Thursday 15 October 2026
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Tech stock sell-off deepens as AI worries spread; UK growth beats expectations

Global technology shares fall sharply while UK August GDP data surprises to the upside, and Defence Secretary attends IMF meeting in Bangkok

By LineZotpaper
Published
Read Time1 min
A sell-off in technology shares intensified on Thursday as investor anxiety about the outlook for artificial intelligence weighed on markets, while UK economic growth for August beat forecasts, raising expectations of a November interest rate rise. Defence Secretary John Healey attended the International Monetary Fund meeting in Bangkok as global financial policymakers gathered.

Technology stocks came under renewed pressure on Thursday, with chipmakers and AI-related companies leading the decline as markets fretted over the sustainability of spending on artificial intelligence infrastructure. The sell-off, which has been building for several days, reflects growing scepticism about near-term returns from AI investments.

Separately, UK gross domestic product data for August exceeded analyst expectations, maintaining the economy's growth streak. The better-than-forecast figures prompted several economists – including analysts at Deutsche Bank and PwC – to suggest the Bank of England is now more likely to raise interest rates at its November meeting. PwC said the UK is on track to be the second-fastest-growing economy among G7 nations this year.

Defence Secretary John Healey was in Bangkok for the annual IMF and World Bank meetings, where discussions are expected to cover global economic stability, inflation trends and the impact of geopolitical tensions on growth.

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Analysis

Why This Matters

  • The deepening tech sell-off signals that investors are reassessing the AI boom's immediate returns, which could slow capital spending and affect broader market sentiment.
  • Stronger-than-expected UK growth complicates the Bank of England's rate decisions, keeping borrowing costs higher for longer for households and businesses.
  • The IMF meetings provide a forum for coordinating policy responses to global economic challenges, including persistent inflation and regional conflicts.

Background

Technology stocks, particularly those tied to artificial intelligence, have been a driving force in equity markets over the past two years. The current sell-off reflects a shift in sentiment as investors question whether the massive investments in AI data centres and chips will generate profits quickly enough to justify valuations. The UK economy, meanwhile, has shown surprising resilience despite high interest rates, with services and manufacturing contributing to modest growth. This resilience has kept pressure on the Bank of England to maintain a cautious approach to cutting rates.

Key Perspectives

Investors: Fears of over-investment in AI and a potential slowdown in corporate spending are driving risk-off positioning, especially in high-growth tech names. Policymakers (Bank of England): Better-than-expected growth data supports the case for a November rate rise to ensure inflation remains under control, though the impact on consumer spending is a concern. Market analysts: The divergent fortunes of tech and the broader economy illustrate the tension between innovation-driven growth and macroeconomic tightening.

What to Watch

  • The extent and duration of the technology sell-off; further declines could trigger broader market corrections.
  • The Bank of England's November decision on interest rates and accompanying guidance.
  • Any signals from the IMF meetings about global growth forecasts or coordinated action on AI regulation.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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