Think Twice – This Is Getting Serious!                      14 August 2026

Dutco Construction has been awarded a contract to transform the former Dubai Zoo site, closed in 2016, after fifty years, in Jumeriah One The investment firm Shamal Holding announced the appointment that will see the building of ninety low-rise homes, set around landscaped courtyards and green spaces, while retaining elements of its history and character.

Shamal Holding will retain ownership of the community and offer all homes for premium leasing rather than sale. Residents will have access to a range of shared facilities, including a clubhouse, wellness area, children’s play area, family pool, lounge and gym. The development will also include communal spaces intended to encourage interaction between residents.

Global Fund Manager, in partnership with H&H, had set up Global Partners Property Fund, and has managed a successful handover of Eden House The Canal, with continuing progress at Eden House The Park. The initial development is located on Dubai Water Canal, one of the city’s most distinguished addresses, including the Four Seasons Private Residences, whilst its follow up launch is to be found nearby. Combined, the two developments, with a gross value of US$ 1.09 billion,  will have delivered more than five hundred residences along Dubai Water Canal. Building on the progress of Fund I, Global Partners has successfully raised more than US$ 300 million for Global Partners Property Fund II (CEIC) Limited providing finance for their third Dubai development – Dubai Creek Gardens – a master-planned residential development. As part of Fund II, Global Partners has partnered with Marriott International to bring the Westin and Renaissance brands to Dubai Creek Gardens, introducing the first Westin and Renaissance branded residences in the UAE.

According to Cushman & Wakefield Core, Q2 witnessed a cooling-off in the Dubai’s residential property market, as both average sale prices and rents moved lower, (by 4.0% and 6.0% respectively), and showed further signs of cooling, with new supply entering the market and buyer activity dipping. It also expects further price corrections across most residential submarkets, as transaction volumes remain subdued, with additional housing supply coming to market. However, established end-user communities are expected to remain relatively resilient, supported by underlying demand.

Expectedly, apartment prices fell to a larger degree than villas/townhouses, with Palm Jumeirah, Downtown Dubai, Business Bay, Dubai Hills Estate and Jumeirah Village Circle, down 9%, 7%, 7%, 4% and 3% respectively. Villa performance was mixed, with The Springs and The Meadows declining 9% and Dubai Hills Estate falling 5%, while Palm Jumeirah and Jumeirah Village Circle continued to post modest gains. These latest quarterly falls continue a correction that had started late last year, with property prices slowing to US$ 456 per sq ft. In contrast, supply is moving higher with an estimated thirteen thousand, two hundred residential units completed in Q2 and a further thirty-two thousand expected to be delivered in H2. In addition, some of the major developers have substantial development pipelines, extending over the next four years. The agency warns that contractor capacity constraints and supply chain issues may well affect future project handovers.

Data by Chestertons seems to indicate that Q2 residential transactions in Dubai fell 19% on the quarter, with total sales value slumping 36% to US$ 23.95 billion. Off plan sales value and volume carved out 74% and 76% of the quarter’s total but posted a 15% fall in activity, compared to a 30% decline in the secondary market. The agency suggested that demand for high-quality space, set against constrained supply in several segments, is expected to keep Dubai’s fundamentals resilient into H2.

Average apartment sale prices, eased in Q2 by 3.1%, on the quarter and almost flat on the year, to US$ 494 per sq ft but holding marginally above the same period last year. Among the different communities, declines ranged from 0.3% to 7.7%, with villas/townhouses performing well, with average values topping US$ 637 per sq ft and 7.0% higher on the year because of constrained supply not keeping up with sustained demand. The top performers were Jumeirah, Victory Heights, Al Barari, Emirates Hills and Jumeirah Village Circle with annual gains of 33.3%, 31.6%, 22.9%, 18.0% and 15.5%.

 Etoro’s Nagham Hassan, posted that rent prices, despite an increase in Q2, were starting to ease, and that it appeared that “real estate firms are now reporting an influx of supply, taking pressure off housing costs.” while the regional instability brought along with it rising fuel and food prices.  In Dubai, the REIDIN index showed June rents 2.16% lower on the month, and 2.55% on the year. Cavendish Maxwell has estimated that some 24.80k homes were completed in H1 – the strongest in years as earlier projects reached handover.

