Key Points from the Week:
The UK economy has delivered stronger-than-expected momentum, with July GDP expanding 0.4% against expectations of no growth, driven by services activity and meaningful contributions from AI, cloud computing, telecommunications and information services, reinforcing evidence that technology investment is becoming a genuine engine of economic activity rather than simply a market theme. Sterling strengthened on the back of the data and hiring showed tentative improvement after a prolonged period of weakness. The recovery is increasingly complicated by renewed inflation risks. Oil prices above $100 a barrel, driven by Middle East tensions and Strait of Hormuz concerns, are raising the prospect of higher energy and food prices feeding into broader inflation. The Bank of England is expected to hold Bank Rate at 3.75% on 17 September, but markets are pricing a potential increase later this year despite Governor Bailey pushing back against the inevitability of a hike. The fiscal picture is equally demanding ahead of the 28 October Budget. The UK’s record 30-year gilt auction yield of 5.82% underlines the rising cost of government borrowing, while elevated long-term yields are compressing the headroom available for infrastructure and other spending priorities.
Financial services activity remained robust across advice, asset management and lending. Absolute Financial Group acquired Platinum Independent Financial Services, continuing the steady consolidation of the UK advice market, while Atomos acquired a £1bn PE-backed IFA in one of the more significant wealth transactions of recent weeks. Rathbones tapped bond markets for £60m amid ongoing FCA scrutiny, a notable move that underlines both the firm’s confidence in its long-term position and the cost of navigating a sustained regulatory review. Gresham House entered the race for a £1bn government fund, highlighting the growing intersection between alternative asset managers and public capital deployment. W1M joined a growing list of firms rolling out Lombard lending, reflecting the broadening of product offerings across the wealth sector as firms seek new revenue streams in a competitive market. MPS providers increased allocations to liquid alternatives, insurance distribution continued to evolve through embedded protection partnerships and AI-driven platforms including HelmGuard and Veridue continued to attract capital.
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Welcome to HSA Advisory’s Financial Services Newsletter, your concise roundup of UK macroeconomic developments and financial services transactions.
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UK Macroeconomics
14 September 2026: UK chancellor offers pact to chief executives on growth
– Chancellor John Healey offered business leaders a growth pact, promising fiscal discipline, economic stability and reduced regulatory burdens in return for greater investment, innovation, training and employment in the UK, ahead of the government’s 28 October Budget
– Chief executives urged ministers to simplify planning rules and provide a more stable tax environment, while businesses highlighted barriers including business rates, National Insurance thresholds and delays in infrastructure decisions that could otherwise constrain investment and expansion
– The government also pledged to improve companies’ access to the electricity grid and support sectors with growth potential, reflecting its broader strategy of using infrastructure, devolution and public investment to attract private capital and strengthen regional economic activity
– The pact comes as businesses prepare for a potentially difficult Budget, with higher borrowing costs reducing fiscal headroom and companies concerned about possible tax increases. Greater policy certainty will therefore be critical if the government wants businesses to increase investment and hiring
14 September 2026: PE executives warn up to 90% of funds may fall short of promised returns
– Private equity executives and investors warn that as many as 90% of funds launched during the industry’s pre-2022 boom could fail to deliver their originally targeted returns, reflecting the prolonged downturn and difficult investment environment facing the asset class
– Funds launched between 2019 and 2021 benefited from exceptionally low interest rates and strong transaction activity, but subsequent geopolitical uncertainty, higher financing costs and elevated entry valuations have significantly reduced the potential for outsized returns from those vintages
– Industry estimates suggest private equity returns have fallen materially from the levels achieved over the previous decade, while some executives expect funds that deployed capital during the boom years to generate internal rates of return of only 7–8%
– Pressure is also building from limited partners seeking liquidity, while managers remain reluctant to sell assets at valuations that could crystallise weaker performance. Extended holding periods and subdued exits are therefore creating additional challenges for distributions and future fundraising
14 September 2026: Oil price surge revives prospect of Bank of England rate rise this year
– Surging oil prices above $100 a barrel have renewed concerns over UK inflation, with the Bank of England facing pressure to reconsider its recent easing cycle as higher energy costs threaten to feed through into consumer prices and wages
– Markets expect the BoE to hold Bank Rate at 3.75% at its September 17 meeting, but investors increasingly anticipate a rate increase later this year. Goldman Sachs has shifted its forecast to a 25-basis-point hike in November
