WeeklyWatch – Oil, gold and conflict

W.24822 Wellesley WeeklyWatch 17.06_1420 x 474

17^th June 2025

Stock Take

Oil impacted by conflict

Investors were enjoying a relatively positive week…until Thursday night. Israel carried out a ‘pre-emptive strike’ on Iran, which has initiated an intense exchange of missile fire, resulting in a dramatic increase in oil and gold prices. Equities, on the other hand, moved in the opposite direction.

Since Trump was sworn into office in January, oil prices have been quite subdued, even in the face of the Republican mantra: “drill, baby, drill.”

However, in the immediate hours after the first airstrike, the price of Brent crude soared over 10% to US $78, eventually settling in the US $74 range, while the market assessed the potential widespread impact.

While the level remains below the US $80 level prices that were reached in January, it’s a significant increase on the $60 oil that was being traded in May. There has since been warning from analysts that prices could reach US $120 if Middle East tensions get worse.

Only once has Brent crude reached US $120 and this was back in 2022 following the Russian invasion of Ukraine, and China easing their COVID-19 restrictions.

Geopolitical uncertainty often leaves oil prices vulnerable to instability. Where events can impact the supply or economic growth is likely to increase, the price of oil will typically rise.

Oil prices can also have a mixed impact on equity markets. Energy companies usually find that higher oil prices lead to greater returns. But for other companies, higher energy prices can result in further costs which reduce their profits and opportunities for investments.

Another possible side effect of higher oil prices is higher levels of inflation. The Chief Economist at St. James’s Place, Hetal Mehta, says:

“Other recent flare-ups in the Middle East haven’t really moved oil prices so much. This time it looks like that might be different. Coming at a time when countries are still battling inflation, this is something to keep an eye on. Doubly so in the UK, where oil price increases tend to pass through to inflation relatively quickly.”

Bold gold – prices shoot up further

Despite already being high in price, the strike has also caused a spike on the price of gold. Over the last few years, numerous countries have been doing their best to stock up on the precious metal as a form of reserve.

Earlier in June, it was revealed by the European Central Bank (ECB) that gold had overtaken the euro as the world’s second largest reserve asset (after the dollar) in 2024. This has come about as a result of governments looking to gold as political uncertainty prevails.

As central banks acquired more gold, its price increased by more than 30%, in nominal terms, over the course of the year, and the trend continued into the first quarter of this year. But over recent months it’s fallen.

The ECB notes that an increase in financial sanctions being imposed has spurred on gold buying by particular governments:

“Recent research indicates that imposing financial sanctions is associated with increases in the share of central bank reserves held in gold. Notably, in five of the ten largest annual increases in the share of gold in foreign reserves since 1999, the countries involved faced sanctions in the same year or the previous year.”

UK figures make for mixed reading

The FTSE 100 suffered a small dent on Friday as a result of the conflict in the Middle East, following a historic high on the Thursday.

The high happened despite the Office for National Statistics (ONS) revealing that the UK GDP shrank by 0.3% in April, significantly more than the 0.1% that was widely expected by economists. New tax rises for employers that began in April have been pinpointed as partly responsible for the GDP drop.

Despite this, the fall followed a fairly strong first three months of 2025, which means that the British economy is larger than it was at the start of the year. Additionally, the FTSE 100 finished the week up 0.14%.

While the immediate impact of the conflict in the Middle East has been slightly more muted in the UK, Israel’s increased tensions with Iran caused a leap in the shares of large energy and defence companies, which are well-represented in the index.

US equities and trade deal positivity dimmed by Middle East conflict

After finally reaching a trade deal with China, things started to look up for the US, but their equities didn’t continue in the same positive manner. After rising over the first four days of the week, gains took a big hit, almost being reversed on Friday, resulting in the S&P 500 and NASDAQ finishing the week in negative territory.

Despite geopolitical tensions appearing to improve with the above deal, conversation at the end of the week was being dominated and determined by developments in the Middle East.

Wealth Check

Labour’s Spending Review – are wealth taxes on the horizon?

The first Spending Review for Labour in 18 years… It’s been long awaited yet contained few surprises.

It included major pledges such as £113 billion in capital funding for infrastructure projects. In total, the government has committed to £300 billion in future spending.

Some of the standout recipients include the Department of Health, which received a £29 billion boost, laying the groundwork of the NHS 10-year plan, for which we’re expecting published details soon.

Other beneficiaries include energy infrastructure, which will benefit from substantial capital investment, including in nuclear. And defence spending will have an £11 billion increase. But, unsurprisingly, the headline grabber has been Chancellor Rachel Reeves’ reinstatement of the Winter Fuel Allowance.

But how much will this review shape the Autumn Budget?

The economic influences

In regards to economic outlook, it’s not looking particularly bright for the UK… Inflation is sticky – that is to say, higher than expected. Growth is at risk from, particularly, both the US tariffs and ongoing conflict in the Middle East. And with the rise of gilt yields, government borrowing has also increased.

The Chief Investment Officer at St. James’s Place, Justin Onuekwusi, says:

“Despite a strong start to the year, we expect the UK economy will likely slow down through the rest of the year due to weakening business sentiment and the impact of tax increases in increased employer contribution implemented in April.

“We remain concerned about inflation and believe it is likely to remain inflated. Services inflation is still running at over 5% and despite some softening in the labour market, pay growth remains stubbornly high.

“Though the review mainly allocates existing funds, ongoing public spending pressures suggest future borrowing and possible tax rises.”

The Autumn Budget starts to loom

The Office for Budget Responsibility’s forecast in the autumn will be required to address these issues. Additionally, other governmental policy initiatives like changes to immigration will need to be factored in.

The Chancellor is also likely to face pressure from Labour to increase spending in the Autumn Budget.

As part of their election manifesto, Labour said no to increases to income tax, employee National Insurance contribution and VAT. However, there are other levers they can pull. It’s been estimated that the government could levy taxes of around £15 billion without crossing red lines, but by doing this, they leave little room for significant spending commitments. This leads experts to believe that tax rises could be on their way.

What’s down the line?

Numerous tax-rising measures have been speculated on including extending the freeze in personal tax thresholds beyond April 2028, which may raise around £7 billion per annum.

More measures to limit tax avoidance may be put into place and changes to property taxation are possible. This could be an additional band on council tax or increases to existing higher bands to raise up to £2 billion.

There’s been additional speculation surrounding the lifetime allowance on pensions and addressing salary sacrifice arrangements. But both these measures would be challenging to implement and would likely cause sector-specific problems, particularly for the NHS.

The Advice Divisional Director, Claire Trott, says:

“Salary sacrifice arrangements offer valuable National Insurance (NI) savings for both employers and employees, so any changes would be unwelcome, especially in light of the increase to employers’ NI earlier this year.

“Introducing further changes to pension taxation also risks undermining pensions as a long-term savings vehicle. With other changes to the pension system on the horizon, there is a danger that these alterations could cause even more confusion and savers could become more disengaged with pensions – which is especially worrying as individuals have increasing responsibility to plan and save for their retirement.”

Updates to ISAs are also likely to feature in the Autumn Budget. The Treasury is looking to encourage more investment in UK markets. A frequent suggestion refers to the cap on cash ISAs with the belief that people will invest more in equities than in an ISA.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

An investment in a stocks and shares ISA will not provide the same security of capital associated with a cash ISA.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Please note that cash ISAs are not available through St. James’s Place.

In the Picture

UK GDP contracted by 0.3% in April…not happy reading for Chancellor Rachel Reeves.

Having said this, if we look at the figure over a longer timeline, it’s placed in better context. Growth levels since COVID-19 haven’t necessarily been strong, but the figure still remains above pre-pandemic levels.

The economy remains ahead of where it started the year thanks to good growth in the first quarter of 2025.

The information contained is correct as at the date of the article. The information contained does not constitute investment advice and is not intended to state, indicate or imply that current or past results are indicative of future results or expectations. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

“FTSE Russell®” is a trademark of the relevant LSE Group companies and is used by any other LSE Group company under license. All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

Source: MSCI. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, endorsed, reviewed or produced by MSCI. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kind of investment decision and may not be relied on as such.

SJP Approved 16/06/2025

WeeklyWatch – Is it a bond farewell for investors?

W.24822 Wellesley WeeklyWatch 10.06_1420 x 474

10^th June 2025

Stock Take

Bonds are no longer the boring bet

There once was a time when bonds were perceived as safe albeit dull – regarded as good ballast to diversify investment portfolios but not likely to cause any major excitement in the markets.

Alas, those times are long gone. Recently, there’s been an increase in volatility in bond markets, which has given rise to the question: how and where is best to invest?

Is it One Big Beautiful Bill?

President Trump’s tariff wars have caused ongoing market volatility, resulting in more fluctuation in the bond markets over recent months. But Trump’s One Big Beautiful Bill Act (OBBBA) has resulted in the bond yields moving higher yet again. The bill was recently passed by the US House of Representatives and is expected to add a further $2.7 trillion to the already huge deficit of approximately $36 trillion over the course of the next decade.

As the US deficit increases, the US government will be required to spend more to service it. This will lead to higher borrowing costs as investors will regard US treasuries as having an increased risk and will expect a higher yield.

