August 2026 Market Review: Tech Strikes Back As UK Lags And Bond Yields Drift Higher

(MENAFN- DailyFX (IG)) UK Economy

Away from the market noise, the UK economy continued to grow in the second quarter, albeit modestly. The most recent figures, published mid-month, showed growth of 0.4%, down from 0.6% in the first quarter but positive nonetheless, leaving the economy 1.2% larger than a year earlier. Services once again did the heavy lifting, while industrial output was broadly flat. There was a lighter note in the detail too, with the ONS suggesting that June's better-than-expected reading owed something to World Cup spending and the warm weather. It is a reminder that even an economy under pressure from elevated energy prices, geopolitics and a cautious Bank of England can still find pockets of momentum.

The Portfolios

For the Smart Portfolios, August was a more constructive month than July, with the recovery in growth and technology assets working in the portfolios' favour. The rebound in semiconductors and the broader AI complex lifted US and emerging market equity exposure. Whilst gold also provided strong gains throughout the month. Gilts and European investment grade credit were some of the more lacklustre performers throughout August for our portfolios.

The Smart Portfolios provide professionally managed, risk-profiled discretionary managed portfolios using BlackRock's iShares ETFs across five options from Conservative to Aggressive, matching different time horizons and risk tolerances. Automatic rebalancing maintains target allocations, whilst costs significantly below traditional active funds compound meaningfully over time. The portfolios are available in ISA and SIPP structures for tax efficiency.

Source: Bloomberg

Sources: Bloomberg, FTSE, LSEG Datastream, MSCI, ONS, Bank of England, US EIA (all data as at 31 August 2026)

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