UK fintech investment falls to a decade low: Sterling Update

UK fintech investment has dropped to a decade low, according to KPMG figures. Investment in fintech firms fell by two-thirds in the first half of 2026 compared to the previous year, marking the lowest level since at least 2016. This decline could be due to a post-COVID adjustment or investors focusing on AI-related businesses. The news is unlikely to cause significant market reaction but should warn the UK government of potential tax changes on larger corporates to ease the burden on SMEs.

An Iranian cyber attack temporarily shut down a UK power plant, highlighting the country's vulnerability to such attacks. Despite no major disruption, the incident underscores the need for stronger cyber security measures. The UK's GBP rally and overall optimism may be viewed with caution due to these events. At the upcoming Jackson Hole symposium, Fed Chair Kevin Warsh and ECB Executive Board member Isabel Schnabel will discuss interest rates.

Warsh's opposition to forward guidance is expected to focus on economic performance, while Schnabel may be more vocal about the ECB's decision to tighten monetary policy, which could raise rates.