds are under water.

Targeting innovation

China has seen the same boom in AI infrastructure spending as the US. It is now becoming increasingly competitive with the US, albeit with a different model. Its AI is open-source, meaning it can be used and adapted by anyone. This makes it different from US AI, which is owned by individual companies. China doesn’t have the sophisticated ‘frontier’ models for AI, such as those from Anthropic, but these aren’t necessary for many of the hoped-for productivity gains from the new technology.

Mackintosh-Whyte, for example, is gaining exposure to AI growth through cloud provider Alibaba (NYSE:BABA).

“It gives exposure to Chinese cloud, enterprise AI and model adoption, which has its own chips and around 10,000 enterprise large language model (LLM) clients,” he says.

He also has exposure through non-US listed companies with significant Chinese businesses. “ASML (AMSTERDAM:ASML) and Applied Materials (NASDAQ: AMAT) are names we own who produce products which are part of the semiconductor supply chain where China is an important end market. We have copper exposure – directly and via owning Freeport-McMoRan (NYSE:FCX) – where the Chinese investment in the electricity grid is driving significant demand for the metal.”

Dale Nicholls, portfolio manager of Fidelity China Special Situations (LON:FCSS), says it is still early days on AI investment and there will be winners and losers, but initial signs for many of the large platforms – TenCent (HK:700), Alibaba and Bytedance - is positive.

“Encouragingly, we are seeing them become more disciplined elsewhere, reducing losses in highly competitive areas such as food delivery while directing more capital towards AI infrastructure, cloud and applications that could strengthen their long-term competitive position,” said Nicholls.

Nevertheless, as in the US there are some worries over the potential for an AI bubble. Valuations in AI companies in China may not be as stretched as their US peers, but they have been subject to similar excitement. With that in mind, Nicholls is seeking less obvious routes into the Chinese innovation trade.

He expects the next phase of adoption to extend beyond digital applications into physical or ‘edge AI’.

“Robotics, autonomous driving, smart devices and wearables should become increasingly important as intelligence is embedded directly into products and services,” he says. He holds robotaxi group Pony.ai (HK:2026) in the portfolio.

Looking beyond AI, Nicholls also holds battery pioneer CATL (HK:3750). While the electric car market looks saturated and most companies are unprofitable, CATL should be a major beneficiary of the electrification trend. It is also moving beyond cars, leveraging its capabilities in energy storage systems to capture growing demand from the AI infrastructure buildout.

“As AI deployment increases electricity requirements, we see opportunities across the wider power ecosystem,” said Nicholls.

Roderick Snell, manager of the Baillie Gifford Pacific Fund, is investing in some direct AI beneficiaries, such as Mech-Mind (HK:9615), a company that develops 3D machine-vision systems – effectively the eyes of robots. However, he is also investing in energy, resources and construction companies that will benefit from demand for power infrastructure and critical materials, both from AI and from the electrification of China’s economy.

How can you invest in China?

A low cost route to access China’s stock market would be through an index-tracking fund or exchange-traded fund (ETF). The HSBC MSCI China UCITS ETF (LON:HCHA), for example, would give investors a decent weighting in Alibaba and TenCent. The problem is that it also gives access to a lot of ‘old economy’ Chinese companies. It has just 11% of assets invested in technology as of 30 September, with higher weightings in consumer and financial companies. Like the broader Chinese stock market, it has fallen over the past 12 months.

Paul O’Neill, chief investment officer at Bentley Reid outlines a possible alternative: “We own the Amundi Core MSCI China A Swap ETF (LON:C027). It tracks the MSCI China A index, which covers large and liquid A-shares listed in Shanghai and Shenzhen, priced in RMB.” The ETF’s top holdings include CATL and chipmaker Cambricon (SHANGHAI:688256). The ETF mixes battery and AI hardware leaders with banks, insurers and utilities.

“The top ten are only about 18.5% of the fund, and it is diversified across roughly 400 stocks,” said O’Neill.

Active funds may provide more targeted exposure to China’s new innovation economy. The Baillie Gifford Pacific fund, for example, has 48% of assets invested in technology, with only negligible amounts in areas such as real estate. The Allianz China A-Shares Equity Fund focuses on ‘created in China’ industrial and technological advances.

The innovation story in China is every bit as powerful as that of the US. There are industries where China is leading the world and it looks increasingly competitive in areas such as AI. Investors have plenty of options to target this part of China’s economic growth story, while ignoring its sluggish, legacy industries.

AI and technology stocks perked up early this week following the publication of the IPO prospectus for Anthropic. Investors took heart from news that the Claude chatbot maker pulled in more than $16 billion in revenue in the first half, says Ipek Ozkardeskaya of Swissquote.

But cracks have begun to emerge in parts of the AI landscape. The cost of insuring debt issued by CoreWeave, a “neocloud” data-centre business, recently rose to allow for “a more than 60% chance of default within the next five years”, according to Bloomberg. CoreWeave is a highly leveraged owner-operator of potentially fast-depreciating assets, says Victor Balfour of Rothschild & Co. It's little surprise the shares have plunged 67% since their peak in June 2025.

That doesn't necessarily spell doom for AI more generally. The technology “hyperscalers” are much more robust – Microsoft shares have risen 38% since the start of July. These companies are issuing a lot of debt to pay for their AI investments, but their strong operating cash flows and balance sheets are “reassuring”.

Stijn Van Nieuwerburgh of Columbia University estimates that spending on AI data centres, power systems, networking infrastructure and specialised chips will hit $10.3 trillion in 2025-2032. On an annual basis, investment will run at 3.63% of US GDP. For comparison, the late 1990s dotcom boom saw capital spending equivalent to 1.1% of annual GDP; the 1870-1890 US railroad mania was previously the historical leader at 2.24% of GDP.

As the credit boom goes on, Van Nieuwerburgh warns financing is moving into an opaque world of “joint ventures, private credit, securitisation, special-purpose vehicles, lease commitments and loan guarantees”. That makes it much harder to keep track of where dangerous credit risks are accumulating.

AI profits bubble?

The Nasdaq 100 trades on a forward price-to-earnings ratio a little over 20 times, a premium rating but not obviously bubbly. That's because the “bubble is in profits, not valuations”, says Edward Chancellor on Breakingviews. Big American blue-chips have reported breathtaking earnings growth; S&P 500 earnings per share rose 26% in the 12 months to July, far above the long-term average of 7%. Morgan Stanley predicts the 42 most AI-exposed firms will grow profits by 67% this year.

But the AI profit boom is something of an accounting “mirage”. When a hyperscaler such as Microsoft buys a chip from Nvidia, the latter is able to book an immediate sale, but the former acquires an “asset” that depreciates slowly over a number of years. Unless the chips deliver the promised earnings bonanza, an earnings hangover will eventually catch up with the hyperscalers – “by the end of the decade… annual depreciation charges will range between $500 billion and $1 trillion”.

Earnings bubbles have occurred before, notably in US housebuilders at the 2006 peak of the property bubble. Should US profit growth revert to the historical mean and losses emerge at data-centre operators and AI frontier labs, then the damage could “metastasise through the financial system”.

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.

The highest earners face a near-50% tax rate on savings interest from April 2027 after chancellor John Healey launched a tax raid on savers.

Tax on savings income was already set to rise by two percentage points in April, but will now rise by four percentage points after Healey announced a further two percentage point rise in the 2026 Autumn Budget.

The move will bring savings tax rates to 24% for basic rate taxpayers, 44% for higher rate taxpayers, and 49% for additional rate taxpayers in the 2027/28 tax year.

You will normally be taxed on your savings when you earn interest from money held in a non-ISA savings account that goes over the amount you can have tax-free.

The main mechanism that allows people to earn savings interest outside an ISA without paying tax is the personal savings allowance.

The allowance is £1,000 for basic rate taxpayers, £500 for higher rate taxpayers. Additional rate taxpayers do not get the allowance.

People on incomes lower than £18,570 can also earn up to £5,000 extra from savings interest tax-free thanks to the starting rate for savings. This £5,000 allowance is reduced at a rate of £1 for every £1 you earn in non-savings income over £12,570.

Bear in mind that savings interest counts towards your taxable income. Interest earned could therefore tip you into a higher income tax band and potentially reduce or remove your personal savings allowance.

High earners with taxable income over £125,140 will be especially hit by the policy as any interest they earn on savings held outside a cash ISA will be taxed at 49%.

At the Budget, Healey said that despite increasing tax rates, “88% of people will pay no more tax on their savings”.

Isabella Galliers-Pratt, senior investment director at wealth manager Rathbones, said: “The decision to increase tax on savings income makes holding large amounts of cash on deposit increasingly unattractive, particularly for higher and additional rate taxpayers.

“Cash will always have an important role in providing liquidity, but the tax changes significantly alter the equation for money held beyond immediate needs. For an additional rate taxpayer facing a 49% rate on taxable savings income, a 4% savings rate would deliver just 2.04% after tax.

“For those holding substantial excess cash, that growing opportunity cost will become increasingly difficult to ignore.”

The table below shows how much more tax you can expect to pay on your savings interest after you use your tax-free savings allowances following next year’s changes.

Source: AJ Bell, assumes all interest shown is taxable, any available tax-free allowances have already been used, and the interest falls entirely within the stated band.

Cash ISA allowance changes axed

While tax rates are set to increase significantly on cash held outside an ISA, the silver lining for cash savers is that chancellor John Healey decided to reverse the previous government’s unpopular ISA reforms.

The annual cash ISA limit was set to fall from £20,000 to just £12,000 for under 65s from April 2027, but Healey reversed these changes at the Budget, meaning it will stay at £20,000. This is the overall annual ISA allowance, and contributions can be split across different types of ISA.

How to avoid paying tax on your savings interest

With tax rates on interest earned outside an ISA rising, keeping cash in a tax-wrapper will become more important than ever for savers.

We look at what you can do to avoid paying tax on your savings interest.

Check your personal savings allowance

Your personal savings allowance lets you earn a set amount of savings interest from a non-ISA before any tax is due.

Before you put money into a savings account, you may want to calculate how much interest you expect to earn from your deposit and see if it will exceed the tax-free allowance.

If the interest you expect to receive is within your allowance, then you will not need to do anything as your interest will not be taxed.

But if you find the deposit will earn more interest than your tax-free allowance, you may want to consider moving the money into a tax wrapper if you can.

If your income is very close to the next tax threshold, you should check whether your savings interest will push you into a higher tax band and cause your personal savings allowance to be reduced.

Put your cash into an ISA

Individual Savings Accounts (ISAs) are one of the most powerful tools savers have to protect their money from tax.

You can hold investments and/or cash in ISAs, and any growth you get from money held in them – whether it is interest payments or investment returns – is entirely exempt from income tax, capital gains tax and dividend tax.

Jason Hollands, managing director at wealth manager Evelyn Partners, said: “The looming tax increases on cash savings and already implemented hikes on [capital gains tax] and dividend taxes, make maximising ISA allowances incredibly important whether you’re a saver or an investor.”

You can only put a maximum of £20,000 into ISAs each year. You can put this amount into one type of ISA or divide it between different types, such as an investment ISA and a cash ISA.

That means if you use most of your annual ISA allowance for cash savings, there will be less left over to protect your investments from tax.

Hollands says you should review the balance of your wealth held between cash and investments.

“Having a cash rainy-day fund is very wise; it can help cover unexpected bills and avoid having to sell investments at the wrong time. But holding more cash than you need for several years can mean missing out on the potential for longer-term investment growth.

“The much tougher tax treatment of savings interest than gains on investments and dividend income is a further consideration. Of course, investments involve more risk as markets can fall as well as rise, so this course of action won’t suit everyone.”

Consider Premium Bonds

Premium Bonds are a savings product offered by government-backed savings bank National Savings and Investment (NS&I).

You don’t earn a guaranteed interest rate with this product. Instead, Premium Bonds holders are entered into monthly prize draws where you have the chance to win prizes between £25 and £1 million.

Every £1 you save in Premium Bonds translates into one entry into the monthly Premium Bonds prize draw and you can hold up to £50,000 in Premium Bonds.

Any Premium Bonds prizes you win are entirely tax-free, but as the prizes are distributed randomly there is no guarantee that your money will actually grow.

Consider alternatives to cash

Cash savings are popular because of their simplicity and safety. The money you hold in cash won’t fall in value, although it can be eroded by inflation.

