8 mins
Content
UK: Struggles with inflation and growth persist, but markets perform well
Europe: A mixed month as inflation falls and markets lag
US: Ongoing trade tensions lead to market fluctuations, and inflation continues to rise
Asia: Markets continue to lead, but inflation and deflation weigh on the region
How this affects your investments
Looking ahead
Summary
Global markets posted gains in October, although performance varied across regions. Politics played a greater role this month – from renewed UK Budget speculation and US-China trade tensions to Japan electing its first female Prime Minister which lifted sentiment across Asian markets.
Inflation trends remained mixed globally. UK inflation stayed above target, while the Eurozone saw further easing. In the US, inflation rose slightly, and the Fed delivered a second consecutive rate cut. Asian markets continued to lead overall, despite both inflationary and deflationary pressures in the region.
For investors, this backdrop reinforces the value of staying diversified and focusing on long-term trends rather than short-term political or economic shifts.
UK: Struggles with inflation and growth persist, but markets perform well
The UK economy showed mixed signals in October. Inflation remained above target levels and growth forecasts were revised down, but the markets outperformed most other developed economies.
Inflation held steady at 3.8% in September, almost double the 2% target. This marked the third consecutive month inflation was at this level, but it stayed below expectations of 4%. The rise in prices was largely driven by increases in transportation costs and the services sector1.
Political focus now turns to the UK Autumn Budget later this month. Markets will be watching closely for any policy announcements that could influence business investment and economic activity. We’ll provide a further update once the full details are confirmed.
Leading analysts cut their 2026 economic growth forecasts to below 1%, and the Office for Budget Responsibility is expected to follow suit after the Autumn Budget. This is due to the expectation that chancellor Rachel Reeves is likely to introduce further tax rises, which could potentially weigh on business investment2.
At its November meeting, the Bank of England voted narrowly (5-4) in favour of keeping interest rates at 4%, rather than cutting them to 3.75%. While inflation remains above target levels, the Bank cautiously predicts that it has peaked and is likely to start falling in the coming months3.
UK markets performed well in October. The FTSE All-Share Index (which tracks 900 of the UK’s largest companies) rose 3.7% over the month, outperforming most other developed markets apart from Japan. Gains were supported by strong commodity prices and a weaker pound, which boosted UK exports4.
Europe: A mixed month as inflation falls and markets lag
European markets lagged behind global peers in October, although easing inflation and modest growth offered some positive news.
Inflation in the Euro area fell to 2.1% in October, down from 2.2% the previous month and moving closer to the European Central Bank’s 2% target5.
Meanwhile, the latest data shows that the Eurozone economy grew by 0.2% in the third quarter of 2025, up from 0.1% in the second and slightly ahead of expectations. Of the major economies, France and Spain grew, while Germany and Italy stalled6.
European equities underperformed in the month. The MSCI Europe ex-UK Index (which tracks large and mid-sized European companies) rose 2.1% in October, making it the month’s weakest performer. This was largely due to ongoing political uncertainty in France and limited exposure to AI-related technology7.
US: Ongoing trade tensions lead to market fluctuations, and inflation continues to rise
The US experienced a relatively subdued performance in October, as inflation continued to climb and markets fluctuated. Inflation rose to 3% in September, up from 2.9% in August, marking its highest level since January. The increase was driven primarily by higher energy costs8.
Geopolitical and trade positioning remained firmly in the spotlight, with ongoing US-China tensions continuing to influence market volatility.
Despite the uptick in inflation, the Federal Reserve (Fed) cut interest rates to a range of 3.75% – 4%, due to a slowing labour market. This marked the US central bank’s second rate cut of the year9.
US equities posted modest gains, with the S&P 500 Index rising 2.3% in October. Early in the month, escalating trade tensions between the US and China triggered the sharpest daily declines since April, but progress in the negotiations later in the month helped markets recover10.
Asia: Markets continue to lead, but inflation and deflation weigh on the region
Asian markets once again led global performance in October, despite inflationary and deflationary pressures across the region.
In Japan, inflation rose to 2.9% in September, up from 2.7% in August, marking the first increase since late 202411. Markets across the region performed well. Japan’s TOPIX (which tracks a broad range of companies) rose 6.2%, making it the best-performing global index in October. Investor sentiment was boosted by the election of the country’s first female prime minister, whose pro-business stance has been viewed positively by markets.
China continued to experience deflation, with consumer prices falling 0.3% in September, which was a slight improvement from the 0.4% decline the previous month12.
Elsewhere, the MSCI Asia ex-Japan Index (which covers major Asian markets outside Japan) also performed well, gaining 4.5% over the month13.
How this affects your investments
Markets reacted not only to economic data but also shifts in political signalling this month – particularly around tax expectations in the UK and trade policy in the US. This highlights the importance of staying focused on long-term market growth rather than reacting to short-term volatility. A well-diversified portfolio can also help to stabilise fluctuations and manage periods of uncertainty.
Looking ahead
The Autumn Budget will be delivered on 26 November and could prompt some short-term market movements, particularly if further tax reforms are announced. We’ll provide a dedicated update once the full details are released and what this could mean for households, businesses and markets.
Whatever the outcome, keeping a long-term view and staying invested across different markets remains one of the most effective ways to navigate periods of uncertainty. If you have any questions about your portfolio, speak with your adviser to ensure you’re on track with your goals.
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This guide is for general information only and does not constitute advice. The information is aimed at retail clients only. The content of this guide was accurate at the time of writing. While information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may affect the accuracy of the guide.
Succession Wealth Management Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Register number 588378. Succession Wealth Management Ltd is registered in England and Wales at The Apex, Brest Road, Derriford Business Park, Derriford, Plymouth PL6 5FL. Registered Number 07882611.
1 06.11.2025 United Kingdom Inflation Rate Trading Economics 2 03.11.2025 Tax rises and drop in investment predicted to limit UK growth The Guardian 3 06.11.2025 Bank of England opens door to December rate cut as it signals inflation has peaked The Guardian 4 03.11.2025 Review of markets over August 2025 JP Morgan 5 06.11.2025 Euro Area Inflation Rate Trading Economics 6 06.11.2025 Euro Area GDP Growth Rate Trading Economics 7 03.11.2025 Review of markets over August 2025 JP Morgan 8 06.11.2025 United States Inflation Rate Trading Economics 9 29.10.2025 US Federal Reserve cuts interest rates as labour market weakens Al Jazeera 10 03.11.2025 Review of markets over August 2025 JP Morgan 11 06.11.2025 Japan Inflation Rate Trading Economics 12 06.11.2025 China Inflation Rate Trading Economics 13 03.10.2025 Review of markets over August 2025 JP Morgan
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