UK

Geopolitical tensions: the FTSE 100 Index began 2026 with a bang, breaching 10,000 points for the first time ever. Investor sentiment was rattled during January by mounting geopolitical tensions and surging gold prices as US President Donald Trump set his sights on Greenland. Threats of higher tariffs on several European countries, including the UK, raised fears that the US/UK “special relationship” might be in decline, although tensions died down towards the end of the month. Elsewhere, a speech by Bank of England (BoE) Governor Andrew Bailey urged multilateral institutions to be prepared to fight for the “international rules-based system” and against the “rise of so-called populism.” The blue chip index rose by 2.9% over January, boosted by its exposure to the mining and defence sectors. Meanwhile, the FTSE 250 Index rose by 3.5% over the month, lifted by an encouraging trading update from Computacenter, alongside exposure to mining companies.

Growth forecast to pick up: the UK economy expanded by 0.3% in November, underpinned by stronger activity in the services sector and the normalisation of activity in in car manufacturing. Higher air fares and increased prices for alcohol and tobacco drove up the annualised rate of inflation from 3.2% to 3.4%, which posted its first annualised increase since June. Looking ahead, the International Monetary Fund expects UK economic growth of 1.3% in 2025 and 1.5% in 2026, and inflation is forecast to return to the BoE’s 2% target by the end of this year, dampened by a weakening labour market.

Share buybacks surged in 2025: dividends paid by UK companies – excluding the impact of a strong pound and special dividends – rose by 3.6% to £84.7 billion during 2025, according to Computershare’s quarterly Dividend Monitor. Dividend growth was driven by payouts from companies in the industrial goods & support sector and the financials sector, and defence contractors Rolls Royce and BAE Systems were notable individual contributors. Share buybacks reached a provisional £63.6 billion over the year, more than twice their 2019 level, whereas dividends fell by 13% over the same period.

Signs of improving sentiment towards UK equity funds: investors may be “reassessing the UK market’s prospects” according to the Investment Association (IA). The IA reported the smallest outflows for the sector since May, and a “rare” inflow of £52 million into actively managed UK equity funds.

Global

The Tariff Man strikes again: geopolitics returned to the spotlight in January, and the price of gold climbed above US$5,000 per ounce for the first time, driven up by intensifying concerns over the geopolitical and financial outlook. Early in the month, the US seized Venezuela’s President Nicolas Maduro in a controversial military operation. Later, President Trump announced that he intended to take ownership of Greenland, triggering tensions between the US and Europe and leading to threats of additional tariffs on eight European countries, including the UK. In a speech at the World Economic Forum, President Trump subsequently stated that he was dropping his plans. Despite market volatility, the S&P 500 Index breached 7,000 points for the first time and ended January 1.4% higher. In comparison, the Dow Jones Industrial Average Index rose by 1.7% over the month.

Fed up: the US Department of Justice launched a criminal investigation into Federal Reserve (Fed) Chair Jerome Powell, who responded: “This unprecedented action should be seen in the context of the (Trump) administration’s threats and ongoing pressure.” In a joint statement, the heads of eleven central banks backed Chair Powell and reiterated the importance of central bank independence. Towards the end of the month, however, concerns over the Fed’s future independence were alleviated by President Trump’s nomination of Kevin Warsh as the next Fed Chair.

Germany returns to growth: mounting speculation around Greenland provided a boost for European defence-related stocks. The euro rose against the US dollar to reach its highest level since 2021. The eurozone’s rate of consumer price inflation eased from 2.1% to 2% year on year in December, raising hopes of further monetary easing. Meanwhile, after two years of recession, Germany’s economy grew by 0.2% during 2025 as government and household spending helped to offset the impact of falling manufacturing output and lower export activity. The Dax Index rose by 0.2% over January.

General election for Japan: Japan’s Prime Minister Sanae Takaichi announced a snap election in a bid to gain a mandate for her economic and fiscal policies. During January, the Nikkei 225 Index reached a new all-time high, while the yen fell to its lowest level against the US dollar since July 2024, and reached its lowest-ever level against the euro. Over January as a whole, the Nikkei 225 Index rose by 5.9%.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

A strong year for UK equities: 2025 proved to be a standout year for the FTSE 100 Index, which notched up its best annual performance since 2009 and outperformed US equity markets over the year. The FTSE 100 Index rose by 2.2% during December, and by 21.5% over 2025 as a whole. In comparison, the FTSE 250 Index climbed by 1.4% over the month and by 9% over the year. In a review of FTSE 100 Index constituents, British Land was promoted to the blue-chip index, while WPP was relegated to the FTSE 250 Index.

Valuation concerns: the Bank of England (BoE) highlighted the risk of a “sharp correction” in its Financial Stability Report. In particular, BoE Governor Andrew Bailey warned: “On some measures, equity valuations in the US are approaching levels not seen since the dotcom bubble, and in the EU and UK, since the global financial crisis. The AI sector is a particular hot spot.”

Rate cut: the BoE cut UK interest rates to their lowest level in almost three years during December, reducing the key base rate from 4% to 3.75%. Officials cited the impact of “subdued economic growth (and) building slack in the labour market”. Lower prices for food, drink and tobacco helped the rate of consumer price inflation to fall to from 3.6% to 3.2% year on year in November, reaching its lowest level since March.

