UK investors quit equity funds at record pace as they flee sky-high stock markets
UK investors have pulled a record amount of cash out of equity funds in the last three months, fretting that valuations have soared too high, new data shows.
Calastone, the largest global funds network, has reported this morning that investors “ran scared of sky-high stock markets” in the third quarter of this year.
Its data shows that UK investors withdrew £1.20bn of their equity-fund holdings in September, taking the total in the third quarter of 2025 to £3.64bn, the worst of any three-month run on Calastone’s 11-year record.
Rather than holding equities, investors have been putting money into bonds and money market funds, which are perceived as safer than shares – at a time when many stock markets (including London, New York and Toyko) have been hitting record highs.
Calastone reports that every major equity-fund sector except European-focused funds saw outflows in September, adding:
Global equity funds suffered an unprecedented fourth consecutive month of net selling (£203m), while North American funds shed £146m. Outflows from Asia-Pacific funds extended to their 29th consecutive month (£209m), while funds focused on the UK shed £691m.
China, Japan, emerging markets, small cap and sector funds all saw outflows too. European funds stood out, as investors added a net £203m to their holdings.
Photograph: Calastone
Edward Glyn, head of global markets at Calastone, reports that “outflows are on the rise again” from UK funds, explaining:
Doubtless, seeing the UK market reach record levels while still not looking expensive has given some sellers pause for thought. But the doom loop of negative commentary on the UK economy with its dire fiscal position, soaring credit spreads, lack of growth and impending tax rises may now be winning out.
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Emily Sawicz, director and industrials senior analyst at consultancy RSM UK, has warned that the European Commission’s proposal to impose a 50% tariff on steel imports worldwide poses “a significant threat to the UK steel industry”.
Sawicz explains:
The EU accounts for around 75% of UK steel exports, so these tariffs risk cutting off access to the UK’s largest and most strategically important market at a time when the sector is already under pressure from global competition and rising energy costs.
“Despite the UK government securing quarterly tariff-free quotas for certain steel categories, there remains uncertainty around which products are covered and how long these exemptions will last. This uncertainty will create a ripple effect across other industries including construction, automotive, real estate and energy, all of which rely on stable supply chains and access to raw materials.
In addition, while steel accounts for just 0.1% of UK production, it is strategically important for overall productivity, particularly in growth-driving industries responsible for delivering housing and infrastructure.
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UK steel unions slam EU tariff plan
Lisa O’Carroll
The UK steel workers union has hit out against EU proposals to introduce a 50% tariff on foreign imported steel as part of a bloc-wide effort to save their own industry in the face of competition from China and Donald Trump’s 50% tariffs (see previous post):
Alasdair McDiarmid, assistant general secretary at steelworkers’ union Community, said:
“Given that around 80% of the UK’s steel exports go to Europe, the new measures proposed by the EU represent an existential threat to our industry, as well as the thousands of jobs and communities it supports right across the country.”
The plans for tariffs will be announced by the EU trade and industry commissioners, Maros Sefcovic and Stéphone Séjourné after 4pm today.
While the UK was spared the 50% tariff on steel imports Trump imposed in June, the UK steel industry is also struggling against cheap Chinese imports and a new 25% tariffs on steel imports imposed by the US president before June.
McDiarmid said the UK government was “acutely aware of the grave risks the EU proposal poses” and called on it to urgently negotiate a country-specific quota.
Sectoral tariff-free quotas for foreign imports can result in de facto blockages, as British farmers can testify.
Negotiators to the UK-US tariff deal revealed earlier this year that the quota for third country imports of beef didn’t work as it was filled up by Brazil and others in South America.
They were able to use warehouses in Mexico to transport beef quickly to the US filling up the US quota and beating British farmers who needed more time to ship their own beef across the Atlantic.
Under the UK-US deal, British farmers now have UK-specific quota for beef imports.