If you are trying to avoid paying tax on your savings interest, and you already have an emergency savings pot in an easy access account, there are other options that offer cash-like returns and safety.

Galliers-Pratt at Rathbones said: “For money that is not needed immediately, investors may want to look more closely at alternatives, including short-dated, low-coupon gilts. While the coupon is subject to income tax, any capital gain on a gilt is generally free from capital gains tax for individual investors.”

Gilts are UK government bonds that are issued when the government needs to borrow money and can be bought by investors.

They are effectively an “IOU”. You buy a gilt and the government promises to pay the money back to you after a certain amount of time, including a fixed rate of interest called the coupon.

“At current yields, some short-dated, low-coupon gilts can offer a post-tax return of more than 4% for an additional rate taxpayer. Once the 49% savings rate [for additional rate taxpayers] takes effect, a savings account would need to pay more than 8% gross to produce a comparable net return,” says Galliers-Pratt.

“The message is not that people should abandon cash. It is about distinguishing between money needed for emergencies and short-term spending, and substantial excess cash that could potentially be working harder elsewhere.”

One of the more eye-catching measures announced in chancellor John Healey’s first Autumn Budget was the creation of a ‘Starter ISA’.

Little is currently known about this product, besides that it will be developed with the UK’s investment industry and will aim to encourage more Brits to start investing, but there is optimism that it could mark a more positive step than previous attempts to foster an investing culture.

“A Starter ISA could be a much more effective way of creating a new generation of investors than simply trying to push people out of cash,” said Isabella Galliers-Pratt, senior investment director at wealth manager Rathbones. “The real barriers to investing are often confidence, understanding and fear of losing money, rather than a shortage of tax-efficient products.”

The context for the Starter ISA

The UK is disproportionately a nation of savers. Despite the historical long-term outperformance of investments compared to savings, analysis from wealth manager Vanguard found that in 2024 34% of UK household financial assets were held in cash, compared to just 16% in investments.

In the 2025 Autumn Budget, then-chancellor Rachel Reeves sought to address this by reducing the annual deposit limit for cash ISAs to £12,000 for under-65s from April 2027 – with the goal of encouraging the remaining £8,000 of the total £20,000 per year annual ISA allowance to be invested in stocks and shares.

The policy attracted criticism for over-complicating the ISA system. Healey has scrapped it, confirming in his Budget that the annual cash ISA limit will remain at £20,000.

What might the Starter ISA look like?

Healey is not abandoning Reeves’s goal of getting more Brits investing. Instead of cutting cash ISA limits, a new ‘Starter ISA’ will be created which will, in Healey’s words, “reward first-time investors” and be developed in association with the investment industry.

The official government Budget document said the government will: “explore a new ISA incentive for people investing in a stocks and shares ISA for the first time. The detailed design will be developed with industry.”

So there is very little to go on at the moment in terms of what this product will look like and how it will get people investing, but the wording suggests that this will take the form of some kind of financial incentive to invest in a stocks and shares ISA over the cash equivalent – as opposed, for example, to a completely new ISA product.

Martin Lewis, founder of consumer finance site MoneySavingExpert, discussed the scheme in a post-Budget video in which he claimed to have spoken to Healey about incentivising people to start investing.

“My proposal for that was basically, you get a 10% uplift on the first £2,000 you put into a [stocks and] shares ISA,” said Lewis, who also claimed he would be involved in the government’s consultation with industry.

There is no clarity yet, though, whether this is the form the incentive will take.

“The detail will matter, but a meaningful incentive to make that first investment, alongside the right education and support, could help turn more savers into long-term investors,” said Galliers-Pratt of Rathbones. “That could take the form of a government top-up on an initial investment, for example, giving people a tangible reason to take that first step.”

“The focus should be on making investing feel accessible and worthwhile, rather than simply making cash less attractive,” she added.

Maintaining as much simplicity within the ISA system as possible is likely to be key to its success.

“As we consider the new Starter ISA, policymakers need to learn lessons from the complexity and unpredictability of changes to ISA rules in recent years,” said John Owen, chief executive of the Investment Association, an industry body that represents the UK’s fund managers. “We therefore urge the Government to now take a consistent, long-term approach to policy affecting ISAs to help people achieve greater financial resilience.”

Investors will for the most part be relieved at the measures chancellor John Healey announced in his first Autumn Budget on 28 October.

Healey rowed back on controversial ISA changes and, in welcome news to investors, avoided a further hike to dividend income tax.

Bond investors have responded positively, if mutedly, to the Budget. Yields on 10-year gilts were little-changed on 28 October, the day of the Budget, but they opened the following day 0.9% lower.

“For investors, the message was one of stability, with few major surprises to unsettle financial markets,” said Tom Stevenson, investment director at wealth manager Fidelity International. “This was a Budget designed first and foremost not to rock the boat. And that is exactly what the chancellor’s most important audience – the bond market – was looking for.”

Some of the changes announced, though, will have a material impact on how Brits go about organising their portfolios.

ISA pivots

One of the most notable announcements, which had been trailed before Healey’s speech, was the reversal of his predecessor Rachel Reeves’s decision to cut the annual cash ISA allowance for under-65s from £20,000 to £12,000.

While the aim of getting more people investing rather than saving was admirable, there’s no denying that this was an unpopular policy. For the sake of preserving simplicity within the ISA system, Healey’s decision to reverse Rachel Reeves’s proposal to cut the deposit limit seems logical – especially given the prospect of the new ‘Starter ISA’ to take its place.

There is next to nothing known about this for the moment. The Budget document simply says:

The government will now go further, working with the investment industry to explore a new ISA incentive for people investing in a stocks and shares ISA for the first time. The detailed design will be developed with industry.

So we’ll wait and see what this ends up looking like, but a carrot approach to encourage investing seems preferable to a stick approach to discourage saving.

Simplicity in the implementation will be key, with some people warning against the introduction of another type of investment ISA.

“We applaud the chancellor's decision to scrap the cash ISA changes,” said Richard Wilson, chief executive at investment platform Interactive Investor (ii). “That said, we will await details on the Starter ISA before concluding he is not replacing tinkering... with more tinkering. One ISA only please.”

Dividend tax untouched – but a further tax hike on property income

If you were worried that more increases to dividend income tax were on the way, you can breathe a sigh of relief. Healey resisted the temptation to further hike levies on income from investment dividends.

But property investors will have to endure a further two percentage point increase in tax on their income (on top of increases announced last year by Reeves) from April 2027. Any savings held outside an ISA will also be subject to the same uplift.

Encouraging entrepreneurship?

Part of Healey’s speech stressed the importance of encouraging the nation’s entrepreneurs, and this translated into measures aimed at creating a more supportive tax regime for them.

A new Capital Gains Tax Founders’ Relief scheme will be introduced from 6 April 2027, offering a reduced 10% capital gains tax rate on up to £10 million of lifetime gains for qualifying business founders. Healey also announced an additional £20.4 billion of support for the National Wealth Fund and British Business Bank, and the value of the Trading Allowance will also be tripled from £1,000 to £3,000 per year.

While this won’t have a direct impact on investors, the hope is that it will create a more vibrant, innovative domestic economy for British investors to invest in.

Missed opportunities

Despite attempts to encourage growth in the UK economy, Healey missed the chance to correct one of its biggest drawbacks for investors.

John Owen, chief executive of the Investment Association, an industry body representing the UK’s asset managers, views the Budget as a “missed opportunity” to remove stamp duty on UK-listed shares.

“The UK’s chilling tax on shares makes investing in British businesses more expensive and acts as a direct disincentive to invest in them,” said Owen. “At a time when the UK is fighting to attract and retain listed businesses, we should be removing barriers to investment, not maintaining them. For a government that says it is serious about growth, it is high time that this counterproductive tax was abolished.”

There was also no change to tax thresholds, which have been frozen since 2022 and will remain so until April 2031.

Chancellor John Healey put the focus on addressing rising living costs when he announced the first Autumn Budget of his tenure.

Nestled within the Budget document and his speech on 28 October were a number of measures to help households with a higher cost of living and energy bills.

A series of policy changes affecting businesses were also confirmed including targeted support for the ailing high street, while measures will be introduced to encourage entrepreneurship and innovation.

Here are some of the major announcements made.

Defence spending

The government has committed to fully funding the £15 billion Defence Investment Plan, including £4.7 billion which was previously unfunded.

It means spending on defence spending will be worth 2.7% of Gross Domestic Product (GDP) in 2027/28.

The chancellor also pledged over £10 billion in additional economic and military support to Ukraine.

While the government will work with manufacturer Rolls-Royce on a joint 10-year £2.5 billion programme to develop gas turbine technology for civil and aerospace defence.

Taxes on businesses

A surcharge charged to banks on their profits will rise from 3% to 6% for 15 months, starting in January 2027.

Meanwhile the threshold at which high street shops start paying business rates in England will be increased from £12,000 to £18,000 from April 2027.

Vape shops and adult gaming centres in England will also no longer benefit from business rates relief from the same date as part of government efforts to “clean up” the high street and ensure support is targeted at shops, pubs and cafes, as well as other businesses.

Taxes on gambling machines will also be hiked from 20% to 25% for higher stakes machines, which allow gamblers to make larger bets, from next April.

The government has said it wants to close a tax loophole which allows foreign firms to sell services to some UK businesses without accounting for UK VAT.

Taxes on savers and landlords

Tax rates paid on income made from property or savings held outside tax-wrappered accounts will rise by a further 2% from April 2027.

The basic rate will go up to 24%, the higher rate to 44% and the additional rate to 49%.

Budget documents say 84% of income tax payers will be unaffected by the change, with the revenue raised from the move expected to come from the top 10% of households.

Energy bill and cost of living support

A £100 ‘Household Energy Payment’ will be made in the form of a council tax rebate to up to 20 million households in England from January 2027. The rebate will be issued to households in council tax bands A to D.

A further £100 million will be distributed among councils in England to provide targeted support to households most impacted by rising energy bills, some of whom are in council tax bands above A to D.

The VAT cut on electricity bills, which had already been announced by the government and was due to end on 31 March 2027, will be extended to 1 July 2027, taking £50 off the average energy bill.

From April 2027, over 10,000 energy-intensive businesses will have their energy bills cut by as much as 25% through the British Industrial Competitiveness Scheme (BICS).

Healey also confirmed the gas standing charge will be ditched, with the government hoping it can be abolished by the end of next year.

The National Living Wage will be increased by 3.9% to £13.21 an hour from the same date, adding £910 to workers’ annual wage.

The 5p freeze to fuel duty has also been extended to 1 July 2027 while the Gas Shipper Obligation, a new planned levy on gas bills to fund hydrogen projects, will be removed from energy bills and be funded by the government, subject to its commitment to the obligation.

Income tariffs on over 100 everyday food and drink products will be reduced, which the government says will save households up to £21 on their grocery shop per year.

Encouraging investment and entrepreneurship

The National Wealth Fund and British Business Bank will receive an additional £20.4 billion in government funding to boost investment and business growth in the UK. The National Wealth Fund will receive a further £15.4 billion.

The trading allowance, available to those making trading or miscellaneous income, will be tripled from £1,000 to £3,000 from April 2027.

Healey also said the government will launch a new ‘young entrepreneurs allowance’, which will cover a year of living costs for young business founders.

From next April, a new ‘Capital Gains Tax Founders’ Relief’ scheme will be introduced, offering a reduced 10% CGT rate on up to £10 million of lifetime gains.

Few details have been published, but Budget documents say venture capital schemes will be improved so founders can raise capital with “greater certainty”.

Housing

The government has committed to putting £4.7 billion towards the Your First Home scheme for first-time buyers which it estimates will help 70,000 people onto the property ladder.

Meanwhile £1.5 billion in funding will be put towards building social and affordable housing.

A further £432 million will be pumped into ending rough sleeping, one of the major pillars of Burnham’s premiership so far, over the next two years.

Plans have also been unveiled for a new first-time buyer ISA, while from today the Lifetime ISA withdrawal charge will be reduced from 25% to 20%.

Support for low-income pensioners

A new pension tax allowance will be introduced meaning some pensioners will pay less income tax.

From April 2027, if pensioners’ total income is more than the £12,570 personal allowance but less than the value of the full new state pension (£13,037), they will not pay income tax.

If their income is between £13,037 and £13,319, they will receive some allowance and pay some income tax, but less than they would have before the change.

