Weekly Market Update: 9th October 2026
By Georgia Holmes
UK market update covering the Conservatives’ IHT proposal, market volatility, HSBC’s AI plans and key changes affecting tax, pensions and investments.
The UK financial landscape has been particularly eventful this week, with investors balancing renewed inflation concerns, higher energy prices, rising government borrowing costs and growing uncertainty around interest rates.
At the same time, the Conservative Party has announced a major proposed change to Inheritance Tax, while HSBC is reportedly planning significant job cuts in its UK wealth management business as it increases its use of artificial intelligence.
With the Autumn Budget approaching and political parties beginning to set out clearer differences on taxation, pensions and spending, there are also important questions for households, investors and business owners.
So, what happened across the UK financial markets this week, and what could these developments mean for your finances?
UK Markets: Oil Prices and Rising Gilt Yields Create Volatility
UK markets have experienced increased volatility this week as investors reacted to higher oil prices, rising government bond yields and changing expectations around interest rates.
The FTSE 100 closed at 10,497.94 on 5 October, rising to 10,541.69 on 6 October, but by the morning of Thursday 8 October it had fallen to 10,413.43.
One of the biggest developments has been the sharp rise in UK government borrowing costs. The yield on 30-year gilts reached 6.036% on 7 October, its highest level for 28 years, as global bond markets came under pressure. Higher gilt yields can have wider implications for the UK economy as they increase the government's borrowing costs and can influence borrowing rates elsewhere, including mortgages and corporate finance.
Oil prices have added to concerns. Brent crude moved above $100 a barrel last week, with prices rising further on Thursday as geopolitical tensions increased and concerns grew over global energy supplies.
For investors, the combination of higher energy prices, inflation concerns and rising bond yields creates a more challenging backdrop for both shares and fixed-income investments.
Bank of England: Bailey Warns Fiscal Credibility Is More Important Than Ever
Bank of England Governor Andrew Bailey has warned that credible government plans to manage public finances are more important than ever as global bond markets face increasing pressure.
Speaking on 8 October, Bailey said governments need to demonstrate they can control debt, particularly during periods of economic and geopolitical uncertainty. He suggested that credible plans could help limit pressure on government borrowing costs and reduce the returns investors demand to hold government bonds.
For investors, Bailey's comments highlight the importance of government finances, inflation and interest rates. With the Autumn Budget approaching, markets will be watching closely for measures that could affect the UK's borrowing requirements and wider economic outlook.
Inheritance Tax: Conservatives Announce Plans to Change IHT
One of the biggest financial policy developments this week came from the Conservative Party, which announced plans to abolish Inheritance Tax (IHT) on family homes if it wins the next general election.
Under the proposal, the individual IHT threshold would increase from £325,000 to £500,000, while a family home could be passed to direct descendants without an IHT charge. The Conservatives say this would allow a couple…