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20 Jul 2026 | 3 minutes to read
(All equity data is MSCI; all data in sterling unless stated)
Little is known about how Andy Burnham will use his power as he succeeds Sir Keir Starmer as UK prime minister – the seventh in ten years.
Burham’s ascent to No 10 went unchallenged, meaning he hasn’t needed to spell out much detail on policy. Any prolonged uncertainty risks curbing UK investment and economic activity. Chatter of “Manchesterism” abounds – referring to Burnham’s approach to the Manchester Mayoralty, the post he vacated to become MP for Makerfield – centred on greater levels of public control (rather than outright ownership) and devolution.
In his Labour leadership acceptance speech, Burnham spoke of his ambition to deliver the most significant change in UK politics in 40 years. Cabinet appointments may give a steer on what he means, with the position of chancellor being hugely consequential for markets and investors. Starmer ultimately failed to control factions within the Labour Party. To have a chance of success, Burnham will have to maintain cross-party appeal whilst balancing taxation and spending and deliver economic growth.
To discover more, look out for an upcoming Insight Focus article and a new edition of the Insight Talks podcast - Investment insights | TrinityBridge
A resumption of bombing between the US and Iran has sent oil prices up and shipments through the Strait of Hormuz down to near-zero. According to the latest UBS Evidence Lab data, just one tanker left the Gulf on 13 July, with both Washington and Tehran claiming to control the waterway.
The trend looks clear: with the July-to-date average for vessel crossings falling to 11 from nearer 50 pre-war, global oil inventories are being drawn down again before they could be fully replenished during a brief and edgy truce. However, a striking feature of the Hormuz disruption recently is that oil markets in Asia appeared more pressured in March than in June, despite a steady drawdown in inventories. A key reason is the sharp decline in China’s crude and petroleum product imports by 42% since March, which has freed up supply to rebuild stockpiles. China’s increasing reliance on its own strategic reserves has eased pressure on regional demand, with the reduction in Chinese imports equivalent to roughly one-third of the oil supply shortfall caused by the disruption in the Strait prior to the US-Iran Memorandum of Understanding in June.
With tensions high, China’s willingness and ability to continue to adjust imports will be a key swing factor for oil markets. Overall, global growth has taken a hit, inflation has picked up and strategic oil reserves have been depleted since the war started. The Strait’s chokehold on oil supplies underscores the importance of a durable solution for global energy security. The broader market needs stability and end to the conflict as much as US and Iran do.
China’s latest GDP figures tell a familiar story: robust exports helping to offset weak domestic demand. China’s economy grew by 4.3% in the year to the end of June, the puniest print since Q4 2022 and below Beijing’s official annual target of 4.5%-5%. Exports grew 27% in the period, surpassing expectations of 18.2%, with AI-related shipments of semiconductors and computer parts soaring by 122% and 53% respectively. Vehicle exports also exceeded one million for the first time, as local electric vehicle manufacturers continued to gain market share in Europe. Imports rose by 36%, far exceeding expectations of a 24% rise.
Domestically, China’s housing market exemplifies the economy’s malaise, with property prices falling into a fifth consecutive year. Weak consumption, soft private investment, and fragile consumer confidence all jar with China’s international swagger.
Attention now turns to July’s Politburo meeting for clues on whether policymakers will try to amp up domestic demand.
US Federal Reserve (Fed) Chair, Kevin Warsh, vowed to “defeat inflation” and “get monetary policy right” during congressional hearings last week. Since arriving in May, Warsh has set up committees to review working practices at the Fed and described established measures of underlying price fluctuation as “imperfect”. They won’t report their finding for months. But the Fed will deliver another interest rate decision next week, with markets expecting policymakers to keep rates on hold before an increase towards year-end.
The Iran war energy shock and AI investment boom are making monetary policy tricky. Some rate-setters are concerned that the former could be contributing to broader price rises, as the demand for memory chips and related tech equipment causes their value to increase. Warsh has previously suggested that AI-related productivity gains will ultimately prove disinflationary.
Near-term, Warsh may take comfort from seeing two closely-watched measures of US inflation fall in June. The consumer price index (CPI) fell 0.4%, bringing the annual rate to 3.5%, and the Producer Price Index (PPI) dropped 0.3%. Commenting on the falls, Warsh said the situation was far from “mission accomplished” on inflation, but that there is evidence of “solid” economic expansion.
As if to underline the point, five of the largest US banks all reported bumper second quarter profits last week, collectively earning more than $49bn. The profit surge was attributed to greater trading activity, public listings (like that of SpaceX), and demand for AI financing.
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