Total income classes as income received from the state pension, private pensions, earnings from work, savings and property or dividend income, or a combination of some or all of these.

Cash ISA changes reversed

Healey ditched his predecessor Rachel Reeves’s proposal to reduce the annual cash ISA limit for under 65s from £20,000 to £12,000 from April 2027.

He also said he will work with the sector to create a new starter ISA to reward first-time investors.

Chancellor John Healey has delivered his first Autumn Budget, with tax rises for some and help for others.

But how closely were you following the Budget? Test yourself in our 2026 Autumn Budget quiz.

How well did you do in our 2026 Budget quiz? Share your results on social media.

• Autumn Budget: What does John Healey’s Budget mean for you?
• Poll: What did you think of the 2026 Autumn Budget?
• Quiz: How much do you know about the Autumn Budget?
• Play our Budget crossword

For the latest Budget news, analysis, and commentary, sign up to MoneyWeek’s free newsletters.

A host of policies were announced in the 2026 Autumn Budget, bringing tax hikes for landlords and savers, and support for those on lower incomes.

The fiscal event was the first test of new chancellor John Healey as the government continued to react to the economic damage from the Iran war.

The price of energy was a major focus, as standing charges were removed from gas bills, and £100 cash payments will be given to people in council tax bands A to D this winter.

Meanwhile, cash savers breathed a sigh of relief after Healey reversed the previous government’s plan to cut the cash ISA limit to £12,000 per year.

There was less positive news for landlords, who are now set to pay an additional two percentage points in tax on their property income from April 2027, on top of an already announced tax hike. The same can be said for those who draw income from savings interest.

What did you think of Labour’s third Autumn Budget since winning the 2024 general election? Tell us in the poll below.

• Autumn Budget: What does John Healey’s Budget mean for you?
• Quiz: How much do you know about the Autumn Budget?
• Play our Budget crossword

For the latest Budget news, analysis, and commentary, sign up to MoneyWeek’s free newsletters.

Subscribe to MoneyWeek magazine to receive financial news and analysis from our team of experts and access our app on a phone, tablet or laptop.

Our digital offer:

• First 6 issues free
• Continues at £32.99 every quarter (just £2.53 per week)
• Access our digital edition before the magazine hits the shops
• Read articles and listen to our podcast on the app
• Your subscription is protected by our full money-back guarantee*

See inside MoneyWeek

In each issue we cover all this, and more...

_{*If it's not for you just cancel before the end of the trial and you won't be charged. After that time, your subscription is protected by our full money-back guarantee. If for any reason you're not satisfied you may cancel at any time during your subscription and receive a full refund on any unmailed issues within 30 days. Read our subscription terms and conditions here. Alternatively, you can request to pause your subscription for up to three months. An annual subscription comprises of 52 issues. MoneyWeek publishes four extended issues throughout the year, each of which counts as two issues.}

More than a third of homes for sale are in postcode areas where house prices are falling, according to new analysis.

The combination of a high number of properties for sale and elevated mortgage rates is putting downward pressure on the housing market, the research by Zoopla found.

Annual house prices fell in 37 out of the 119 postcode areas the property portal tracks between September 2025 and September 2026, with the majority of these areas in southern England and London.

However, the picture is different in other parts of the UK, with property values rising by up to 5.8% in regions like Northern Ireland, Scotland and north west England.

Zoopla said house prices are rising in these regions as properties are generally worth less compared to the south of England and the impact of higher mortgage rates isn’t felt as strongly.

Richard Donnell, executive director at Zoopla, said: “The extra cost of mortgages has made home buyers more selective while greater choice of homes for sale has increased the scope to negotiate on price.

“The impact is being felt by sellers in southern England where house price falls are most concentrated as average prices continue to rise across the rest of the country.”

The postcode areas where house prices are falling

House prices fell in four regions in the year to September 2026, according to Zoopla’s analysis: London, south east England, east of England and south west England.

On a local level, just 10 out of the 37 postcode areas where property values dropped were outside the south of England and London.

House prices fell the most in west central London, steeply declining by 5.7%. They also fell by 4.3% in Llandrindod Wells, Wales.

In east central London, property values decreased by 3.8% in the year to September, and by 2.2% over the same period in Truro, south west England.

Zoopla’s analysis found 85% of homes in London and the south east of England are in postcode areas where property prices fell year-on-year.

Source: Zoopla

Stamp duty reform ‘could support buyers and sellers’

Donnell from Zoopla said the government could do a number of things to stimulate the housing market in the 2026 Autumn Budget.

He said the biggest boost it could provide would be to “create the conditions” for lower mortgage rates. If they went below 5%, activity would pick up again, he said.

Lenders have increased rates following conflict in the Middle East, which has contributed to inflation rising by 3.5% in the year to September.

The average two-year fix (on 27 October) is 5.97%, up from 4.83% on 27 February, a day before the US and Israel launched airstrikes on Iran, sparking the war.

Donnell also said another lever the government could pull is to reform the stamp duty land tax (SDLT) regime.

Zoopla research suggests extending the 2% rate to properties worth up to £500,000, from £250,000 currently, could save home movers up to £7,500 while similar reforms for first-time buyers could save them up to £6,000.

Donnell said SDLT changes “could support buyers and sellers, particularly in southern England where transaction costs are highest”.

How to sell your home in the current market

The first key thing to do to sell a home in a buyer’s market is to set the right asking price.

Zoopla analysis found that of the homes listed for sale between April and June 2026, 41% listed 5% or more below their estimated value found a buyer within 90 days, versus just 26% of those priced at least 20% above their estimated value.

It’s crucial to price well the first time around too. Zoopla also found just 19% of homes that had asking prices reduced sold within 90 days, compared to 41% of those where the sellers didn’t have to reduce the asking price.

How you present your home is also important. Tidying gardens, cleaning windows and ensuring outdoor spaces are well-lit will create a strong first impression.

Inside the home, make sure to declutter, check rooms are bright and spacious and address any minor issues such as leaking taps or flickering lights.

James Waight, head of sales at estate agent John D Wood and Co., said: “With competition between properties increasing, small improvements can make a real difference to how a home is perceived.”

Presentation of your home extends to how it will be perceived on estate agents’ and property portals’ websites too.

Waight added: “High quality photography, an engaging description and flexibility around viewings can help attract a wider pool of potential buyers. Sellers should also listen carefully to feedback from viewings and be prepared to respond if buyers consistently raise the same concerns.”

The number of people living alone is rising. The latest data from the Office for National Statistics (ONS) reveals 8.6 million lived by themselves in the UK in 2025, up from 7.7 million in 2015. This equated to 29.5% of households in 2025 and 28.6% in 2015.

If you live alone, you’re more exposed to rising essential costs such as food, energy bills and transport.

Single people spend £8,100 a year on housing, bills and groceries, compared to £7,800 per person for couples, according to research by investment platform Hargreaves Lansdown.

But it’s not just ongoing costs that can be more expensive for singletons.

When it comes to inheritance tax (IHT), single people can miss out on significant tax breaks, potentially leading to higher bills for their beneficiaries. Divorcees and cohabitees suffer from a similar treatment too.

Ed Wood, financial planning director at wealth management firm Rathbones, said: “The inheritance tax system can produce very different outcomes depending on an individual's relationship status.

“Single people, divorcees and cohabiting couples may face a larger inheritance tax bill than married couples with comparable assets because they do not benefit from some of the same allowances and exemptions.”

How inheritance tax can be higher for singletons, cohabitees and divorcees

Whether an inheritance tax bill is due depends on the value of your estate – your property, possessions and money – when you die.

If the value of your estate is worth less than £325,000, known as the nil-rate band, there’s no tax liability, however some people are entitled to extra allowances.

If you give away your home to your children (including stepchildren, adopted children and foster children) or grandchildren, you receive an additional residence nil-rate band worth up to £175,000, taking your nil-rate band up to £500,000, if the estate is worth less than £2 million.

If you’re married or in a civil partnership, you can transfer any unused nil-rate band, as well as the residence nil-rate band, to a surviving husband, wife or civil partner.

This means, in some cases, estates worth up to £1 million can be passed on IHT-free.

On top of this, you can pass your estate to your partner when you die free from IHT through the spousal exemption.

These benefits aren’t afforded to single people, divorcees or cohabitees though.

How it works in practice

If you’re single

It effectively means single people miss out on a significant boost in the amount they can pass to beneficiaries without them having to pay IHT.

For example, a single person without a child, stepchild or foster child, receives just the basic £325,000 nil-rate band upon death.

Anything in their estate worth over this figure will usually be taxed at the standard 40% inheritance tax rate.

Meanwhile, a single person with children would only be able to pass on £500,000 free from IHT.

Cohabitees

Cohabiting couples can also miss out on increased IHT allowances.

If a person in a cohabiting couple without children dies and wants to pass their estate to the other, as laid out in their will, IHT would typically be owed on anything over the first £325,000.

This is because the surviving partner does not benefit from the spousal exemption and any unused nil-rate bands.

This tax treatment can leave the surviving cohabitee facing a significant IHT bill, potentially needing to sell the family home to pay for it.

Ben Glassman, head of family and managing partner at leading UK wealth management firm Evelyn Partners, explained: “If an unmarried partner is left a property, or a share of a property, worth significantly more than the deceased’s available nil-rate band, they could potentially have to sell or borrow against the home to meet the tax.

“While IHT can in some circumstances be paid by instalments where property is involved, the need to calculate and arrange payment of the liability as part of the estate administration process – in order to obtain probate – can still create considerable financial and emotional pressure for a cash-poor family.”

Changes to the tax landscape from April 2027 will make the situation worse for single people, cohabitees and divorcees.

Unused pensions are set to form part of estates for IHT purposes from this date. Any leftover pension funds left to spouses or civil partners will benefit from the spousal exemption. Cohabitees, however, won’t.

What can you do to lower your inheritance tax bill?

There are two things single people and divorcees can do to mitigate the IHT blow – lifetime gifting and making a will.

Lifetime gifting, when used correctly, can lower the value of your estate and give loved ones a financial boost while you’re still alive to see them enjoy it.

However, beware of the seven-year rule and the common misconception around how it applies, if your gifts exceed inheritance tax gifting allowances.

Wills can also ensure assets go to the right beneficiaries, which can lower your IHT bill in certain circumstances.

For example, if you name a charity as one of the beneficiaries on your will and leave at least 10% of your net estate to it, the IHT rate on the remaining estate can decrease from 40% to 36%.

Cohabiting couples can get married or enter into a civil partnership to benefit from the tax advantages that come with it, explore lifetime gifting and ensure they have wills set up.

It’s recommended you ensure your nomination of beneficiary forms, sometimes known as expression of wish forms, have been returned to your pension providers and are up to date.

These forms tell providers who you want to inherit your pension, rather than leaving it to the discretion of the pension trustees or administrators.

Wood, from Rathbones, said: “Proactive estate planning is especially important.

“Many choose to focus on gifting during their lifetime, supporting wider family members, or incorporating charitable giving into their plans.

“Taking a deliberate approach can help ensure your wealth is distributed according to your wishes while minimising unnecessary tax.”

Investors looking for opportunities in emerging markets should look beyond the big Asian players in regions like Taiwan, China and South Korea.

That’s according to Adnan El-Araby, lead manager of the Barings Emerging EMEA Opportunities Trust (BEMO), which has been heavily investing in Eastern European, Middle Eastern and African securities markets, on the latest MoneyWeek Talks podcast, which can also be watched on YouTube.

Speaking to editor-in-chief Andrew Van Sickle, El-Araby highlighted how a significant amount of the MSCI emerging markets index is made up of countries in the East.

Taiwan and South Korea, both heavily involved in the artificial intelligence (AI) sector, make up around 50% of the index, with China and India comprising another 30% between them.

However, investing solely in these regions could mean you’re missing opportunities for above-benchmark returns in Europe, the Middle East and Africa (EMEA).

El-Araby said: “We felt that our shareholders and the investors in the trust can essentially capture a lot more alpha across the entire region of EMEA.

“When people speak about emerging markets, emerging markets is effectively Asia, right? So it’s 80% of the [MSCI] benchmark…so the other regions in emerging markets sometimes get left behind or become almost too small.”

Why it’s worth investing in emerging Europe

While Europe has gone through plenty of change in recent years, with Russia’s invasion of Ukraine and the coronavirus pandemic both destabilising elements, there are still opportunities for investors.

