The US economy expanded at a 3.8% annualised pace in Q2 2025, its strongest run since 2023. Growth was lifted by robust consumer spending and higher business investment. Inflation edged up to 3.0%, mainly due to firmer energy prices, while underlying price pressures continued to ease. The Federal Reserve trimmed rates by 25 bps to a range of 3.75–4.00%, responding to a softer jobs market. Overall, the US remains on solid footing, though the Fed is expected to ease policy gradually to keep both growth and inflation in balance.

In the Eurozone, annual GDP rose 1.3%, showing resilience despite weak trade. Inflation eased to 2.1%, near the ECB’s target, as energy prices fell and core inflation held at 2.4%. Manufacturing activity stabilised, and services recorded the fastest growth since August 2024, supported by rising new orders and job creation. Overall, growth remains modest yet stable, giving the ECB room to delay rate cuts.

The UK economy grew by 0.3% in Q2 2025 over the previous quarter, supported by services and construction, while manufacturing output contracted. Consumer and government spending rose modestly, though business investment fell 1.1%. Exports weakened slightly, leaving annual GDP up 1.4%. Inflation held steady at 3.8% in September, with higher transport and hospitality costs offset by easing food and energy prices, core inflation eased to 3.5%. Recent business surveys indicated signs of stabilisation in the industrial sector and modest growth in services. Companies reported improving order pipelines, better cost control, and early signs of renewed confidence ahead of the November Budget, suggesting that economic momentum may be starting to firm into year-end.

Global equities rose in October, albeit at a slower pace than in the previous month, led once again by mega-cap, AI-related names such as NVIDIA, Microsoft and Amazon. The MSCI advanced by 1.7% on broad developed-market strength. In the United States, the S&P 500 gained 2.3% and the Nasdaq Composite climbed 4.8%. In the UK, large caps rose strongly on higher oil prices and a weaker pound, with the FTSE 100 up 3.9%. The FTSE 250 and FTSE Small Cap added 0.7% and 2.2%, respectively, while AIM stocks underperformed, declining by 1.8%.

Our portfolio declined by 1.17% and after providing for fees and expenses the Net Asset Value (NAV) declined by 1.8%. During the month, we initiated a new position in Boku (LSE: BOKU), a global mobile and online payments platform providing direct carrier billing and digital wallets in over 90 countries. The company’s capital-light model, network effects, recurring revenues, and disciplined management align well with our investment philosophy. We added to our holdings in Begbies Traynor and Dunelm, while reducing positions in Auto Trader and Treatt.

In October 2025, RELX reported 7% underlying revenue growth for the first nine months, reaffirming guidance and highlighting strong demand across its data and analytics divisions. Dunelm delivered a robust Q1 update, maintaining sales momentum and healthy gross margins. Liontrust Asset Management recorded £1.2 billion in net outflows, with AUM declining to £22 billion, though management noted improving sentiment. S&U posted a 22% profit increase, driven by better credit quality and strong growth in bridging finance. The largest contributors to portfolio performance were Games Workshop, Cake Box, and S&U, each gaining over 5%, while PayPoint, Liontrust, and Spectra Systems were the main detractors.