This has proven true with a sharp increase in the yields on longer-duration treasuries of 10 years or more. Over the last few weeks, these reached 5% and then fell back. However, this isn’t just the case in the US. There’s been a rise in yields on longer-term UK gilts, and Japanese government bonds (JGBs) hit yield highs during the same period.

Earlier in the month, the CEO of JP Morgan Chase, Jamie Dimon, warned that if the US doesn’t bring down its record debt levels then the bond market was in “danger of cracking”.

Low appeal for long-term bonds

While some investors believe the higher yields are an investment opportunity, others are voting with their feet and choosing to move away from longer-term bonds.

Last month, Japan auctioned off 20-year government bonds, which was met with little enthusiasm and demand. A subsequent US auction of 20-year treasuries was met with a similar response from investors. In the meantime, the UK is issuing more short-duration gilts due to low levels of interest in 30-year gilts.

The Fixed Income Strategist at St. James’s Place, Greg Venizelos, says:

“Longer-duration bonds are challenging because we get so much noise and movement, even if yields ultimately don’t rise that much.

“The volatility on its own undermines the attractiveness of being at that end of the curve, as we say. And of course, the US treasury market is a massive market, as Jamie Dimon has flagged.”

Venizelos also notes that it’s not just the long-term bonds that have seen yields rise, the same applies to short-term bonds. He indicates that while movement at the long end is as a result of fiscal concerns and fear surrounding debt sustainability, the tariff disturbance is creating short-term inflation issues at the short end.

Consequently, mid-term bonds are more in demand. They’re seen as lower risk than long-term bonds and offer incrementally more yield than short-term bonds.

Venizelos continues:

“This is sometimes described as the butterfly trade. As investors are trying to move away from the longer end of the curve, they come towards the belly, say between three and seven years. This is a lower risk to the long end and more value to the short end.”

There’s already been a dip in demand for US treasuries and there are indications that this fall could continue.

All markets have a global component, and if something happens to one market – particularly one as dominant and as influential as the US – it impacts on other markets. The Japanese government bond market (JGB) went through a regime change that has seen the yield on 30-year JGBs rise significantly. Venizelos notes that when comparing the two countries, the yield a Japanese investor would currently receive when buying JGBs is far more attractive than what they’d get in the equivalent treasury after foreign exchange hedging costs.

This doesn’t mean to say that Japanese investors will start selling US treasury holdings to purchase JGBs, but they might be more reluctant to buy treasuries. In terms of demand for the stock of treasuries that need to be refinanced, this is already significant.

Is a bond market implosion likely?

Dimon highlighted the threat to the US bond market – and consequently other bond markets – as a result of escalating US debt, so how likely is a bond market implosion? And do bond investors have cause for concern?

It’s undeniable that if all these factors come together, there’ll be a significant increase in pressure for global markets.

Venizelos goes on to say:

“If you get a major incident in the treasury market, there will be material spillovers to global risk, global appetite, stock markets, currencies and what happens to the dollar – everything can be affected.”

However, he does believe that Elon Musk and President Trump’s public spat could have a silver lining as it’s creating awareness of the likely cost of the OBBBA. A revision to the planned act may therefore be possible, which will ease pressure on the overall bond markets.

“I think more senators are getting cold feet about this so-called beautiful bill. The deficit is already big as a percentage by any standard and on the biggest economy out there. If the bill goes ahead, it may be getting out of control.

“Ultimately there needs to be more caution on what the US administration actually does rather than says. So, while it will pass something, it will hopefully be a lot more diluted.”

Equities on the up

Even though OBBBA has caused uncertainty, US equities maintained their recovery path. Last week, the NASDAQ and S&P 500 rose by 2.2% and 1.5% respectively.

For Europe, the MSCI Europe ex UK finished the week up 1.1%, following the European Central Bank’s vote to reduce rates by 0.25% to 2.0% to help encourage more economic growth. Inflation has been relatively benign across the continent, and the market is anticipating a further cut later in the year.

Additionally, the FTSE saw a 0.8% rise last week, continuing to push back towards the record level that it set earlier in the year.

Wealth Check

Providing your business with a solid foundation

Determining a practical governance framework is a must for every organisation and should be based on the structures and systems that suit them best. There’s no such thing as a ‘one size fits all’, off-the-shelf package when it comes to these matters.

Having said this, there are some core elements that can direct your thinking and help you create your own response:

Business purpose – This might seem a bit obvious, but clearly articulating and sharing a perspective on the ‘purpose’ of an organisation is a key beginning point. This will help you clarify how you’re structured in order to deliver what your customers are asking for – within the context of broader societal needs and while resonating with your unique position and values.
Leadership, the board and strategy – At the top of the organisation, you need strong leadership to propel the business forward. In addition, you must establish a well-balanced board who will set objectives and strategies, with the senior management team, that will steer the business to achieving their objectives.
Risk management and internal control – A risk to your business is anything that will divert you from achieving the agreed objectives. This can manifest as negative threats or positive opportunities – both require a strategic focus. The control environment works to protect key assets, essential systems and daily operations. You must have internal controls in place, which are usually a combination of physical boundaries, human checks and balances, and tech-based routines.
Culture, ethics and capability – In all areas of business, people are essential. This means that an appropriate culture needs to be established; this incorporates behaviours of the workforce and helps to reinforce pursuing the right thing. Additionally, there needs to be a strong effort to attract, nurture and keep people who are skilled and capable – all while maintaining an appropriate level of quality control.
Structure, policies and procedures – In every organisation, the best structure to achieve optimal productivity needs to be determined. Smaller organisations can keep things simple, but as they grow, operations may become more complex, meaning that the structure will need to adapt and change as appropriate.
Information systems and reporting routines – Businesses generate a wide range of data and information, which means that systems are required to capture, store and provide access to it. Usually, these processes are linked to reporting and communication routines. As the saying goes: “The right information is needed at the right time to make the right decisions.”
Assurance and audit provision – In an organisation, there’s a lot of moving parts! And as businesses grow and develop, a ‘siloed’ mentality can creep in. Boards and senior management often benefit from feedback on how things are operating, so assurance activity in some form may need to be implemented. The job of external auditors is to cover the finance and accounting information of the business, but other areas may need an experienced specialist to assess the other aspects of the organisation every now and then.
Compliance and stakeholder relations – All organisations must be compliant with legal and other related requirements. Size, sector, geography and customer or client interaction may determine some of these legalities – these areas must be frequently reviewed. All organisations have a wide range of ‘stakeholder groups’ – these are both internal and external and represent anyone with an interest in the organisation. Knowing who they are, what their expectations are and the best way to engage with them is highly important.
Board procedures and oversight – The cycle of corporate governance is led by the board, which holds ultimate responsibility. As such, the board and its procedures are where the areas outlined above come together – the board should maintain oversight of day-to-day business operations.
Annual reporting and disclosure – Having trust in an organisation is integral to good governance, and building trust happens with effective communication and reporting mechanisms. Reporting and disclosing of information must be fit for purpose. There are multiple ways to convey key messages and to have healthy dialogue, ensuring all interested parties can make informed decisions about the company. It’s important that you’re in control of your narrative and are able to tell your story.

What’s been summarised above should act as a cycle of activity that applies to your corporate existence rather than be a checklist. Success in these areas will boost confidence in expansion plans, further attracting, supporting and retaining customers, suppliers and a committed workforce.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 09/06/2025

WeeklyWatch – Could Asia help investors weather US markets?

W.24822 Wellesley WeeklyWatch 03.06.25_1420 x 474

3^rd June 2025

Stock Take

Tariff twists and turns

Unfortunately, the trend of market uncertainty continues. Among the major news of the week was the US Court of International Trade’s decision to block Trump’s upcoming tariffs. The global markets welcomed this news and subsequently rallied. But less than 24 hours later, the tariff ban was paused by the US appeal court “until further notice”.

Despite the upheaval, the US S&P 500 still managed to record its best May in 30 years, indicating that Wall Street predicts that some relief on tariffs is on its way – but this can’t be certain. If the tariffs are imposed in full, or increased, there will be further upheaval for global markets, including the US.

As US markets continue to rise and US equities remain relatively expensive, could it be time for investors to turn their attention to further afield – perhaps towards Asian markets?

Is Asia a safer investment option?

Volatility is no stranger to the Asian markets either, evident through the ever-changing nature of the trade talks that are taking place between the US and China. Weeks after agreeing on tariffs, the relationship has broken down once again, leading President Trump to accuse China of “violating” the trade deal that was agreed on.

In the previous week, US Treasury Secretary Scott Bessent described trade talks between the two nations as “a bit stalled”. Both countries have been unable to agree on issues, including the production of chips and issuing visas. Additionally, there were further reports that the US are looking to put more restrictions on Chinese tech companies.

Despite this, there are still lots of investor opportunities for those looking to diversify or find better value, in the view of St. James’s Place Head of Investment Advisory, Asia & Middle East, Martin Hennecke. He looks to Jensen Huang, the CEO of Nvidia, and his talk of ‘formidable’ competition from China in the past week and China’s strong economic fundamentals:

“China’s industrial profit growth has been more resilient than expected, coming in at 3% year-on-year for the month of April. This is despite the tariff fallout.”

Even though consumer spending remains fairly weak, Chinese household bank deposits have seen a $10.6 trillion net increase over the past five years. This suggests that there’s a strong potential for a recovery in spending once spending confidence is stabilised.

