Roundup of the week: 3 October 2025

If you think I have missed something you would like to discuss or would like to send in a question for next week's podcast episode, please let me know, and I will give you my view.

Politics

In what has generally been a quieter week for new political developments, the standout story was the government shutdown in the US. This is the 20th shutdown in the last 50 years. It is 7 years since the last one, which lasted just over a month, so this is relatively unfamiliar territory for investors. Interestingly, the US stock market rose more often than it fell during these shutdowns, so the fact that markets have ignored what’s going on in Washington is not that surprising. How this budget impasse will be resolved and over what timescale is unclear. Both sides are entrenched at the moment, and compromise appears some way off. In the past, shifts in public opinion about who is to blame have tended to influence who blinks first, and I suspect this time will be no different.

Having said that, as more public sector workers are furloughed, and this coincides with higher redundancies following DOGE’s activities earlier in the year, this will have a noticeable impact on weak labour market data. This, in turn, will increase pressure on the Fed to cut again and may therefore play to Trump’s agenda. In summary, though, my guess is that both sides will be aware of Barack Obama’s warning from 2013 that “there are no winners here. The American people are completely fed up with Washington” and look to bring the shutdown to an end promptly.

Economics

UK

The long wait for this year’s budget creates fertile ground for those inclined to speculate about what it has in store for the UK economy and to continue with the black hole crisis narrative. I completely disagree with this apocalyptic vision of the future and have written a lengthy blog about why and what I think the Chancellor should do. It will be published in the next few days, so I won’t repeat here what’s in it other than to draw your attention to what I think was the most important economic story in the UK this week (which received zero attention) – the significant revisions to historic economic data released by the ONS. Most notable were a £33bn upgrade to 2024’s nominal GDP number (about 1.2% of GDP) and an astonishing £42.2bn upgrade to the ONS’s estimate of investment spending in 2024. (That’s 1.6% of GDP) Quite how the ONS managed to miss this giant amount of investment in the UK economy is beyond me, but once again reflects the inability of that organisation to measure what’s going on in the UK accurately.

Markets

This is not a busy time of year for company results, but there were a few announcements this week from businesses I follow.

Card Factory

Card Factory, the UK’s leading specialist retailer of greeting cards, gifts and “celebration essentials”, announced its interim results. Although the numbers did not receive a warm welcome on the day, my assessment is that they reflect a robust performance against a challenging backdrop, which saw significant government-imposed cost increases. Significantly, even though profits were down in the first six months, the dividend was increased, reflecting not just the robust financial position of the business but also its confidence in the future. Indeed, even though profits fell in the first half, the outlook for the second half is unchanged, and confidence is high going into the busy Christmas trading period.

Paypoint

In a significant announcement, Paypoint this week revealed that IDS, the business now owning Royal Mail, will pay Paypoint £43.9mn for a 49% stake in its Collect+ business. Collect+ has an extensive network of 14,000 “out of home” locations in the UK, 8,000 of which offer Royal Mail collect, send and return parcel services. As part of this new arrangement, 500 of these sites will be upgraded to provide over-the-counter services, and additional sites will come on stream later, as will the launch of self-service kiosks during Q1 2026. Historically, Paypoint has struggled to collaborate with Royal Mail despite the complementarity of the two businesses. The relationship has thawed since Royal Mail has new owners, and this new partnership marks a significant turning point.

Paypoint has also announced that following this transaction, it will return 50p per share via a special dividend, combined with a share consolidation (12 for 13).

What to look out for next week

It’s another relatively quiet week in the round. In the UK, there are retail sales data on Tuesday, a gilt auction on Wednesday, and US labour market data on Thursday (which may not appear because of the government shutdown). Other than that, it’s also quiet on the company front with no major announcements scheduled from the companies I follow, but as ever, there are likely to be other things going on that will require some attention.