“Pre-Budget jitters”: the UK economy contracted by 0.1% in the three months to October, shrinking by 0.1% in the months of October and September, and stalling in August. Concerns ahead of November’s Budget curbed activity in October. Elsewhere, “pre-Budget jitters” resulted in a lacklustre Black Friday for the UK’s retail sector; the British Retail Consortium reported that sales rose by 1.4% year on year in November, compared with the 12-month average of 2.5%. The rate of unemployment rose to 5.1% over the three months to October, and the number of unemployed people in the UK reached its highest level since January 2021.

Economic headwinds? The Organisation for Economic Cooperation & Development (OECD) expects the UK economy to grow by 1.2% this year and by 1.3% next year. Economic activity is set to be hampered by the impact of tax and spending adjustments; the OECD warned that tax-raising measures from November’s Budget will “act as a headwind to the economy.”

Global

A rollercoaster ride: despite a tumultuous year, global markets ended 2025 strongly, with many major indices notching up double-digit gains over the year in the face of geopolitical instability and trade tensions. Concerns over stretched valuations among AI-related stocks continued, and the Organisation for Economic Cooperation & Development warned against the risk of “potentially abrupt price corrections.”

AI continued to dominate: in the US, the “Magnificent Seven” stocks comprised almost 35% of market value  at the end of December, according to S&P Global, and accounted for 42% of the 2025 performance of the S&P 500 Index, which rose by 16.4% in 2025. Meanwhile, the Dow Jones Industrial Average Index rose by 13% over 2025, and by 0.7% during December, posting two new closing highs in December, and eighteen during the year. 

Fed cut rates in December: the Federal Reserve cut its key interest rate by 25 basis points in December to a range of 3.5% to 3.75%. The annualised rate of consumer price inflation dropped sharply from 3% in September to 2.7% in November. The government shutdown meant that there was no October data, and this led to some scepticism over November’s unexpectedly large decline. The US economy grew by 4.3% year on year during the third quarter of 2025, partly boosted by an acceleration in consumer spending.

Strong returns from Germany: the European Central Bank (ECB) maintained its key interest rate at 2% and upgraded its economic growth forecast from 1.2% to 1.4 in 2025, and from 1% to 1.2% in 2026, citing stronger domestic demand. In an FT interview, ECB President Christine Lagarde commented: “When the tariffs hit, when uncertainty grew, when war was raging, everyone thought that growth in the euro area would fall very badly, and this hasn’t been the case.” The Dax Index rose by 2.7% over December, and by 23% over 2025.

Japan raises rates: in a bid to curb inflation, the Bank of Japan (BoJ) raised its key interest rate by 25 basis points to “around 0.75% in December. Japan’s rate of inflation remained above the BoJ’s 2% target rate in November, climbing by 3% year on year. The Nikkei 225 Index rose by 0.2% in December, but surged by 26.2% over the year, boosted by yen weakness. The broader-based Topix Index hit a new high during December and rose by 22.4% over 2025.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

A month of two halves: November proved to be a month of two halves for the UK: first, the run-up to the Budget, and then the fallout from the Budget. Amid hopes of a forthcoming cut in interest rates, the FTSE 100 Index flirted with the 10,000-point level during the month, but eventually subsided, dampened by Budget-related jitters. Alongside the FTSE 250 Index, the blue-chip index eventually ended November broadly unchanged.

Budget measures: the government’s Budget froze income tax and National Insurance thresholds until 2030-31 – a move that will take more people into higher tax brackets over time. According to the Office for Budget Responsibility (OBR), Chancellor of the Exchequer Rachel Reeves’ tax-raising measures will send the tax take to “an all-time high of 38% of GDP in 2030-31”. The OBR cut its forecast for UK real GDP growth over the next five years to an average of 1.5%. The Cash ISA allowance was cut to £12,000 from April 2027 for all savers below the age of 65, and pension contributions over £2,000 made via salary sacrifice will incur National Insurance contributions from April 2029.

Before and after: ahead of the Budget, consumer confidence fell, according to GfK; meanwhile, retail sales volumes contracted by 1.1% in October, posting their first monthly fall since May as consumers delayed spending ahead of Black Friday. Afterwards – according to the Institute of Directors – UK directors’ flagging optimism about the UK’s economic prospects was further dampened by the Budget.

Lacklustre economic growth: having expanded by 0.3% during the second quarter, UK economic growth slowed to only 0.1% during the third quarter. The annualised rate of inflation eased from 3.8% to 3.6% in October, fuelling hopes of a rate cut. The Bank of England opted to leave UK interest rates unchanged at 4% in November, although the Monetary Policy Committee was narrowly split at five votes to four; policymakers need to see more evidence that inflation is returning to target. Elsewhere, the unemployment rate rose to 5% over the three months to September – the highest level since the three months ending February 2021 – boosting hopes of a rate cut in December.

Global

Tech angst: despite continuing concerns over an increasingly frothy US technology sector, the Dow Jones Industrial Average Index (DJIA) breached 48,000 points during November for the first time. Nevertheless, growing questions over elevated valuations within the sector – particularly amongst AI-related stocks – triggered some sharp dips during the month, and the DJIA eventually ended November only 0.3% higher than it began. Jitters over the possibility of an AI bubble were not allayed by news of record revenues at Nvidia and, in a BBC interview, Sundar Pichai, CEO of Google’s parent company Alphabet, acknowledged that there were “elements of irrationality” in the ongoing tech boom.