There is no doubt that, despite all the hullabaloo in the Dubai real estate market, its ultra-prime residential property sector, (residential units selling for more than US$ 10 million), is booming notwithstanding regional uncertainty over the past five months since 29 February. Sales of homes surged 23%, on the year, to reach US$ 6.0 billion – for three hundred and twenty properties – accounting for 9.7% of the emirate’s total residential sales value. The resilience shown, particularly in this sector, illustrates Dubai’s growing appeal as a safe haven for global wealth.

A total of three hundred and twenty residential properties, valued above $10 million, changed hands during H1, while the ultra-prime segment accounted for 9.7% of Dubai’s total residential sales value. The market’s resilience was particularly notable given that the wider property sector experienced a more measured trading environment after a strong start to the year. Although caution was brought into the equation, after the commencement of the troubles, activity moderated for the first three months, to May, but began recovering in June. In H1, 80.51k residential transactions, valued at US$ 61.72 billion, were registered.

Daniel Hadi, CEO of Engel & Völkers Middle East, commented that, “the first half of 2026 demonstrated the resilience and increasing maturity of Dubai’s real estate market. We saw buyers become more considered during the period of regional uncertainty, but importantly, demand remained present and activity began to strengthen again as conditions improved”, and “what continues to give us confidence is the depth of the market, from growing international demand for exceptional ultra-prime homes to sustained activity across the wider residential sector”. Jumeirah, Jumeirah Asora Bay and the Dubai Water Canal were hotspots for major deals, with the consultancy noting that emerging luxury communities are increasingly competing with established prime destinations as affluent buyers seek new investment opportunities.

The commercial property sector performed best in H1, with mega record annualised growth figures posted. Commercial sales topped US$ 16.95 billion and 6.47k transactions, office sales rose 35.3%, with 2.57k transactions, and retail deals 50.2% higher, with 0.85k transactions. The best statistic in this sector saw the value of off-plan commercial sales skyrocket from US$ 817 million, a year earlier to US$ 4.63 billion in H1, attributable to surging demand for new Grade A office developments, retail space and mixed-use business districts. The agency also saw a bright future, with the emirate’s long-term fundamentals, (including population growth, global capital inflows, economic diversification and infrastructure investment), continuing to support demand across both residential and commercial real estate markets.

With some one hundred federal officials attending a workshop, the country has launched the strategic phase of its agentic AI project, with its target of converting 50% of federal government operations, services and tasks to AI-driven models within two years. The initiative will integrate AI into federal operations to support areas including policy development, future planning and decision-making under the UAE Government 4.0 framework. It encompasses seven areas including strategy and projects, foresight, policies, governance, government performance, global competitiveness and innovation.

A LinkedIn report, The UAE Economic Graph Report 2026, noted that, in 2025, the country posted one of the strongest hiring recovery rates compared to pre-pandemic levels, and was among only a small number of nations globally to sustain hiring activity above 2019 figures throughout the year. Latest data indicates that in June, hiring recovered well after a period of regional instability, instigated, on 29 February by the ME crisis. If this upward momentum were to continue, and market conditions stabilise, the UAE will be in a position to build on last year’s gains.

The report, now in its sixth edition, and in partnership with the Ministry of Foreign Trade, ranked the UAE first globally in FinTech skills, second in attracting AI talent relative to population size, tenth in business skills, and eleventh in personal and behavioural skills. Technology and media, professional services, and manufacturing recorded the highest levels of digital skills penetration. It also ranked high for net talent migration, indicating that more skilled professionals are moving into – rather than out of – the UAE.

Compared to 2019 levels, real estate recorded the highest hiring growth rate of any sector while education, construction, healthcare, administrative and support services, and transport and logistics all sustained hiring above the national average. Professional services remained the largest sector, by number of LinkedIn members, at 14.5%, followed by manufacturing at 12.0% and accommodation and hospitality at 9.2%.

A Memorandum of Understanding has been signed between Mobility, Abu Dhabi’s leading public parking operator, and Parkin Company, Dubai’s largest provider of public parking facilities and services. The agreement will see further discussions on smart parking technologies, digital integration and the exchange of expertise, with the aim of making parking services more efficient, convenient and sustainable, and the development of joint initiatives, exploring pilot projects using AI, data analytics and advanced digital platforms. The principal aim is to create smarter, more connected and customer-focused mobility solutions across the two emirates.

