UK fintech investment falls to a decade low: Sterling Update

Here’s the latest currency news from our partner Moneycorp, to help you find out what your money is worth.

Figures from KPMG suggest that fintech firms received around two‑thirds less investment funding in the first half of 2026 than a year earlier, marking the lowest level of funding since at least 2016. That decline may partly reflect a prolonged adjustment following the surge in funding during the COVID period, but it may also indicate that investors are increasingly directing capital towards AI‑related businesses. The news is unlikely to generate significant market reaction, but it should, in my view, serve as a warning to the UK government, which is considering increasing some taxes on larger corporates to reduce the tax burden on SMEs.

Meanwhile, reports in the UK press over the weekend detailed an Iranian cyber attack that shut down a small UK power plant for several days. This suggests the UK remains exposed to such activity from the Iranian regime. While the incident caused no significant disruption to the wider power grid, it is likely to reinforce efforts to strengthen cyber security across the network. Again, market reaction has been limited, but in my opinion it provides another reason for markets to remain cautious about the GBP rally and broader UK optimism.

Jackson Hole symposium later this week features US and Euro Area central bank speakers

The US Federal Reserve will hold its annual Jackson Hole symposium later this week. Speakers include Fed Chair Kevin Warsh and ECB Executive Board member Isabel Schnabel.

For markets, the focus will remain on the risk of higher interest rates. Here, I see a potential imbalance in what the speakers are likely to communicate. Kevin Warsh has been clear in his opposition to forward guidance and is unlikely to provide specific signals ahead of upcoming Fed meetings. His comments are therefore likely to focus more broadly on economic performance and the role monetary policy can play. Schnabel, by contrast, may be more vocal regarding the forthcoming ECB decision and the prospects for further tightening. In my opinion, the ECB remains more likely to raise rates than other major central banks, despite the negative outlook for Euro Area activity.

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