Shutdown ends: the 43-day US government shutdown – the longest in history – ended in November thanks to a short-term funding bill that will expire at the end of January 2026. The shutdown meant that some economic data releases were missed; in particular, there was no consumer price inflation data for October. Elsewhere, employment data for September – released in November – proved to be mixed: 119,000 jobs were created in September compared with 4,000 lost in August; however, the rate of unemployment crept up from 4.3% to 4.4%, fuelling expectations of an interest rate cut in December. US consumer sentiment, as measured by the University of Michigan’s survey, deteriorated in November, falling to its lowest level since June 2022, while the Conference Board’s index of consumer confidence fell to its lowest level since April.

Downgraded outlook for Europe: the European Commission lowered its 2026 economic growth forecast for the eurozone from 1.4% to 1.2%, citing geopolitical tensions and trade-related uncertainties. Although the European Commission raised its 2026 forecast for Germany’s growth from 1.1% to 1.2%, it downgraded its prediction for France from 1.3% to 0.9%, citing economic and policy uncertainty. In a speech, President of the European Central Bank Christine Lagarde warned that Europe’s current growth model, based on export-led growth, is “geared towards a world that is gradually disappearing” and called on policymakers to focus on developing the region’s domestic economy. The Dax Index fell by 0.5% over the month. 

Sanaenomics: Japan’s Cabinet approved a 21.3 trillion yen fiscal stimulus package to help boost the country’s economic growth and address the impact of persistent inflationary pressures. Over November as a whole, the Nikkei 225 Index fell by 4.1%.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

Cutting through the noise: despite continuing concerns over the possibility of an AI-fuelled stock market bubble, ongoing global trade tensions, and – closer to home – mounting speculation about possible measures in the UK government’s forthcoming Budget, UK equity markets ended October in positive territory. While the FTSE 250 Index climbed by 0.7%, the blue-chip FTSE 100 Index rose by 3.9% over the month and hit a new high, boosted by the impact of higher gold and oil prices alongside positive corporate earnings reports.

Stretched valuations: the Bank of England (BoE) warned that the risk of a “sharp market correction” has increased and that valuations appear stretched, particularly among technology firms focusing on AI. Elsewhere, the Financial Stability Board commented: “Valuations could now be at odds with the uncertain economic and geopolitical outlook, leaving markets susceptible to a disorderly adjustment.”

All eyes on the Budget: ahead of the Budget on 26 November, British Chambers of Commerce reported that UK businesses have become increasingly concerned over the possibility of tax increases and inflationary pressures. UK government borrowing rose to £20.2 billion in September – its highest September level since 2020 – driven higher by an increase in debt interest costs. The news triggered fresh speculation over possible strategies in the impending Budget. 

Services sector stalls: the UK economy expanded by 0.1% during August. Activity in the manufacturing sector boosted growth; however, the services sector stagnated during the month. Meanwhile, growth in July was downgraded from no growth to a contraction of 0.1%. Nevertheless, the International Monetary Fund (IMF) expects the UK to deliver the second-fastest economic growth of any country in the G7 this year, outstripped only by the US. The annualised rate of inflation  remained stable at 3.8% year on year in September; the IMF forecast UK inflation to average 3.4% this year and 2.5% next year – the highest rate among the G7 nations – and urged  the BoE to be “very cautious in its easing trajectory.”

Consumer-driven profit warnings: a quarterly study from EY found sixty-four profit warnings from UK-listed companies in the third quarter. A record 47% were sparked by policy change or geopolitical uncertainty, while 19% cited weaker consumer confidence. Consumer-facing sectors saw an increase in profit warnings during the third quarter, and warnings in the media sector hit their highest level in two years.

Global

Complacency risks: speculation over the possibility that the US stock market is in an AI-fuelled bubble continued during October. The International Monetary Fund warned of market “complacency,” noting that concentration risk is now “substantially higher than during the dotcom bubble;” meanwhile, US AI technology company Nvidia became the first-ever company to achieve a market capitalisation of US$5 trillion. Global equity markets dipped in the middle of October amid concerns over bad and fraudulent loans in US regional banks, and the price of gold breached US$4,000 per ounce during the month.

Investors shrug off US shutdown: despite the unresolved US government shutdown, the Dow Jones Industrial Average Index rose by 2.5% over October. Stronger-than-expected third-quarter earnings announcements provided a boost for sentiment, with several leading technology companies – including Alphabet and Microsoft – posting robust results. Trade tensions between the US and China eased towards the end of the month following a meeting between Presidents Trump and Xi in South Korea.

Fed cuts again: having cut US interest rates in September, the Federal Reserve (Fed) continued to ease monetary policy, cutting the key federal funds rate by 0.25 percentage points to a range of 3.75% to 4% – its lowest level since November 2022. Looking ahead, however, Fed Chair Jerome Powell remained cautious, saying: “A further reduction in the policy rate at the December meeting is not a foregone conclusion – far from it. Policy is not on a preset course.”

