The City of London is holding its breath this Wednesday, 19th November 2025, as investors anxiously await the latest UK inflation figures, seeking a reprieve from a relentless market downturn and political turmoil that has rattled confidence.
Market Plunge and AI Warnings
Global markets remained firmly in the red on Tuesday, with London's blue-chip FTSE 100 index closing the session down. The bearish sentiment was compounded by a stark warning from Sundar Pichai, the chief executive of Google's parent company Alphabet.
In an interview with the BBC, Pichai cautioned that no company, not even Google, would be immune if the current artificial intelligence bubble were to burst. He drew a parallel to the early days of the internet, noting, "We can look back at the internet right now. There was clearly a lot of excess investment, but none of us would question whether the internet was profound." His comments served as a sobering reminder of the risks inherent in the tech sector's soaring valuations.
UK Assets Face Historic Outflows
The pressure on UK markets intensified with a damning new report from the Bank of America. The data revealed a startling exodus, showing that fund managers are ditching UK stocks at the fastest pace since the 2022 mini-budget crisis under Prime Minister Liz Truss and Chancellor Kwasi Kwarteng.
This flight from UK assets has been exacerbated by the recent Budget debacle, which included a dramatic government U-turn on income tax. Nigel Green, CEO of deVere Group, stated that this reversal risked a "credibility shock" for the government, drawing direct comparisons to the market panic that followed the Truss-era policies.
Inflation Data Offers a Glimmer of Hope
All eyes are now fixed on the inflation data due for release today, which could offer a crucial turning point on the road to the next Budget on 26th November. City analysts are predicting a slight easing in core inflation, which strips out volatile food and energy prices. Some economists also suggest that services inflation could show signs of cooling.
This key dataset represents a potential lifeline for the beleaguered market, offering a chance to restore a measure of stability and investor confidence after a period of significant volatility and political uncertainty.