Hennecke continues:

“If investors are overweight on US equities, and technology in particular, the recent strong rebound in US markets might be a good second chance to broaden out across other relatively discounted markets regionally.

“Investors could also think about different investment styles, such as balancing growth with value.”

What about Japan?

Japan has frequently featured in the news as of late. After struggling for decades with deflation, there’s been a sharp rise in inflation. In April, core inflation hit 3.5% in comparison to the previous year – the fastest rate of growth in two years.

This puts pressure on the government to increase interest rates and on Japanese government bonds, where there’s been a sharp increase in yields. Higher yields on bonds means that there are bigger borrowing costs for the government as a result, which could limit the Bank of Japan’s ability to increase interest as required. It can also mean that Japanese investors could pull money that’s held in the US to invest domestically instead. US markets could therefore see a knock-on effect, particularly in the tech sector, where over the last decade, Japan has been the largest foreign direct investor.

Japanese investors tend to be cash-heavy, but fears surrounding inflation rates exceeding deposit rates (effectively negative real interest rates) and the subsequent impact on purchasing power could result in a shift to equities.

Hennecke notes:

“As the Bank of Japan’s interest rate remains far lower than inflation, we might see Japanese households choosing to redeploy their large deposit holdings into other assets, possibly including domestic equities. This may help protect against inflation.”

There are further reasons to be positive about Japan. The Nikkei 225 rose by 2.2% last week, largely influenced by the optimism that Japan will secure a beneficial trade deal with the US.

The European and UK response

After the US Court of International Trade’s ruling on US tariffs, the markets unsurprisingly had a very positive response. The MSCI Europe ex UK rose by 0.7% last week.

Unlike other countries that have been dominated by challenging inflation figures, this narrative has been less prevalent across the continent. Figures showed slower inflation across numerous key European nations, including France, Spain and Italy.

In the UK, the FTSE 100 and FTSE 250 increased by 0.6% and 1.5% respectively.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Past performance is not indicative of future performance.

Wealth Check

The seven-year rule explained

Passing on large sums to your loved ones while you’re still alive is both a practical and tax-smart option for inter-generational money flow. Often called a ‘living inheritance’, it can be a savvy choice for those wishing to give the next generation a head start.

But you must remember that if you die within seven years of making a substantial gift, the value of the gift will be counted as part of your estate (unless it’s covered by an inheritance tax (IHT) exemption). This money could be liable for IHT if there’s not a sufficient nil-rate band available on death which can protect the gift.

What you need to know:

Seven-year giving rule

The Autumn Budget announced that there will be changes to pensions and could see taxpayers having to pay an increased tax bill. This has meant that more people are looking to pass on their money or assets during their lifetime.

The seven-year rule means that you’ll need to live for seven years from the date of the gift; if not, the beneficiaries may have to return some of it to HMRC.

What’s considered a gift?

A gift is defined as anything you give away, according to HMRC, and can include:

Money
Property or land
Stocks and shares listed on the London Stock Exchange
Household and personal goods
Furniture
Jewellery
Antiques
Unlisted shares (if you’ve held them for less than two years before your death)

These gifts are called Potentially Exempt Transfers or PETs (unless they fall under an IHT exemption, such as the £3,000 annual exemption). Don’t worry, it’s not as complicated as it sounds! What it means is that your gift is ‘potentially exempt’ from IHT – it’s an outright gift exchanged between two people. IHT is only paid on a PET if you don’t live seven years from the date of the gift and it’s not covered by your available nil-rate band when you pass away.

Gifts worth over £3,000 can be considered a Chargeable Lifetime Transfer (CLT). A CLT is usually a gift made into a discretionary trust, where IHT is paid upfront – at 20% on any amount over the nil-rate band (currently £325,000 per person).

The ‘tapering off’ rule

Good news! The rate of IHT on gifts made above the available nil-rate band tapers off on a sliding scale, known as taper relief.

How does it work?

If you die 3 to 4 years after gifting, the rate of IHT on your gift reduces to 32%
If you die 4 to 5 years after gifting, the rate of IHT reduces to 24%
If you die 5 to 6 years after gifting, the rate of IHT reduces to 16%
If you die 6 to 7 years after gifting, the rate of IHT on your gift to 8%

If you live for seven years, your gift is IHT tax-free.

Can gifts be protected from IHT?

Yes, they can. You can protect any gift amount surpassing your available nil-rate band by taking out a ‘gift inter vivos policy’ – a form of life insurance which works to protect the recipient from IHT if you don’t live for seven years. These policies are created to mirror the tapering effect of your liability – e.g. if you die in the sixth year, it’ll pay out the exact amount to cover any tax that’s due.

You can also protect gifts that are made within the available nil-rate band by using a level term assurance policy. The term is arranged to match the period until gift falls outside of the estate – if the gift had just been made, this would be seven years.

What other gifts can be made that are tax-free?

Tax-exempt gifts of up to £3,000 every tax year can be made. You can split your annual allowance between numerous people, or you can give it all to one person. When you make your first gift, you can roll over the gifting allowance from the last year, meaning that you can give away £6,000. Gifts under £250 are tax-free and gifts to civil partners or spouses are automatically tax-exempt.

Top tip: Keep a written record of each and every gift you make – if you can’t prove when you made a gift, for example, you may end up paying some IHT regardless.

Planning ahead

If you make a gift in good time, you can make a big difference to your family’s financial well-being in the here and now – and in their future.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

In The Picture

All that glitters is gold…or is it? There’s been a large increase in gold prices while investors seek out a safe haven as the geopolitical noise continues. Sentiment hugely influences markets, but it shouldn’t be part of your investment decisions. These sharp rises in gold prices are reflective of the effect of short-term noise on markets and are no guarantee of future returns. Instead, portfolio resilience is more effective when opting for a long-term approach and building a diversified portfolio.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 02/06/2025

WeeklyWatch – UK inflation woes return

W.24822 Wellesley WeeklyWatch 13.05.25_1420 x 474

28^th May 2025

Stock Take

Inflation is on the rise again

Inflation makes an unwelcome return… In April, UK headline inflation increased to 3.5% – the highest level seen in over a year and which surpassed the expectations of both analysts and the Bank of England.

With higher inflation figures, costs of some goods and services will increase for consumers, which will come as disappointing news when it was widely believed that the economic tide was turning in their favour. Increased inflation figures aren’t usually welcomed by investors either, as they erode the real value of investment returns.

For bond investors, the picture is more mixed. A rise in inflation usually results in lower bond prices. Additionally, inflation reduces the purchasing power of the yield on bonds (the interest payments) which makes them less attractive. Consequently, yields on bonds usually go up to try and draw in investors.

The recent inflation figures have diluted hopes of further cuts to the Bank of England base rate. But the Director of Advice at St. James’s Place, Alexandra Loydon, says:

“The higher-than-expected rise in inflation has likely brought this optimism to a halt.”

The Head of Economic Research at St James’s Place, Hetal Mehta, agrees that interest rate cut prospects have ‘receded’. In addition to the recent inflation figures, she highlights the meeting of the Bank of England’s Monetary Policy Committee (MPC) that’s taking place in May, describing it as “hawkish”.

“While the rate cut announced by the MPC in May was expected, the fact that two members voted for no reduction at all was a surprise. In fact, Huw Pill, the BoE’s chief economist, has since been hawkish in his view and last week talked down the need for further aggressive interest rate cuts.”

Markets are now factoring in one to two further rate cuts by the BoE by the year’s end. Mehta identifies that earlier this month, before the MPC meeting, there had been an expectation for three rate cuts in the second half of 2025.

Many moving parts

Rising UK inflation has resulted in concerns in some quarters about an economic slowdown, whereas others say this is too soon to tell. There are many moving parts that have an impact on UK inflation which include the energy element as the energy cap was increased in April, which has fed the higher inflation. Additionally, firms have indicated that the higher costs of national insurance will be passed onto consumers.

Mehta says the largely anaemic UK growth will likely have the opposite effect on inflation figures longer-term.

“It may just be a case of sequencing and timing. When we look at what the market is expecting, UK inflation is expected to pick up a bit as we head into the next few months and then start falling slowly.

“In the near-term, the commodity price increases from a few months ago will continue to exert more upward pressure on inflation.”

Mehta adds that while UK inflation is moving upwards, to date it hasn’t been substantial and is unlikely to be.

“Inflation had fallen back significantly after the initial Russia/Ukraine shock but there are signs that it’s sticky and it’s unclear how quickly inflation can get back to the 2% target.

“It would take a huge, unpredictable shock to see double-digit inflation again.”

For a more positive outlook, the UK economy is resilient and can withstand a fair amount of volatility. The independent central bank is able to adjust interest rates when necessary to respond to the economic changes. And unlike the US commentaries, it’s not under huge government pressure to move fast when it comes to cutting interest rates.

The impact of inflation is felt in everybody’s lives, but the likelihood of returning to a higher inflationary environment that caused widespread issues a few years ago is highly unlikely as it stands.

Inflation elsewhere

Is current inflation an upward trend? Or simply swings and roundabouts? In 2024, we saw the largest global increase in inflation since 1996 (Statista) at 5.76%, even though across wealthier Western economies, inflation spiked at 11% in 2022.