“A remarkable example would be Poland," El-Araby said. "It’s amazing what you can have when you have the human capital, the entrepreneurial spirit, low corruption and a government which is quasi-okay.

“And what they’ve managed to evolve and develop and deliver…the economy’s effectively at a developed market standard.”

Greece is another market worth exploring, El-Araby said, where the government takes a hands-off approach to innovation.

Hungary too, which is emerging from 16 years of rule under right-wing populist prime minister Viktor Orbán and whose new leadership is more pro-European.

“Hungary now has a real opportunity. It’s almost at those early stages of where Poland was several years ago.

“If the politics do move in the right direction, if even half of what the new government is looking to implement is genuinely implemented, then you’re going to see innovation, you’re going to see ambition come to the forefront and really capitalise on some of those opportunities.”

How Africa and the Middle East can offer something different

Further afield, and Africa and the Middle East also look interesting.

South Africa is the biggest country holding in the BEMO Trust, taking up 30%, with Saudi Arabia at 23% and the United Arab Emirates (UAE) at 12%.

The Government of National Unity in South Africa, appointed in 2024, has “delivered some economic growth”, said El-Araby, with retail bank Capitec one institution capitalising on a significant proportion of the population without bank accounts.

“You want to be invested in companies like that, where they’re moving away from the easy or the well-trodden path and can really see the opportunity across a very large country,” El-Araby said.

There are also opportunities across healthcare, renewable energy and tourism sectors for investors in the Middle East, namely Saudi Arabia and the UAE, despite tensions in the region.

El-Araby said: “The real dividend is twofold. One is the change in the mindset of the region and one that is where you have to proactively find a way to live with your neighbours, you have to find a way to work with each other.

“Two, I think the real economic dividend will be the large investments in infrastructure across the entire region…you’re going to be investing in defence.

“And you’re going to be investing in drone technology, and you’re going to be investing in data centres.”

About the podcast

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

Follow the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence. You can also watch the episodes on our YouTube channel.

The utilities and infrastructure sector has seen new structural growth drivers in the last few years. And the Ecofin Global Utilities & Infrastructure Trust (LSE: EGL), launched just ten years ago, gives exposure to the sector's long-term trends, solid protection from inflation and high degrees of predictability of future cash flows.

The bulk of our infrastructure was built in the era following World War II and now significant capital expenditure is required to renovate it after decades of under-investment. The US's Inflation Reduction Act of 2022 and Germany's €500 billion infrastructure programme aim to address the issue.

Furthermore, demand for electricity is accelerating after 25 years of decline and is expected to rise by about 50% in the next decade. Energy-intensive AI data centres are securing their power supplies through multi-decade procurement contracts, which are proving highly profitable for utilities. Such fundamental drivers are yet fully to be appreciated by equity markets and there are attractive entry points for undervalued companies with solid earnings outlooks. Three shares stand out to me as particularly compelling.

Three utilities and infrastructure stocks to consider

One of the most unfairly hit infrastructure stocks is Canadian developer Brookfield Renewable Partners (NYSE: BEP), down more than 20% since its highs at the end of May. The group operates a portfolio of high-quality renewable assets in North America and across the world and its strategy is to gather assets essential to energy security to meet growing demand worldwide. This includes nuclear assets in the US through Westinghouse, acquired in 2023. The group has developed a major franchise in batteries, with an 80GW development pipeline, reinforced by the 2024 acquisition of Neoen, and is well positioned to supply data centres. The firm also has one of the strongest balance sheets in the sector and we expect it to deliver earnings growth of about 15% a year over the next three years, with 90% generated from long-term contracts and with 70% of revenues inflation-linked. The stock offers a 5.5% dividend yield.

Greece's power transmission operator ADMIE (Athens: ADMIE) provides exposure to one of the fastest-growing markets in Europe. Its subsidiary, IPTO, Greece's sole transmission system operator, plans to double its regulated asset base by 2029. A $530 million equity issuance earlier this year provided the finance for this ambitious capital-expenditure programme. The regulatory framework provides a pre-tax return on equity of 9.8%, at the top end of the range of its European peers. The stock, down by more than 10% since late June, trades on a price/earnings ratio (P/E) of 14 times, with a 2.7% dividend yield. This looks attractive and growth in earnings per share (EPS) over the medium-term is expected to be 25%-30% a year.

Through its combination of flexible renewable-power generation and transmission assets, SSE (LSE: SSE), the UK-listed energy group, is well positioned to benefit from the energy transition. By 2030, 80% of group revenues are bound to be either regulated or fully contracted. SSE expects 25% annual growth in its regulated asset base over the 2025-2030 period via a fully funded £33 billion capital-expenditure programme. The stock trades on a p/e of less than 12 times and annual growth in EPS solidly in the double digits. Annual dividend growth is expected to be 5%-10% over the medium term. SSE looks like one of the cheapest stocks in the pan-European utilities sector.

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.

British engineering firm Tek4 is joining London's junior market, Aim. It’s particularly welcome, as the London stock market has spent much of the past decade shrinking. British companies have been taken private or, in some cases, tempted to list in New York instead. Too few new arrivals have replaced them, leaving investors with a dwindling choice of growing domestic businesses.

Tek4 is a small engineering company based in Leicestershire. It makes highly specialised equipment for some of the world's biggest manufacturers of jet engines and power-generating turbines. Its shares will begin trading on 26 October. But is Tek4 worth buying?

Tek4 helps solve tough engineering problems

Modern jet engines operate at extraordinary temperatures. The gases flowing through their turbines can be hotter than the melting point of the metal blades inside them. Nonetheless, those blades must survive thousands of hours of service without failure. The solution is ingenious. Engineers pump relatively cool air through hollow passages inside each blade. Thousands of tiny holes allow that air to escape across the blade's surface, forming a protective film between the metal and the scorching gases. This lets engines run hotter, improving efficiency and reducing fuel consumption. Making those holes is extremely difficult. Turbine blades are made from exceptionally tough alloys and protected by ceramic coatings. The holes must be drilled at precise angles, sometimes through walls barely a millimetre thick. Drill too far and the tool can damage the opposite wall inside the hollow blade, ruining an expensive component.

This is where Tek4 comes in. Its equipment uses electrical sparks to remove tiny amounts of metal with extraordinary precision, a technique known as electrical discharge machining (EDM). Sophisticated controls detect when the tool breaks through the blade wall and stop it before it causes damage. Other systems combine lasers with EDM, allowing manufacturers to drill through ceramic-coated blades without moving them between machines. For an engine manufacturer, the purchase price of such equipment is less important than its ability to produce thousands of accurate holes without damaging valuable components.

Tek4 was founded in 2002 by Jason Duffin, an engineer who had already spent years developing machinery for the turbine industry. He previously helped establish MJ Technologies, another specialist engineering business. Drawing on that experience, Duffin concentrated on solving the difficult manufacturing problems faced by turbine makers rather than competing in the crowded market for general-purpose machine tools.

That focus has given Tek4 an international customer base. Its customers include aerospace and power-generation companies such as Rolls-Royce, GE Vernova and Siemens Energy. Although based in Leicestershire, much of its sales go overseas, principally to America and Europe.

Customers also have good reasons to stay. Manufacturing processes for critical engine components must meet exacting standards. Once equipment and its operating procedures have been approved, switching suppliers can require expensive testing and disrupt production.

Tek4 also supplies maintenance, upgrades and specialist tooling. These relationships give it more durable earnings than investors might expect from a small machinery manufacturer.

Tek4 still has room to grow

Tek4 generated about £16 million in revenue in 2025, almost twice the previous year's figure, while reported profit more than tripled to around £4.2 million. It sold more than 40 machines during the year, with individual systems typically costing between £300,000 and £750,000. Such expensive equipment makes annual results inherently uneven. A handful of additional sales can transform revenue and profit, particularly given the fixed costs of running a factory. Equally, delays to a few orders can have a disproportionate impact on earnings.

New equipment accounts for most of the business, but servicing, maintenance and upgrades contribute a meaningful amount of revenue. This provides a more dependable income stream, as customers need to maintain their machines throughout their working lives. It also strengthens Tek4's relationships with customers and creates opportunities to sell additional equipment as their requirements evolve.

Demand is supported by rising aircraft production and investment in electricity generation. Modern engines require increasingly sophisticated cooling systems, while manufacturers are seeking ways to improve productivity and reduce waste. Tek4 plans to add a second assembly line at its Leicestershire factory, increasing production capacity substantially.

The company is also broadening its capabilities. In April it acquired Rugby-based InnoLas, a British specialist in advanced laser technology. This could strengthen its existing equipment and eventually open opportunities in other precision industries, including medical devices and semiconductors. But for now, its prospects rest chiefly on turbine manufacturing.

Why investors should buy Tek4

The listing will also give existing investors an opportunity to sell shares. Robin Womersley, a corporate financier and early investor, currently owns 56% of the business, while Duffin holds 34.5%. Duffin is expected to retain a substantial stake after the listing. His interests will therefore remain closely aligned with those of other shareholders.

Once trading on Aim, investors will need to assess the valuation alongside the company's earnings, growth prospects and the amount of capital, if any, raised for the business itself. There are risks. Tek4 operates in a narrow market, depends on a relatively small number of major customers and sells expensive equipment that buyers can postpone ordering. Its recent results have been impressive, but investors should not assume sales and profits will keep rising at the same pace.

Nevertheless, Tek4 has built a profitable international business around a difficult engineering problem, supported by specialist expertise that competitors cannot easily reproduce.

One flotation will not reverse years of decline in London's equity market. But Tek4 is a reminder that Britain still produces successful engineering businesses capable of competing internationally. The company looks a promising addition to the Aim market. Whether it becomes an attractive investment will depend on the price shareholders are asked to pay.

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.

The Budget is one of the biggest days in politics, with the policies announced affecting everyone in the country.

Depending on the priorities of the current chancellor, some people may find they will start paying higher taxes, while others may enjoy a tax cut.

But how much do you know about the Budget? Test your knowledge in our crossword.

Did you manage to finish the crossword? Share your results on social media.

What would you like to see in the 2026 Autumn Budget? Get in touch by emailing editor@moneyweek.com and you may feature in our Budget coverage.

• How much do you know about the UK’s chancellors of the exchequer?
• How much do you know about the Autumn Budget?
• Income tax quiz: How much do you know about Britain’s biggest tax?

For the latest Budget news, analysis, and commentary, sign up to MoneyWeek’s free newsletters.

JCDecaux (Paris: DEC) has become an unexpected winner of the global AI boom. The company, which owns thousands of billboards and other advertising assets worldwide, isn't the most obvious AI play. But thanks to its vast real-world estate, it's reaping the benefits of a shift in spending by advertisers. As the market has woken up to this potential, the shares have charged higher, rising more than 70% this year alone.

Why JCDecaux's advertising strategy is a success

JCDecaux operates in the so-called out-of-home (OOH) advertising market. As I mentioned in a recent feature, this is one of the few traditional advertising mediums that have seen demand from advertisers rise over the past decade. According to WPP, one of the world's leading advertising companies, OOH advertising revenue is expected to grow 5% to $57.5 billion globally in 2026, then grow another 5.3% in 2027. By 2031, the group has pencilled in a total market size of $73.7 billion. WPP calls this growth a “structural anomaly”: while other traditional advertising mediums, such as radio, TV and print, are shrinking as a percentage of global spending, OOH is holding its own.

In the $720 billion-a-year global advertising market, digital platforms get the largest share of spending. Platforms such as Facebook and Google account for half the market. These are designed to get users to click through to websites and buy products or services. Alongside these are AI platforms, such as ChatGPT and Gemini, that have started embedding advertisements into responses, a market expected to exceed $100 billion by 2031, up from only $5 billion today.

The thing is, no one really knows whether people are seeing the advertisements displayed on these platforms. Fraud is rife and more than half of all online traffic is now just AI bots. Estimates vary, but on average, figures suggest that as much as $1 of every $3 advertisers spend online is lost to fraud or non-human engagement. In some cases, that rises to $1.5 of every $3.

Advertising has always had some level of such “leakage”, but this level is unprecedented. OOH fills in this gap nicely. Advertisers can pick one location, say Bank Underground station in the City of London, and know they're in one place, with tens of thousands of people passing through every day. It's straightforward to target a particular audience in a given place with digital advertising, but there's never a guarantee that that person or digital device is where it says it is. It's hard to move a station, airport, or shopping centre, where the most lucrative OOH billboards tend to be located. Stadiums are another top play.