ECB holds rates: the inflation outlook for the eurozone remains “broadly unchanged,” according to European Central Bank President Christine Lagarde, as central bank policymakers opted to leave the bloc’s interest rates unchanged. The eurozone’s annualised rate of inflation eased from 2.2% to 2.1% in October. The Dax Index rose by 0.3% over the month. 

Japan hits new highs: Japan’s benchmark Nikkei 225 Index hit a new all-time high in October amid hopes that Sanae Takaichi, the country’s first female prime minister, will pursue a pro-business agenda. Over October as a whole, the Nikkei 225 Index surged by 16.6%.

Equity outflows: investors pulled £3.64 billion from equity funds during the third quarter of 2025 – the worst-ever three-month outflow. According to global funds network Calastone’s Fund Flow Index, every major equity sector experienced outflows apart from Europe; in comparison, bond and money market funds enjoyed inflows of £895 million.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

What’s in the red box? During September, investors became increasingly preoccupied by possible measures in the forthcoming Autumn Budget. Concerns over the state of the UK’s public finances and worries over the possibility of tax increases pushed up the yield on the 30-year gilt to its highest level since 1998. Having grown by 0.4% in June, the UK economy stagnated in July as growth in the services and construction sectors was more than offset by a sharp contraction in the manufacturing sector. Meanwhile, the Office for National Statistics revealed that government borrowing had hit £18 billion – its highest August level since 2020.

All that glitters record gold prices drove up share prices in the mining sector during September, propelling the FTSE 100 Index to a new high. Over the month, the FTSE 100 Index rose by 1.8%, while the FTSE 250 Index climbed by 1.9%. In the quarterly review of FTSE 100 Index constituents, luxury design house Burberry and Metlen Energy & Metals were promoted to the blue-chip index, replacing housebuilders Taylor Wimpey and student accommodation provider Unite Group.

Inflation remains the key to lower rates: the Bank of England (BoE) maintained its key base rate at 4% in September. In an interview with West Midlands Life, BoE Governor Andrew Bailey commented: “I think there is still some further journey down in interest rates to go. But exactly when that will be and how much it will be will depend on the path of inflation going down.” The annualised rate of inflation remained at 3.8% in August. Although food price inflation rose by 5.1% - its fastest pace since January 2024 – this was mitigated by slower growth in prices for clothing, footwear, and transport.

Lacklustre forecast from OECD: the Organisation for Economic Cooperation & Development (OECD) predicted that a tighter fiscal stance, higher trade costs, and uncertainty are set to hamper external and domestic demand, causing UK growth to slow from 1.4% this year to 1% next year. The OECD also raised its forecast for average UK inflation during 2025 from 3.1% to 3.5%, representing the highest rate of any of the G7 countries. Elsewhere, having improved slightly in August, UK consumer confidence deteriorated once again in September, according to a survey by GfK that highlighted the impact of high day-to-day costs on UK households.

Global

First US rate cut since 2024: interest rates took centre stage in September as the US Federal Reserve (Fed) finally delivered a much-anticipated cut of 25 basis points, taking the key federal funds rate to a range of 4% to 4.25% – its lowest level2 since December 2022. Policymakers expect4 rates to ease to an average of 3.6% at the end of this year, 3.4% at the end of 2027, and 3.1% at the end of 2027. Fed Chair Jerome Powell commented: “It’s not a bad economy … we’ve seen much more challenging times” but also warned: “There are no risk-free paths now.”

US hits new highs: second-quarter US corporate earnings proved stronger than expected, providing a boost for investors. The Dow Jones Industrial Average Index rose by 1.9% during September and registered six new closing highs over the month. As September ended, however, the prospect of a US government shutdown loomed, sending the price of the price of gold to a fresh record.

More rate cuts to come? The rate of US economic growth in the second quarter was revised up from 3.3% to 3.8%, representing its fastest pace since the third quarter of 2023. The Organisation for Economic Cooperation & Development (OECD) expects the US economy to expand by 1.8% in 2025 and 1.5% in 2026, following growth of 2.8% in 2024. Annualised consumer price inflation reached 2.9% in August, while the core personal consumption expenditure (PCE) index remained steady at 2.9% in August, stoking hopes of further monetary easing.

France and Italy set to drag on European growth: having expanded by 0.6% in the first quarter of 2025, the eurozone’s economy expanded by 0.1% in the second quarter. The OECD expects the euro area’s economy to grow by 1.2% this year, slowing to 1% next year. Although fiscal expansion is predicted to provide a boost for Germany’s economy, consolidation is likely to curb growth in France and Italy. The Dax Index edged 0.1% lower over the month.

Stronger growth in Japan: following the resignation of Japan’s Prime Minister Shigeru Ishiba, the yield on the 30-year Japanese government bond (JGB) hit a new all-time high. Japan’s second-quarter economic growth was revised up from 1% to 2% year on year, lifted partly by a stronger contribution from private consumption. The Nikkei 225 Index rose by 5.2% during September.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

Challenges ahead for the big banks? The FTSE 100 Index reached a new all-time high during August amid widespread hopes that the US Federal Reserve will implement an interest-rate cut in September. However, the blue-chip index subsided from its highs towards the end of the month amid speculation that the UK government might levy a windfall tax on the banking sector. Over August as a whole, the FTSE 100 Index rose by 0.6%, while the FTSE 250 Index fell by 1.6%.