Across the pond, the inflation outlook for consumers doesn’t look much better than in the UK, as Trump’s tariff policies are likely to increase inflation and future rate expectations. The University of Michigan recently published their figures which showed that consumers predict that inflation will rise by an annual rate of 7.3% over the next 12 months.

US–EU trade discussions

There was another injection of volatility to the markets last week following some quick-fire announcements from President Trump in regard to the potential EU tariffs. On Friday, he announced that from 1^st June, there will be a 50% tariff on EU imports – driving markets down across both continents.

Thankfully, the volatility was short-lived. Trump agreed to delay the introduction until 9^th July which will give the regions more time to negotiate a trade deal. Even though markets have responded well to the delay, the rapid and unpredictable changing events exemplify the mantra: ‘Time in the markets, not timing the markets.’

Wealth Check

Numerous factors can impact the growth or restriction of a small or medium-sized enterprise (SME), ranging from limited internal capabilities to external elements like supply and demand.

The Business Growth Advisor at Elephants Child, Kevin Petley, identifies four key areas for SMEs to strengthen their market position and increase growth that’s sustainable…

Market access – In order to gain a foothold in any market, you have to look beyond just offering a product or service. Essential to your success will be elements such as brand recognition, optimal distribution channels and compliance with regulatory requirements.
Competition – Businesses rarely have no competition. For SMEs, their competitors tend to be larger companies with more significant economies of scale. This is where your unique value needs to be leveraged in order to boost your growth.
Networking and partnerships – Many business owners often express little confidence in this avenue, saying that they don’t see the benefit or simply don’t have the time to put aside for networking. It can mean that you miss out on impactful insights and isolation can limit growth. Laying the groundwork now is important to reap future benefits.
Customer demand – When businesses have spent time analysing their potential for growth they’re in a better position to enter a market and experience growth. As part of the analysis, businesses should determine the size of opportunity, monitor competitor activity, decide on pricing and consider possible volatility including seasonal movement.

Going beyond enthusiasm

A successful business will have innovation, enthusiasm and commitment at its heart, and to accomplish this requires effective planning, researching and good financial management.

In order to grow, it’s essential that businesses take all available options into consideration, understand the levels of risk involved and put clear measurements in place in order to track progress. This allows business owners to quickly validate success or anticipate and identify where change is needed in a timely manner. This will put your business on a stronger growth trajectory.

We work in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected by St. James’s Place. The services provided by these specialists are separate and distinct to the services carried out by St. James’s Place and include advice on how to grow your business and prepare your business for sale. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

In The Picture

As soon as stocks start to fall, the temptation is usually to sell and sell fast!

But if economic history has taught us anything, it’s that when markets are down, panic selling does your long-term finances no good.

Not long ago, American indices rapidly fell following the Liberation Day tariff announcements. Giving into temptation and selling in the subsequent days would have locked in the losses.

Following this, the S&P 500 has recovered well and is now higher than it was pre-Liberation Day. By panic selling holdings before the recovery, the losses will have been locked in, and you’ll have missed out on the benefits that came from the recovery. Patience is a virtue.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Past performance is not indicative of future performance.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 27/05/2025

WeeklyWatch – Positive UK growth

W.24822 Wellesley WeeklyWatch 20.05.25_1420 x 474_HR

20^th May 2025

Stock Take

It was revealed last week there had been a strong growth spurt for the UK in the first quarter of 2025. It seems hard to reconcile this with the fact that just weeks ago there were concerns that the nation was headed towards a recession. While expectations seem to change almost every day, it can make people question whether it’s worth keeping an eye on the economic news…

The latest UK lowdown

Leading with the good news, in the three months leading up to March, the economy grew by 0.7%. This was up from 0.1% at the end of 2024, making the UK the fastest-growing G7 economy over that time period. The country’s growth outpaced the US, Canada, Germany and others. And it gets better: just last week the blue-chip FTSE 100 climbed 1.52% and the mid-cap FTSE 250 rose by 2.28%.

Yesterday, reports came in to say that the UK had signed a trade deal with the EU. Although details haven’t yet been confirmed, the government has said that economic growth should be further boosted.

However, in the week before, the Office for National Statistics revealed that job vacancies had fallen to 761,000 in April. This comes as less of a surprise due to the employer’s National Insurance increase and a rise in minimum wage taking effect in the same month.

US reveals mixed results

At the beginning of the month, there were growing concerns that the US was on the verge of entering a recession. The US economy had somewhat shrunk, mostly because of the ongoing disputes with China over tariffs. Additionally, the price of US government bonds (Treasuries) fell and the US dollar’s value was down.

Additionally, US credit rating agency Moody’s downgraded the US from an AAA rating to Aa1 last week, following concerns surrounding the government debt. As Moody’s was the last of a few credit rating agencies that still rated the US as AAA – S&P downgraded the US in 2011 and Fitch Ratings in 2023 – the downgrading is seen as mostly symbolic.

As mentioned above, economic behaviour repeatedly swings back and forth, and last week was no different. The de-escalation in the US–China trade war saw significant reductions in tariffs for both American and Chinese companies for a 90-day period, which consequently boosted global stock markets.

The Head of Economic Research at St. James’s Place, Hetal Mehta, says:

“We have seen financial conditions unwind because of the de-escalation. As they have loosened, some forecasters have brought their recession probabilities back down and revised up their growth forecasts.”

However, she also adds that this doesn’t mean that a continued positive direction is guaranteed; it will depend on what decisions are made next:

“We believe that from here, there’s still some two-sided risk. There might be further reductions in tariff rates, but it’s also possible that a proper deal between the US and China takes more than the 90 days to thrash out. So, you could actually see tariffs go up. And there could still be some more tariff volatility ahead either at the end of the 90-day period, or if negotiations aren’t going well.”

Expect the unexpected

Economic volatility. Political uncertainty. Tariff wars. Significant swings in the markets. It’s almost become the new norm! But if this is the new status quo, then how will our investment habits be impacted?

Although it’s worth keeping up to date with the events that can shape an investor’s financial situation, as demonstrated over recent months, sometimes choosing to do nothing can be a positive path to take during market volatility. It’s difficult to time the markets even when the environment is calmer, so an investment strategy that embraces diversification is essential, particularly when times are uncertain. As highlighted in previous editions by the Investment Research Director at St. James’s Place, Joe Wiggins, blocking out the noise rather than the markets is a wise approach:

“Periods of heightened uncertainty and market noise are incredibly challenging for long-term investors often not because of the issue that is the focus of attention but rather our behavioural response to it. When under stress, investors tend to make decisions that relieve short-term anxiety often at the expense of their long-run objectives.”

He adds that, at the risk of sounding like a broken record, taking a long-term approach when planning for the future has never been as valuable.

De-escalation remains at the forefront

Markets continue to respond well to the 90-day pause on sky-high tariffs coming into place between the US and China and continued to climb from their April lows.

Last week, the S&P 500 came close to where it started the year after rallying 5.3%. But with the dollar’s value being down, the market is still a wary area for sterling investors.

Asia

By the end of last week, the Shanghai Stock Exchange Composite was up 0.76% (1.66% in sterling terms). Hong Kong’s Hang Seng also saw a rise of 2.09% (2.15% in GBP).

There were also small gains in the Japanese market: the Nikkei 225 increased by 0.32% in sterling terms.

Europe

It was also a positive week for European markets as they also responded well to the de-escalation of tensions between the US and China. Across continental Europe, the MSCI ex UK also gained 1.53% in sterling terms.

Wealth Check

Money and mental health

There’s a close correlation between our finances and our mental health, as St James’s Place’s Financial Health Report highlights:¹

One in four people said they felt anxious about the year ahead
28% said their concern relates to rising energy bills
20% are worried they’re not saving enough for future financial security

Money is a key part of our day-to-day lives, so it’s understandable that it weighs heavily on our minds, whether we unintentionally spend more on a grocery shop, become anxious over an unexpected bill or feel alarm if we edge into the red at the month’s end. Putting things off, including checking your bank balance or avoiding bills, is common but can make the situation more difficult.

Tackling the issues head on is the best solution – creating a plan to get things back on track will help prevent the situation getting worse. Plus, being open about this with a family member or close friend can be extremely helpful.

It’s easy to feel overwhelmed when considering the bigger decisions, such as purchasing a house, changing jobs or preparing for retirement. Many of us acquire financial knowledge and habits as life goes on and often without formal training or education – learning as we go. As a result, we may feel unprepared to manage investments or effectively plan for retirement funds without putting in a lot of time and effort into conducting research. It may even be seen as boring or difficult to comprehend, which is where a financial adviser can be a real asset.

Financial advice supporting mental health

The Head of the St. James’s Place Charitable Foundation, Catherine Ind, identifies that one in four of us will experience a mental health disorder each year. She adds:

“Providing timely support is essential to reduce crisis situations and enable people to move forward in a more positive and hopeful way.”

No-one is born automatically knowing how to manage money. But acquiring more knowledge will help you feel calmer and more in control of your finances.

Financial advisers will help you make sense of your personal financial situation and guide you through practical steps to achieve your financial goals. They form lifelong relationships with clients and their families and are there to offer support with the big life decisions and challenging moments.

If you’re feeling any anxiety surrounding money, please get in touch with a Wellesley Financial Adviser today – we’d love to help!

Source:

¹SJP Financial Health Report 2025 conducted by Opinium who surveyed 6,000 UK adults nationwide in two polls between 23^rd December 2024 and 17^th February 2025. Quotas and post-weighting were applied to the sample to make the dataset representative of the UK adult population.