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Updated at 12.13 CEST
EU to raise tariffs on foreign steel imports
Lisa O’Carroll
The EU is to take a leaf out of Donald Trump’s playbook and increase tariffs on foreign steel imports as the local industry, particularly in Germany, is threatened with “collapse” in the face of cheap Chinese imports and 50% punitive tariffs imposed by the US in June.
In a major shift in policy, the European Commission is expected to propose doubling the current 25% tariff to 50% on foreign steel while at the same time drastically reducing the current quota for duty-free imports.
The bloc’s industry commissioner Stéphane Séjourné in Strasbourg said this morning:
“The European steel industry was on the verge of collapse – we are protecting it so that it can invest, decarbonise, and become competitive again.”
He insisted the move was not the same as Trump’s blunt 50% steel tariff that applies, with some exceptions such as the UK, across the globe.
The EU tariff, in contrast, will only apply after a quota of foreign imports has been filled, with all foreign imports below that duty-free.
Alongside the proposal being presented after 4pm in Strasbourg on Tuesday, the EU is seeking a “metals alliance” with the US to ring-fence their respective economies from over-capacity.
As the 27-nation EU pushes ahead with decarbonising industry, steel is critical for renewable energy equipment, from solar panels to wind turbines, and for electric cars.
“The European Union needs to act now, and decisively, before all lights go out in large parts of the EU steel industry and its value chains,” said industry group Eurofer’s president Henrik Adam.
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Updated at 11.48 CEST
UK investors quit equity funds at record pace as they flee sky-high stock markets
UK investors have pulled a record amount of cash out of equity funds in the last three months, fretting that valuations have soared too high, new data shows.
Calastone, the largest global funds network, has reported this morning that investors “ran scared of sky-high stock markets” in the third quarter of this year.
Its data shows that UK investors withdrew £1.20bn of their equity-fund holdings in September, taking the total in the third quarter of 2025 to £3.64bn, the worst of any three-month run on Calastone’s 11-year record.
Rather than holding equities, investors have been putting money into bonds and money market funds, which are perceived as safer than shares – at a time when many stock markets (including London, New York and Toyko) have been hitting record highs.
Calastone reports that every major equity-fund sector except European-focused funds saw outflows in September, adding:
Global equity funds suffered an unprecedented fourth consecutive month of net selling (£203m), while North American funds shed £146m. Outflows from Asia-Pacific funds extended to their 29th consecutive month (£209m), while funds focused on the UK shed £691m.
China, Japan, emerging markets, small cap and sector funds all saw outflows too. European funds stood out, as investors added a net £203m to their holdings.
Photograph: Calastone
Edward Glyn, head of global markets at Calastone, reports that “outflows are on the rise again” from UK funds, explaining:
Doubtless, seeing the UK market reach record levels while still not looking expensive has given some sellers pause for thought. But the doom loop of negative commentary on the UK economy with its dire fiscal position, soaring credit spreads, lack of growth and impending tax rises may now be winning out.
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E-bike operator Lime boosts turnover
Lauren AlmeidaLime rental bikes parked on a pathway at Eel Brook Common in Fulham, London. Photograph: Kevin Coombs/Reuters
The electric bike sharing start-up Lime has reported a 75% rise in turnover to £111.3m in the UK, as the popularity of its green bikes and scooters continues to grow.
While more people are hopping on Lime bikes, the UK arm of the company reported a 40% drop in pre-tax profit to £1.7m in its 2024 financial year, which was largely driven by a 79% rise in its administrative expenses.
Lime bikes have become an increasingly popular mode of transport in London, although the company has come under fire from local authorities over bikes being discarded on the street. In some areas, there are geofences that stop bikes from being parked and freeze their electrical functions to discourage people from cycling through.
Lime, which is based in San Francisco, operates fleets of e-bikes and scooters in 280 cities around the world. Over the summer there were reports that it was considering a stock market floatation, with estimates suggesting that it could be valued at about $500m.
Last year, chief executive Wayne Ting told the Sunday Times that Lime was “ready” for a float in New York, but that the IPO market at the time was “largely shut”.
