Weekly Briefing: Stronger Investment Culture, $26 Bn Investment, Consumer Confidence, & US Fed Cuts Rates

This week brought a mix of regulatory reform, shifting consumer behaviour, major global investment announcements, and a divided US central bank navigating an evolving economic backdrop. The FCA set out proposals aimed at strengthening the UK’s investment culture, while new retail spending data painted a cautious picture heading into Christmas. In Asia, large US tech firms outlined sizeable commitments to India’s fast-growing digital economy. And in the US, the Federal Reserve cut rates again amid growing uncertainty over the direction of inflation, jobs, and policy itself.

Read on for the full context.

FCA seeks clearer rules and a stronger investment culture

The FCA set out new proposals designed to make investment information more useful for consumers and to give firms greater confidence when engaging with experienced investors. At the heart of the package is a move away from rigid retail disclosure templates that, according to research cited by the regulator, consumers find confusing rather than informative. The goal is to allow firms to present risks, costs and potential returns in clearer, more engaging formats that genuinely support informed decision-making.

A parallel strand of the reform focuses on client classification. The FCA wants a sharper distinction between retail and professional investors so wholesale markets can remain agile without imposing unnecessary retail-level guardrails. The threshold for professional status will remain intentionally high, ensuring that only individuals with the right experience, advice or risk-bearing capacity operate outside retail protections such as the Consumer Duty.

The proposals also remove several “arbitrary tests” and instead place more responsibility on firms to ensure accurate classification. A new opt-out route for wealthy, experienced individuals is intended to streamline assessments while keeping standards high. The FCA argues that clearer boundaries will free firms to innovate and compete more effectively, particularly in how they design and communicate investment products.

Long-term, the regulator is also seeking industry input on how rules should evolve as the retail investment landscape continues to shift. This includes how best to support a healthier appetite for appropriate levels of investment risk, making it easier for consumers to choose products that match their goals rather than defaulting to overly cautious positions.

Simon Walls, the FCA’s executive director of markets, said the intent is to support better outcomes right across the spectrum: “They ensure that firms can compete to give retail customers material that informs and engages them. They also draw a brighter line for professional markets, defined by contracting parties, informed consent and regulation that is proportionate to that.”

UK consumers delay Christmas spending as confidence softens

UK households cut spending at the fastest rate in almost five years, according to Barclays, with card outlays down 1.1% year-on-year in November - the sharpest fall since early 2021. Much of this slowdown appears tied to uncertainty surrounding the November budget, with shoppers holding back during a period that usually marks the start of Christmas activity. Retailers still saw Black Friday deliver their busiest day of the year, though transaction volumes were significantly less impactful than usual.

The British Retail Consortium and KPMG described the mood as marked by “jitters”, noting that while food sales rose 3%, this increase remained below the 3.6% rate of food inflation. Non-food sales barely moved, increasing just 0.1% year-on-year, well under the 12-month average of 1.6%. A mild start to November further dampened seasonal fashion sales, while homeware and upholstery performed comparatively better as households prepared for festive hosting.

Political debate has intensified around the causes of the downturn, with opposition parties blaming months of pre-budget speculation by the chancellor, Rachel Reeves, for weighing on consumer confidence. Some retailers and pub chains have also urged a review of upcoming business rates changes, arguing that the new structure will hit medium-sized operators particularly hard during an already fragile period.

Despite the slowdown, Barclays did identify very small pockets of resilience. Travel agents saw a 10.7% rise in spending during Black Friday promotions, and subscriptions to streaming services increased by 3.5%, buoyed by popular series. 

Economists expect the Bank of England to cut interest rates from 4% to 3.75% later this month, with this weakening in consumer activity a likely factor. As Jack Meaning, Barclays’ chief UK economist, put it, “Even with a boost from Black Friday, consumer spending remained muted… The question remains as to whether easing interest rates and falling inflation can offset this trend… or whether tightening fiscal policy and continued uncertainty will see the malaise continue in 2026.”

US tech firms deepen long-term investments in India

Amazon announced plans to invest more than $35 billion in India by 2030, marking one of its largest long-term commitments in any global market. The company said the investment will expand AI capabilities, enhance logistics, support small businesses and create new jobs - all areas that align with India’s national priorities for digital growth. This follows $40 billion already deployed since 2010, including a major $26 billion commitment announced just last year.

The move comes amid a broader surge of US tech investment into India. Microsoft confirmed a $17.5 billion plan for AI and cloud infrastructure earlier in the week - its biggest investment in Asia - and Google has committed $15 billion over the next five years for new AI data centres. Taken together, these commitments reflect India’s growing role as a strategic hub for cloud, deep-tech and advanced digital infrastructure.

Competition in India’s e-commerce market is a clear factor behind Amazon’s acceleration. The firm continues to battle Walmart-backed Flipkart and Reliance Industries’ retail arm, each backed by deep domestic and international capital. Amazon also highlighted its export programme, stating it has enabled more than $20 billion in cumulative exports from Indian sellers over the last decade and aims to increase this to $80 billion by 2030.

India’s expanding internet user base and the broader shift in global supply chains have strengthened the country’s position as a long-term growth market for US platforms. For Amazon specifically, the target of creating one million additional job opportunities by 2030 underscores the scale of its commitment and the role it expects India to play within its global operations.

In its statement announcing the investment, Amazon said the plan is “strategically aligned with India’s national priorities and will focus on expanding AI capabilities, enhancing logistics infrastructure, supporting small business growth and creating jobs.”

US Fed cuts rates again amid internal division and political pressure

The US Federal Reserve cut interest rates by a further quarter point, bringing them to a range of 3.5% to 3.75% in its third reduction of the year. Unlike typical FOMC decisions, the vote was split - nine in favour, three opposed - highlighting diverging views on how to manage an economy shaped by tariffs, labour-force changes linked to immigration shifts, and major fiscal cuts. The division is notable for a committee that usually seeks unanimity.

The Fed’s challenge is compounded by incomplete data, as government shutdowns halted the collection of labour and price statistics for October and half of November. Inflation has risen from 2.3% in April to 3% in September, while unemployment has edged up from 4% to 4.4% over the same period. These small but persistent increases place policymakers in a difficult position: rates kept too high may weaken the labour market further, but reducing them too quickly risks fuelling additional price pressure.

Chair Jerome Powell acknowledged that recent figures may overstate the true strength of job creation, urging caution in interpreting upcoming releases. The uncertainty has also heightened tensions between the Fed and the White House. President Trump and his advisers have repeatedly criticised the central bank for not cutting rates more aggressively, even as tariffs continue to contribute directly to price increases for some goods.

Looking ahead, new projections from Fed officials signal hesitance to cut rates further next year, a stance that could deepen political pressure as the presidential administration seeks to influence the trajectory of economic policy. Powell’s term ends in May, giving Trump the opportunity to appoint a new chair, with National Economic Council director Kevin Hassett discussed as a leading candidate.

Reflecting on the uncertainty surrounding both the data and the policy direction, Powell said officials will have to approach incoming figures “with a somewhat skeptical eye” and added: “My thought is that I really want to turn this job over to whoever replaces me with the economy in really good shape.”

Final Note

Across regulation, consumer behaviour, global investment and monetary policy, this week’s developments point to an environment still adjusting to structural change rather than responding to shocks. UK regulators are redefining risk communication, households are calibrating spending amid fiscal uncertainty, major tech firms are positioning for long-term growth in Asia, and US policymakers are weighing imperfect data against political pressure. Together, they suggest economies navigating transition with a cautious but forward-looking mindset.