Previous years’ research was also conducted by Opinium – among 6,000 UK adults between 16^th and 25^th October 2023.

In The Picture

The Bank of England makes another rate cut – its fourth in the space of a year, with signs of cooling inflation and increased concerns surrounding weak economic growth. This is what the cut potentially means for investors, savers and homeowners:

For the stock market, possibly good news! Cheaper borrowing allows companies to invest and grow more easily.
For savings, it’s not so great. Lower rates mean less interest paid out by the banks. This could be a good time to check what your cash is earning.
Looking for a mortgage? Two-year fixed rates are at their lowest since 2022 (Moneyfacts, 12^th May 2025). Now may be a good time to start your search!

What about the wider world? Mehta explains that it moves at different speeds:

“The European Central Bank has been the most aggressive of the major central banks in cutting rates this year, reflecting deeper concerns about growth in the euro area as well as more progress on bringing inflation down. The Bank of England is following suit, but more cautiously. Meanwhile, the US Federal Reserve is holding steady, awaiting clearer economic signals given all the tariff uncertainty.

“We may see this divergence shape global markets in the months ahead, but we think it’s unlikely any of the central banks will take rates as low as they did after the Global Financial Crisis.”

Your home may be repossessed if you do not keep up repayments on your mortgage.

Investing does not provide the security of capital associated with a deposit account with a bank or building society.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 19/05/2025

WeeklyWatch – Caught a break? Positivity for UK equities

W.24822 Wellesley WeeklyWatch 13.05.25_1420 x 474_HR

13^th May 2025

Stock Take

The nation celebrates

There’s been a lot of doom and gloom surrounding the UK and its companies as of late, but is there a plot twist in this narrative?

The Labour government saw some welcome headlines last week, when trade deals were struck with both India and the US. What’s more, the tariffs introduced in March by President Trump have now been removed completely on UK steel and aluminium exports. UK car export tariffs have also been reduced (up to a limit of 100,000 vehicles) from 27.5% to 10% with immediate effect. The UK government says this deal will save up to 150,000 jobs and also claims that the India trade deal will boost the UK economy by around £5 billion by 2040.

Additionally, the Bank of England announced a 0.25% reduction to the Base Rate, which is great news for borrowers. It’s hoped that this will increase consumer confidence and restore much-needed momentum to the UK economy.

On the back of this good news, UK equities rose towards the end of the week. This positive sentiment suggests that investors might be hoping the US–UK trade deal is a firm step towards more concessions and lighter tariffs.

Is the UK back on the hotlist?

At the start of May, the FTSE 100 enjoyed 15 consecutive days of gains, its longest ‘winning’ streak in five years. And it gets better: there are further indications to show that investors are feeling more bullish about the UK.

For several years, UK equities have been considered undervalued. This has particularly been the case when compared to US equities, especially technology stocks such as the Magnificent 7, which includes the giants Nvidia, Amazon and Apple.

But in the first quarter of the year, these big companies in the US tech sector have underperformed, likely exacerbated by the volatility caused by the tariffs.

The Investment Research Director at St James’s Place, Joe Wiggins, says:

“UK equities have been trading at historically depressed relative valuations but there is now some indication of rising corporate activity.

“Although it has been difficult investing in UK equity markets in recent times – particularly relative to the US – low valuations are often a strong indicator of higher returns in the future.”

Even more cause for optimism?

The optimism trend continued with the government-backed plans to ensure more UK investment by pension funds. In 2023, then-Chancellor Jeremy Hunt announced that 11 pension providers had agreed to allocate at least 5% of their assets to unlisted UK equities by 2030. But a ‘landmark’ agreement that would have seen this increased to 10% – this was due to be announced last week – has been postponed. While it still may be announced over the next few weeks, it’s not certain.

The Head of Economic Research at St James’s Place, Hetal Mehta, welcomed the more positive economic news but warns against any widespread expectation of an economic miracle or more significant falls in interest rates. She says:

“While a base rate cut is welcome, the Bank of England (BoE) continues to be hesitant about accelerating the pace of easing, given its persistent concerns about inflation. Growth and inflation forecasts were both revised down by the BoE, and wage growth is expected to moderate, so quarterly cuts are most likely.

“While the UK–US trade deal is a start – and good news for car and steel sectors – there are still quite limited details, with the overall 10% baseline tariff in place leaving tariffs higher than before the US’ so-called ‘Liberation Day’. Negotiations are set to continue but scope and timing is not clear, and the overall impact is limited so far.”

Stepping down the tariffs

News of more progress between China and the US regarding tariffs has been welcomed. Chinese imports have been temporarily reduced to 30% (from 145%) for 90 days, and China will cut tariffs on US goods from 125% to 10%, with further trade talks still to come.

US equities remain expensive in comparison to other developed equity markets. But it’s noteworthy that a large amount of US earnings growth is down to the Magnificent 7.

Positive outlook for Asia

Following the progressive outcomes of the China–US trade talks, there was a lift in Asian stock markets. Plus, the decision by China’s central bank to cut interest rates from 1.5% to 1.4% last week also helped provide a boost. The decision was made with the purpose of stimulating lending and investment and decreasing the negative impact of the ongoing US tariff war. The Shanghai Composite Index ended the week 1.92% higher in local currency.

Additionally, Japan’s Nikkei 225 ended the week 1.83% higher in local currency after the finance minister had to backtrack from the comments made concerning the country’s $1 trillion-plus of US treasuries potentially being used as a bargaining ploy in trade talks with the US.

Benefits felt and reaped across Europe

Further stock market boosts were recorded across Europe following the temporary slash in tariffs between the US and China. On Monday morning, the Stoxx Europe 600 was up 1% and the main stock market indexes in France and Germany rose.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Wealth Check

Taking time off without taking a hit: smart summer planning for small business owners

As a small business owner, one of the biggest challenges you’ll face is deciding when to take time off. With summer on the way, it’s important that you set aside time to take a break and create the best conditions to ensure that everyone is able to enjoy time off and come back to work feeling refreshed.

HR Consultant at business advisory firm Elephants Child Chloe Carey shares her 10 tips to ensure that your business continues to run smoothly over the summer period.

1. Actively encourage booking time off – As the business owner, you’re required to keep your company running at optimal levels. And you want your workforce to be rested, happy and productive. Make sure you remind them to effectively plan their leave and not leave it all until the end of the year.

2. Make sure that absence policies are clear – Whether it’s extreme weather or travel delays which can lead to unauthorised absences, you need to ensure that your policies are clearly communicated to your workforce.

3. Approach holiday clashes fairly – If several people wish to take time off at the same time, a consistent and fair process must be in place to deal with this.

4. Review your summer dress code – Comfort makes for a happier workforce. In the warmer months, it’s recommended that you relax your dress code.

5. Host a summer team event – Build engagement and bring your team together by organising something fun for you all to get involved with. Consider sharing your photos and comments on social media to give your business a boost at the same time.

6. Offer flexible summer working – When adjusting schedules, consider early starts and finishes or building up extra hours to allow early finishes on Fridays.

7. Discourage work being done during annual leave – Remind both yourself and your colleagues to leave a clear handover so that they switch off properly before going away.

8. Switch off notifications – Encourage people to avoid checking work emails and messaging apps during their time off – lead by example.

9. Set a professional out-of-office message – Agree on a standard format that reflects your business’s tone of voice.

10. Take a break yourself – Stress and burnout are no use to your loved ones or team, so take a well-deserved rest!

Putting preparations in place for summer, and as your business grows, ensures that the right policies and processes are in place to ensure success in the years to come. By implementing good delegation habits and being able to step away every now and then will benefit your business morale hugely. Longer-term, if you wish to exit the business, ensuring you leave behind a company that runs smoothly without you is more attractive to buyers.

Fostering an environment of trust and flexibility creates a culture that values hard work and the importance of rest.

Don’t let it all build up

Ready to embrace a balanced work life? Contact us to find out more about how we can help you empower your business, prepare for the summer season and create and promote a healthy work environment.

We work in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected by St. James’s Place. The services provided by these specialists are separate and distinct to the services carried out by St. James’s Place and include advice on how to grow your business and prepare your business for sale. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

In The Picture

More charts, similar message, but still important!

Last week, we took a zoomed-out perspective of the FTSE 100. This week, we’re widening the lens to address global equities over the past 20 years.

The navy bars show the largest market drops within a given year – the worst-moment headlines, most notably 2008 and 2020!

Spot the turquoise line? That’s the long-term trend emerging upwards.

Expect setbacks, be patient with progress and remember that perspective goes a long way.

Past performance is not indicative of future performance. It is not possible to invest directly into the MSCI World Index. The figures shown do not take into account any relevant tax or investment wrapper charges.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 12/05/2025

WeeklyWatch – Is the US on the brink of a recession?

W.24822 Wellesley WeeklyWatch 07.05.25_1420 x 474_HR

7^th May 2025

Stock Take

A strike of US economic woe

Is there a storm brewing in the US economy? Some commentators are voicing concerns that a recession is closer than previously thought – but is the panic valid?

