8^th April 2025

Stock Take

The markets experienced a highly turbulent week after President Trump’s tariff announcement last Wednesday. In this edition of WeeklyWatch, Justin Onuekwusi, Chief Investment Officer at St. James’s Place, provides his expert assessment of this latest significant global economic development.

A turbulent week in markets

Global markets were left reeling last week, as the US introduced near-blanket tariffs across trading partners.

Speaking on Wednesday, President Trump announced a minimum tariff of 10% on nearly every country, including the UK.

Other countries received substantially harsher terms. For example, imports from EU countries will face 20% tariffs, while those from Japan will face 24%. Chinese imports, meanwhile, will receive an additional 34% tariff on top of the 20% they already face.

These tariffs are due to go live from 9^th April, giving other governments very little time to react. If they go live in their current form, these tariffs will amount to the largest US tax hike in 40 years.

So far, policy responses from other countries have been mixed. Vietnam, for example, offered to remove all tariffs on US imports, according to several sources. On the other hand, China announced that US imports would receive an additional 34% tariff from 10^th April.

The EU is yet to provide its official response, though it is expected to announce new tariffs of its own on various US products.

In the UK, meanwhile, the Prime Minister wrote in the Telegraph that the Government’s position would be to “Keep calm and fight for the best deal.”

Perhaps unsurprisingly, stock markets have taken the threat of a global trade war rather badly. Markets fell on Thursday and Friday, as trillions of dollars were wiped from the stock market. The falls have so far continued (as at the time of writing – Monday 7^th April).

Over the course of the week the FTSE 100 fell 6.97%, with the MSCI Europe excluding UK Index dropping 6.95%. The situation was similar in Asia, where the Japanese Nikkei 225 declined 6.01%. Falls were even worse in the US, where the S&P 500 and NASDAQ ended the week down 9.05% and 10.0%, respectively.

What this means for investors

While market falls can be difficult to live through, it is important to remember they are a feature of investing. Market falls of 10% are not rare occurrences compared to the long history of equities. However, decisions you make when these occur can significantly impact your long-term returns.

Making reactive selling decisions when markets are volatile can be very challenging as these become market timing decisions. Markets can fall and/or rebound faster than we can participate in them. Instead, for investors in already resilient well-diversified portfolios, taking little or no action has often led to better long-term outcomes, based on historical data.

Regardless of the current market topics and noise, markets are driven by behaviours. It’s important to be aware of behavioural biases leading to irrational decisions that stray away from process and principles.

For his part, so far Trump has indicated he plans to stay the course. On Sunday he told reporters:

“I don’t want anything to go down, but sometimes you have to take medicine to fix something.”

Outside the immediate market reaction, these tariffs are likely to lead to an increase in inflation in the US. At the same time, they are likely to reduce GDP growth and push unemployment higher, meaning the tariffs could potentially lead to an increase in stagflation fears.

This will also have an impact on the Federal Reserve’s policy on interest rates. As a result, markets are beginning to price in more interest rate cuts of 2025 than they did previously.

The only certain thing right now is we’re facing uncertainty. We still don’t know how several major economies plan to react, nor do we know how the US will respond to these reactions.

At the moment, any decision that we make should reflect the fact that uncertainty is high. We’re not going to be able to predict our way out of it, nor should we try.

There will be narratives around how different things are now, how the world is changing. It was the same in 2008 and during COVID. It’ll be the same now. But history shows that if you’ve got a good process, then you should be sticking with it.

Trying to make sensible decisions in these environments might be really difficult but will be incredibly important for delivering good outcomes over the long run.

Periods of political and economic uncertainty often test investor resolve, but history has repeatedly demonstrated the importance of diversification, discipline, and a long-term perspective. While short-term market volatility can be unsettling, staying calm and avoiding impulsive decisions is essential – this is when behavioural missteps can be most damaging. Investors who stray from their long-term strategy during turbulent times risk locking in losses and missing out on the recovery that often follows. Our portfolios remain grounded in these core principles, and we continue to monitor market developments closely.

Justin Onuekwusi

Chief Investment Officer, St. James’s Place

Wealth Check 

What is the impact of the US tariffs?

According to investment experts at St. James’s Place, the US’s move to implement tariffs on trading partners will likely have widespread and unforeseen effects.

