Monday marked the end of the first quarter of 2025 and I think we can all agree that at times during the past three months, the amount of news bombarding investors has made it difficult to retain focus. I’ve said it before but if there’s one thing we can quite confidently predict, it is that this period of political volatility looks likely to continue for the foreseeable future.
This week the US administration is set to announce reciprocal tariffs on many of its trading partners, although I must admit that writing this before the event makes me a little uneasy. Who knows what will be in place this time next week and although markets have previously been boosted by reports that any tariffs might be more targeted than feared, Trump’s announcement on Sunday that they will hit ‘all countries’ has sent global stock markets tumbling once again. Further announcements over the next few days could be a key factor for investor sentiment as we move into the second quarter of the year.
Closer to home, the OBR halved its 2025 UK growth estimates to what could yet prove to be a generous 1%, and what has been dubbed ‘awful April’ is now officially upon us, with hikes in the levels of council tax, energy bills and employers’ national insurance contributions to name but a few.
Although the ONS reports that at the end of last year real incomes were increasing at their fastest pace for a number of years, household confidence still seems to be lacking, with the savings ratio once again sitting well above its long-run average. Given the unknown effect of any global trade war, this could prove to be only the tip of the iceberg unless the government can magic a period of stronger growth from somewhere very soon.
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