Between January and March – the first full quarter of Donald Trump’s presidency – the US economy shrank by 0.3% (on an annualised basis). Last week’s numbers reveal that it’s the first decline since 2022. While this was not dissimilar to analysts’ expectations of a 0.2% fall, it’s a significant slowdown when compared to the 2.4% growth in the last quarter of 2024.

Additionally, markets have been forced to adapt and change as tariff uncertainty continues to cause high volatility. Last week, WeeklyWatch focused on the impact on the US treasuries, where prices have fallen and yields have risen, as the perceived risk for investors increased.

The dollar’s value has also suffered a fall as a result of investors turning away from US assets. The dollar index compares the relative value of the US dollar to a basket of other countries’ currencies, and it suffered its worst two-month performance since June 2002. For a second consecutive month, the US dollar weakened against every other G10 currency.

Trade talk

As the end of the week drew to a close, global equity markets, which included the main US markets, were able to rally as there were indications of China and the US restarting negotiations on trade and tariffs.

But despite these seemingly positive signs, it’s not certain whether there will be a resolution when it comes to the core issues. Some of these issues include the US’s trade deficit with China and provocative trade practices like suspected intellectual property theft and significant subsidies provided by the Chinese government to their national companies.

The Head of Economic Research at St James’s Place, Hetal Mehta, doesn’t think investors should give too much weight to the US’s most recent economic growth figures despite the ‘noise’ that surrounds them. She says:

“We continue to believe there is a roughly 35% probability of a US recession and we haven’t changed that in light of the recent economic data. Too much is being made of the negative surprise on US growth because it was not that much of a miss.”

She highlights the fact that this US data is annualised, meaning figures are scaled up for a full year. The significant move in US imports was also hugely influential on the numbers; imports soared by more than 40% which was down to people trying to get ahead of the tariff changes that are due to come into effect on 9^th July.

Whether the current pause is extended or not, what happens with the tariffs will dictate how much more volatility the markets will face and whether a recession occurs sooner rather than later.

Mehta also says:

“If the tariffs do take effect in full then it’s likely to have quite a notable impact. It could even move the US to a stagflationary environment, where inflation is high, and growth is much weaker. However, given the uncertainty, we have a level of humility when it comes to predicting these things.”

A decline in consumer confidence will also likely play an influential role in determining the economic outcome. A driving force for economic growth for some time, US consumers now look like they’re being far more cautious when it comes to spending, with big companies like Starbucks and Chipotle seeing sales fall.

Furthermore, shipping from China into the US has slowed dramatically as we draw closer to the planned implementation of Trump’s tariffs. There have even been warnings of possible empty shelves in US shops in just a matter of weeks.

The savings ‘buffer’ that was built up by consumers during the pandemic period has been chipped away as time’s gone on. This can also impact consumer spending, especially within a volatile market.

But there are still some silver linings to the storm clouds! An important reason why a recession may not be an obvious outcome is the fact that the US economy starts from a strong footing. Up until the end of 2024, growth was strong – around 3% a year – which could provide a protective cushion before the technical definition of recession is met (two consecutive months of negative economic growth). But, as Mehta highlights:

“A dramatic slowdown can feel like a recession if you have had strong growth for some time.”

Might there be a contagion impact?

In part, yes. If there’s a deterioration in the world’s largest economy, the likelihood of other global economies being impacted is high, which is why investors pay so much attention to US economic data.

For the UK, the selling-off of US treasuries and confidence loss in bonds as a safe haven could impact gilts (UK government bonds). UK economic growth has also been slow for several years and doesn’t have as big a buffer as the US, meaning that it wouldn’t take as much of a shock to place the UK into recession.

In recent years, the euro area has also had slow economic growth, impacted by Covid, falling exports and increased imports, particularly energy imports where there’s been heavy reliance on countries like Russia for supplies.

Having said this, the fiscal changes that are happening Germany – where they’ve pledged to spend €500 billion on infrastructure investment – will go some way to supporting Europe but will also take time to filter through to the economy.

As far-reaching as Asia?

No nation is exempt from the fallout of the US’s deterioration. Due to the wide-reaching nature of the tariffs, most nations are susceptible, but this varies in extent.

China is the most obvious nation that will be affected, due to the scale of tariffs that have been proposed. Chinese consumer demand has declined over the last year or so – retail sales have fallen. But unlike some nations, China has more fiscal firepower to push back on the tariffs and support its own economy to decrease their dependency on exports.

Time for a moment of calm?

Volatility has defined the markets over the last few weeks, but according to Mehta, April has been unusually volatile for both markets and economists; bond and stock markets soared to new highs and dropped to new lows before returning to more normal levels. Predictions concerning a US recession have gone down many different avenues.

Mehta says:

“We have seen a lot of volatility in the way that economists are assessing the state of the economy. I can’t remember a time in recent history when in the space of 48 hours so many economists changed their view.

“Usually economists are slower to move, they wait for the data and for a critical threshold to be reached but recently it has been very noisy. Taking the long-term view and not reacting quickly always has to be the better option.”

Wealth Check

The retirement roadmap – what to save in your 20s, 30s, 40s and beyond

Two common questions that arise around the topic of retirement:

How much money will I need?
Have I left it too late?

Important questions, and ones that most of us don’t carefully consider until we reach middle age.

Good news! By spreading your savings over decades – and starting early – you’re far more likely to secure a great retirement.

Many of us believe we’re too old or too young to begin saving for retirement. But a comfortable retirement needs long-term practical planning. Let’s break down the retirement saving process, decade by decade.

“How much money will I need?”

A pension pot worth about 10 times your annual salary by the time you retire is well advised. To help you define this figure, a financial adviser is extremely useful, plus they can help you create a personalised plan for your long-term saving.

These plans incorporate everything you want to have in your retirement and will consider inflation and possible medical or social care costs in the future.

Starting young – saving in your 20s

Aim to have saved the equivalent of a year’s salary by the time you turn 30 – this can be in personal savings or in your workplace pension.

Basic-rate taxpayers receive an extra £20 for every £100 they save into their pension! By starting early, earning power can literally translate into getting money in the bank, and there are many years ahead for you to benefit from compounding.

Saving in your 30s

You should be aiming to have retirement savings equal to three times your annual salary.

Starting small is fine if needed. You can gradually build on your retirement savings as time goes on. Affordable means sustainable. Making an increase in your contribution year on year in line with inflation or a wage rise is a tax-smart plan also.

Saving in your 40s

Aiming to have savings that total six times your annual salary by the time you turn 50. This is the time where you usually see earnings peak – it’s the decade to optimise!

Saving in your 50s

By 60, you should aim to have saved eight to 10 times your salary and this is when you should consider putting specific plans for your retirement income in place.

Is 60 too late to start saving?

Definitely not! But we do recommend that you start earlier, and seeking out the help of a financial adviser can help you get started.

50s to 60s – getting prepped and ready for retirement

It’s only half the story to build your assets. Having a financial plan in place to help you get ahead is key. It’s never too early to start thinking about how you want to utilise the income you’ve saved in the most sustainable, tax-efficient way.

Get in touch with one of our advisers today and achieve your retirement dreams.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are dependent on individual circumstances.

In The Picture

One month, two sides, same index – April has been quite the rollercoaster!

The Times, 4^th April 2025 – “FTSE suffers biggest drop since pandemic amid tariff turmoil.”

The Standard, 28^th April 2025 – “FTSE 100 matches longest run of consecutive gains in eight years.”

This serves as a good reminder that:

Framing matters. When in isolation, each headline feels like a turning point. But step back – as the chart reveals – and April’s highs and lows hardly register for long-term investors.
Timing shapes perception. Whatever time we check the news, we could see panic or positivity, but we rarely see the full picture.
Power is perspective. Without dips, we probably wouldn’t see the rally. Volatility often prepares the way for recovery; it’s just the nature of markets!

These headlines won’t disappear, and this won’t be the last drop (or rally) we’ll see happen this year.

So, what’s the way forward? Keeping focused on what matters is key: long-term goals.

Please note it is not possible to invest directly into the FTSE and the figures shown do not take into account any charges applicable to the appropriate investment wrapper or any relevant tax charges.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 06/05/2025

WeeklyWatch – The US–China trade war escalates

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29^th April 2025

Stock Take

Stock Take usually provides a comprehensive overview and analysis of equity markets, but with the backdrop of escalations between the US and China, this week we’re exploring what impact the ongoing tariff war between the two nations could have on bond markets and investors.

US bond market faces turbulence

Political tensions are mounting and the trade war between China and the US is deepening. As a result, fluctuations in the bond market have investors feeling concerned.

Bonds are debt securities issued by governments and companies to raise money. Bondholders are effectively providing a loan to the government or company issuing a bond, on which they earn interest, known as the yield.

US treasuries (US government bonds) have typically been viewed as a safe investment. However, with all the volatility that’s been playing out over the last few weeks – the threat of huge tariffs on all Chinese goods entering the US and consequential reciprocation on American goods exported to China – investors are now left scratching their heads when it comes to predicting what’s to come next, both in the short and longer term.

Several investors have opted to vote with their feet, reducing their exposure to US dollar assets, treasuries and equities – resulting in sharp falls in these markets and the value of the dollar. Many of these losses have been recovered by equity markets, but there are major concerns that foreign investors are losing confidence in the stability of the US economy, casting a shadow over the bond market.