– Stronger-than-expected UK economic growth is adding to the inflation challenge, with July GDP expanding 0.4%. Combined with elevated energy prices, the resilient economy could give policymakers less justification for maintaining an accommodative stance if underlying price pressures persist
– The BoE must balance renewed inflation risks against weaker labour-market conditions and rising borrowing costs, while monitoring whether the energy shock generates second-round effects. A sustained oil-price increase could strengthen the case for tightening and further pressure households and businesses
13 September 2026: Burnham promises a ‘culture shift’ in how Britain does business
– Prime Minister Andy Burnham is set to position the UK government as a “partner for growth”, promising greater support for entrepreneurs and businesses as he seeks to create a more investment-friendly environment and unlock stronger economic growth across Britain
– Burnham plans to bring together entrepreneurs from AI, fintech, health technology, manufacturing and quantum computing with senior executives from major companies, encouraging closer collaboration between government, business and local authorities to support investment and job creation
– A central element of the approach is greater devolution, with local leaders expected to receive more powers and resources to accelerate infrastructure development, attract private investment and support reindustrialisation, building on Burnham’s experience as Greater Manchester mayor
– The initiative comes ahead of the 28 October Budget, as businesses remain concerned about taxation, regulation and rising costs. With borrowing costs elevated and growth uncertain, delivering greater policy stability will be critical to converting the government’s pro-business ambitions into investment
13 September 2026: EU-UK reset talks delayed again amid tension over ‘Made in Europe’ rules
– The next EU-UK summit has been pushed back until late November at the earliest, as disagreements over Brussels’ proposed “Made in Europe” industrial policies complicate efforts to reset post-Brexit relations and deepen economic cooperation between Britain and the EU
– The UK is concerned that the EU’s Industrial Accelerator Act could disadvantage British manufacturers by limiting access to subsidies, public procurement and supply chains, particularly in strategically important industries including automotive, chemicals and other advanced manufacturing sectors
– Brussels has resisted linking the “Made in Europe” policy directly to the wider reset negotiations, arguing that the legislation requires European Parliament approval. The EU instead wants to focus discussions on previously agreed priorities including border checks, carbon-market cooperation and youth mobility
– The delay increases uncertainty for businesses operating across UK-EU supply chains, with Britain seeking safeguards while maintaining closer relations with its largest trading partner. Failure to resolve the dispute could discourage investment and complicate future cooperation on trade, industry and regulation
11 September 2026: UK-backed debt coalition pushes wider use of payment pause clauses
– The London Coalition on Sustainable Sovereign Debt plans to promote wider adoption of debt pause clauses, allowing developing countries to suspend repayments for up to a year during major shocks such as natural disasters, pandemics, conflicts or severe economic disruptions
– The coalition also wants its implementation guide for restructuring private-sector sovereign loans to become a common reference in live debt negotiations. The initiative aims to make restructurings faster and more predictable, particularly where private loan negotiations have historically lagged behind bond restructurings
– Ghana and Zambia illustrate the challenges the framework seeks to address, with negotiations over private loans progressing more slowly than bond restructurings. Senegal’s planned debt treatment could provide an early test of whether the coalition’s approach can improve coordination between borrowers and creditors
– The push comes ahead of Britain’s 2027 G20 presidency, giving the UK an opportunity to promote broader sovereign-debt reforms internationally. Coalition participants include governments, the African Union, major financial institutions, law firms and asset managers, strengthening its private-sector reach
11 September 2026: Pound climbs after UK growth beats expectations
– Sterling rose around 0.1% against both the US dollar and euro after UK GDP increased 0.4% in July, far exceeding expectations for no growth. The stronger reading reinforced perceptions that the economy remains more resilient than previously anticipated
– Services activity drove the expansion, growing 0.4% month-on-month, while investment linked to artificial intelligence supported sectors including telecommunications, information services and software development. The figures added to evidence of continued momentum despite significant external economic and geopolitical pressures
– UK GDP expanded 1% during the first half of 2026, the fastest pace among G7 economies, although some economists believe seasonal adjustment issues may have overstated the strength. The Bank of England’s 1.1% full-year growth forecast could therefore be exceeded
– Stronger growth is supporting sterling but also complicating the Bank of England’s policy outlook, particularly as oil prices approach $110 a barrel. Markets are increasingly pricing a November rate increase, although Governor Andrew Bailey has cautioned against assuming higher rates are inevitable