At a recent meeting with fellow BRICS countries, the UAE Minister of Foreign Trade, Dr Thani bin Ahmed Al Zeyoudi, highlighted that his country’s 2025 non-oil trade, with the bloc, rose by 28.5% to US$ 312 billion. He also raised UAE’s concerns about ongoing attacks on commercial shipping and the continued closure of the Strait of Hormuz. Ministers also discussed global trade, market connectivity and challenges facing international commerce, although they were unable to reach agreement on a joint declaration. He also held talks with counterparts from India, China, Egypt, Indonesia, Russia and South Africa, focusing on trade, investment and greater private-sector cooperation. The eleven-member bloc, which also includes Brazil, Egypt, Ethiopia, India and Iran, accounted for around 31% of the UAE’s total non-oil foreign trade last year, including 34% of imports and 23% of non-oil exports.

Emirates NBD is to partner with the Dubai Future District Fund – the emirate’s US$ 272 million, (AED1 billion) evergreen venture capital fund of funds – to identify and test new AI and FinTech that looks to change how customers use banking services. Both parties will jointly source, identify, pilot and potentially adopt technology-driven solutions so as to improve the efficiency and quality of financial services. The bank will have access to a gamut of technical solutions developed by startups in DFDF’s portfolio. DFDF will provide Emirates NBD with access to startups in its portfolio, allowing the bank to identify companies whose technology matches its requirements. Selected startups will be able to test their products with Emirates NBD and potentially move to commercial agreements, if the pilots were successful.

Dubai Aerospace Enterprise has signed a purchase and a long-term leaseback agreement with Saudia for four new Boeing 777F freighter aircraft, with deliveries between this October and May 2027. The four aircraft will support Saudia’s expanding cargo operations and strengthen its ability to serve key markets across its global network. DAE currently owns, manages, and is committed to owning more than one thousand aircraft, (valued at US$ 9.54 billion), including over two hundred and fifty from Boeing, and has plans to further expand its fleet to meet growing market demand.

The Central Bank of the UAE has granted Edenred, part of the global Edenred Group, UAE in-principle approval for it to operate as a licensed Stored Value Facility provider in the country. The sixteen-year-old firm, part of the global Edenred Group and the UAE’s largest salary processing provider, services over twenty thousand businesses, along with two and a half million employees. In-principle approval is an intermediate step in CBUAE’s licensing process which assesses governance, compliance, cybersecurity, and operational controls, before a full SVF licence is granted.

With Spinney’s H1 revenue rising 4.8% to US$ 520 million and gross profit by 4.1% to US$ 214 million, profit came in at US$ 48 million, with adjusted EBITDA increasing 1.2% to US$ 100 million, as profit before tax was broadly stable at US$ 55 million. The main drivers behind the revenue figure were a 1.9% increase in like-for-like sales, the opening of eleven stores across the UAE and Saudi Arabia since July 2025, and increased penetration of fresh products, private-label goods and online sales, (which accounted for 19.1% of sales, cf 16.2% in H1 2025). The board approved an interim dividend of US$ 0.93 per share, equivalent to US$ 33 million, which will be distributed next month. Although Q2 revenue declined 1.6% on the year, to US$ 244 million, profit increased 3.1%, to US$ 24 million, and adjusted EBITDA rose 1.3% to US$ 50 million.

The DFM opened the week on Monday 10 August on 5,796 points, and having gained one hundred and fifty-eight points (2.6%), the previous fortnight, gained sixty-one points, (1.0%), to close the week on 5,886 points. Emaar Properties, US$ 0.13 higher the previous week, shed US$ 0.10 to close on US$ 3.03 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.76, US$ 8.74, US$ 2.06 and US$ 0.39 and closed on 14 August at US$ 0.74, US$ 8.68, US$ 2.02 and US$ 0.38. On 14 August, trading was at two hundred and thirty-eight million shares, with a value of US$ two hundred and fifty-eight million dollars, compared to one hundred and twenty-seven million shares, with a value of US$ one hundred and sixty million dollars, on 07 August.