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Goldman lifts gold price forecast
Goldman Sachs has hiked its forecast for the gold price at the end of next year, following the surge in bullion prices in recent weeks.
Goldman now expects gold will hit $4,900 per ounce in December 2026, up from a previous forecast of $4,300 per ounce.
They argue that the flows of money into gold from central banks, and investors buying gold-focused exchange-traded funds (ETFs), are “sticky”, meaning prices will rise higher than expected.
Gold is currently trading at $3,947 per ounce, having hit a record high of $3,977/oz overnight.
In a new analyst note, Goldman analysts Lina Thomas and Daan Struyven say they expect:
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Central bank buying to average 80/70 tonnes in 2025/2026 as EM central banks are likely to continue the structural diversification of their reserves into gold (contributing 19pp to the 23% price increase we expect by Dec26)
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Western ETF holdings to rise as the Fed cuts the funds rate by 100bp mid-2026 (contributing 5pp by Dec26)
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Speculative positioning to gradually normalize
Goldman Sachs has raised its December 2026 #Gold price forecast to $4,900/oz (from $4,300 prev), citing strong & persistent inflows that have fueled a 17% rally since Aug26. The bank says continued buying from Western ETFs and CenBanks appears to be durable, prompting it to lift… pic.twitter.com/dsKR096RAD
— Holger Zschaepitz (@Schuldensuehner) October 7, 2025
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Denmark’s Ørsted raises $9.35bn in share issue
An employee at an Orsted’s offshore wind farm Photograph: Tom Little/Reuters
In the renewable energy sector, troubled wind generator Ørsted has tapped its investors for almost $10bn.
Ørsted has raised 59.56 billion Danish crowns ($9.35bn) in a heavily discounted share issue, a move that will strengthen its finances.
The company said 99.3% of the rights issue was subscribed, with demand for the remaining shares “extraordinarily high,” as investors snapped up discounted shares.
The price was 66.6 crowns per share, well below Monday’s market price of 122.35 crowns.
The rights issue was launched after the Trump White House caused uncertainty for its US projects, and forced Ørsted to stop construction on its $1.5bn (£741m) Revolution Wind project off the coast of Rhode Island.
Ørsted also said today it expects to complete its offshore Sunrise Wind project in the US in the second half of 2027, and has fully resumed work on Revolution Wind.
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JLR boss: recovery is “firmly underway”
Adrian Mardell, chief executive officer of JLR, says the resumption of engine manufacturing tomorrow is a significant moment for the company:
This week marks an important moment for JLR and all our stakeholders as we now restart our manufacturing operations following the cyber incident.
“From tomorrow, we will welcome back our colleagues at our engine production plant in Wolverhampton, shortly followed by our colleagues making our world‑class cars at Nitra and Solihull.
“Our suppliers are central to our success, and today we are launching a new financing arrangement that will enable us to pay our suppliers early, using the strength of our balance sheet to support their cashflows.
“I would like to thank everyone connected to JLR for their commitment, hard work and endeavour in recent weeks to bring us to this moment. We know there is much more to do but our recovery is firmly underway.”
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JLR pledges to pay suppliers quicker
JLR has also announced it is “fast‑tracking” a new financing scheme that will provide qualifying JLR suppliers with cash‑up‑front during the production restart phase.
Under this scheme, qualifying JLR suppliers will be paid much faster than under their standard payment terms, the carmaker pledges.
That should help with suppliers’ cashflow in the near term, helping them through a highly disruptive period after JLR shuttered its manufacturing more than a month ago.
JLR explains that the scheme will begin with suppliers who are critical to the restart of production, but will then be expanded.
The company explains:
Working with a banking partner, this short‑term financing scheme means qualifying JLR suppliers will receive a majority prepayment shortly after the point of order and a final true‑up payment on receipt of invoice. JLR’s typical supplier payment terms are 60‑days post invoice, so this scheme accelerates payments by as much as 120 days. JLR will reimburse the financing costs for those JLR suppliers who use the scheme during the restart phase, as the company returns to full production.
