# Roundup of the week: 17 October 2025 _Ceasefire in Gaza, more posturing between the US and China ahead of the Trump–Xi summit, and yet another twist in France’s ongoing political soap opera — all while central banks edge closer to rate cuts. Markets have been choppy, but sentiment remains broadly stable as inflation cools and confidence builds._ Neil Woodford · 17 October 2025 · 7 min read ![Silicon wafer with chips in UV lighting.](https://cdn.sanity.io/images/v3acfbvo/production/4a57414b8b6be25f79c35421a4faa91ffd69efdf-2700x1800.jpg?w=1600&fit=max&auto=format) --- **If you think we have missed something you would like to discuss or would like to send in a question for next week's podcast episode,** [**send us an email**](mailto:hello@noisecancelling.co)**.** ## Politics This week’s top political stories were the Gaza peace summit in Egypt, more tariff manoeuvring between China and the US, more discussions, and the ongoing political crisis in France. ### Ceasefire deal signed Political leaders from across the world, along with President Trump and other Western political figures, gathered in Sharm el-Sheikh on Monday this week to sign a Gaza ceasefire deal. Although it is a relief that the deal marks an end to the war, much needs to be done to secure a lasting peace. That work starts now and will be led by the “Board of Peace” headed by President Trump and Tony Blair, with an administration in Gaza run by a group of Palestinian policy experts. ### China/US trade friction On Friday last week, financial markets once again had a reason to wobble on the back of what at the time looked like a noticeable increase in the trade tension between China and the US. Once again, the reality is that this appears to be trade policy posturing ahead of the Trump/Xi summit in Korea later in October. This latest round of tit for tat measures was prompted by China imposing various restrictions on the export of important rare earth metals and related technologies. These materials (which interestingly are not rare) have unique electromagnetic, magnetic and optical properties and are essential for many products, including consumer electronic devices, EVs, batteries, medical imaging equipment, lasers and all sorts of military equipment. The problem stems from the fact that China has a near monopoly in the rare earth supply chain, as it controls about 61% of global rare earth production and an estimated 92% of the refining and processing of these metals, which is both energy-intensive and produces significant amounts of toxic waste. Interestingly, these materials are also found in substantial quantities in the US, Canada, Myanmar, Vietnam, Australia, Brazil, India and Russia. This announcement prompted President Trump to threaten to impose 100% tariffs on all products from China starting on November 1st, which spooked markets last Friday. On reflection, these announcements are part of the posturing that takes place before a face-to-face meeting between the two leaders. In parallel with these announcements, it appears that negotiations have been going on, which, although robust, do seem to indicate that both sides are keen to do a deal later this month. ### France The political crisis in France has once again surprised onlookers following a series of extraordinary developments this week. First, the French PM, Sebastien Lecornu, who resigned last Monday, was reappointed on Friday by President Macron. He appears to have bought his survival by dropping key pension reforms, which included increasing the retirement age from 62 to 64. This key development meant that the Socialist Party, which has 65 MPs, was prepared to back the PM, who also pledged not to use a constitutional device to force through new laws without a parliamentary vote, and by doing so handed more power over the budget to parliament. Although these concessions appear to have enabled the PM to survive (two no-confidence votes today were defeated) for the time being, these are nowhere near the permanent fix France requires. Both left and right-wing parties want new elections or Macron’s resignation, so this temporary peace is unlikely to last. Of course, it also fails to address the key issue of the budget deficit, which will not fall anywhere near as much as had been promised next year and in 2027. This story will, I am afraid, run and run and is unlikely to end until new elections are called. ## Economics There is not much to report in terms of significant economic developments or announcements this week. I did notice some pretty weak China inflation numbers earlier in the week, and UK GDP data on Thursday were in line with expectations. Importantly, and encouragingly, the three-month GDP growth rate to the end of August was 0.3%, which hints at an outturn for Q3 somewhere close to the Bank of England’s 0.4% forecast. Perhaps the most significant economic events were speeches given by the heads of the Fed and the Bank of England. Powell highlighted a significant weakening in the US labour market and reiterated that the Fed committee had overestimated the inflationary impact of the tariff increases. In my view, this almost