That's not to say OOH is winning at digital's expense. It's part of a toolkit. OOH is mainly used for visibility and brand building and helps drive awareness of the brand, increasing the likelihood you'll click a similar advertisement the next time you see it online. As analysts at Berenberg note, OOH enables the “critical need for brand differentiation as AI rapidly commoditises content”.

JCDecaux is a family success story

JCDecaux effectively created the market for outdoor advertising. In 1964, Jean-Claude Decaux invented the concept of “street furniture”, with bus shelters financed by advertising in Lyon (France). Two years later, it started rolling out the same concept across Europe. Since then, the business has grown alongside the advertising industry. It has worked with local governments, advertising agencies, clients, and world-leading designers, such as Norman Foster, to create street furniture and OOH advertisement placements that fit the environment, using space that would otherwise go unused.

Today, the founding Decaux family still owns a majority of the business (66% via JCDecaux Holding SAS) and it holds a 12% share of the global OOH market, making it the largest single player. France is still its largest single market with 17% of revenue generated in the country, followed by the UK (11%) and US (8%). The rest of Europe accounts for 30% of revenue, Asia-Pacific for 21% and the rest of the world 14%. Street furniture is the group's biggest revenue segment, making up just over 50% of sales and 66% of earnings before interest, tax, depreciation and amortisation (Ebitda).

Should you invest in JCDecaux?

Operating OOH assets is not particularly capital- or resource-intensive. The company has reported near 20% Ebitda margins for the past few years and Berenberg has pencilled in margin growth to 22.2% by 2028. While the group has some debt, it's manageable at 1.1x Ebitda. What's more, with free cash flow of €336 million in 2025, rising to €354 million by 2028, analysts believe the company is on track to wipe out its debt within the next three years.

However, that's unlikely as the group is hunting for deals in multiple markets, in the range of around €100 million – or around 50% of annual free cash flow after dividends. Even without these deals, Berenberg believes the group can grow its top line in line with the market over the coming years, with adjusted Ebitda rising faster – 6%-9% thanks to margin growth.

Even after running 70% higher this year, the shares trade at a relatively undemanding valuation of 17.1 times forward earnings and a free cash-flow yield of 6.6%. That does not appear to give any account for its growth or possible bolt-on deals. On Berenberg's 2028 estimates, JCDecaux is selling at 14.4 times earnings and a free cash-flow yield of 7.2%. The shares also yield 3%.

JCDecaux stands out for its rock-solid balance sheet, free cash flow and presence in a market that is full of AI-related risk, and seems to be holding its own against the digital onslaught.

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.

Our ETF portfolio has become a little over-exposed to tech, so it's time to introduce a new fund.

“Unprecedented” is a word that gets thrown around too easily, but make no mistake: the AI infrastructure boom that many investors are betting on would be unprecedented in scale – if it materialises.

Total spending based on the announced data-centre pipeline could amount to $10 trillion in the US between 2025 and 2032, according to a paper by Stijn Van Nieuwerburgh of Columbia Business School, which would be 3.6% of GDP. The previous record was the 2.2% of GDP spent on railways between 1870-1890.

This doesn't mean that it's impossible, but if expectations are not met, makers of chips and other hardware – who are earning huge profits from an incredibly tight market – may not enjoy as many years of limitless demand as forecasts currently suggest. And the recent jitters in data-centre and memory stocks are a sign that the cost of disappointment could be severe.

The most unexpected downside could be in emerging markets; almost 45% of the MSCI Emerging Markets is now in tech, mostly in hardware suppliers. At present, we have 10% of our MoneyWeek ETF portfolio in the iShares MSCI Emerging Markets ETF (LSE: EMIM). We also have 5% in WisdomTree True Emerging Markets ETF (LSE: WEMP) to tilt to traditional emerging markets (there's no China, Korea or Taiwan in that fund).

I have often said that if we start to worry more about the sustainability of the AI cycle, we need to keep an eye on our ETF portfolio's tech exposure via EMIM. Increasingly, we feel the urge to act on that, so we are going to cut the 10% in EMIM to 5%. This brings our headline emerging-markets exposure to 10%, but the real effect is to bring down the total tech exposure that is hidden in our overall emerging-markets position.

We can still have higher tech exposure if we want, but do so in a way that becomes explicit – eg, hold something like iShares MSCI Global Semiconductors (LSE: SEMI). Or we can dial it down altogether. Either are valid – the key is that we can see more clearly what we have chosen to do.

When we look at how different sectors are performing, it is clear the market's top anti-AI or risk-off trade is healthcare. You can see in the chart how it has moved broadly inversely to the tech-influenced markets indemerging-ex over the past year.

A change to the MoneyWeek ETF portfolio

This makes sense. Other defensives such as consumer staples are battling a number of problems, including changing tastes and weaker pricing power. Of course, healthcare is not risk-free either. Medical costs are a political issue. The patent cliff never goes away. Concentration is not low: Eli Lilly is 11% of the sector index. It is not cheap: on a forecast price/earnings ratio of 17.5, the MSCI World Health Care is at the same valuation as the overall MSCI World. However, demographics bode well for demand and earnings should be steady. It is attractive in its own way, as well as diversifying us from AI. So we will add 5% in Xtrackers MSCI World Health Care ETF (LSE: XWHS) to our portfolio.

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.

Italian arch dealmaker Stefano Pessina has finally found “the right shopkeeper” for Boots, four years after The Economist predicted there might be a long wait.

The Canadian branch of the Weston family, which once owned Selfridges, has bought the 177-year-old pharmacy and beauty chain for $8.9 billion.

After 20 years of steering what Pessina called “an iconic brand and a British institution” through various ownership structures and makeovers, with mixed success, he can finally close his medicine cabinet. “We are delighted to be passing on a thriving Boots,” he said.

It's been a “tortuous” process for Stefano Pessina and his wife Ornella Barra, who “through more than a thousand deals” once sought to dominate global pharmacy, says the Financial Times.

Pessina, who took Boots private with the backing of investment firm KKR in 2007, kept a stake under different private-equity owners, and merged and de-merged the business with a US peer, Walgreens. A plan to re-float Boots was dropped in 2024.

But at least the Nottingham-based chain's future now seems secure. Pessina, 85, said he's now working “just 12” hours a day instead of the usual 18 he used to clock up. Yet clearly, “he hasn't lost his touch”, says Bloomberg. The entrepreneur and his latest private-equity partner, Sycamore, won't get the $10 billion they hoped for. But with sales driven up by a resurgence in beauty and the wild popularity of weight-loss jabs, the price fetched isn't “too far off”.

The Monaco-based power couple have been entwined romantically and commercially since the 1980s, when they combined their pharmaceutical businesses in their native Italy. They proved a winning double act: “Pessina as the methodical empire builder and Barra the hard-driving operator”. One former colleague recalls how “it was not uncommon for Barra to juggle closing a deal while packing Pessina's suitcase for their next trip”. He may be the strategist, but she is the engine room.

Stefano Pessina's life-changing decision

Stefano Pessina was born in 1941 in Pescara, and is a graduate of Milan's Polytechnic university. He started out in academia but, reportedly turned off by its left-wing politics, quit to join the market-research firm ACNielsen, says the Monaco Tribune.

In the mid-1970s, as Italy was struggling through a lengthy period of political and economic turmoil known as “the years of lead”, Pessina made the life-changing decision of attempting to salvage his family's failing wholesale pharmaceutical business. His “ability with numbers” came up trumps, says The Times. He repeated the trick for some of his father's business associates “in return for small stakes in their companies” and his deal-making career began.

There followed a whirlwind of takeover activity as Pessina's Alleanza Farmaceutica (shortly renamed Alleanza Salute Italia) became the country's undisputed leader in pharmaceutical distribution. France, Greece and Portugal followed. In 1997, Pessina broke new ground in Britain by acquiring Unichem, which had retail as well as wholesale and distribution operations. That gave him the scale to rise still higher, says The Guardian. Having “stalked” Boots for six years, Pessina flamboyantly invited its management for merger talks on his yacht off Sardinia in 2006. A year later, he teamed up with private-equity firm KKR to take the combined Alliance Boots private for around £11bn in what was then Europe's largest leveraged buyout.

The deal cast Pessina as an international predator. Yet from an investment standpoint it was hugely successful, says the FT. While most of the cheap credit-fuelled “mega-buyouts” of 2006-2007 crashed in flames, Boots was “a rare example of the alchemy coming good”. By 2012, when merger plans with the US drugstore giant Walgreens were announced, Pessina and his KKR partners had “almost tripled” their 2007 investment. That historic deal resulted in a truly global behemoth, with turnover close to $140bn by 2023.

Pessina, who is known for his “long, meditative periods of silence”, bestrode the world, says the Monaco Tribune. Times have changed. “Globalisation as we have known it is over,” he told the Italian daily La Stampa in 2024. It seems timely that he is now handing over the baton. Still, he will go down in business history as the “Italian alchemist” who turned deals into gold.

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.

So-called frontier markets account for about a quarter of the world's population today, but only 5% of global GDP. A little over half of the world's eight billion people are in emerging economies and about 12% of the world's population lives in developed countries.

The US and North America as a whole account for only about 4.7% of the world's population. But the US stock market makes up around 73% of the MSCI World index. And, while the World Federation of Exchanges tracks about 58,200 listed companies worldwide, the Magnificent Seven technology stocks (Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta and Tesla) account for about 22% of global equity benchmarks.

Those figures speak volumes about the global influence of the US economy and financial system, but it also reminds us that there are other options out there for investors. Many frontier markets are chalking up growth rates in the mid- to high single digits and economies are opening up. Investors generally overlook these countries. But they really shouldn't.

One of the biggest success stories recently has been Vietnam. Its economy has been on a tear over the past five years as the trade war between China and the US has drawn in producers attracted by the country's low-cost labour and healthy infrastructure investment. GDP growth in the first nine months of the year hit 9%. To sustain growth, the government aims to invest $1.5 trillion in infrastructure by the end of the decade. Index providers didn't allow it to join emerging-market indices until the country pushed through major trade-settlement reforms and opened its markets to foreign investors. But on 21 September 2026, Vietnam officially became an emerging market when 27 Vietnamese stocks entered the FTSE Global All Cap index, with full integration phased in over 12 months.

Vietnam's growth and graduation underline one of the key trends that is set to shape the global economy over the next decade. As the Western world ages, emerging and frontier markets will play a crucial role in global economic expansion, contributing about 65% of global economic growth by 2035, according to S&P Global. Notably, frontier markets, particularly those in sub-Saharan Africa, will play a prominent role in this growth due to their favourable demographics.

What is a frontier market?

The term “frontier markets” was coined by the International Finance Corporation, the World Bank Group's private-sector arm, in the early 1990s, to serve as shorthand for the next generation of emerging markets. What constitutes a frontier market varies by the bank or NGO conducting the research, but generally, markets in this category have meaningful but still limited access to international financial markets and GDP per capita around one-third of the median level of emerging markets. That's not to say all frontier markets are low-income countries. Barbados and Bahrain are both classed as frontier markets by rating agency S&P Global and have estimated GDP per capita figures of around $30,000 (about 15% below Spain and Japan).

At the end of 2025, there were 56 frontier markets, up from 39 in 2012. The list has added previously unclassified countries as they've issued debt or made efforts to unlock capital markets. Four frontier markets (Bulgaria, Costa Rica, Panama and Romania) have become emerging markets since 2012 by attaining high-income status, but as the World Bank notes, only Vietnam has actually graduated from frontier market to developing market in the eyes of equity-index providers.

Around a third of frontier markets are located in Africa, which has long drawn investors seeking exciting, underdeveloped growth markets. But its reliance on the volatile commodity industry, along with limited internal investment and unsustainable growth, has often left investors disappointed. Now, it could be about to turn a corner, thanks to one man's vision.

One person lifts Africa's prospects as a frontier market

Africa holds about 30% of the world's mineral reserves, 8% of its natural gas and 12% of its oil reserves. It holds 40% of the world's gold and the largest reserves of cobalt, platinum and uranium, all key to the global energy transition, not to mention 60% of the world's uncultivated arable land. However, the continent has never really controlled its own resources. Money has flowed in to develop mines, then flowed right back out to shareholders in London and New York. Nigeria is a great case study. The US Energy Information Administration (EIA) notes that the country was one of Africa's top crude-oil producers in the 2000s, producing two million barrels a day. However, it lacked the refining capacity to turn this into usable fuel. Nigeria exported oil and then imported it back at market rates, losing wealth and exposing consumers to global oil-market volatility.