This move follows steps taken by JLR during September to prudently bolster its liquidity, following the interruption to business since the cyber incident.
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Updated at 09.37 CEST
JLR announces some manufacturing will restart tomorrow after cyber-attack
Newsflash: Jaguar Land Rover has announced that the phased restart of car manufacturing will begin tomomorrow after the cyber-attack which disrupted its operations for the last month.
JLR says operations will restart tomorrow at its Electric Propulsion Manufacturing Centre (EPMC), where the company builds engines, and its Battery Assembly Centre (BAC), both in the West Midlands.
The company adds that staff will begin to return on Wednesday to the company’s stamping operations in Castle Bromwich, Halewood and Solihull, UK, and other key areas of its Solihull vehicle production plant, such as its body shop, paint shop and its Logistics Operations Centre (LOC).
The Guardian reported last night that some JLR factory workers had returned to work, as the company attempts to restart production five weeks after the cyber-attack forced the company to shut down key systems, from vehicle design software, the flow of millions of parts, manufacturing and sales.
JLR says tomorrow’s restart will be “closely followed” by vehicle manufacturing in Nitra, Slovakia.
It also plans to restart Range Rover and Range Rover Sport (MLA) production lines in the Solihull facility later this week.
But we don’t, yet, have a restart date for JLR’s Halewood plant on Merseyside.
Further updates on the next steps of the controlled, phased restart will follow, including for Halewood, the company says.
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Updated at 09.27 CEST
German industrial orders drop again
In another blow to European industry, German factories have been hit by a drop in orders.
Industrial orders in Europe’s largest economy fell by 0.8% in August, statistics office Destatis has reported, mainly due to a sharp drop in orders in the automotive industry, for data processing equipment, electronic and optical products, and for pharmaceuticals.
That followed a 2.7% month-on-month plunge in July.
Carsten Brzeski, ING’s global head of macro, warns that Germany’s industrial slump is not about to end any time soon.
Brzeski explains:
While foreign orders surged until May and then collapsed, domestic orders remained subdued until July but staged a strong increase in August. The story behind this divergence is clearly the front-loading of exports to the US, but also the ongoing structural weakness of German industry.
In a very disappointing report, the increase in domestic orders in August remains a small piece of hope, suggesting that the announced large-scale investments into infrastructure and defence could start to find their way into German industrial companies’ order books.
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Jim Ratcliffe’s chemical plant announces 60 job cuts
Sir Jim Ratcliffe’s chemical company, Ineos, is cutting a fifth of jobs at its Hull chemical plant, blaming net zero rules, high energy costs and competition from overseas.
Ineos blamed anti-competitive trade practices for its decision to cut 60 skilled jobs. It warns the cuts are part of a structural crisis in the industry, and that the UK and Europe are “sleepwalking into deindustrialisation”.
The Hull plant is Europe’s largest producer of acetic acid, acetic anhydride and ethyl acetate. Ineos says the job losses are “a direct result of sky-high energy costs and anti-competitive trade practices”, claiming that importers are dumping their product into the UK and European markets.
Ineos argues that “dirt-cheap carbon-heavy imports from China” are “flooding the market” after being blocked from entering the US by tariffs.
David Brooks, CEO of INEOS Acetyls, says:
“This is a very difficult time for everyone at the Hull facility. We have a leading-edge, efficient and well-invested site and the team here is highly skilled, professional, and dedicated.
Making the decision to cut 60 roles was not taken lightly. We have explored every possible alternative but in the face of sustained pressure from energy costs, combined with unfairly low-cost imports into the UK and Europe, we’ve been left with no other choice.
Our priority now is to support those affected and protect the long-term future of the site.”
Yesterday, Ineos announced the closure of two production units in Rheinberg, Germany, with the loss of 175 jobs. It said the closures were “the direct result of crippling energy and carbon costs, and a lack of tariff protection”.