The US Census Bureau state that in 2024, the US imported $4,110 billion of goods and services. Most of these imports will now face an additional tariff of at least 10%.¹

The Head of Economic Research at St. James’s Place, Hetal Mehta, points out that while it was common knowledge that President Trump would issue reciprocal tariffs on key trading partners, no-one knew exactly what it would look like or what effect it would have in practice.

The US has large trade deficits with a large number of the affected countries (meaning the US imports more than it exports to them), many were close geopolitical allies with tight-knit, interwoven economies and supply chains.

Mehta mentions that the tariffs are unlikely to cause as much disruption to supply chains as the pandemic, but they’re likely to alter the relationships between nations. It’s not just a matter of switching suppliers or placing a stronger emphasis on buying domestically. It takes time to build supply capacity from other regions and areas to fulfil current demands. There are also non-tariff barriers with other countries, including things like regulation.

She says:

“You can’t just jump to another supplier that easily. So, will these non-tariff barriers get watered down? Where will the trade get re-rerouted to?”

She adds that the US consumer already buys more than the US can supply, which is why more goods are imported than exported.

“One way or another the US consumer will pay for tariffs – they are on the hook. The impact could be, firstly, higher inflation; secondly, higher interest rates to combat that inflation; and, thirdly, higher taxes for households. The latter is because the intention is to funnel the profits of the imposed tariffs to lower US corporate taxes. If the US were to reverse this action in the future, they may find it difficult and have to turn to consumers to pay that bill.”

Source: ¹US Census Bureau: US International Trade in goods and services, December 2024.

In The Picture

Not since the COVID pandemic in 2020 have we seen such levels of economic uncertainty. However, history teaches us that maintaining a steady course and taking little action when big deviations take place between asset classes often produces positive long-term outcomes.

We focus on diversification as a core principle when creating portfolios, and the choices made by the St. James’s Place investment team over the past year demonstrate this strategic focus.

Past performance is not indicative of future performance.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 07/04/2025

1^st April 2025

Stock Take

UK Chancellor breathes a sigh of relief

It will have been welcome news for UK Chancellor Rachel Reeves that the markets have not had a big reaction to her Spring Statement last week.

Encouraging news preceded the statement: UK inflation unexpectedly fell from 3% in January to 2.8% in February, with clothing prices – particularly women’s – being the biggest factor in the fall, as noted by the Office for National Statistics (ONS).

That said, economic developments since the Autumn Budget back in 2024 had left Reeves feeling somewhat boxed in, meaning spending cuts or increasing taxes were the most likely options. Ultimately, she opted for spending cuts for the time being and we’ll have to see whether these will be enough in the long term.

The Portfolio Manager at TwentyFour Asset Managers, Jonathan Owen, described the market reaction, saying:

“Gilts began Spring Statement day in positive territory on Wednesday as they were buoyed by an encouraging UK inflation print, but the fairly muted gains reflected market caution around the spending adjustments later announced by Chancellor Rachel Reeves.

“We suspect the Bank of England will use its May 8 [Monetary Policy Committee] meeting as a window to push through another rate cut, but beyond that, markets will need stronger evidence of labour market weakening before pricing in any more [interest rate] cuts for 2025. With growth faltering, fiscal headroom tight and the risk of tariffs looming, the UK is at a crossroads.”

Noteworthy details from the Spring Statement

One of the key statistics from the Spring Statement came from the Office for Business Responsibility, who have downgraded the UK’s expected GDP growth from 2% to 1% for the year, putting it just below 2024’s yearly growth.

Towards the end of last week, the ONS released their Q4 GDP statistics, which revealed a 0.1% growth between October and December, meaning that the UK economy was up 1.1% for 2024.

Despite the large amount of economic information that was thrown their way, the markets remained fairly flat. The FTSE 100 was up just 0.1% over the week.

Who wants to address the elephant in the room?

Of course, a huge factor for economic growth projection is trade policy – specifically policies related to the US.

President Donald Trump looks set to reinforce his objective to increase his tariff usage, calling tomorrow (2^nd April) ‘Liberation Day’. It remains unknown as to what exactly will be announced, but investors are expecting Trump to announce some kind of reciprocal tariffs. The UK and Europe will be keenly focused on how Trump treats VAT as he navigates trade barriers. Emerging markets are also vulnerable to this as they often place higher tariffs on imports.

