In this week’s briefing, we split our focus between the UK economy and investment trends across the Atlantic.
We start at home, where Britain’s labour market continues along a familiar path, though subtle shifts may be hinting at what lies ahead, followed by a brief look at the latest GDP data and what it suggests.
In the US AI and tech sectors continue to dominate headlines, with valuations climbing higher than ever and investment deals showing no signs of slowing. On a smaller scale, we’ll also look at an interesting move from Goldman Sachs - an investment into an area that could soon capture the attention of more investors.
Read on to find out more.
After months of turbulence, the UK jobs market finally appears to be steadying. Albeit still at a fragile point. The unemployment rate rose to 4.8% in the three months to August, up from 4.7% in July, defying City expectations that it would hold steady. HMRC data showed 10,000 fewer people on payrolls in September, but the Office for National Statistics (ONS) noted the pace of decline has slowed compared with earlier in the year.
The ONS’s Liz McKeown described a “levelling off” in hiring activity - a sign that the worst of the labour market correction may be passing. However, there are still pockets of strain. The single-month unemployment rate hit 5.3% in August, the highest since 2020, highlighting the uneven recovery across different sectors. Business leaders remain cautious, warning that if Reeves opts for further tax increases in the November Budget, the weaker growth outlook could make them difficult to sustain without denting confidence.
Policymakers are increasingly concerned about “flying blind” due to problems with the ONS labour force survey, which has seen collapsing response rates and sparked warnings over unreliable data.
Alan Taylor, a member of the Bank’s Monetary Policy Committee, perhaps summed up the tension best: “In an economy with rising unemployment and weak demand, wage settlements will be pushed down, and wage-led domestic inflation will not rekindle an upward spiral.”
If the UK’s economic story is one of stabilisation, the global tech world tells the opposite - a tale of explosive expansion and interdependence. The AI infrastructure boom has reached eye-watering scale, with OpenAI alone reportedly securing around $1 trillion in deals this year, according to the Financial Times. The company’s $300 billion agreement with Oracle for computing power, part of a $500 billion project dubbed Stargate, illustrates how the AI arms race is as much about access to data centres and chips as it is about algorithms.
The web of partnerships is dizzying. OpenAI has struck a $22 billion deal with CoreWeave for GPU access, partnered with Broadcom to design custom chips, and received $100 billion in backing from Nvidia - some of which is likely to circle back to Nvidia through GPU leasing. In parallel, Nvidia has agreed to buy up to $6.3 billion of CoreWeave’s unused capacity, while Oracle has spent $40 billion on Nvidia chips to serve OpenAI’s infrastructure. It’s a closed ecosystem of mutual dependency, with SoftBank, Microsoft, and CoreWeave all playing interconnected roles.
Beneath the excitement, analysts are beginning to voice concern. Bain & Company estimates AI firms would need $2 trillion in annual revenue by 2030 to sustain projected infrastructure costs - leaving an $800 billion shortfall. It’s an echo of past tech booms, where growth expectations risk outpacing financial reality.
Still, industry leaders insist this isn’t a bubble, but a foundational buildout. The digital equivalent of constructing railways or power grids for the 21st century. As CoreWeave CEO Mike Intrator put it: “There’s nothing circular about that. It’s a fundamental infrastructure buildout that’s taking place... when you have such a massive-scale investment in infrastructure, it is not unusual to see partnerships as people try to serve infrastructure to the consumer.”
While global investment pours into AI, Britain’s economic growth remains sluggish, leaving Chancellor Rachel Reeves under mounting pressure ahead of the 26 November Budget. The latest ONS data shows GDP grew by just 0.1% in August, aided by a 0.7% rise in manufacturing output, while the July figure was revised down to a 0.1% contraction. Over the three months to August, growth averaged 0.3%, modestly up from 0.2%.
The services sector - spanning retail, hospitality, and finance - flatlined once again, underscoring how uneven recovery has become. Economists like Yael Selfin of KPMG expect uncertainty around tax rises to weigh on business activity through winter.
The IMF has predicted that the UK will still rank as the second-fastest-growing major economy this year, but also the G7’s highest for inflation, largely due to energy and utility costs.
As ruth Gregory of Capital Economics warned: “There is little reason to think GDP growth will accelerate much from here... The disruption to the auto sector caused by the Jaguar Land Rover cyber-attack probably meant the economy went backwards in September.”
Away from macroeconomic worries, one of the more strategic financial moves came from Goldman Sachs, which has agreed to acquire Industry Ventures for just under $1 billion. The deal expands Goldman’s reach in venture secondary investing - an increasingly vital niche where investors buy and sell stakes in private companies or funds. It’s a market that has flourished as start-ups stay private longer and IPO exits become rarer.
Industry Ventures, based in San Francisco, manages around $7 billion in assets and will now sit within Goldman’s $540 billion alternatives division. CEO David Solomon has made asset and wealth management a key strategic pillar, aiming to balance the firm’s reliance on volatile trading revenues with steady fee-based income.
Goldman will pay $665 million upfront in cash and equity, with another $300 million tied to performance through 2030. The deal builds on a minority stake Goldman first acquired in 2019, signalling a deepening partnership rather than a takeover. Industry Ventures’ founder Hans Swildens described it as “an opportunistic next phase” in a relationship that had already proven mutually beneficial.
This measured, selective acquisition aligns with Solomon’s more conservative approach to expansion after mixed experiences with past deals - such as buying NN Group’s asset management unit in 2022, but later offloading GreenSky in 2024. As Solomon himself recently said: “The bar to do something significant has to be very, very high. The small things that you can incrementally add, sure, we’ll think about that stuff.”
This week’s briefing explores two key areas on our radar — with data points focused on the UK economy and investment activity across both large and smaller scales.
The UK economy remains on a similar trajectory to recent months. However, this sense of stability isn’t necessarily a positive one. With the Budget now just a week away, attention turns to whether it might offer any indication of a shift — from stagnation toward more sustainable, long-term growth.
On the investment side, the ongoing circular flow of capital within the AI and tech sectors remains fascinating. Many economists believe this pattern contributes to a cycle of artificial revenue growth, inflating market capitalisations in the process. With the Shiller P/E ratio for the S&P 500 now at its second-highest level since the peak of the dot-com bubble, investor confidence has started to waver — though that’s not to say panic is setting in just yet.
At the smaller end of the market, it’s interesting to see major institutions like Goldman Sachs making moves into the alternatives space — particularly through venture capital and startup investments, albeit in a slightly different format than we’ve typically seen from such players.
Looking ahead to next week’s briefing, we’ll be featuring fresh data from the ONS, including updates on public finances and CPI figures.