By 3pm GMT 14 August 2026, Brent, US$ 17.48 (17.4%) lower the previous fortnight, gained US$ 5.63 (6.9%), to close the week on US$ 87.53. Gold, US$ 300 (7.4%) higher the previous week, gained US$ 140 (6.9%), to end the week’s trading at US$ 4,489 on 14 August. Silver was trading at US$ 63.68 on 07 August – and closed today, 14 August, on US$ 5.88 (2.9%) higher on the week at US$ 65.52.

According to the August International Energy Agency Oil Market Report, global oil demand is now set to decrease by 1.6 mbd this year – 46.8% higher than its July forecast – driven by higher energy prices resulting in lower fuel consumption. It also noted that annual contractions will ease from 4.9 mbd in Q2, to 2.8 mbd in Q3, and then returning to 5.49 mbd in Q4; oil demand is then projected to expand by 2.4 mbd next year.The global oil balance is now expected to show a deficit of 1.8 mb/d in Q3, more than double the estimate of around 0.8 mbd reported for the June quarter. Global oil supply is now projected to decline by 4.3 mbd on average in 2026 and rebound by 8.3 mbd next year to 110.3 mbd.

Naoise Connolly Ryan has been awarded US$ 29 million in damages by a Chicago jury, after she had brought a case against Boeing in relation to the 2019 crash of a Boeing 737 Ethiopian MAX.. Her husband, Mick, an Irish-born UN worker, died in the crash. This case was one of the final remaining civil suits pending against Boeing following the pair of deadly MAX crashes in 2018 and 2019 that together claimed three hundred and forty-six lives. His wife, via her attorney, was “committed to seeking accountability and justice from a jury and not accepting money from Boeing directly.” The plane maker had already apologised for the crashes and acknowledged that anti-stall software was implicated in both accidents.

IHG posted that H1 revenue climbed 6% to US$ 2.6 billion, driven by strong trading in the US and China, offsetting “challenges in the Middle East”; pre-tax profits fell 8.7% to US$ 578 million. Revenue per available room, a key industry metric, rose 4.1%. The FTSE 100 global hotel group, behind brands such as Holiday Inn and Crowne Plaza, reported that demand had been enhanced by the Fifa World Cup matches held across the US, Canada and Mexico. The company expects to remain on track to meet full-year consensus profit and earnings expectations.

A UK legal case, starting more than ten years ago, claimed Mastercard’s fees were “unlawful”, making it more expensive for retailers to accept card payments and that extra costs were then passed on to consumers through higher prices. The court agreed and the global tech company concurred, at the end of last year, to pay US$ 270 million to settle the case. The settlement was approved by the Competition Appeals Tribunal in May last year. Aggrieved customers can expect payouts of up to US$ 95 as part of a landmark group legal case against Mastercard next year after it settled outside court. If the expected number of people claim, which is roughly 2.2 million, based on professional estimates, each person will get US$ 61, and if fewer people than expected claim, then the maximum each person will get is US$ 95 and any remaining funds will go to the Access to Justice Foundation, a charity.

For the year ending 31 January 2026, Harrods posted a 1.2% increase in revenue to US$ 1.49 billion, and a 2.9% decline in operating profit to US$ 233 million, with a pre-tax profit of US$ 115 million, compared to a US$ 46 billion loss, a year earlier; in 2024, the department store had to take an US$ 84 million compensation charge relating to Mohamed Al Fayed’s decades-long catalogue of abuse. To date, Harrods has so far compensated roughly one hundred women, with hundreds more still to reach settlements. The company’s Harrods Redress Scheme was launched on 31 March 2025 and closed to new applications on 31 March 2026.

During the year a 3.2% pay rise for staff cost US$ 11 million, while increased employer national insurance contributions, (after Rachel Reeves had upped it 1.2% to 15.0% from 01 April 2025), totalled a further US$ 8 million. The latest accounts do not appear to show any provision for the two cyberattacks which hit Harrods in 2025. While global macroeconomic and geopolitical uncertainty continues to shape the operating environment, Harrods remains cautiously optimistic.