How are Trump’s policies affecting the markets?

While ‘Liberation Day’ has been demanding the most attention this week, there were some significant developments last week for the US. This included Trump’s announcement of a 25% tariff on cars built outside of the US, which drove car manufacturer share prices down.

The US markets continue to struggle with the policy shifts, exemplified by the Nasdaq which dropped 2.4% and the S&P which dropped 1.5%.

How is the rest of the world adjusting to the tariffs?

The Head of Asia and Middle East Investment Advisory, Martin Hennecke, commented on the potential further challenges caused by the tariffs:

“For all the tariff noise emanating from the US, we should take note that the country’s share of global trade represents only 11% at present, as China overtook the US as the world’s largest trading nation long ago, in 2013 to be precise. As long as the rest of the world sticks to more friendly tariff policies amongst each other, there may be hope of potentially less of a Trump fallout than feared.”

One of Hennecke’s points refers to the recent trilateral talks that have taken place between Japan, China and Korea that have been focused on deepening their trade ties.

Tariffs commonly impact inflation figures. In the previous week, the Bureau of Economic Analysis showed that US core personal consumption expenditures inflation went up to 2.8% in February – an increase from 2.7% in January – which is above expectations.

As more tariffs are likely to be announced over the next few days, the Federal Reserve are looking to face quite the challenge during their next meeting to discuss interest rates.

Wealth Check 

Insuring to protect yourself

Often, to keep our tangible assets safe (cars, contents of our homes, pets and much more), we take out insurance on them. But putting more protection on your standard of living and health can be much more valuable than insuring material possessions.

What kinds of protection insurance are available?

There are many types of protection insurance, all of which offer different types of coverage and depend on what – or who – requires the protection and for how long. Income protection, life assurance and critical illness cover are the three most widely available forms of protection insurance.

Income protection – This pays a percentage of your income to allow you to cover bills and outgoings if you can’t work as a result of illness. For self-employed individuals, this can be particularly useful as they’re responsible for their own health, welfare and pension.

Life assurance – This form of protection insurance pays out a lump sum after death. If the policy is written in trust, the payout will not be affected by inheritance tax. This significantly helps avoid delays during probate. These policies are also different from life insurance; they’re whole-life policies as opposed to fixed-term policies, which usually makes them cheaper as well.

Critical illness cover – This protection will pay out a lump sum if you suffer a serious illness such as cancer or a heart attack. You can choose whether you want the cover to be in place for a specific period of time or for your whole life. And as life expectancy is increased, this policy could be one of the most significant to have to ensure future financial resilience.

Planning protection insurance with a financial adviser

We understand that taking out life assurance or critical illness can be a significant step in your financial planning. Our team of expert financial advisers are on hand to help guide you through the process and provide more information about protection insurance.

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.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 31/03/2025

25^th March 2025

Stock Take

A narrow escape for US markets

At the end of last week, the S&P 500 finished 0.5% above where it started. This brought an end to four consecutive weeks of falls – but only just.

Markets initially enjoyed a boost after Trump’s election at the end of 2024, but US equities have struggled since the start of 2025. This has been largely due to the continuous economic and policy volatility.

As they tried to navigate the uncertainty, the Federal Reserve opted last week to keep interest rates at their current level. They also reduced their economic projections for the year and lifted inflation forecasts. That said, the majority of officials still maintain the belief that there will be two 0.25% reductions in 2025.

The Federal Reserve Chairman, Jerome Powell, did note:

“We do understand that sentiment has fallen off pretty sharply, but economic activity has not yet.”

The measure of economic success

One way in which the economy is showing some resistance is through the jobless claims numbers, which remain relatively low.

Company reports are another metric for assessing US economic health is being assessed. The Head of DFM Research at SJP, Peter McLoughlin, said:

“Earnings season is now largely done, but the last week was a little bit worrying. There were a number of companies that issued profit warnings. At this stage there aren’t signs of this turning into a tidal wave of downgrades, and generally earnings continue to hold up in the double-digit growth range. But it’s still something we want to keep an eye on. Most companies remain cautiously optimistic, but a lot of them do note Washington’s unpredictability isn’t helping matters.”

Are European markets closing the gap?