11 September 2026: BoE faces September rate decision as inflation risks intensify
– The Bank of England is widely expected to leave Bank Rate unchanged at 3.75% at its September 17 meeting, but policymakers face a more difficult environment as stronger UK growth and rising energy prices have increased the risks of inflation remaining elevated
– Investors will closely watch the MPC’s voting split for evidence of growing support for higher rates. Three policymakers backed a rate increase in July, and a similar division in September would reinforce expectations that the Bank’s easing cycle may have ended
– Surging oil prices linked to renewed Middle East conflict have complicated the inflation outlook, while stronger-than-expected July GDP provides policymakers with less justification for further easing. Markets are increasingly pricing a potential rate increase later this year, particularly in November
– The meeting will also determine the pace of quantitative tightening, with investors expecting the Bank to slow gilt sales amid elevated long-term borrowing costs. Any reduction in balance-sheet runoff could help ease pressure in the gilt market and support financial stability
11 September 2026: UK economy unexpectedly grows 0.4% in July, boosted by AI surge
– UK GDP grew 0.4% in July, accelerating from 0.3% in June and significantly outperforming economists’ expectations for no growth. The stronger-than-expected result provided a welcome boost to the government ahead of Chancellor John Healey’s first Budget
– Services drove the expansion, with computer programming, consultancy and IT activities making a particularly strong contribution. The ONS said businesses involved in artificial intelligence and cloud computing accounted for much of the increased turnover, highlighting the growing importance of technology investment
– The stronger GDP reading suggests the economy began the third quarter with greater momentum than expected, potentially putting full-year growth on track to exceed the Bank of England’s forecasts. However, consumer-facing sectors remained subdued, indicating that growth is not evenly distributed
– Rising oil prices threaten to offset some of the positive momentum, with crude reaching around $109 a barrel and markets increasing bets on higher interest rates. Higher energy and borrowing costs could weigh on households, businesses and growth in coming months
10 September 2026: FTSE 100 falls for fifth straight day as rate hike and inflation fears bite
– The FTSE 100 fell 0.57% to 10,608.92, marking its fifth consecutive daily decline and weakest close since late July. The FTSE 250 also dropped 0.92%, reflecting broader investor caution as inflation and monetary policy concerns intensified
– Brent crude traded above $105 a barrel as continuing attacks on shipping raised concerns over energy supply disruptions. Higher oil prices are increasing expectations that the inflation shock could persist, creating a more challenging environment for equities and economic growth
– A stronger-than-expected US producer price reading further increased expectations of tighter monetary policy, adding pressure to rate-sensitive UK shares. Homebuilders fell 2.15% as government bond yields climbed, while rising borrowing costs weighed on investor sentiment across domestic sectors
– Energy stocks provided some support, with Shell and BP rising as oil prices climbed, but this was insufficient to offset declines elsewhere. Investors are now focused on upcoming UK growth and inflation data for signals on the Bank of England’s rate path
9 September 2026: War and weather threaten another burst of UK inflation, BoE governor warns
– Bank of England Governor Andrew Bailey warned that the war in Iran and disruption around the Strait of Hormuz could push energy prices higher, creating renewed inflationary pressure. The risks are increasingly tilted upwards as crude oil supplies and refining capacity remain uncertain
– Extreme weather is adding another source of inflation risk, with UK drought conditions and El Niño threatening agricultural production and food supply chains. The Bank expects food inflation to rise towards 3.5% by year-end, while some forecasts point to sharper increases thereafter
– The renewed inflation threat complicates the Bank’s interest-rate outlook, with policymakers expected to remain cautious despite the possibility of future cuts. Financial markets are increasingly pricing the prospect of a rate increase before year-end if energy-driven inflation proves persistent
– The warning adds pressure on Prime Minister Andy Burnham and Chancellor John Healey ahead of the 28 October Budget, as higher inflation and borrowing costs could further reduce fiscal headroom. Tough spending decisions or additional tax measures may therefore become increasingly difficult to avoid
9 September 2026: UK universities pledge work experience to more than 1mn students
– UK universities have pledged to provide meaningful work experience to all undergraduates within a decade, with more than 1 million students expected to benefit annually. The initiative aims to improve graduate employability and better align higher education with changing labour-market demands
– Universities UK is targeting work-based learning for half of undergraduates by 2030 and all students by 2035. Opportunities could range from job shadowing and live employer projects to traditional placements and year-long industry experiences, depending on course requirements