Harvey Nichols has been bought, for US$ 54 million, by the owner of Sports Direct, which warned a “significant restructuring” was needed to ensure the one hundred and ninety-five -year-old business remains sustainable. Having earlier been frozen out of any dealings in the sale process of the embattled luxury department store, Frasers has ended up as the new owners of the iconic retailer. Some suppliers are concerned about Mike Ashley’s Frasers taking over the six stores, where approximately eight hundred premium and luxury brands are sold; they include Armani Beauty, Balmain, Cartier, Juicy Couture, Lancome, Max Mara, Nike, Polo Ralph Lauren and Spanx. The caution of some suppliers is down to the fact that they had dealt with the retail tycoon before – when Frasers had briefly owned Matchesfashion, an online retailer, which collapsed in 2024.

Now Harvey Nichols have been trying to reassure its suppliers about its future stewardship under the new ownership. Its chief merchant, Kate Benson, sent a memo to suppliers confirming that one thousand jobs would be saved and that, “throughout the sales process we have spoken at length with Frasers, and we are confident that they understand our business and value our brand relationships”. She added that the chain had “made significant progress in repositioning this iconic business, investing in our flagship store, broadening our customer proposition, and strengthening the brand DNA”. She concluded that Harvey Nichols wanted to hold further talks with brand partners to “work collaboratively on outstanding payments and orders, to ensure we rebuild a sustainable business that can thrive in the future”.

It is reported that Fenway Sports Group, who acquired control of the club for US$ 405 million in a 2010 deal, is to divest around 30% of Liverpool Football Club to a consortium including Jeff Bezos. The deal is led by Amit Bhatia, the son-in-law of steel billionaire Lakshmi Mittal and until recently a shareholder in Championship club Queens Park Rangers, along with the Amazon founder, and Eduardo Saverin, a co-founder of the Facebook. The transfer, one of the sport’s richest-ever deals, would value the club at US$ 6.0 billion and shows that Fenway, and the Boston Red Sox owner, made a great deal sixteen years ago. In 2023, a small stake in the club changed hands to Dynasty Equity, at which time Liverpool FC was valued at US$ 4.5 billion.

Liverpool’s value is in the Championship League when compared to the Los Angeles Lakers. It is reported that venture capitalist, Joshua Kushner, and former Disney CEO, Bob Iger, have purchased the NBA club, valued at US$ 12.5 billion. (That news lands just weeks after Kushner, the brother of Donald Trump’s son-in-law, Jared,  and who was very closely tied to Gianni Infantino’s pipedream and futile plan to sell off a piece of the World Cup’s commercial business – a shonky scheme that ultimately blew up in Infantino’s face. Some consider the sale a “shocking development”, given that billionaire Mark Walter had bought the Lakers only fourteen months ago for US$ 10 billion from the Buss family. At the time, he commented that. “it has been an extraordinary investment, but what I will carry with me is the community, the fans, and a city that treats this team as family”.

A rare occurrence in the US saw a judge dismiss criminal charges against Indian billionaire Gautam Adani, after the Justice Department said it had decided to abandon the fraud and bribery case against him. The case against a subsidiary of his Adani Group, commencing in November 2024, involved an agreement to bribe Indian government officials to win approval to develop a solar energy plant, but then misled US investors by providing reassuring information about his company’s anti-corruption practices. On 18 May, the Justice Department announced it would no longer pursue the case, followed by a 04 July filing by Trent McCotter, a senior Justice Department official, that the case was primarily foreign, hard to prove and inconsistent with the agency’s current priorities. The senior Justice Department official also denied as false what he called media stories suggesting he sought to dismiss the case in part because of a promise by Adani to invest money in the US.

On 22 June, the US government ordered Anthropic to stop exporting its most advanced AI tools, citing national security concerns. This week, the ban has been lifted, with the tech company posting that it will begin restoring access to Claude Fable 5 and Mythos 5 on Wednesday 12 August. It is reported that the Commerce Department said that Anthropic had addressed the risks, allied with its two most advanced AI tools, with concerns that they could be used by hackers to exploit weaknesses in computer systems. Apart from agreeing “to proactively detect and address security risks associated with the models”, it has also agreed to collaborate on future releases of its AI models and alert the government of any malicious activity.