Base rate cut to 4%: having expanded by 0.7% during the first quarter of 2025, the UK economy grew by a better-than-expected 0.3% in the second quarter, underpinned by activity in the services and construction sectors. The Bank of England (BoE) cut its key interest rate to its lowest level since February 2023 during August. Central bank policymakers voted by five to four for a quarter-point cut, taking the base rate to 4%. The BoE predicted that policies in the Spring Statement are likely to dampen economic growth, and that measures, including higher employers’ National Insurance contributions and minimum wages, will stoke inflationary pressures. Although government borrowing proved lower than expected during July, tax increases are widely expected in the autumn Budget.

Persistent inflationary pressures: the rate cut appeared to provide a boost for consumer confidence, which reached its highest level since late 2024. However, the annualised rate of consumer price inflation rose to 3.8% in July – its highest level since January 2024 and undermining hopes for further monetary easing soon.

22% of UK companies cut dividends in Q2 2024 vs Q2 2023: according to Computershare’s Dividend Monitor, UK dividend payouts fell by 1.4% to £35.1 billion on a headline basis in the second quarter of 2025. On an underlying basis, dividends rose by 6.8% to £33.1 billion on a constant currency basis. 22% of companies cut their dividends during the period year on year.

£10 trillion AUM in the UK: the UK investment management industry registered a new peak of £10 trillion assets under management (AUM) in 2024, according to the Investment Association. The increase reflected strong market performance. For the first time, AUM managed on behalf of retail investors surpassed pension funds for the first time, while assets managed on behalf of overseas investors rose above 50%.

Global

US markets hit new highs: hopes of a September interest rate cut in the US provided a boost for global equity markets and drove up the Dow Jones Industrial Average Index to a new closing high. Federal Reserve chair Jerome Powell stoked expectations of a quarter-point cut next month during his speech at the annual Jackson Hole symposium, commenting: “The shifting balance of risks may warrant adjusting our policy stance.” Over August, the Dow Jones Industrial Average Index rose by 3.2%.

Core inflation hits a five-month high: alongside hopes of imminent monetary easing, stronger-than-expected corporate earnings provided a boost for sentiment and helped to offset persistent inflationary pressures and disappointing labour market data. Although the annualised rate of consumer price inflation remained at 2.7% in July, core inflation rose to 3.1%, its highest level for five months. Producer price inflation rose at a monthly rate of 0.9% in July, representing its largest monthly increase since June 2022, as the impact of President Trump’s tariffs started to take effect. Meanwhile, fewer-than-expected new jobs were created in July, and the figures for June and May were revised down.

Tariffs – and the impact of tariffs – are set to remain in the spotlight. The eurozone’s economy expanded at an annualised rate of 1.4% during the second quarter, representing a slight slowdown from first-quarter growth of 1.5%. President of the European Central Bank Christine Lagarde highlighted an “already evident” tariff-related slowdown in economic activity in the eurozone, which is expected to continue into the third quarter. Elsewhere, share prices in France dropped sharply towards the end of August against a backdrop of rising political turmoil. Over August as a whole, France’s CAC 40 Index declined by 0.9%, while Germany’s Dax Index fell by 0.7%.

Nikkei 225 breaches 43,000 points: in Japan, the Nikkei 225 Index hit a fresh all-time high in August, boosted by hopes of a US interest rate cut. The benchmark index rose by 5.5% during the month, breaching 43,000 points. Following July’s trade agreement between Japan and the US, Bank of Japan policymakers said they believe that the country’s economic growth may moderate in the short term but expect growth to recover thereafter. Japan’s economy expanded at a quarterly rate of 0.3% during the second quarter, having grown by 0.1% in the first quarter.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

FTSE breaches 9,000: the UK equity market performed relatively strongly during July as the blue-chip FTSE 100 Index closed above 9,000 points for the first time.  Over the month as a whole, the FTSE 100 Index rose by 4.2%, boosted by a strong contribution from the mining and pharmaceuticals sectors, while the FTSE 250 Index climbed by 1.6%.

Support for UK financial services? During July, the government unveiled the “Leeds Reforms”, including measures designed to encourage UK savers to seek better returns by investing in the equity market with cash that would otherwise sit in low-interest savings accounts. Elsewhere, in the annual Mansion House speech, Chancellor of the Exchequer Rachel Reeves  urged regulators “not to bend to the temptation of excessive caution”, observing: “For too long, we have presented investment in too negative a light, quick to warn people of the risks, without giving proper weight to the benefits.”

Possible changes to lending rules: as part of its response to the government’s call to identify areas where the UK’s financial sector could contribute more to sustainable growth without compromising stability, the Bank of England’s (BoE’s) Financial Stability Report recommended allowing lenders to increase lending to borrowers with higher loan-to-income ratios.