– The initiative responds to concerns from employers about graduate work readiness, with only around one-third of surveyed companies saying graduates possess the skills they expect. Businesses particularly highlighted gaps in practical capabilities, communication, punctuality and resilience
– Universities UK is working with the British Chambers of Commerce to strengthen links between institutions and employers, including regional “one-stop shops” connecting smaller businesses with student talent. Greater workplace exposure could help address graduate recruitment challenges while strengthening the UK’s skills pipeline
8 September 2026: UK set to ban trade with Israeli settlements as Washington warns of repercussions
– The UK announced plans to ban imports from Israeli settlements in the occupied West Bank and sanction companies and individuals supporting settlement expansion, marking a significant shift in British foreign policy and intensifying pressure on Israel over its treatment of Palestinian territories
– Foreign Secretary Ed Miliband said the measures were intended to protect the viability of a two-state solution, following concerns over settlement expansion and violence. The UK will also restrict services including construction, infrastructure, financing and real estate linked to settlement activity
– The intervention has drawn strong criticism from Washington and Israel, with US Ambassador Mike Huckabee warning of potential repercussions and Israeli officials threatening retaliatory measures. The diplomatic response highlights the growing divergence between Britain and the Trump administration over Middle East policy
– The economic impact is expected to be limited because settlement exports represent a relatively small share of UK-Israel trade, but the diplomatic significance is substantial. The policy could further strain UK-Israel relations while positioning Britain alongside France, Canada and other countries pursuing coordinated restrictions
8 September 2026: UK pays highest borrowing cost since 1998 at gilt sale
– The UK sold £4.25 billion of 30-year gilts at a yield of 5.8168%, the highest recorded at any gilt auction or syndication since the Debt Management Office was established in 1998, highlighting the sharp rise in long-term government borrowing costs
– The record yield reflects broader pressure across global bond markets, with investors concerned about persistent inflation, higher government borrowing and rising debt issuance. Renewed Middle East conflict and elevated oil prices have further intensified expectations that inflation could remain higher for longer
– Despite the expensive borrowing cost, investor demand remained strong, with orders exceeding £85 billion and around 71% coming from UK domestic investors. The well-covered sale suggests investors remain willing to hold long-dated gilts when offered sufficiently attractive yields
– Higher gilt yields could significantly reduce the government’s fiscal headroom ahead of the 28 October Budget, increasing pressure on Chancellor John Healey to maintain spending discipline. The higher cost of servicing government debt could make tax increases or spending restraint more likely
8 September 2026: Rising UK debt costs narrow government’s fiscal room for manoeuvre
– The UK is facing a difficult combination of higher borrowing, rising gilt yields and weaker investor confidence, increasing pressure on Chancellor John Healey to demonstrate fiscal discipline while maintaining the government’s commitment to infrastructure investment and long-term economic growth
– Changes to fiscal rules have protected infrastructure spending from being cut to meet borrowing targets, but the approach has increased reliance on debt financing. Higher borrowing still carries substantial costs, particularly as global bond yields remain elevated and markets demand greater compensation
– Rising debt-servicing costs are reducing the government’s flexibility ahead of the Budget, limiting its ability to respond through further infrastructure cuts. The political alternatives, including welfare reform, pension changes and healthcare funding reforms, are considerably more difficult to implement
– The immediate challenge is balancing fiscal credibility with investment needed to support growth, while avoiding measures that could undermine public services or household finances. Persistently elevated gilt yields could force the government towards politically difficult spending reductions or higher taxes
8 September 2026: BoE’s Bailey pushes back against expectations of inevitable rate hike
– Bank of England Governor Andrew Bailey pushed back against market expectations that a rate increase is inevitable, stressing that future policy decisions will depend on economic and geopolitical developments rather than following a predetermined path
– Bailey said financial markets were pricing a risk premium into interest-rate expectations, reflecting concerns about further energy-price increases. Markets were pricing one 25-basis-point rate increase by year-end and two additional hikes during 2027
– The comments came ahead of the BoE’s September 17 meeting, with policymakers broadly expected to maintain Bank Rate at 3.75%. Bailey noted that recent economic data had been somewhat stronger than forecast, describing UK activity as reasonably resilient
– Policymakers remain divided over the inflation outlook, with concerns that prolonged oil-price increases could create more persistent inflation expectations. However, Deputy Governor Dave Ramsden described domestic inflation pressures as relatively benign, reinforcing the Bank’s data-dependent approach
UK Financial Services Key Transactions
14 September 2026: Major MPS firms increase allocations to liquid alternatives