Africa's richest person, Aliko Dangote, has changed all that with his 700,000-barrel-a-day oil refinery in Nigeria. The $20 billion project keeps oil in Nigeria and lets it export refined products to other countries (its jet-fuel exports helped ease a global crisis following the closure of the Strait of Hormuz). The continent's largest oil refinery is listing its shares across Africa (on exchanges in Nigeria and Botswana), seeking to raise $1.6 billion from investors, with demand exceeding the offer by three or four times.

Dangote is looking to replicate this with a new refinery in Lamu, a coastal town in southeastern Kenya. Construction on the $16 billion refinery began in September. Tanzanian billionaire Mohammed Dewji has said he intends to invest $100 million in the project. Others are also moving into the region. Canada's Zimar Group signed a deal in August with Niger to build a $1.9 billion oil refinery and a petrochemical complex. France's TotalEnergies SE and its partners say they plan to invest $10 billion in Angola's oil sector over the next five years. China alone committed $33.5 billion to the region in the first half of 2026 under its Belt and Road Initiative.

Another example is fertiliser. It's no help having 60% of the world's uncultivated arable land if you don't have fertiliser to grow crops on it. The African Development Bank (AfDB) estimates that 80% of the fertiliser used on the continent is imported. Despite $15 billion invested in recent years to boost production, it's still not enough. Governments have now committed to tripling domestic fertiliser production and distribution by 2034.

This internal investment, driven partly by supply chains reconfiguring away from China, is fuelling the growth of the middle class in these countries. Rami Sidani, head of Frontier Investments at Schroders, notes that many companies “are benefiting from this expansion in the middle class, from this wealth effect that's trickling down and fuelling this domestic-consumption story”.

“Financial inclusion” is also a big part of the story. In many frontier markets, the vast majority of the population has historically been excluded from the banking system. That's changing rapidly with the adoption of financial technologies (fintech). Sidani cites the example of GCash in the Philippines. The company, which recently floated on the stock exchange with a $7 billion valuation, has become the country's go-to banking app. “Around 70% of the population in the Philippines has an e-wallet compared with around 40% who have deposits with banks,” he explains.

In Africa, the trend is even more pronounced. It used to take 18-24 months to open a branch in a rural area, says Sidani, but now consumers can access their money from their beds anywhere in the country.

Ahmed Awny, head of investments and portfolio manager of the Templeton Frontier Market Strategy, points to Safaricom and Vodafone, which launched M-Pesa, a mobile-phone-based financial services and money-transfer platform, in 2007 to piggyback on text-message technology for sending money. Nearly 20 years later, the technology has revolutionised financial services in Africa, and peers have sprung up all over the world: dLocal in Latin America; GCash in the Philippines; M-Pesa in Kenya; MoMo in Vietnam; Kaspi in Kazakhstan; and Airtel across Africa. The adoption of this technology has been as fast in frontier as in emerging and developed markets, if not even faster, because it has been taken up by younger generations, who are more aspirational, quick to adapt and to learn, says Awny.

How frontier markets are leapfrogging developed peers

Consumers in frontier markets are also leapfrogging their developed- and emerging-market peers in the rollout of AI. Cavan Osborne, a portfolio manager for Old Mutual in South Africa, notes that for this reason one of the most interesting sectors in Africa right now is telecoms. Five years ago, consumers sent messages and searched online using only a few bits of information per request; now, with AI search and AI tools, each request requires many more bits of data.

Sub-Saharan Africa is projected to see the fastest global 5G subscription growth, rising from roughly 30 million in 2025 to 370 million by 2031, according to the Ericsson Mobility Report. Mobile devices account for the vast majority of web traffic across African networks, driven by lower costs and a lack of fixed-line desktop infrastructure. In Nigeria, which has the most mobile users on the continent at more than 100 million, monthly mobile-data consumption surged from about 518,000 terabytes in early 2023 to more than 1.23 million terabytes by November 2025, an increase of roughly 140% in less than three years.

Airtel Money (LSE: AMC), the largest London initial public offering (IPO) since 2021, is one success story, says Osborne. The fintech was spun off from FTSE 100 firm Airtel Africa (LSE: AAF), one of the larger telecoms groups operating in Africa (others are South Africa's MTN, Vodafone, Orange and Dubai Etisalat). Osborne says it is growing by around 30% per year and most of the growth comes from “fees on payments, driven by new users as people switch to smartphones”. The mobile money business is “very capital light” and, despite growing at about 25%, pays out around 80%-90% of its earnings as dividends.

Osborne also highlights the opportunity in Africa's banking sector. “The [African] banks generally are quite simple,” he explains. “A lot of them just gather deposits and put them into government treasuries…where you could be getting 10%, 15%, 20% yields.” With a low cost base thanks to the rollout of technology and a lack of a need for a vast branch network, most lenders are quite profitable. From the bank's perspective, risk is also limited because the currency is hedged and default risk is generally low. That has helped make the banking sector one of Africa's best performers.

Such embedded structural hedges are vital for managing risk, says Awny. Take Vietnamese exporters. Vietnam's currency has been mildly depreciating over time, but for exporters, with a Vietnamese Dong-denominated cost base and exporting into a US dollar market, this has been a structural tailwind; or take Bank of Georgia, a subsidiary of Lion Finance (LSE: BGEO), which, like its peers in Africa, can adjust loan pricing to offset political and economic uncertainty.

Other markets are growing up too

Africa is seeing the most notable economic shift, but investors shouldn't overlook other regions. Awny points to central Asia, to Georgia, which is “now offering Eastern European governance, but at frontier valuations”, and Kazakhstan, home to world-class fintech platform Kaspi (Nasdaq: KSPI). Kaspi has 13 million active users in Kazakhstan out of a total population of around 18 million-19 million. The UAE is another example. It is technically an emerging market, but Sidani believes it's being “disregarded by the big global funds” and offers exposure to “multiple themes on the liberalisation and transformation of the economy”, including data centres and AI infrastructure.

Ten to 20 years ago, investing in frontier markets required a lot of legwork. Investors had to be on the ground, speak the language and be willing to do the work to find the best opportunities. That's no longer the case. Awny notes that many of these businesses are operated by managers of comparable quality to peers in New York or London. CEOs and their teams have also “cracked the manual on how to bring the equity story up to the level of the emerging markets”. “Today, if I take you to a company meeting in Ho Chi Minh City or in Hanoi in Vietnam, you will have the same level of spoken English, same level of detailed PDF presentation, as the one that you would have from Alibaba or from any company that you sit in front of in India or some of the developed markets,” says Awny. “The same is the case with Kenyan banks, Peru and Colombia, Morocco and Oman.”

Because operating in less efficient, less financialised economies adds friction, these companies also tend to have stronger balance sheets and higher returns, Awny notes. “Credit is not that easy; credit is costly,” he says, meaning most businesses must rely on internally generated cash flows. As a result, returns on equity and capital employed can be 300 or 400 basis points higher than the typical emerging-market company.

Much of the opportunity in frontier markets stems from their inefficiency and under-reporting compared with developed or emerging markets. But that opportunity also adds risk. Stocks in frontier markets are typically much less liquid than those in developed or even emerging markets. And while it has become easier to find information on businesses listed in these markets, transparency for the average investor is still poor. That's without considering trading restrictions. Hargreaves Lansdown and Interactive Investor, two of the UK's biggest trading platforms, don't offer direct share trading on any frontier markets, and only offer two or three emerging markets. Many of these countries themselves also place restrictions on international investors.

How to invest in frontier markets

For investors who want to invest directly, London offers a handful of names previously mentioned, such as Lion Finance and Airtel. Dangote Oil Refinery is pursuing a secondary listing in London, while Dangote Cement (the billionaire's first business) has appointed Goldman Sachs and UBS to offer about 10% of its shares in London via a secondary listing. Data from the LSE shows there are 110 African companies listed in London with a combined market value of $200 billion, but these include the likes of Old Mutual and Investec, both of which are based in South Africa. They offer frontier exposure, but you're also taking on extra risk. The National Investment Fund of the Republic of Uzbekistan (UzNIF) also listed in London this year.

Closed-ended vehicles are well suited to navigating the challenges of investing in frontier markets because managers don't face the risk of having to sell illiquid holdings at short notice to meet withdrawals. Jean-Baptiste Andrieux, an analyst at Kepler Trust Intelligence & Expert Investor, highlights BlackRock Frontiers (LSE: BRFI), which specialises in frontier markets and smaller emerging markets, excluding the largest markets by capitalisation (that is, Taiwan, South Korea, China, India, Brazil, Mexico and South Africa). Managers Sam Vecht and Emily Fletcher analyse macroeconomic cycles across the countries, then position the portfolio according to where they see the best stock opportunities.

Andrieux recommends combining frontier with smaller emerging markets, which are often underrepresented in emerging-market indices and funds. Redwheel Next Generation Emerging Markets, managed by James Johnstone and Victor Erch, is one option. There's also the Templeton Frontier Markets Fund, managed by Ahmed Awny and Bassel Khatoun, and the Schroder International Selection Fund Frontier Markets Equity, managed by Rami Sidani.

Neither the quality of management nor the quality of these companies' balance sheets is reflected in valuations. At the end of September, the MSCI World index traded at a trailing 12-month price/earnings ratio of 22.7, a price-to-book-value ratio of 4.1 and a yield of 1.5%. By comparison, the Templon Frontier's portfolio is trading at a book ratio of 2.1, and a 12-month trailing P/E of 10.2. Schroder Frontiers has a valuation of 9.9 times earnings. According to Morningstar, Redwheel's fund has the cheapest portfolio, trading at just 8.3 times historic 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.

Shareholders of Scottish Mortgage Investment Trust (LSE: SMT) have been on an extraordinary roller coaster. In the five years to November 2021, the share price almost quintupled before falling nearly 60% in the next 18 months. Since then, they have risen 150% to a new all-time high, putting them easily at the top of the performance table of global funds over three years.

Recent attention has focused on SpaceX, in which Scottish Mortgage invested in 2018 at a valuation of $31 billion. Following an initial public offering (IPO) in June, its market value is over $2 trillion and Scottish Mortgage has sold it down from more than 25% of the portfolio to 15%. Still, “we have no intention of selling out and expect to hold the shares for ten years”, says Lawrence Burns, who manages the trust with Tom Slater.

AI firm Anthropic is also heading for an IPO. It was 3.9% of the portfolio at 22 September but likely to rise to over 5% at the target valuation. TikTok owner ByteDance, which accounts for 4.4%, is likely to stay private, while payments firm Stripe, which also has no plans to float, is 2.9%. Overall, Scottish Mortgage’s decision in 2012 to invest in private companies has been amply vindicated. (The unlisted limit was later set at 30% of the portfolio, but the actual proportion is currently 22%.)

Why Scottish Mortgage Investment Trust cut exposure to Tesla

Scottish Mortgage also has a strong record in listed companies, including Nvidia and TSMC. It did well from Tesla, but sold out this year. “Tesla paved the way for decarbonisation in a key sector, forcing incumbents to keep up in the EV race,” says Slater.

“However, the competitive environment for Tesla has intensified significantly, particularly in China. There are long-term opportunities in Tesla's autonomous driving software and robotics businesses, but though these areas have the potential to be very large and profitable in the future, we believe we are being asked to pay too much for them.”

Moderna, which soared 22-fold between the end of 2019 and September 2021, was once Scottish Mortgage’s largest investment before it collapsed by 94% in the next four years. The company had developed a novel technology for the discovery of vaccines against a variety of conditions, including cancer. But it was the success of its Covid vaccine that sent revenues rocketing from $60 million in 2019 to $18.5 billion in 2021. However, sales collapsed as Covid demand fell away. Profits of $12 billion in 2021 turned into losses, while the company also became embroiled in a series of patent disputes.

Investors stampeded for the exit, but Slater and Burns held their nerve. The shares started to recover as progress in its respiratory vaccines gained momentum. Then in August this year, a phase III trial for a vaccine for late-stage skin cancer in combination with Merck's Keytruda drug produced very promising results, though experts advise caution. Moderna doubled on the news and is now nearly 4% of the portfolio.