“A little weaker and more uncertain”: the BoE warned that uncertainty around the global outlook had increased, and that the UK growth prospects had become “a little weaker and more uncertain”. The UK economy shrank by 0.1% during May, dampened by a decline in manufacturing activity. The annualised rate of UK inflation rose from 3.4% in May to 3.6% in June, stoked by higher transport costs, and reaching its highest level since January 2024. Business confidence remains weak, according to the British Chambers of Commerce (BCC); sentiment has been undermined by rising employment costs alongside worries about taxation and inflation. The BCC urged the government to rule out any further business taxes in the autumn Budget. Meanwhile, GfK’s consumer confidence index found that sentiment deteriorated during July amid concerns over the possibility of tax increases.

An increasingly attractive destination? The UK’s relatively low 10% tariff deal with the US appears to have boosted its attractiveness as a destination for investment: according to Deloitte’s Q2 survey of chief financial officers, the UK was placed alongside India as the most attractive location  for investment, ranking well ahead of Japan, the US and China. 

Global

Tech drives US: US markets were boosted in July by better-than-expected corporate earnings for the second quarter. In particular, strong earnings from the technology sector – including Microsoft – drove markets higher: the Nasdaq Index rose by 3.7% over the month, while the Dow Jones Industrial Average Index edged up by 0.1%. The S&P 500 Index posted ten new closing highs during July, prompting speculation over the possibility of a ‘bubble’.

Tariffs continue to garner headlines: early in July, President Trump delayed plans to impose higher levies on imports into the US, announcing a new deadline of 1 August. He subsequently announced a raft of fresh tariffs at the end of July, including levies of 50% on Brazil, 35% on Canada, 25% on South Korea, and the lowest rate of 10% on the UK. Meanwhile, Congress passed President Trump’s controversial “One Big Beautiful Bill”, which was subsequently signed into law on 4 July.

The EU and Japan reached trade deals with the US: the US and EU successfully reached a trade agreement: the US will levy a tariff of 15% on EU goods. European equity markets dipped in response amid concerns that the deal could curb the region’s growth. The European Central Bank left its key interest rate unchanged at 2% in July, and the Dax Index rose by 0.6% over the month. Elsewhere, Japan and the US agreed a trade deal of 15% on the import of Japanese goods to the US. The news provided support for Japanese carmakers, driving the Nikkei 225 Index to a new high. Over July as a whole, the Nikkei 225 Index rose by 1.4%.

Signs of dissent in the FOMC: the Federal Reserve (Fed) left its key federal funds rate  unchanged at 4.25%-4.5%; however, two officials voted for a cut of 0.25 percentage points – the first time  since 1993 that the Federal Open Market Committee has had two dissenting members. President Trump continued his criticism of Fed Chair Jerome Powell; meanwhile, Chair Powell alluded to the impact of ongoing trade uncertainty, commenting: “Changes to government policies continue to evolve, and their effects on the economy remain uncertain.” Having contracted by 0.5% in the first three months of 2025, the US economy expanded at an annualised rate of 3% during the second quarter, although this reflected a decline in imports as President Trump’s tariffs took effect.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

UK outperforms US over H1: despite a turbulent start to 2025 – compounded by an escalation of ongoing conflict in the Middle East – UK equity markets performed strongly over the first half of the year. The FTSE 100 Index rose by 7.2% on a six-month basis, outperforming the US Dow Jones Industrial Average Index and the S&P 500 Index, which rose by 3.6% and 5.5%, respectively. During June, defence stocks were boosted by the news that the UK had agreed to spend 5% of GDP on national security by 2035. Over the month, the FTSE 100 Index edged 0.1% lower, while the FTSE 250 Index rose by 2.8%.

Trade tensions: the Bank of England’s (BoE’s) Monetary Policy Committee held interest rates at 4.25% at its June meeting. Giving evidence to the House of Commons Treasury Select Committee, BoE Governor Andrew Bailey said that the path for UK rates remains downwards, although ongoing tariff-related uncertainties means that the pace of future cuts is shrouded in much more uncertainty. He called for countries to return to the multilateral table but commented: “The US-China relationship is the centre of this whole thing, really.” 

Elevated uncertainty: the Organisation for Economic Cooperation & Development (OECD) warned that the UK’s “very thin fiscal buffers” might not provide sufficient support without breaching fiscal rules in the event of an adverse shock to growth. The OECD expects the UK economy to grow by 1.3% this year, slowing to 1% next year, citing “heightened trade tensions, tighter financial conditions and elevated uncertainty.” Elsewhere, the Confederation of British Industry (CBI) predicted that UK growth will slow as companies struggle with higher labour costs, inflationary pressures, and global uncertainty. The CBI cut its forecast for UK economic growth this year from 1.6% to 1.2%, and next year from 1.5% to 1%.

Worsening outlook for living standards? Real household disposable income per head posted its first quarterly decline since early 2023, indicating that the outlook for UK living standards may be deteriorating. Meanwhile, having risen by 1.3% in April, UK retail sales volumes dropped by 2.7% in May, representing their fastest monthly decline since December 2023. The annualised rate of consumer price inflation eased from 3.5% to 3.4% in May as lower prices for transport were offset by higher food costs.

Global

Gloomy outlook: geopolitical events took a new turn in June as Iran and Israel engaged in a short but intense ‘12-day war’ that also included a US military attack on three Iranian nuclear facilities. Meanwhile, trade-related uncertainty dampened the outlook for the global economy: the World Bank warned that it could be heading for its worst decade since the 1960s, saying: “Economic cooperation is better than any of the alternatives – for all parties.”

