12th November 2026
The Footsie skips higher as the UK economy confounds expectations.
UK GDP grew 0.2% in September, with quarterly growth accelerating to 0.7%.
AI investment is feeding through into the wider economy, with computer programming and consultancy the biggest contributor to GDP growth for seven months running.
UK is on course to be one of the fastest-growing G7 economies this year, behind only the US.
Stronger growth risks adding to inflationary pressures, cementing expectations of a February rate hike.
Nvidia faces fresh turmoil as allegations surrounding Jensen Huang intensify questions over leadership, governance and succession planning
Susannah Streeter, Chief Investment Strategist Wealth Club
''London's Footsie skipped higher in early trade as the UK economy again confounded expectations, with another show of resilience. The big sums being poured into AI are starting to be felt across the wider economy and consumers have been shrugging off the squeeze in standards of living, and splashing the cash, keeping activity more upbeat. With the UK is on course to be one of the fastest-growing economies in the G7 this year, with only the US expected to outpace it. It's quite a turnaround in fortunes for an economy that has so been tarnished with a reputation of sluggishness but it also cements expectations for an interest rate hike in February, as the Bank of England policymakers have been fretting about the rising inflation and this rate of growth could fuel it.
AI is no longer just a huge investment story playing out on Wall Street, the big sums being poured into AI are starting to be felt across the wider economy. Computer programming and consultancy the biggest individual contributor to GDP growth for seven months on the trot and indicating that the sums being poured in are filtering through to the wider economy as businesses invest in the software, computing power and specialist expertise needed to put AI to work. In the three months to September, the industry added 0.15 percentage points to overall GDP growth with activity in computer programming and consultancy jumping 4.4%.
But the brakes look set to be applied to the broad economic acceleration given the outlook does look more challenging with the Bank of England warning that inflation may climb towards 5% next year as higher energy costs feed through. Brent Crude is still hovering around $93 dollars a barrel despite more hopes of a resolution in the Middle East, which is around a third higher than before the conflict began. With higher bills set to land and the latest interest rate hike taking effect, the Bank expects growth to slow in the final quarter and remain more subdued through 2027, as squeezed real incomes and higher borrowing costs weigh on demand. Markets are still pricing in three rate hikes next year, although much will depend on the outcome of the peace talks aimed at ending war with Iran.
Deep drama at Nvidia is still playing out, with fresh allegations set to sideswipe the stock when trading resumes later. Jensen Huang is reported to have had another affair, this time with an executive at the firm, and his decision-making and judgement are coming under increasingly intense scrutiny. Questions are mounting over corporate governance and whether the board can continue to place its faith in a leader whose personal conduct is now threatening to become a serious distraction for the business. It also highlights the risks of having so much power concentrated in one individual at a company sitting at the very heart of the global AI boom, especially given that there does not appear to be a succession plan in place.
The concern is that this is no longer simply a personal scandal. With allegations involving a suspected Chinese intelligence operation, questions over chip shipments and now a reported relationship with a subordinate, the implications reach right into national security and the company's internal controls.
The board is considering Huang's future, and it looks increasingly likely that he may be suspended, which could leave the company rudderless and that’s likely to be behind the sharp slide expected in the share price later. Given the weight of Nvidia on indices and the apprehension about the potential knock-on effects to the AI eco-system – the intense speculation looks set to drag down the wider tech sector when trading begins on Wall Street, with the Nasdaq and S&P 500 set for declines.
Susannah Streeter
Chief Investment Strategist
Wealth Club
www.wealthclub.co.uk/