The Market Call - Week Ending 15th August 2025

In their usual weekly chat, Progressive's Jeremy McKeown and Gareth Evans cover the macro market news and events with a few thoughts on what it all means.

While the UK reporting season is a bit dull, the US Q2 reports have been more positive. There is a long wait for the Autumn Budget in the UK, and many companies are likely to face a long wait for the inevitable tax increases. Lots of comments out there about gambling taxes, IHT and maybe VAT increases.

Overall, the UK economic news this week has been poor but not calamitous.

Equity markets are moving to all-time highs, with powerful rallies seen from the early April lows, particularly in the US.

Maybe investors are looking ahead to a period of policy easing. However, in bond markets, the message is more mixed. Will the Fed cut rates next month? A stronger-than-expected US PPI print for July indicates that tariff-induced inflation might be on the way, giving Powell a reason, or excuse, to keep rates on hold.

There is a setup for a big showdown between the White House and the Fed. If Powell is focused on his legacy, then he might want to go out as the man who stood up to Trump and defended the economy from inflation, as Paul Volcker rather than Arthur Burns.

Gareth covers the updates from Xaar and Zoo Digital. Jeremy highlights the warning from Shoe Zone and suggests the shares might have overreacted to the news. Almost certainly meaning there is worse to come!

Looking ahead, next week, there is UK inflation data, which might increase to 4%. So, it’s not the typical environment in which to cut rates.

We also have Japan’s inflation data, which is expected to remain at a tricky 3.3%.

The main event is likely to be the outcome of the talks in Alaska. Will Trump and Putin move the lines on the map of Europe?

Brought to you by Progressive Equity.