The International Monetary Fund (IMF), an organisation made up of 190 countries, monitors global economic stability. Last week, they opted to downgrade their forecast for global economic growth in 2025 to 2.8% – down from 3.3% in January. They also reduced their forecast growth in the US in 2025 by 0.9 percentage points to 1.8%.

All the market turmoil has resulted in a fall in US treasury prices and, therefore, yields have risen. As of Friday 25^th April, the yield on the 2-year US treasury was 3.79%, while 10-year US treasuries stood at 4.28%, although the latter was down from a peak of 4.79% in mid-January.

The reputation of US treasuries as a safe haven is due to the low chance of the government defaulting on its debt. Although highly unlikely, it has happened in the past – the last time being in April–May 1979 when the then US government was unable to repay bondholders for a short period. With the US looking increasingly uncertain now, and the possibility of a recession, the higher yields are indicative of higher risks for investors (even if yields are meant to decline in a recession). However, this may appeal to those prepared to take on more risk for potentially higher rewards.

Are China playing a risky game?

After Japan, China is the next largest holder of US treasuries. If the nation decides to retaliate against Trump’s threatened tariffs by no longer buying bonds – or even trying to sell US bonds – it could have economic repercussions for both nations, as well as on a wider global scale.

Having said this, a sell-off from US treasuries by China would also push up their currency value, making Chinese exports more expensive and further heightening already volatile tensions with the US.

In the latter stages of the previous week, there were indications that President Trump could be reconsidering the size of the levies imposed on China. It has been reported that tariffs on Chinese goods could be around 50% to 65%, but there’s been no confirmation of this.

The Head of Economic Research at St. James’s Place, Hetal Mehta, says:

“From the Chinese government’s perspective, you have to ask what would they gain from selling US treasuries? It could be used as a bargaining chip for a better trade deal.

“Economically, this is an inflation shock for the US if we see tariffs pick up materially and that’s bad for growth. It’s the combination of higher inflation and weaker growth that makes it difficult for the central banks to know how to deal with it.”

Fixed Income Strategist at St. James’s Place Greg Venizelos draws attention to a reduction in appeal for US treasuries. He states:

“From recent auctions of treasury debt, it seems that the non-domestic appetite has decreased and the domestic audience including banks had to increase to take up the slack. And, as assets such as equities have come off in the US, the dollar has also weakened, which is rare as usually when there is a global risk-off there is a flight to the dollar.”

He also highlights that if US growth decreases, tax receipts are also likely to decrease and with planned tax cuts by the US administration coming up, the fiscal risks increase for holders of US treasuries.

“You have seen this reflected in the risk premium that investors should expect, to compensate for this added uncertainty.”

Can Europe reap any benefits from the tensions?

As it stands, the IMF has predicted that growth in the eurozone will slow to 0.8% in 2025, down 0.2%. But the current volatility of the US treasury market has resulted in some positive movements for European bonds.

Venizelos continues, saying:

“Bonds still have a role to play, and we have seen over the past few weeks occasions where yields were rising in the US and retreating in Europe, so there is that divergence. The main issue for investors is market size. The European bond markets are still quite small relative to the US.”

The US treasury index benchmark is close to $17 trillion in face value and the German bond market is around a tenth of this. However, the Italian bond market is the fifth biggest in the world because of the large amount of debt relative to the size of its economy.

What’s the economic outlook across Asia?

It’s an IMF fiscal forecast downgrade for Asia too. Predictions for Japan’s economic growth was reduced to 0.6% from January’s 1.1%.

There’s expected to be a 4% growth for China in 2025, but this is still down by around 0.5% from the forecast in January. Much will depend on the size of the tariffs imposed by the US if/when they arrive, and China’s government has brought in stronger fiscal measures in order to weather the impact.

Are investment opportunities still possible?

Despite the volatility, there are still plenty of opportunities for investors. Mehta goes on to say:

“We shouldn’t be afraid of volatility, it can bring opportunities. However, in order to have resilience you need to be well diversified and this is the focus.”

The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is dependent on individual circumstances.

Wealth Check

Securing the lifestyle you want – now and in the future

A successful career often equates to a high standard of living during your working life – but is it possible to sustain this lifestyle when you retire?

Thanks to continuous discoveries and advancements in medicine, healthcare and better living conditions, life expectancy is increasing. Around one in three children born in the UK today are expected to live to 100.¹

While this is something to be celebrated, have you thought about how you will financially support yourself if you live to 100? Savings may need to stretch over 40 years or more after you stop working, particularly if you wish to maintain the lifestyle you’re accustomed to.

Although no one can know what the future entails, it’s still important to plan for a long retirement that includes considerations for possible care and leaving money to your children or grandchildren.

Using working life to save

Making provisions during your working life is essential in funding your later retirement. It may be tempting just to focus on the present and short term, but this is where a financial adviser can really help.

A financial adviser will help you tailor a comprehensive personalised savings plan that considers how much you earn and how much you can afford to save. The sooner you start, the more time you give your money to grow.

Not only that, but your adviser will help assess your risk profile, giving your invested money the best chance of long-term growth. We’ll balance risk depending on your age and retirement goals.

It’s advisable for everyone to put as much money as possible into a pension. Remember, if you’re employed, your employer will pay in too. Even if you set aside just 4% to 5% of earnings, you can significantly build this up over time through compound growth.

One of the biggest benefits of pensions is the tax relief. Another form of tax-efficient growth can be found in ISAs; our financial advisers will discuss the best options for your situation.

An ideal retirement

One of the most common questions asked once you’ve retired is: “How do I make my money last?”

This will be dependent on the type of pension you have. Defined benefit pensions guarantee an income for life, but most people today will have defined contribution pensions, where income depends on investment performance.

The timing of your pension access is crucial, where you can decide to take your 25% tax-free cash as a lump sum or gradually.

Securing a financially beneficial future

Advisers use cash-flow modelling to plan ahead – we consider inflation and help you work out when and how to utilise income or gift money to family tax-efficiently. This is important in covering potential unforeseen costs like care or nursing fees.

There’s no straightforward solution on how to fund a long retirement. Each individual has different needs, savings and family circumstances to consider. Financial advisers can add immense value in these areas, helping you navigate the future and aiming to ensure that you can cover all you need to maintain your lifestyle and living standards.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Source:

¹Office for National Statistics, ‘Past and projected period and cohort life tables: 2020 based, UK, 1981 to 2070’, January 2022

In The Picture

Last week, the US Dollar Index fell to a three-year low. Rising political tensions between the White House and the Federal Reserve are partially responsible for this. Markets had a quick reaction – gold (a traditional safe haven for investors) briefly surged to another new high.

However, this shift was reversed following Trump’s reassurance to markets that he didn’t plan to remove Fed Chair Jerome Powell, subsequently easing concerns surrounding central bank independence. However, the dollar remains down over 8% from the start of the year as concerns surrounding tariffs continue to heavily impact markets.

Mehta explains:

“Movements in the dollar are often about more than economic data – they reflect how investors feel about stability, leadership and risk. Last week’s fluctuations show how quickly confidence can be shaken or restored by political messaging.

“As the world’s reserve currency, the dollar underpins global trade, investment and borrowing. So when its value shifts, it doesn’t just affect the US, it has knock-on effects across international markets.

“Understanding these dynamics helps investors make sense of what can sometimes feel like erratic market behaviour – and reminds us that markets respond not just to numbers, but to the stories behind them too.”

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 28/04/2025

WeeklyWatch – Global markets struggle to find direction

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23^rd April 2025

Stock Take

There was a lot of volatility across the markets last week. The culprits: further escalations in trade tensions, central bank policy moves and renewed concern for investors as they look at the global economy.

Increased pressure for US markets

Political tensions seeped into monetary policy discussions, which caused US equities to struggle. Federal Reserve Chair Jerome Powell faced more public criticism from President Trump who called him a “major loser” as he continued to pressure him into making more cuts to interest rates to give the economy an immediate boost and offset the impact of tariffs on Chinese goods.

On his Truth Social platform, Trump described Powell as “Mr Too Late” in responding to the risks that the US economy currently faces. This also gave rise to new speculation over the Fed’s independence. The President can’t dismiss the Fed Chair, but Trump’s strong language has certainly added to investors’ unease.

Over the week, the S&P 500 fell by 1.5%, the Dow Jones Industrial Average was down 2.7% and the Nasdaq Composite lost 2.6%. Many other sectors also finished the week lower, with healthcare one of the hardest-hit areas. There was a 22% single-day fall for UnitedHealth Group following disappointing earnings – the group’s worst performance since 1998.

Adding to the bad news, the US dollar weakened to a three-year low against major currencies. Investors sought safety, leading to gold prices hitting a record $3,450 per ounce.

And to round it off, economic data revealed that while retail sales remained steadfast, inflation data continued to stay high – this leaves the Fed in a challenging place before its next meeting.

Europe paves its own way

The European Central Bank (ECB) decided to cut their deposit rate by 0.25% to 2.25% after concerns regarding economic growth. As inflation moderated, the policymakers made the decisive move to keep momentum up in the eurozone economy.

ECB President Christine Lagarde revealed next to nothing about the bank’s next plan, only insisting that policymakers would make choices meeting-by-meeting. Some of Lagarde’s colleagues spoke out, saying that the bar for future cuts is low. The new rate cuts provided a much-needed boost, and European markets recovered some ground – the Euro Stoxx 50 finished the week 3.09% higher, overcoming a three-week losing streak.