Trump intensifies pressure on the Fed: imports of goods to the US dropped by 20% during April in response to President Trump’s tariffs, cutting the US trade deficit in goods by 43%. Although the annualised rate of US inflation edged up to 2.4% in May, the tariffs appear to have had a limited impact on US consumers so far. The Federal Reserve (Fed) left interest rates unchanged, triggering fresh criticism of Fed Chair Jerome Powell from President Trump, who warned that he would select a new Chair to replace Chair Powell at the end of his term. The US dollar dropped to its lowest level against the pound since mid-2021.

Big, Beautiful Bill: as June ended, the US Senate was preparing to vote on President Trump’s “Big, Beautiful Bill.” The Congressional Budget Office calculated that the controversial bill would increase the budget deficit by US$2.4 trillion from 2025-2034. Over June, the Dow Jones Industrial Average Index rose by 4.3%.

ECB cuts again: the eurozone’s economy expanded by 0.6% over the first three months of 2025 compared with 0.3% in the previous quarter, underpinned by expansion of 9.7% in Ireland, reflecting its exposure to US multinationals. Inflation in the eurozone dropped below the European Central Bank’s (ECB’s) 2% target during May, falling from 2.2% in April to 1.9%, curbed by declines in the services sector. The ECB cut its key interest rate from 2.25% to 2% but warned that trade-related uncertainty was set to weigh on business investment and exports. The Dax Index fell by 0.3% in June.

Inflationary pressures:  in Japan, industrial production slowed by 1.8% year on year during May, reflecting the impact of US tariffs. Although the rate of core consumer price inflation slowed to 3.1% in June, it remained well above its 2% target. The Nikkei Index rose by 6.6% over the month, underpinned by yen weakness.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

Sentiment picks up: after a torrid April, UK equity markets rose during May as investor sentiment improved, boosted by hopes of a continued moderation in global trade tensions. The UK and US reached a one-year tariff agreement that will include a baseline 10% tariff on UK imports to the US and cuts to vehicle import tariffs. The UK and EU also agreed a partial “reset” on their trading relationship. Over May, the FTSE 100 Index rose by 3.3%, while the more domestically focused FTSE 250 Index climbed by 5.8%.

UK rates fall: policymakers at the Bank of England (BoE) voted by five to four in favour of cutting the key base rate2 from 4.5% to 4.25% in May, taking UK rates to their lowest level4 for two years. However, BoE chief economist Huw Pill also cautioned against policymakers cutting too quickly, observing: “The MPC started cutting … slightly too early in 2024.”

Risks to growth: the BoE9 warned that US trade policy had created “a new source of risk for the global economy” although the impact on the UK’s growth outlook is expected to be relatively small. Elsewhere, the International Monetary Fund (IMF) warned that “persistent uncertainty” caused by global trade tensions will reduce UK economic growth by 0.3% by 2026. Nevertheless, having cut its forecast for UK economic growth for this year from 1.6% to 1.1% in April, the IMF upgraded its 2025 prediction to 1.2% and maintained its 2026 forecast at 1.4%, urging the UK government to “stay the course” on its fiscal plans.

Inflationary pressures intensify: the annualised rate of consumer price inflation rose sharply in April from 2.6% in March to 3.5%, stoked by in part by an increase in domestic energy prices; meanwhile, service price inflation rose from 4.7% to 5.4% year on year. The UK economy expanded by a better-than-expected 0.7% during the first quarter of 2025, boosted by activity in the services sector.

Backing Britain: seventeen of the UK’s biggest workplace pension providers intend to allocate at least 10% of their defined contribution default funds into private markets by 2030, with at least 5% of the total to be invested in the UK. The pledge forms part of the new Mansion House Accord and is designed to secure better financial outcomes for DC savers through the higher potential net returns available in private markets.

Global

Tariffs remain in the spotlight: share prices recovered during May as fears of a tariff-induced global recession receded. Nevertheless, markets remained jittery as the trade saga continued to unfold. Although President Trump announced a “reset” for the US/China relationship, relations between the two nations soured when the US announced plans to revoke Chinese students’ visas. He also revealed plans to impose 50% tariffs on imports from Europe but subsequently suspended this measure until 9 July.

… but are the tariffs legal? President Trump’s trade policy was thrown into fresh disarray as the Court of International Trade ruled that the tariffs were illegal; nevertheless, they will remain in place while the Trump administration appeals the ruling. The Dow Jones Industrial Average Index rose by 3.9% in May, while the technology-rich Nasdaq Index climbed by 9.6%.

Not so beautiful? The US House of Representatives passed President Trump’s “One Big Beautiful Bill”, raising concerns about the potential impact on US national debt. The yield on the ten-year US Treasury bond yield rose from 4.18% to 4.4% over the month, while the 30-year Treasury bond yield increased from 4.69% to 4.92%. 

Fed leaves rates unchanged: the US Federal Reserve maintained its key federal funds rate  at a range of 4.25% to 4.5%, commenting  that the uncertainty created by President Trump’s tariffs had made it “not at all clear what … (it) should do” with regard to monetary policy. 