Scottish Mortgage Trust embraces AI

The managers are optimistic about AI. “The companies leaning into AI are seeing greater and greater value,” says Burns. “The demand drivers will only get stronger; hyper-scalers (builders of data centres) can't afford to miss out. Companies are thinking about redirecting their entire processes around AI. The returns on hardware are fantastic and the technology keeps getting better. We are going to need a lot more compute if the potential continues to grow.”

At the cutting edge, the trust also has a small holding in PsiQuantum. But “we invest in growth, not pure technology so will have a small holding till our conviction in quantum computing increases”, says Burns. However, “there are lots of natural phenomena that are very hard to model with conventional computing”, so this area has huge potential.

After a strong run, holders of Scottish Mortgage Trust may want to trim their holdings, but the shares could have much further to go.

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.

In 2000, the UK stock market was the second largest in the world, accounting for 10% of the global total. Now, it constitutes just 3% and is either the sixth or ninth largest, depending on the source of measurement.

With an absence of growth stocks (technology accounts for just 1% of the All-Share index), an absence of issuance either from existing companies or new flotations, and a relentless stream of takeovers and emigrations, there is no doubt that the UK's position will drop further.

Floatations on North America's stock markets raised $138 billion in the first half of 2026, including $86 billion from SpaceX. A total of $30 billion was raised in the Asia-Pacific region and €7.6 billion in Europe, but just £577 million in the UK. This was treble the total for the first half of 2025, but three-quarters of it came from the National Investment Fund of the Republic of Uzbekistan. The imminent flotation of Airtel Money will raise more, but this is a spin-off from FTSE 100 constituent Airtel Africa.

Meanwhile, six FTSE 100 firms (Schroders, Intertek, Beazley, DCC, easyJet and Segro) have disappeared through takeovers this year, as have numerous FTSE 250 companies, including Tate & Lyle, Bodycote and Senior. Flutter Entertainment has moved its listing to New York as have Carnival and AstraZeneca, although the latter maintains a secondary listing in London. There have been persistent rumours that Shell will follow.

The UK stock market's cultural aversion to risk

The causes of the decline of the UK stock market go back to the late 1990s and the relentless programme of taxation, regulation and intimidation initiated by the Blair government, but continued by its successors. Gordon Brown's first Budget removed the tax credit on dividends from UK companies, then worth £5 billion a year, while privatised utilities were chased into ownership by private equity, foreign companies or both. Pension regulators pushed pension funds into reducing equity exposure and solvency rules introduced after the 2008 crisis removed insurance firms from equity markets.

At the same time, globalisation encouraged investors to invest overseas while the UK had much less to offer overseas investors. The long bull market in bonds provided investors with an attractive alternative to equities and many larger UK companies, following the mega-mergers of the late 1990s, became complacent.

For a while, London's stock market shrugged off these problems. Flotations continued. In the fall out from the bust in the technology, media and telecoms sectors and the subsequent commodities boom, Britain's “old-economy” companies prospered. The prospect of a more market-friendly government in 2010 appeared to promise better times after a decade in which the UK had suffered two of its worst four bear markets in a century.

Unfortunately, while the technology sector in the US started to recover with the flotation of Google in 2004, it continued to decline in the UK. DeepMind chose to sell out to Google in 2014 rather than float and UK investors rushed to cash out of ARM in 2016 and of Imagination Technologies in 2017. With pension funds and insurance companies “de-risking”, the pool of long-term capital available for backing new companies or supporting established ones disappeared.

Yet as Julia Hoggett, CEO of the London Stock Exchange, points out, Britain has no shortage of capital – the fourth-largest source in the world – of which £2 trillion is in cash deposits. The problem is that it is not allocated to generate growth. “We don't have an innovation problem,” she says, “we have a capital-allocation problem.” The UK has developed a cultural aversion to risk-taking and a persistent scepticism about technology, innovation and the market economy.

There are other problems, as Tim Campbell, CEO of Baillie Gifford, points out. More than 50% of UK-listed company shares are owned by passive funds, which take no interest in the companies in which they are invested. A further block is held by traders and hedge funds focused on short-term results. The lack of long-term shareholders makes a stock market listing unattractive. Companies prefer private equity, which offers more flexible financing, gives better incentives for management, lower taxation and lower corporate costs. Hence the UK is not the only market in which the number of companies is shrinking; the Wilshire 5000 index in the US has shrunk to around 3,500 companies from a peak of around 7,500 in the late 1990s.

The UK is waking up to the problem

The UK has at last recognised the issue. Listing regulations have been relaxed, pension funds have committed to invest more in the UK and the Treasury has made some minor tax concessions. However, this is tinkering and there is neither the appetite nor the funding from the government to go further.

The global bull market in equities rolls on, with the UK market keeping pace, thanks to takeovers, share buybacks and sharper management, yet UK investors continue to sell out. The Investment Association reports only one month of inflows into UK equity funds since July 2021, with outflows of £561 million in June, £1.6 billion in July and £615 million in August. Flows to the rest of the world, where investors see opportunities, are positive.

It's taken a generation to wreck the UK stock market and it will take a generation to rebuild it. Tax and regulatory concessions will help, but changing the anti-equity investment culture in the UK is a monumental task, not helped by the lack of growth-orientated listed companies. Average house prices peaked in real terms 20 years ago, while even the underperforming FTSE 100 has doubled relative to housing, but the UK public is in denial. Maybe with inflation and taxation eroding the value of bank deposits and the relentless hostility of governments towards the private rental markets the pendulum, in the absence of another bear market, will swing back towards equity investment in the UK. But there is no quick fix.

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.

The Autumn Budget is days away, with chancellor John Healey due to set out the Burnham government's fiscal plans on 28 October.

While the upcoming Budget will be Labour’s third since they won the 2024 general election, it will be the first fiscal test of prime minister Andy Burnham’s new government which has promised to help those struggling with the cost of living and devolve power out of Westminster.

It will also be the first time new chancellor John Healey delivers the fiscal statement after he replaced Rachel Reeves in the summer.

Although Burnham and Healey have indicated that they want to increase public spending, the Budget comes at a time when the public purse is under pressure, meaning many are worried that taxes will need to rise.

What do you think? Are you dreading the Budget and its potential tax rises, or are you excited to see what the new government will do to help with the cost of living?

Tell us what you think in the poll below.

What would you like to see in the 2026 Autumn Budget? Get in touch by emailing editor@moneyweek.com and you may be featured in our Budget coverage.

• Why you shouldn’t act on Budget rumours
• Recap: What was announced in the 2025 Budget?
• Quiz: How much do you know about the UK’s chancellors of the exchequer?
• Quiz: How much do you know about the Autumn Budget?

For the latest Budget news, analysis, and commentary, sign up to MoneyWeek’s free newsletters.

What was the Big Bang?

The “Big Bang” was the sweeping deregulatory overhaul of the London Stock Exchange that took effect 40 years ago this coming week, on Monday, 27 October 1986. The Big Bang reforms were part of a programme of financial liberalisation pushed through by the Conservative government under Margaret Thatcher. They led to the transformation of the City over subsequent years and decades, making it more open, more competitive, more international and much richer. The reforms were driven by the realisation that the City had to change and modernise in order to survive and prosper – and they resulted in a radical and permanent cultural shift.

What did Margaret Thatcher change?

First, fixed commissions were abolished, meaning brokers were allowed to compete on price when it came to fees. Second, the centuries-old “single capacity” distinction between brokers and “jobbers” (market-making intermediaries) disappeared, allowing brokerage firms to become “dual capacity” stockbrokers and “stockjobbing” market makers, licensed to act both for clients and as dealers trading on their own account. Third, foreign ownership rules were relaxed, opening the way for major international banks to enter the market and/or buy existing British brokers. And fourth, the trading floor itself was transformed, with the old system of face-to-face dealing and “open outcry” trading (shouted prices) replaced by electronic systems. That allowed more business to be conducted more quickly, with greater volumes and across a wider range of markets. And all these big changes took place over a single weekend.

Did the Big Bang work?

Yes. In the short term the changes led to a surge in the volume of trading in UK equities and an influx of international banks into London. Traditional British stockbroking and market-making firms, often organised as partnerships, were bought up by much larger American, European and Japanese banks – a takeover boom that paved the way for London's growth into a financial centre to rival New York. Competition increased, transaction costs fell and market liquidity improved. At the same time, salaries for traders and investment bankers soared as institutions competed for scarce talent. In the longer term, the reforms drove a broader expansion far beyond stock trading, as the internationalisation of the City strengthened its position as a major centre for foreign exchange, international banking, bonds, derivatives, asset management and specialist insurance.

Was the Big Bang a success?

Broadly, yes. The UK's expanded financial sector generated well-paid finance jobs, vast pipelines of business for lawyers, accountants and consultants, and substantial tax revenues. It attracted overseas investment and enhanced Britain's international influence. The Big Bang reforms threw out old rules that meant bank bosses had to work from offices within ten minutes' walk of the Bank of England, paving the way for the City's eastern outpost at Canary Wharf. The regulatory revolution also boosted the democratisation and demystification that made it far easier for ordinary punters to access investment for a sensible cost. No Big Bang, no MoneyWeek. At the same time, the Big Bang undoubtedly helped entrench a model of British economic success, and uneven economic geography, that has always had its critics – that of a world-class financial centre sitting awkwardly alongside a broader economy characterised by persistently low levels of investment and productivity. Others argue that the deregulation and internationalisation of finance in the 1980s and 1990s sowed the seeds for the global financial crisis of 2007-2009.

How is the City of London doing now?

Pretty well. Famously, London has suffered a slump in initial public offerings on the stock exchange since the last flotation boom in 2021. By market capitalisation, the London stock market is now, at best, sixth in the world – though on some calculations, it's not even in the top ten. But doom-mongers should remember that stock trading is far from being the City's only suit, says David Smith in The Sunday Times. London leads in other financial sectors – notably foreign-exchange trading, interest-rate derivatives and speciality insurance – where no other centre comes close. Across a range of metrics and specialisms, it comes a very close second to New York and remains – post-Brexit – the “undisputed financial capital of Europe, with no other continental financial centre in the top ten”.

Is there any need to panic?

The City retains many core strengths that mean its pre-eminence is likely to persist: language, legal system, depth in accounting and consulting services, communication facilities and handy time zone (between Asia and America), diversity of markets and their infrastructures, diversity of counterparties, and institutional tradition, combined with continuing regulatory evolution. Important, too, is the diverse talent pool of people who would rather live in London than in Frankfurt or Amsterdam. Brexit knocked London's appeal as a place to float businesses, but in lots of other ways the City looks like “it's getting its mojo back” after a few years of uncertainty, says The Economist. Overall, the UK has the same number of people working in financial services now – about 1.1 million – as it did in 2017, accounting for a slightly bigger chunk of GDP (8% rather than 7%). As for the City (where the “EU decided not to take an axe to Europe's financial plumbing after all”), some 225,000 people worked in finance in 2024 – 36,000 more than in 2019. Another 181,000 worked in related fields such as law and accountancy, up by 51,000 over the same period. If that's what decline looks like, it's a decline worth celebrating.

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.

A bond crisis is heading France’s way, adding to Emmanuel Macron’s troubles as rioting sweeps through the country. However, if you're feeling particularly brave, French bonds do look like a bargain.

The French bond crisis has been simmering for years. The country has not run a primary budget surplus since the mid-1970s, it has been spending way more than it collects in tax revenues and a stagnating economy can no longer sustain the debt burden. Even from the UK, where the debt load is also hard to afford, the numbers are sobering. The deficit is expected to run at 5.4% of GDP this year even though there is no immediate crisis for the government to deal with.

The debt-to-GDP ratio has hit 121% and it would be higher if its share of all the money owed by the EU were added in. It will have to issue more than €300 billion of bonds in the coming year simply to keep the show on the road. The state already accounts for 57% of GDP, one of the highest levels of spending in the world, and there is little prospect of that coming down any time soon. The government already squeezes 45% of GDP out of its long-suffering taxpayers, again one of the highest rates in the developed world, meaning there is very little scope to push taxes any higher.

Meanwhile, the country is politically paralysed, with a divided parliament unlikely to pass a Budget, and with a presidential election due next year in which all the leading candidates are committed to yet more spending. It is a mess. So it is hardly surprising that the yield on French bonds has risen sharply. The ten-year yield is close to 5% and the spread with Germany, the key measure of country risk, has risen to levels not seen since the height of the eurozone crisis in 2011-2012.