While Europe celebrated positive market reaction, caution lingers. Despite the upswing, growth remains fragile and vulnerable to further external risks, such as weaker demand from China – this could deepen slowdown, causing investors to keep a close eye on the situation.

Mixed market signals from Asia

Reports released from China fractionally beat expectations as they showed first-quarter GDP growth of 5.4% year-on-year, with March data revealing that retail sales and industrial output were strong. But the MSCI China Index dropped by 1.8% over the course of the week; this, coupled with continued concerns around US–China trade tensions, fuelled investor worry further.

Heading east, Japan’s Nikkei 225 reported modest gains, celebrating its best week in three months. Investors also became more hopeful that Trump will broker trade deals with some of the region’s top trading partners, which includes Japan.

The world looks ahead

Market behaviour and developments across the week reflect the forces that are shaping current markets: geopolitical uncertainty, inflation pressures and changes in monetary policy. Investors will be monitoring US–China trade negotiations carefully.

Central banks are predicted to be a key focus during this time. Europe has opted for action to support growth while the Federal Reserve tries to balance matters under increased political pressure.

During these times, it’s important to remember the core principles of investing. Chief Investment Officer at St. James’s Place, Justin Onuekwusi, says:

“Emotional decisions can lead to poor investment outcomes. Investors typically have long-term plans to meet their overall goals. Sticking to those plans in periods of volatility is incredibly important.”

Wealth Check

Building your business takes time and hard work, but there comes a time when you may step back and consider selling and realising the value that you’ve created. But sadly, for many businesses that go to market, a successful exit isn’t achieved.

Chief Revenue Officer at Elephants Child, Crawfurd Walker, has worked to assist many businesses get ready for sale. Here, he shares his top advice on how owners can best prepare.

When preparing a company for sale, it’s essential to maximise value, ensure a smooth transition and minimise risks. If you don’t fully prepare, you could find significant gaps between your expectations and a buyer’s perspective on fair markets prices, and could run the risk of losing buyers.

Preparing a business for sale can take years and depends on several factors so it’s important to work with a team of financial advisers who will help you prepare and guide you through the sales process.

The importance of the preparation process:

Business valuation maximised

Potential buyers will pay close attention to financials. By preparing your business properly you have time to improve profitability, sort out inefficiencies and boost value.

Once you’ve resolved outstanding debts and clarified asset ownership, your business will be more attractive as potential financial risks will have been taken away.

Attracting potential buyers

Make sure that your business documents are well-organised, processes are clear and your branding is strong. Buyers also seek certainty, so by having your business well-prepared, you present fewer risks and are far more likely to attract serious buyers, who’ll also be willing to pay a premium.

Do your due diligence

Unresolved issues or missing information can disrupt or even collapse sales. By having the correct documents, records and contracts ready, you can help avoid delays. Additionally, having well-organised records shows transparency, making it easier for buyers to build confidence in your company, plus you’ll increase the likelihood of a smooth and successful transition.

Smooth business continuity during transition

By having guides on operations, customer relationships and staff relationships, you’ll enable a smooth handover to the new company owners. As well as preparing your business, you must also take time to prepare your key employees, making sure that they remain motivated; retaining essential staff preserves important business knowledge and value.

Make the most of tax and legal strategies

Reduce your tax liability by structuring the sale strategically so you can minimise tax consequences and maximise financial outcomes. By preparing for this well in advance, you allow yourself time to seek out expert advice to help you along the way.

Furthermore, making sure that you’re addressing all legal compliance criteria (legal and regulatory issues) will reduce the risk of issues arising during the sale.

Getting the most out of your personal and business goals

Clarifying your personal objectives during your preparation will help you understand exactly what you want from the sale of your business – from financial security to preserving company legacy or a combination of goals.

Achieving the legacy that you want for your business long after its sale is all down to your preparation, which will ensure that it continues under the new ownership.

Are you considering selling your business?

Making sure your business is well-prepared for sale is a way of investing in its future value. By seeking out the right financial advice, you can boost your chances of a sale, achieve a higher price, get a better deal structure and make the transition as smooth as possible, in order to protect your interests and those of the business.

More opportunities with financial advice

By enlisting the help of a financial adviser, you can access the kind of personalised support that will prepare your business for an exit that’s smooth and successful. Get in touch with Wellesley today to get started on your business transition journey.

St. James’s Place works in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected. The services provided by these specialists are separate and distinct from those carried out by St. James’s Place and include advice on how to grow and prepare your business for sale. Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 22/04/2025

WeeklyWatch – Market behaviour reflects tariff disruption

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15^th April 2025

Stock Take

‘Liberation Day’ and the ongoing repercussions of the US tariffs continued to heavily impact the markets last week. And tariff rumours, pauses and changes didn’t help matters, forcing market behaviour to change on an almost daily basis.

Hitting pause

One such rumour that began to circulate last Monday was that tariffs would be paused for 90 days, but this was quickly quashed by the US administration. By Wednesday, it emerged that President Trump would reduce higher tariffs on a number of countries down to 10% for 90 days, with immediate effect.

With this small window of time in place, it’s likely that many nations will try to negotiate with the US to avoid their initial higher tariff level. But with this pause comes even more uncertainty, and it remains relatively unknown as to what compromises and offers nations will have to put forward in order to satisfy Trump.

Markets try to adapt

The tariff pause did help lift US equities – the S&P 500 and NASDAQ ended Friday noticeably higher than when they started on Monday. But although this sounds like positive news, both indices are still below pre-Liberation Day levels.

One of the big exceptions to the pause in the tariffs was China. Towards the end of the week, the two largest economies gradually increased their protectionist agendas against each other. Tariffs between China and the US are now incredibly high, even though trade volume between them decreased significantly after Trump was elected for his first term as President back in 2016.

Outside of tariff developments

In other economic news, US CPI inflation fell to 2.4% in March – down from 2.8% in February and below the 2.5% that had been anticipated. Included in this data would have been some price changes from the initial US tariff moves, like the 25% import tax on steel and aluminium, but it won’t include any of the more recent and further-reaching tariffs.

This places the Federal Reserve in a tricky situation. As inflation remains relatively low, Trump has encouraged the Fed to reduce interest rates in order to help the economy. However, the ongoing tariff changes and anticipation of higher prices could make cutting interest rates a risky option.

Signs of growth for the UK?

Chancellor Rachel Reeves revealed on Friday that GDP grew more than expected. The UK economy expanded by 0.5% in February, according to the Office for National Statistics (ONS). The news came at the same time that the ONS revised up their January figures from a 0.1% fall to a flat 0.0%.

Monthly GDP figures can be volatile and are often subject to revision, however. And some of the most recent growth may also have been boosted by exporters rushing to beat the US tariffs coming into place.

Despite the positive GDP news, the FTSE 100 index ended the week down 1.13%. There was a spike when Trump announced the temporary tariff reduction, even though the UK are facing a 10% tariff regardless.

Activity across the European continent

The MSCI Europe ex UK Index finished the week up. Shares were boosted after the temporary tariff changes took place on Wednesday.

As this week goes on, the European Central Bank is expected to cut their interest rates as inflation seems to be under a bit more control and growth is threatened by US tariff policy.

Wealth Check

Finish the sentence – “I’ve always wanted to…?”

When you’ve got your mind fully focused on your working life, retirement can seem like a distant dream and difficult to picture…

For the present and the future

When you start thinking about putting money aside, your bucket list should take a valued position in your financial plans – whether it’s taking up new hobbies, visiting friends near and far, going on that big trip or retreating to the countryside.

At the same time, day-to-day lifestyle also needs to be factored into your plans, such as increased healthcare costs as you age. This can feel like a big juggling act, which is why seeking out financial advice can help turn a ‘wish list’ into a realistic, practical and sustainable plan for your retirement.

Putting the retirement plan into action

A good place to start when planning for your retirement is to set aside a regular amount of money in an easily accessible account or Cash ISA for emergencies, acting as an important safety net. Aiming to have enough to cover your outgoings for six months is an advisable practice. You can also set aside further regular monthly amounts into other tax-efficient ISAs or your pension to boost your medium- and long-term financial goals.

There are plenty of options to help you save, including Stocks & Shares ISAs, Cash ISAs, other investments and pensions. Each option has different tax advantages and positive and negative outcomes attached, which makes seeking out financial advice when planning for retirement all the more important in order to find the right plan and solution for you.

Flexibility is key when it comes to stress-free retirement planning. Diversifying your savings options spreads the investment risk and allows you the choice of which pot you take from when you eventually stop working. If one option doesn’t perform so well, you can use another in the short term.

Additionally, turning hobbies or skills into an income during retirement years is a popular choice. Homeowners also may choose to rent out a room in their home before considering downsizing. And many of us will receive a form of State Pension.

The value of a financial adviser

By having regular meetings with your financial adviser, you can make changes to your financial plans as you go and as situations come up. Discussing your aspirations for retirement with someone you trust is highly reassuring, and you know that you won’t be compromising your living standards as you move forward.

An investment in a Stocks and Shares ISA will not provide the same security of capital associated with a Cash ISA.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Please note Cash ISAs are not available through SJP.

Source: London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). ©LSE Group 2025. FTSE Russell is a trading name of certain of the LSE Group companies.

SJP Approved 14/04/2025