Welcome to this week’s Market Pulse, your 5-minute update on key market news and events, with takeaways and insights from the Sidekick Investment Team.
Today, we’re looking at Labour’s Employment Rights Bill being approved after months of debate, Wall Street forecasting strong gilt performance in 2026, and major automakers retreating from electric vehicles.
But first, our number of the week…
0.1%
That’s how much the UK economy grew in November 2024, broadly unchanged from the previous month. It continues to underperform the optimistic expectations of Reeves, Starmer, and the OBR.
Workers’ rights bill approved by the House of Lords
After months of debate and scrutiny, the Employment Rights Bill has passed through the House of Lords without major amendments. It now awaits Royal Assent before becoming law. The bill introduces significant changes to UK employment law, including:
- Day-one rights to unfair dismissal protection
- Guaranteed hours for zero-hours contract workers
- Statutory sick pay from day one of illness
- Enhanced trade union rights
Sidekick Takeaway: The bill represents the most significant reform of UK employment law in decades. As we noted in a previous Market Pulse, the legislation may be a positive for employee wellbeing, but there are legitimate concerns about its economic impact. If it makes it more costly to hire and retain staff, it could discourage companies from adding to headcount or growing their businesses, which could see a net negative impact on employment. The Federation of Small Businesses has also argued that smaller companies may find these changes particularly challenging to navigate.
Wall Street bullish on UK bonds in 2026
Goldman Sachs, JP Morgan, and other major US banks are predicting strong performance for UK government bonds (gilts) in 2026, expecting yields to fall as the Bank of England cuts rates more aggressively than the market currently expects. Analysts cite stubbornly weak UK economic growth and growing government borrowing pressures as potential drivers of a shift toward more accommodative Bank of England policy.
Sidekick Takeaway: Gilt yields have been under significant upward pressure in recent weeks, which has been headlined in the media as a ‘budget crisis’. But as we noted in our analysis, this appears to be an overreaction to broader global bond market dynamics rather than a UK-specific crisis. These Wall Street forecasts support the view that gilts are currently more attractively priced than headlines might suggest. Rising gilt yields now also mean higher returns for new investors buying UK government bonds, which is a positive for portfolio diversification.
Major automakers retreating from electric vehicles
Ford, GM, and Volkswagen have each announced significant reductions in their EV investment plans and are scaling back production targets as sales growth slows. The reasons cited include infrastructure challenges, high production costs, and softening consumer demand. Simultaneously, Chinese manufacturer BYD continues to expand rapidly, suggesting the issue is with the established Western manufacturers rather than EVs as a whole.
Sidekick Takeaway: The EV transition is proving bumpier than anticipated, but the direction of travel remains clear. When a disruptive technology matures, the innovators often struggle while incumbents (and new entrants like BYD) capture market share. This is consistent with Clayton Christensen’s innovator’s dilemma — the very success and inertia that made these companies dominant makes it harder for them to pivot quickly enough. There’s an important distinction for investors between EV sector challenges (which appear real) and structural automotive industry shifts (which continue apace).
This Market Pulse is for informational purposes only. The information contained herein does not constitute the provision of investment advice. It is not intended to be, and should not be construed as, an offer to purchase or sell any investment product. Independent financial advice should be sought where appropriate. Past performance is not a reliable indicator of future results. Capital is at risk.