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UK house prices: what the experts say
The slowdown in UK house prices over the last year shows the market is “ticking over, but far from buoyant,” says Martin Beck, chief economist at WPI Strategy, who explains:
Overall, house prices have held up better than expected in the face of higher interest rates, economic turbulence and shifting stamp duty rules, but signs of strain may be emerging.
“Mortgage rates, though below last year’s peak, look set to settle around 4% for the foreseeable future – well above the norm of the last 15 years. Rising property prices are also offsetting the gains from cheaper borrowing, keeping affordability stretched. And with November’s Budget approaching, the threat of new property taxes could dampen demand, even if tighter fiscal policy leads to earlier BoE rate cuts.
Tom Bill, head of UK residential research at Knight Frank, points to caution creeping into the housing market ahead of the budget in November:
“Sellers are getting the message that house prices are under pressure due to higher levels of supply and a creeping mood of caution as November’s Budget approaches. Stable mortgage rates have supported demand but we believe prices will continue to dip modestly before ending the year broadly flat.”
The 0.3% drop in UK house prices last month reflects the ongoing pressure on the housing market from higher borrowing costs, economic uncertainty, and affordability constraints, says Nathan Emerson, CEO of Propertymark, adding:
While price declines may raise concerns among homeowners and sellers, they also present opportunities, particularly for first-time buyers who have struggled with stretched affordability in recent years.
“A cooling in prices is not unexpected given the current economic backdrop and should be viewed in the context of the significant gains seen over the past few years.
“As we look ahead, the key to restoring momentum lies in improving market confidence, whether through interest rate stability, better mortgage accessibility, or policy measures that ease the transaction process.
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UK house prices growth weakest since April 2024
UK house price growth has slowed to its weakest rate in almost 18 months, on an annual basis.
Halifax has reported that over the past 12 months prices have grown by +1.3%, the slowest annual rate since April 2024.
In September alone, it says, prices dipped by 0.3%, leaving the average home now costing £298,184.
Amanda Bryden, head of mortgages at Halifax, said:
“This slight monthly dip in house prices reflects a housing market that has remained broadly stable, prices are up +0.3% since the start of the year.
“It’s also important to remember that prices vary widely depending on characteristics like location and property type. As a result, many homes are available at a cost well below this headline figure. For example, for those looking to take their first step on the property ladder, the typical first-time buyer home costs £236,811, up +1.7% year on year, with pockets of even greater affordability to be found across different regions.
“While affordability remains a challenge, a relatively lower mortgage rate environment and steady wage growth have helped support buyer confidence.
“Although the broader economic outlook remains uncertain, with the affordability picture gradually improving, we continue to expect modest growth through the remainder of the year.”
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Introduction: Trump announces new 25% large truck tariff
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
Donald Trump has opened yet another front in his global trade wars, by announcing that new tariffs on trucks imported to the US will begin at the start of next month.
From 1 November, all medium- and heavy-duty trucks imported into the US will face a 25% tariff rate, as the US president escalates his effort to protect U.S. companies from foreign competition.
Posting on his Truth Social site, Trump declared:
“Beginning November 1st, 2025, all Medium and Heavy Duty Trucks coming into the United States from other Countries will be Tariffed at the Rate of 25%.”
The move could have significant impact on truck manufacturers in neighbouring countries. As AXIOS points out, until now foreign trucks manufactured in Mexico could be imported tariff-free if they complied with the U.S.-Mexico-Canada Agreement.
Trump’s announcement comes a day before he hosts Canada’s prime minister, Mark Carney, at the White House.
However… Trump had previously announced a 25% levies on heavy-duty trucks in late September, which didn’t actually come in at the start of this month as expected. This new statement, the FT argues, suggests he is determined to press ahead….
The agenda
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7am BST: Halifax house price index
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8am BST: Abta report on state of industry travel trends
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2pm BST: IMF to release a chapter of its Global Financial Stability Report
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5.30pm BST: FCA release on consultation released on proposed motor finance scheme. Shell quarterly update (so not the full Q3 results)
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