Against that backdrop, the important question is whether the European Central Bank (ECB) will intervene. The treaties suggest it won't be able to. The ECB has mechanisms in place to calm “disorderly markets”, but before they can be implemented, a country needs to commit to a credible deficit-reduction plan. There is little sign of that, and it is hard to see a country like France putting up with the humiliation of using tools designed to rescue Greece and Portugal. ECB officials insist their hands are tied. France will have to sort itself out.

The ECB will intervene if the bond crisis escalates

They have to say that. In reality, in the midst of a serious crisis, the ECB will intervene. France is too important to the eurozone to be allowed to fail. It is still the second-largest economy within the zone, it is home to two of its largest banks and Paris is a major financial centre. If France were forced to restructure its debts, then the credit of the entire zone would collapse, plunging the whole of Europe into financial turmoil. It would be far too damaging to all the other countries inside the single currency to be allowed to happen. The ECB's own survival would also be at stake. If France fails, the euro fails, and the independent national central banks would reassert their authority.

So what will the ECB do? A “whatever it takes” speech from the bank's president is not likely to work a second time. Instead, the bank will probably come up with a new “support mechanism”. My best guess is that it will be in the form of loans to the French banks, which in turn buy government bonds. If the market senses the French banks are buying junk because they have been told to, they will sell them off instead and a bond crisis will have been turned into a banking crisis. There are no guarantees of success. But it may well be the best of a whole series of bad options.

That doesn't make French bonds a good investment. There is too much uncertainty and the economic outlook is bleak. But at some point the ECB will step into the market to start buying and bring yields back down again. It won't have any choice – it is just a question of when and how it happens.

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.

What do Charles Darwin, Elizabeth Gaskell and the Mitford sisters have in common? At some point in their lives, they all spent time at the lavish Dumbleton Hall, located on the border of Worcestershire and Gloucestershire.

Built in 1830 on the wealth of the Cotswolds wool trade, this Grade II-listed hotel was constructed as an elegant country house that became a refuge for some of the Victorian era's most notable thinkers, writers and artists. Now, after an extensive two-year restoration, it has opened its doors to a new generation of discerning guests.

As I arrived to check in, what caught my eye was how much of the original estate remained intact. Ancient cedars line the driveway, and water lilies thrive in a pond beneath a canopy of mature trees. On a sunny day, the hall's honey-coloured facade is illuminated against the foliage of the grounds that are spread across 16 acres of woodland and open countryside.

It is tempting to spend an entire afternoon doing little more than wandering around. Before long, it becomes clear why Dumbleton Hall attracted generations of intellectuals. The mood is tranquil and idyllic.

Dumbleton Hall is an antiques haven

The sense of calm extends into the bedrooms. My suite had olive and khaki tones that complemented a beautiful Queen Anne secrétaire chest in walnut and mahogany. It looked less like hotel furniture than an heirloom treasure. William Morris's prints nodded to the designer's strong connections to the Cotswolds and brought vibrancy to the rooms' antiques, which sit alongside all the contemporary comforts you would expect from a luxury hotel.

Dumbleton Hall was built on the wealth from the wool trade comforts you would expect from a luxury hotel in this day and age.

However, the property's history isn't just evident in the decor. Guests receive an autographed copy of Dumbleton Hall: The Story of a Victorian Country House by John Hodges, which chronicles the many families and visitors who have passed through the estate since the 19th century. It is the sort of book that is just asking to be read outside, beneath one of the ancient trees in the estate's gardens.

A culinary highlight at Cedar 1905

Dinner at restaurant Cedar 1905 is another highlight. The menu is distinctly English, but there is enough imagination to keep things interesting. Chalk-stream trout gravlax was paired with melon gazpacho, lime and lovage (£16), and the Cornish crab came with a crumpet, cucumber and watercress (£26). For something more substantial, the nine-ounce ribeye steak is served with pickled shallots, “Dumbleton butter” and fries (£44).

Dessert was no afterthought either. There is a peach and lemon-thyme pavlova, served with peach-nectarine sorbet and vanilla chantilly – a light yet decadent way to end an evening (£15). Breakfast is a similarly sumptuous affair, comprising a full English and a selection of English cheeses and Cobble Lane cured meats.

Enjoy country walks and pretty villages in the Cotswolds

Dumbleton Hall is well situated for exploring the Cotswolds. It is located between the village of Broadway, the towns of Winchcombe and Stratford-upon-Avon, which makes it ideally placed for embarking on long country walks and visiting the pretty nearby villages and historic towns. That said, there is little need to venture far from your room to find the landscape that draws so many visitors to this part of the country. Wonderful views of the surrounding countryside can be enjoyed from Dumbleton Hall.

For a change of pace, Broadway is close enough for an afternoon of visiting independent shops, galleries and cafes, while the market town of Winchcombe offers a more traditional feel, with its medieval streets and stone cottages. If Dumbleton Hall's history and literary connections inspires you, Stratford-upon-Avon, the birthplace of William Shakespeare, is within easy reach. The beauty of the hall is that you can spend the morning exploring, return for some quiet time, enjoy a drink or two at the Library Bar, and then take a walk around the lake before dinner.

Perhaps the best indication of what Dumbleton Hall embodies came from another guest I met during my stay. She mentioned, almost in passing, that she had got married here more than 20 years ago and still finds reasons to return. That feels fitting for a grand house that is curating new experiences for guests, who themselves may return decades from now.

Oojal was a guest at Dumbleton Hall. From £380 per night, dumbletonhall.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.

The Autumn Budget is one of the most important dates in the political calendar, and is certainly the most important day for fiscal policy.

On the day, the chancellor lays out the government’s plans for the economy in the House of Commons.

But how much do you know about the history and traditions of the Budget? Test yourself in our quiz.

How well did you do in our Budget quiz? Share your results on social media.

Do you have a question about the Budget which you’d like to put to our financial experts? Email editor@moneyweek.com and your question may feature in our Budget coverage.

• When is the Autumn Budget?
• Will taxes rise in the Autumn Budget?
• Why you shouldn't act on Budget rumours

For all the latest news and analysis, subscribe to MoneyWeek’s newsletters.

UK firms delivered over £28 billion in dividends in the third quarter of 2026, marking the highest payout since 2019.

The dividend total in Q3 2026 was up 14.1%, compared to the same time last year, providing larger payments for income investors, according to new data from financial administration firm Computershare.

Its dividend monitor report shows profit distributions were led by banks and mining firms – the sectors returned more than £8.3 billion to investors.

Underlying dividend growth in Q3 2026, which excludes volatile special dividends and exchange-rate movement, was better than expected, reaching 8.4%, the best third-quarter performance since 2019.

This quarter’s strong performance follows a record Q2 for UK dividends, during which UK companies paid out their all-time highest levels of dividends.

With two thirds of all dividends paid between April and September, strong growth during the second and third quarters will make up for a sluggish first quarter and an expected weaker final quarter.

Mark Cleland, CEO of issuer services at Computershare, said: “The pronounced strength of the third quarter has significantly boosted what is turning out to be a very positive overall picture for UK dividends in 2026.

“Resilient economic growth supported company revenues and profits, while higher-for-longer interest rates and the upswing in commodity markets have provided an additional boost to two of the UK market’s biggest dividend-paying sectors.”

Cleland warned that the fourth quarter of 2026 could see lower distributions, partially driven by drink giant Diageo’s announcement in February that it would slash dividends.

“However, with so much of the year’s dividend income already paid, we now anticipate dividends to finish comfortably ahead of 2025 and headline payouts to deliver their strongest annual growth since 2019,” he added.

What are the best sectors for dividends?

Mining was the best-performing sector for dividend growth, as payments soared nearly 90% – up from £2 billion in Q3 2025 to £3.9 billion in Q3 2026.

Higher commodity prices and stronger cash generation fuelled dividend growth from miners such as Rio Tinto, Glencore, Antofagasta and Fresnillo.

Meanwhile, the banking sector returned £4.4 billion to investors through dividends in Q3 2026 – marking a 24.5% increase from £3.6 billion in the same quarter last year.

Computershare said the strong dividend performance came after major banks increased ordinary payouts alongside ongoing share buybacks amid strong profitability and capital generation.

The top sectors for dividends are:

Source: Computershare

The top dividend stocks

The top five dividend stocks in the UK collectively delivered £8 billion to shareholders in Q3 2026, accounting for 28% of payouts in the quarter.

Rio Tinto led the way, followed by Shell, National Grid, Glencore, and British American Tobacco.

The top dividend stocks in Q3 can be found below:

Source: Computershare

What’s the outlook for income investors?

Strong dividend performance in Q3 has led Computershare to improve its outlook for 2026, which is set to be the best year for dividends since 2019.

Total dividends are expected to reach £93 billion, up 7.3% on 2025’s figure, while regular payouts (which exclude one-off payments) are forecast to reach £8.8 billion, up 4.8% on the year.

Computershare said the outlook has been improved due to stronger than expected UK economic growth and favourable stock market conditions.

Computershare said earnings across the wider market have remained robust and that it expects regular dividend payouts to finish the year comfortably higher than in 2025.

In times of rising inflation and interest rates, commodities can provide essential protection for investors’ portfolios.

“If you’re listening to the bond market today, it’s telling you ‘diversify,’” Evy Hambro, global head of thematic and sector investing at asset manager BlackRock, tells MoneyWeek Talks, which is available on all podcast platforms and YouTube.

Bond yields have soared over recent weeks, a classic sign that all is not well. Government deficits are rising higher and higher, but spending shows no signs of abating.

Interest rates are rising, and yet the stock market is trading at unprecedented heights.

“There’s an alarm going off, and people aren’t listening”

“It’s very clear to me that government bonds are telling you things aren’t healthy,” he said. “The annual deficits that governments are having to fund are growing, and that’s putting a lot of pressure on the financial system.”

Higher bond yields are the natural response to this pressure, as investors seek higher rewards for the higher risk perceived in lending to governments.

Governments are much less likely to default on their debts than businesses or other private borrowers. But what they often do instead, is reduce the real value of their debt through inflationary policies.

“How do you have some protection against that?” asks Hambro. “To me, it’s real assets. Real assets can be infrastructure, it can be commodities, it can be gold. Those are the kind of things that through time have protected purchasing power.”

Are commodities set to thrive?

Hambro believes that the current market setup sees us on the verge of a new commodity ‘supercycle’ – following previous iterations that have seen prices of the assets initially rise as demand ran away from supply, then fall after the investments to capture this opportunity meant supply caught up.

Infrastructure in the developing world is in increasing need of replacement, which strengthens demand for industrial metals. This dynamic is being further fuelled by the rise of artificial intelligence (AI).

“We’ve now gone into this period of very, very strong demand growth, driven by this incredible scale of investment around technology, AI, electrification and so on,” says Hambro. This has, he says, “exposed the fragility and the maturity of existing infrastructure in the developed world”.

Copper is one of the commodities most impacted by this trend, given its central role in electrification; the price of copper has risen nearly 17% so far this year.

Competition for these resources is intense, given their strategic importance. Nations are now viewing access to them as a national security concern.

“There’s a bit of a war going on for access to commodities as a result,” says Hambro.

China’s effective monopolisation of rare earth minerals – critical components in most modern technologies – is a case in point.

“There was a story from last year when president Trump went to China to discuss tariffs, and had to come back saying he’ll be unable to put tariffs on China because they’re going to turn off the rare earth supply,” says Hambro. “All the automotive companies in the US said, ‘whatever you do, don’t lose that supply, because there’s no production without it.’”

How much gold to hold, and why

As well as other real assets, in Hambro’s view, portfolios should contain an allocation of approximately 10% to gold.

He compares this allocation to insurance. Every year gold underperforms, you’ll top it up by selling off some of your other assets that have outperformed.

This feels like a waste of money in the same way that buying insurance you don’t use can.

“But if you don’t have insurance, when something goes wrong it’s very painful,” says Hambro.

Gold has a track record of holding its purchasing power: it’s often said that an ounce of gold has bought a men’s suit for 2,000 years.

So during periods when inflation is high and other assets are falling, gold can act as an insurance policy for your portfolio.

About the podcast

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

Follow the MoneyWeek Talks podcast and get ready to make it, keep it and spend it with confidence. You can also watch the episodes on our YouTube channel.