Weekly Briefing: Government Spending Plan, Crypto Access Ahead, Alternative Asset Popularity & £800m+ Defence Contract

This week’s briefing unpacks four developments with growing relevance for investors. These include renewed warnings over potential tax rises, a possible FCA shift that could pave the way for crypto access, a new £800 million defence contract, and increasing strength in private markets as sentiment drifts from listed equities.

Read on for insights into each story.

Rachel Reeves’ Spending Plan Faces Questions Over Fiscal Credibility

• Chancellor Rachel Reeves has committed to a significant rise in public sector spending, including a £29bn per year increase for the NHS and a £4.5bn uplift in school funding—moves she said “deliver the priorities of the British people.”
  
  
• Amongst other spending adjustments, defence sector spending is set to climb to 2.6% of GDP by 2027, with additional funds allocated to bolster intelligence services, indicating a stronger focus on both domestic and international security.
  
  
• The proposals, however, sparked criticism from the opposition, with Sir Mel Stride branding it a “spend now, tax later” approach and warning of future tax hikes to plug the growing fiscal gap.
  
  
• Economists at Capital Economics estimate Reeves may need to raise an additional £13–£23bn in the Autumn Budget just to maintain compliance with her own fiscal rules, despite having only £9.9bn of headroom post-Spring Statement.
  
  
• With costly pledges like the £5.3bn potential reversal of the two-child benefit cap and a winter fuel payment U-turn, pressure is mounting for Reeves to either raise taxes or cut elsewhere to avoid market backlash.
  
  
• As Deputy Chief UK Economist Ruth Gregory noted, “whatever happens, it’s clear even harder decisions for Reeves lie further down the line”, particularly if she wants to avoid market instability.

FCA Proposes Retail Access to Crypto ETPs Amid Competitiveness Push

• The UK’s Financial Conduct Authority (FCA) is consulting on lifting its four-year ban on retail investors buying crypto-linked ETPs, a move intended to align more closely with the US and Europe’s pro-crypto stance.
  
  
• There are currently 30 crypto ETPs on the London Stock Exchange, but all are limited to professional investors. This new proposal would allow broader access, though still with risk warnings and safeguards.
  
  
• FCA executive David Geale stated: “We want to rebalance our approach to risk… lifting the ban would allow people to make the choice on whether such a high-risk investment is right for them.”
  
  
• Europe is far ahead in this space, with 130+ crypto ETPs already trading across SIX Swiss, Euronext Paris, Amsterdam, and Germany’s XETRA, with the first launched in 2018 on the Swiss Stock Exchange.
  
  
• Critics worry the move could legitimise speculative behaviour and make it harder for the regulator to protect less-experienced investors while still meeting political goals tied to growth and innovation.
  
  
• Financial experts like Mike Barrett and Mick McAteer warn the FCA must tread carefully between enabling useful innovation and encouraging what McAteer called “spurious and toxic” financial products.

Alternative Assets See Surge as Investors Seek Returns Outside Public Markets

• Investors are increasingly moving beyond public markets due to volatility, limited growth, and correlation between stocks and bonds during downturns. Alternatives offer a compelling diversification route.
  
  
• Private assets—such as venture capital, real estate, and private equity—allow investors to access growth areas that aren’t available via public exchanges, and this trend is expanding rapidly among HNWIs and institutions.
  
  
• The appeal lies in both performance and opportunity, with private investments offering higher potential returns than public markets, though they typically involve greater risk and lower liquidity.
  
  
• Investors are accepting that trade-off. For some, in a low-yield environment, the upside of participating early in high-growth firms outweighs concerns over short-term access or resale constraints.
  
  
• As economic uncertainty persists, alternative investments are seen not only as a hedge but a long-term growth strategy. As one analysis noted, “Private markets provide the diversification and upside that public assets increasingly lack.”

BAE Systems Joins US “Golden Dome” Missile Defence Network

• FTSE 100 defence contractor BAE Systems has secured an £880m contract from the US Space Force to build 10 satellites that will help track hypersonic and intercontinental missile threats.
  
  
• The satellites, planned for delivery from 2029 onwards, will operate in medium Earth orbit (between 1,000 and 22,000 miles above the Earth), using infrared sensors to deliver real-time tracking intelligence to US defence personnel.
  
  
• These assets form part of Donald Trump’s proposed “Golden Dome”—a $175bn initiative to develop a global missile shield modelled loosely on Israel’s Iron Dome, but with far broader coverage.
  
  
• Trump has said the system will employ “super technology” to intercept all missile types, including nuclear ones, declaring: “This is very important for the success and even survival of our country.”
  
  
• Despite growing interest, defence experts remain sceptical about both the cost and technical feasibility of a truly global missile shield, particularly against next-generation threats from China and Russia.

Final Note

This week’s briefing raises fresh questions about how the government plans to fund recent spending adjustments. For now, the expectation is that we’ll see tax changes in the Autumn Budget—and, as one person put it, this will undoubtedly lead to a “summer of speculation.”

With global equities still experiencing significant volatility and traditional property investments becoming less attractive to many investors, as we've seen throughout 2025, attention is shifting further toward alternative investments. Property bonds, venture capital, private equity, and similar assets are gaining traction.

All things considered, including the growing possibility of more accessible crypto investments, the investment landscape is evolving quickly. From a stronger emphasis on portfolio diversification to a broader range of available investment products and noticeable shifts in global investor sentiment, the picture is changing—and fast.