The Australian Competition and Consumer Commission has accused Amazon of making unfair contracts with over a million annual subscribers between November 2023 and August 2025. It notes that the tech giant had introduced adverts in Prime Video, using allegedly unfair contract terms. ACCC chair, Gina Cass-Gottlieb, added that, “consumers who wanted to avoid ads were left with no choice but to pay more to maintain the service they’d initially signed up for”. In 2018, Prime had become available and, six years later, introduced global advertising in early 2024 and advised subscribers that there would be a further additional fee pushing the monthly fee up to US$ 9 to keep the service ad-free; at that time, eight hundred and fifty thousand Australians had already paid for a year’s worth of Prime service, with the ACC claiming that “those subscribers were provided with a degraded, ad-supported Prime Video service for the balance of their prepaid term unless they paid for the ad-free option”. The watchdog claimed that the tech giant manipulated this by relying on five unfair terms in contracts, with over a million customers, signed between 01 November 2023 and 18 August 2025.

The man, who many considered to have been one of the richest people in China has been sentenced to thirty years in jail in the US for running a billion-dollar scam. Guo Wengui fled to the US in 2017 and began his new life, reinventing himself as a Communist Party critic and built a loyal online following. He had been a property developer and had direct links with the Chinese hierarchy but had been accused by top Chinese officials of corruption. This week, in New York, the man, who was also known as Miles Guo and Ho Wan Kwok, has been convicted on charges of racketeering, fraud and money laundering . Judge Analisa Torres said Guo had “preyed on those seeking to bring democracy to China”, taking their money to fund his lavish lifestyle.

US prices rose 3.4% in the year to July – 0.1% lower on the month – as gasoline prices dipped 2.9% lower in the month, but still 24.6% higher on the year. After a flat month in June, prices, excluding food and energy, rose 0.2%, with medical care and airline tickets edging higher and car insurance continuing to head south. The new Federal Reserve chair, Kevin Warsh, has said the central bank’s priority is to “keep inflation moving down” while avoiding unnecessary shocks to the economy. If inflation were to reach the 2.0% a level policymakers say keeps prices stable, supports steady economic growth, and helps prevent deeper downturns.

After the Board could not come to an agreement to a five-year extension of his term, current Tata Group chairman, N Chandrasekaran, has confirmed that he will not seek reappointment when his term ends in February. It seems that the conglomerate – owner of Air India, Tata Steel and Jaguar Land Rover – has been beset by ongoing tensions and a boardroom power battle between trustees. It appears that the board members had disagreed over issues such as board nominations, funding approvals and the public listing of Tata Sons. News of his resignation sent listed Tata companies’ shares scuttling lower. The chairman added, “it is not only necessary to have a leader in place to lead the Group beyond Feb 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders”.

The World Bank Board of Executive Directors has approved a US$ 100 million grant from the International Development Association to support the post-Assad era in building the foundations of a modern, secure, and digitally enabled financial sector. It will assist the Syria Financial Sector Modernisation Project support investments that will help make financial transactions safer, faster, and more transparent, while creating conditions for better access to financial services. The project aims to operationalise foundational financial sector systems, which include, at least fifteen million annual electronic retail payments, support at least half a million people and businesses, (including one hundred and fifty thousand women), in actively using digital payments through project-supported systems. The Governor of the Central Bank of Syria, Mohamed Safwat Raslan, noted that the Central Bank will continue working to build an advanced financial sector that enhances confidence, drives economic growth, and contributes to re-integrating Syria into the global financial system. (On Tuesday, the Fourth Criminal Court in Damascus sentenced former Syrian president, Bashar Al Assad, 2000 – 2024, and his brother, Maher al Assad, in absentia, to death, for the crimes carried out from 2011 to the end of the regime).

July saw a surprise shedding of 23k US jobs, (rather than an expected 80k hike), with the Bureau of Labor Statistics also revising downwards previously registered 103k jobs in May and June. Even if summer is seen as a slow time of the year, the US economy is creating fewer jobs than expected. The decline – with cuts in local government, education and retail roles – came about despite analysts predicting growth. Notwithstanding the still sticky and high inflation, figures like these will probably help the Federal Reserve not to raise rates at their next meeting; rates were left unchanged, as broadly expected, between 3.5% and 3.75% last month. However, the Bureau of Labor Statistics confirmed the unemployment rate had dipped 0.1% to 4.1%, as the number of people in work or looking for work declined slightly. At the same time, average hourly earnings rose by 3.2%, on the year, with average hourly earnings for all employees on private non-farm payrolls at US$ 37.62.