guarantees that the Fed will cut rates at its next meeting at the end of October. The governor of the Bank of England, Andrew Bailey, also gave a speech about the UK labour market. In it, he reiterated his concern that the UK labour market is softening due to rising unemployment and falling vacancies. He also discussed participation rates and productivity, which I have written about in a separate note that will be published next week. Suffice it to say here that I think he’s basing his comments on flawed data, and as a result, I would attach little credibility to them and any conclusions about these two important economic variables. Interestingly, at his Jackson Hole speech last week, he talked about the UK’s “acute challenge” to raise its underlying rate of economic growth due to a combination of weak productivity (the data is totally unreliable and in my view wrong, and so at best sweeping conclusions about how good it is or isn’t are guesses) and low workforce participation. This last comment is also odd, given that the UK’s inactivity rate, albeit slightly higher than it was a few years ago, is not far off a 55-year low, as the chart below shows. (This chart shows the UK’s inactivity rate from 1970 through to 2025) ![Roundup of the week: 17 October 2025](https://cdn.sanity.io/images/v3acfbvo/production/77d6de7dfe6f5b4288562e7a2a2b50f1207bfadc-2267x1506.png?w=1600&fit=max&auto=format) Having said that, Bailey’s comments on the contemporaneous labour market are appropriate and may signal an increased likelihood of a cut in official interest rates at the meeting in early November. If the Fed cuts at its October meeting (which is a near certainty), this may subtly increase the pressure on the MPC to follow suit. If we don’t get a cut at this meeting, I am sure we will in December. ## Markets Global equity markets have been a little choppy in the last week. Last Friday, the concern was increased tariff tension, which was then followed by relief, and then enthusiasm triggered by strong results from a number of leading US investment banks and from the tech sector. TSMC’s results, in particular, were received well. Today, global equity markets are down again (is it a Friday thing?) for reasons that are not at all clear. This will not stop “traders” speculating about all sorts of coordinated concerns, but my guess is that after such a strong run in recent months, some sort of sell-off was inevitable and, in my view, isn’t the product of a singular concern. As some wise heads used to say, more sellers than buyers! Perhaps of more interest is what’s happening in government bond markets, particularly the UK gilt market. Regular readers will recall that quite recently a number of high-profile media commentators have been drawing attention to high gilt yields, especially at the long end, and suggesting that this is in some way a prelude to a buyers’ strike and some kind of financial stress that eventually leads to an IMF bailout. I have said that this is nonsense and explained why. Interestingly, as some might say, it’s all gone quiet over there, because gilt yields have most recently fallen significantly, such that the ten-year yield is now down at 4.48% having been as high as 4.8% at the end of August. This is, I think, a reflection of increasing confidence, first that the Fed will cut official interest rates later this month (the US ten-year yield is now down at 3.95%) and second that here in the UK, a softening labour market and a sterling oil price that is over 32% below its 2025 peak both bode well for lower inflation later this year and on into 2026. ### Results Notable results this week from companies I follow include ASML’s numbers, which, along with TSMC’s, confirmed that the AI capex cycle is still very strong and likely will remain so for years to come. AI-related demand in the chip industry is more than compensating for challenges in the Chinese market, where the shift to domestically developed and manufactured chips is increasing. British Land’s trading update was also noteworthy, especially because sentiment towards the UK’s commercial and retail property markets is so bearish. BL confirmed that it is achieving good rental deals with its tenants, with 251 agreements secured at rates on average 5.3% above ERV. It commented that office attendance is increasing across its portfolio, retailers are expanding out of town, and supply remains very constrained across both markets. For example, across its retail park portfolio, BL’s 1,200 units have 99% occupancy. ## What to look out for next week The quarterly results season in the US will be in full swing next week, but in the UK, there are relatively few companies reporting, although there will be a number of trading statements mid-week. There will be some important UK economic releases next week too, with the focus likely to be on Wednesday’s inflation numbers, which are not expected to be good but may well mark the peak in UK inflation this year. US macro data releases would normally have included labour market indicators, but these are unlikely to be published given the ongoing government shutdown there.