US loses its last perfect rating: credit ratings agency Moody’s downgraded the US’s top triple-A rating to “Aa1” and changed the outlook from “stable” to “negative”, citing the impact of rising government debt and interest costs. Fitch downgraded the US in 2023, while S&P Global Ratings downgraded it in 2011.

Better-than-expected growth for Germany: Germany’s economy expanded by a revised 0.4% over the first three months of 2025, compared with a contraction of 0.2% in the final quarter of 2024. Overall growth was boosted by activity in manufacturing and exports. The Dax Index rose by 6.7% over May.

Bank of Japan to cut again? Japan’s annualised rate of consumer price inflation remained unchanged at 3.6% in April. However, core inflation – which strips out the impact of fresh food – rose to 3.5%, stoking speculation that the Bank of Japan might seek to tighten rates again. During May, the Nikkei 225 Index rose by 5.3%.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.

UK

Volatility hits markets: President Donald Trump’s announcements on trade tariffs absorbed the limelight during April and, in common with the rest of the world, UK markets were volatile, fluctuating in response to daily newsflow from the US. Having plummeted by over 10% between the end of March and 9 April, the FTSE 100 Index ended April only 1% lower, while the FTSE 250 Index – whose constituents tend to be more domestically focused – rose by 2.1% over the month.

Deteriorating outlook: despite a subsequent pause on tariffs, the British Retail Consortium warned that confidence amongst UK businesses and consumers remains fragile against a backdrop of rising global prices, higher employer National Insurance contributions, and an increased National Living Wage. Meanwhile, GfK’s index of consumer confidence showed a sharp deterioration during April. Elsewhere, the Bank of England’s (BoE’s) Financial Policy Committee warned: “Uncertainty has intensified … The probability of adverse events, and the potential severity of their impact, has risen.” The tariff announcements from the US have contributed to a “material increase in the risks to global growth”.

IMF downgrades growth forecast: the UK economy grew by 0.5% during February, boosted by activity in the services sector. UK exports to the US rose by £500 million in February, indicating that UK businesses had increased export activity ahead of the expected introduction of US tariffs. The International Monetary Fund (IMF) downgraded its growth forecast for the UK in 2025 from 1.6% to 1.1%, citing higher gilt yields, weaker private consumption, and higher inflation. The prospect of lower economic growth boosted speculation over the possibility of further cuts to UK interest rates.

Inflation set to pick up? The UK’s annualised inflation of inflation rate eased to 2.6% in March, compared with February’s rate of 2.8%. The IMF raised its 2025 UK inflation forecast by 0.7 percentage points to 3.1%, highlighting the impact of one-off regulated price changes. 

Stronger pound set to dampen dividends: dividend payments in 2025 from UK listed companies are expected to rise by 1.8% on an underlying basis, but to remain flat on a headline basis, reflecting a stronger pound and a cooling global economy. According to Computershare’s UK Dividend Monitor, the impact of companies leaving the UK stock exchange is set to mean £5 billion less in dividend payouts this year than would otherwise have been the case.

Global

Trump unveils his tariffs: April began with a bang with ‘Liberation Day’ – US President Donald Trump’s plan to ‘liberate’ the US from the perceived unfairness of trading arrangements with the rest of the world. He unveiled a swathe of ‘reciprocal’ tariffs on countries around the world, ranging from 10% to 50%. The announcement triggered sharp declines in global markets and was widely criticised. International Monetary Fund (IMF) Managing Director Kristalina Georgieva commented: “Trade policy uncertainty is literally off the charts”.

A volatile April: President Trump subsequently announced  a 90-day ‘pause’ on reciprocal tariffs for all countries apart from China and, although markets generally regained some ground from their recent lows, the rest of the month continued to be marked by volatility, exacerbated by a series of tit-for-tat moves between China and the US. The ongoing uncertainty drove the US dollar down and bond yields up; meanwhile, the price of gold hit fresh highs. Over April as a whole, the Dow Jones Industrial Average Index fell by 3.2%, while the Nikkei 225 Index rose by 1.2% and the Dax Index climbed by 1.5%.

Pressure on the Fed: sentiment towards the US was further destabilised by President Trump’s ongoing criticism of Fed Chair Jerome Powell as he continued to urge Chair Powell to cut US interest rates. The IMF warned: “Central banks need to remain credible. And part of that credibility is built upon their central bank independence.”

IMF downgrades US growth forecast: having grown at an annualised rate of 2.4% in the final quarter of 2024, the US economy contracted by 0.3% in the first three months of 2025. Import activity rose sharply as companies sought to get ahead of the President Trump’s anticipated tariffs. The IMF cut its 2025 growth forecast for the US by 0.9 percentage points to 1.8%, citing “greater policy uncertainty, trade tensions, and a softer demand outlook”; tariffs are expected to continue to hamper growth in 2026.

US rate cuts on the horizon? The European Central Bank cut interest rates by 25 basis points in March, reducing its key rate to 2.25%. Policymakers believe that the disinflation process is “well on track” but warned that intensifying trade tensions had caused the growth outlook to deteriorate. Elsewhere, investor sentiment in the US was lifted towards the end of the month by hopes of a summer rate cut.

As ever, if you have any questions regarding your investments, please do not hesitate to contact us by calling +44 (0) 7917 390 344  or emailing me at richardbrazier@culverfinancial.co.uk and we will be happy to talk to you.