It is reported that Treasury sources have confirmed that internal modelling presented to the Prime Minister, Andy Burnham, suggests UK GDP growth could be as low as 0.3% next year, if disruption in the Strait of Hormuz continues until the end this year. The UK economy had a robust start to the year but was stymied by the ME crisis, from March onwards. The Iran war has had the impact of higher energy prices and supply chains in disarray. The reasonable worst-case scenario of there being no peace deal until 2027 and the Strait of Hormuz being effectively closed for the rest of 2026, would result  in the UK economy growing by 0.9% -slightly lower than the 1.1% forecast by the Office for Budget Responsibility. However, this would be followed by next year’s growth being 0.3%, compared to the OBR’s forecast of 1.6% The same analysis would see inflation peaking at 4.3% – well above the BoE’s 2.0% target and the current level of 2.6%. Under the modelling, inflation would peak at 4.3% in Q1 2027. The dynamic duo of Andy Burnham and Chancellor John Healey has a massive task not only to stick to the Labour Party’s 2024 manifesto but also tackling the cost of living crisis which would have to be financed in an environment where the Chancellor has said he will ensure ‘strong fiscal discipline’.

An index of permanent hiring by the Recruitment and Employment Confederation  and KPMG has topped 50 points – the threshold between contraction and growth – for the first time in nearly four years. It is possible that the sector could escape from a long-term downturn, exacerbated by factors such as an extra US$ 33.75 billion payroll tax, and increases in the minimum wage, (both levied by the former Chancellor Rachel Reeves), as well as rising inflation and high energy costs. There was no surprise to see that London businesses took on new full-time staff at the quickest pace in nearly four years, whilst permanent placements continued to decline in the north of England.

Nvidia has teamed up with some of Wall Street’s largest banks and investors – including Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs and KKR – to raise US$ 500 billion for AI infrastructure. The chipmaker noted that this would be the first time that investors had treated AI hardware and infrastructure, sometimes referred to as “compute”, as a critical infrastructure asset class, with KKR adding that “our approach to digital infrastructure, we’ve learned that delivery, not ambition, is the hard part”. Nvidia’s chief executive, Jensen Huang, commented that “in AI, compute is revenue. We are bringing the world’s leading long-term capital providers together to independently underwrite AI infrastructure”. The money raised will finance the tech giant’s own projects, as  well as those of its partners, and could include new factories to manufacture AI chips plus building new data centres to house, operate, and cool miles of stacked computer chips that process AI data and actions. A big majority of the big tech giants – including Amazon, Anthropic, Google, Meta, Microsoft, OpenAI, SpaceX and Tesla – all utilise Nvidia’s popular chips or GPUs and it has been estimated that over the past three years, they have cumulatively spent US$ 1.0 trillion on AI projects and infrastructure.

Goldman Sachs has estimated that the AI revolution has seen five of the leading mega tech companies – Google-owner Alphabet, Amazon, Meta, Microsoft and Oracle – spend a combined US$ 1.5 trillion on capital expenditure on leasing space in data centres; this includes US$ 1.0 trillion in off-balance sheet spending commitments – this spending potentially masks the long-term debt liabilities underpinning the AI boom. There is such a vast amount of money, already being spent, in the stampede to obtain the computing capacity needed to power AI. Leases are sometimes agreed as much as a decade in advance, and under US accounting rules, such expenditure does not have to be included in financial statements – only to be included in the financial reports as footnotes. In other words, a company does not recognise the future lease agreement, either as an asset or liability, in the actual audited financial statements, until it actually starts. Even the ratings agencies have different interpretations. S&P does incorporate the leases into its adjusted debt metrics, arguing that these leases “reflect committed obligations that are unlikely to be avoided without significant cost or disruption”. In contrast, Fitch and Moody’s only incorporate operating leases into the adjusted leverage metrics after the lease has commenced, with future leases, that have yet to start, are only considered as part of a “qualitative overlay”. There is no doubt that the investing world is becoming increasingly worried about the capex of major tech companies and whether they can all justify – and cover – such high spend. Think Twice – This Is Getting Serious!