– Several of the UK’s largest MPS providers are increasing allocations to liquid alternatives, with some portfolios reaching their highest alternative exposure since launch. The shift reflects demand for diversification beyond traditional equities and bonds, although managers remain divided on the role of alternatives, highlighting differing views on liquidity, cost and portfolio complexity
11 September 2026: W1M joins rush of firms rolling out Lombard lending
– W1M has partnered with Firenze to offer eligible HNW and UHNW clients portfolio-backed lending, allowing them to access liquidity without moving investment assets or changing custody arrangements. The move adds lending to W1M’s broader wealth proposition and reflects growing adoption of Lombard facilities among UK wealth managers seeking more holistic client solutions
10 September 2026: Rathbones taps bond markets for £60m amid FCA scrutiny
– Rathbones has raised £60 million through Tier 2 notes, strengthening its capital structure and refinancing £40 million of existing debt. The issuance comes as the wealth manager undertakes a two-year remediation programme following FCA scrutiny, with approximately £60 million of related costs expected, highlighting the importance of maintaining capital resilience during regulatory remediation
10 September 2026: Atomos acquires £1bn PE-backed IFA
– Atomos has agreed to acquire MWA Financial, adding approximately £950 million in assets under advice and 24 advisers to the Oaktree-backed consolidator. The transaction strengthens Atomos’ national footprint and combines its institutional investment capabilities and infrastructure with MWA’s entrepreneurial culture, accelerating its strategy to build a scaled UK financial planning platform
10 September 2026: HelmGuard raises $7.3m to replace static compliance checks
– HelmGuard has raised $7.3 million in seed funding, co-led by Infinity Ventures and Frontline, to expand its agentic governance, risk and compliance platform. Its AI agents assess live risk signals directly from source systems rather than relying on static questionnaires, while funding will support US expansion and tools for monitoring AI-agent behaviour
9 September 2026: Veridue raises $4m to accelerate energy M&A dealmaking
– Veridue has raised $4 million in pre-seed funding, led by Episode 1 Ventures, to scale its AI-native due diligence and M&A platform for energy infrastructure. The technology aims to automate deal screening and diligence, enabling investors to assess more opportunities faster as renewables, data centres and energy security drive significant infrastructure investment
8 September 2026: Tatton-backed Absolute acquires £280m Manchester IFA
– Absolute Financial Group has acquired Platinum Independent Financial Services, adding approximately £280 million in assets under advice and taking the consolidator to £2.68 billion. The deal is Absolute’s fifth North West acquisition, strengthening its regional hub while retaining Platinum’s 15-strong team and Sale office
8 September 2026: LifeSearch and Snoop partner to embed protection into money management
– LifeSearch has partnered with Snoop to bring life insurance quotes directly into Snoop’s open-banking money management app. Users can purchase cover digitally through a LifeSearch-powered journey, while more complex cases are referred to specialist advisers, embedding protection into everyday financial management and creating a new digital distribution channel for insurance
8 September 2026: Surely partners with Heka on flexible life cover
– Surely, the life insurance brand of Certua Life, has partnered with Heka to make personalised life cover available directly through its employee benefits platform. Employees can arrange cover from £5 a month, with policies designed to be reviewed and adjusted as circumstances change, supporting greater protection uptake through embedded workplace financial wellbeing
8 September 2026: Gresham House enters race for £1bn government scale-up fund
– Gresham House has entered the competition to manage a £1 billion UK government-backed scale-up fund, joining a growing field of asset managers seeking the mandate. The fund is backed by major UK pension providers and aims to channel institutional capital into high-growth British businesses, reinforcing the expanding role of pension and private capital in supporting UK companies
A Word from Our Founder & Managing Director
Stronger GDP, a government actively courting business confidence and technology beginning to show up meaningfully in the economic data and yet a 5.82% thirty-year gilt yield, oil above $100 and a Budget that must address structural fiscal pressures without derailing the recovery. The tension between the positive and the precarious has rarely been more sharply defined. At HSA Advisory, we help clients build strategies that hold their shape across both scenarios bringing senior-led insight to M&A, cross-border growth and capital raising where the quality of preparation determines who is best placed when the dust settles. The data is improving. The complexity is not going away.
Himanshu Singh, Founder & Managing DirectorNew Podcast: M&A Station by Himanshu Singh
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Pulse Check
Resilient growth is encouraging, but higher oil prices and gilt yields could constrain monetary easing and fiscal flexibility.
We’d love to hear your thoughts.
Source: Financial Times, Reuters, The Times, Insurance Times, Insurance Business UK, The Guardian, Insurance Age, CityWire, FinTech Global.
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