As US equities struggle, some are looking to other markets for opportunities…

Analyst at Redwheel Filippo Neuimaier stated:

“Europe faces a challenging macroeconomic backdrop. A complex geopolitical environment, risks of an energy crisis and the threat of being squeezed between the tensions of China and the US are all valid reasons to be cautious on the outlook for Europe today. We do, however, see pockets of real value within European equities that, in our view, have been caused by excessive pessimism about the economic prospects for the region.”

He also notes that over the last three years, European banks have outperformed the Magnificent Seven (the seven dominant tech companies) stocks, when claims was on the US overperforming in comparison to Europe.

What’s more, Europe has plenty more reasons to be optimistic. The German parliament passed the huge spending bill last week. Germany’s growth has been stagnant over the last few years, which has been problematic as Europe’s largest economy, but this new bill is now expected to generate growth, especially for the defence sector.

Spending cuts on the horizon for the UK?

Similar to the Fed, the Bank of England (BoE) chose to hold their interest rates and noted an intensifying of global trade policy of uncertainty since their last meeting.

Keeping interest rates the same wasn’t unsurprising, and it had a limited impact on the FTSE 100, which only saw a rise of 0.2% over the course of the week. This has fed economist’s expectations that there will be two interest rate cuts over 2025.

The BoE Governor, Andrew Bailey, added to this narrative, saying:

“We still think that interest rates are on a gradually declining path.”

In addition, UK Chancellor Rachel Reeves is due to deliver her Spring Statement later this week. While she’s not expected to make any significant announcements regarding tax, spending cuts are likely to be at the forefront of the statement.

Investors will have a keen eye on the Office for Budget Responsibility’s updated forecasts. Since the Autumn Budget in late 2024, the UK’s financial situation has increased in complexity, therefore downward revisions to the forecast will impact the summer spending review.

Wealth Check 

When can I afford to stop working?

This is a common question that many of us start asking ourselves once we’re into our fifties or sixties, and many worry that if they haven’t started saving early, it’s too late to save up a significant amount for retirement.

We’d always recommend that earlier is better, particularly when you’re at peak earning capacity (usually around your early 50s); however, it’s never too late to start planning and saving for your retirement regardless of your age.

Efficiently planning for the years ahead

With the years ahead of you, it’s important to work out how you’ll financially support yourself. Having sufficient savings put aside for retirement frees you up to enjoy your hobbies, travel, spend time with your family and live life to the fullest with the peace of mind that your financial future is secure.

One of the most tax-efficient options is your pension. Setting one up, even when you reach 60, can still work in your favour as you make the most of the tax advantages, including tax relief added by the government on eligible contributions.

Our top advice in regard to putting stress-free retirement finances into place is to incorporate many flexible options. Pensions aren’t the only option…

Many choose a variety of sources to fund their retirement. This can include state pension and private pension pots, Stocks and Shares ISAs, earnings and property.

Because money can be withdrawn from each of these in different ways, this can be extremely beneficial to your retirement funds.

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. The value of any tax relief is generally dependent on individual circumstances.

In The Picture

Drops in the US markets over the last few weeks are certainly not the first time that investors have experienced a shock to the system.

When markets move quickly, whether it’s up or down, the temptation arises to make hurried decisions that are emotive rather than logical. Emotional cycles of investing show that this kind of decision-making can threaten your long-term financial objectives.

The Investment Research Director at St. James’s Place, Joe Wiggins, says that being able to resist emotional financial decisions is becoming more challenging:

“Perhaps it’s the rise of social media, or perhaps it’s the unusually high returns delivered by global equities over the past decade, but investors seem more sensitive than ever to equity market declines.

“Even relatively minor ones like those experienced recently provoke dramatic responses. At times such as these, it is important not to lose sight of the fact that the returns from owning equities over the long run are as high as they are because they are volatile and suffer from intermittent drawdowns. We cannot have one without the other.”

Market boosts and falls are inevitable in an investment journey, but keeping perspective and understanding where you are in the emotional cycle can help you steer the success of your long-term goals.

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.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 24/03/2025

18^th March 2025

Stock Take

US market confidence rattled

Continued uncertainty surrounding unfolding policies and tariff threats had a big impact on US equities, which continued to fall last week.

In the short term following Trump’s election in late 2024, US equities surged – and investors hoped that he would work to reduce regulations and taxes and therefore help boost growth. But since mid-February these hopes have been more than reversed…

The persistent fears about tariffs and possible emerging trade wars have quelled hopes for economic growth. Trump’s unpredictable leadership style has led to markets being wrongfooted and incapable of predicting any of the President’s actions. As a result, there has been a large increase in uncertainty, which typically doesn’t suit markets.

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

“The data flow we’ve had out of the US in the last couple of weeks has broadly turned south, from consumer confidence surveys to Purchase Manager Indices (PMIs). So far, this is mainly concentrated in what we call soft data, such as surveys. We still need to see if this sentiment lasts long enough to feed into ‘harder’ economic data though.”

This has fed through to poor performance from US stocks since mid-February. Hetal continues:

“Uncertainty tends to feed into investment decisions. It’s clear the indirect effect of this uncertainty has been quite material.”

This narrative was exemplified at the beginning of last week, when several large companies took a big hit. The S&P 500 fell over 4% by Thursday before a small recovery helped to combat some of the loss – over the week, the index finished more than 2% down. It was a similar case for the Dow Jones and NASDAQ. The latter is down over 10% compared to at the start of 2025.

A lack of spring in the step for the UK

It was revealed by the Office for National Statistics that the UK economy shrank 0.1% in January. Expectations had been for small positive growth.

The Spring Statement is due to be announced next week and will likely highlight exactly what challenges the Chancellor will face across the course of the year, with economic forecasts dependent on growth to form the basis of her calculations.

Where expectations for encouragement from the statement remain low, Partner at TwentyFour Asset Management Felipe Villarroel has suggested looking for opportunities for reforms that focus on the welfare system. He states:

“The positive spin on this situation would be that if the government’s welfare reforms were to result in more people entering the workforce, this could have a positive impact on productivity and wage inflation.”

But there was a glimmer of light among the negativity for the UK. In recent months, the FTSE 100 has been one of better performing markets. The 0.6% fall over the course of the week puts it in good stead compared with other Western markets and means that the UK’s main index is up 5.6% for the year to date. This reflects the notion that markets don’t necessarily perform in accordance with the wider economy.

The go-ahead to rebuild in Europe

Despite markets being down for the week overall across continental Europe, due to widespread geopolitical uncertainty, they still finished the week in a strong position. The German Chancellor-in-waiting, Friedrich Merz, announced on Friday that he’s secured the essential backing of the Greens to give his borrowing plan the go-ahead. As a result, its passage through parliament could be very soon, which in return installed confidence in the market.

Wealth Check 

Planning for the hereafter, but don’t overlook the here-and-now!

Findings from the Office for National Statistics – based on data analysis from the 2021 census – estimated that 13.6% of boys and 19% of girls born in the UK in 2020 are expected to live to at least age 100.¹ With longer lifespans, this means that people are likely to receive their inheritance later in life, and as a result, inheritances themselves are shrinking, with retirement income being dependent on them for a longer period of time.

We all want to do the right thing for our families and loved ones when we’re no longer around, but don’t forget the actions you can take now!

How can I still make inheritance beneficial for my family?

A lump-sum inheritance can dramatically change a family’s fortunes. Mortgage pay-offs, covering independent school fees or possibly launching a new business are all common uses of this kind of financial income.

When you’re looking to pass money on to your children and grandchildren, it can be difficult to accept that some of your intended money won’t get to them due to Inheritance Tax (IHT) that’s payable on your assets.

By making full use of exemptions, gifting, trusts and other tax-efficient strategies, you’ll be able to mitigate some of what could be payable.

When should I start planning for IHT?

When your savings and assets begin to accumulate, this is the best time to put your IHT plan into action. A strong indicator of this time could be when daily expenses decrease when your children leave home, or you’ve nearly paid off your mortgage. Allowing yourself time to put your plan in place ensures that you avoid compromising your standard of living both in the present and later on.

You also owe it to yourself to make sure you have enough money to feel financially secure as you get older, which is where having a clear strategy comes to the fore.

Where there’s a Will, there’s a way

IHT planning should also be conducted with your family’s pace at its core. Significant life events, such as the arrival of a new grandchild or a new marriage, are good moments to consider updating your Will.

Conversations with your family surrounding inheritance can be challenging, but it’s still better to start the talks now so that you can explain what you want to do while you’re still here and the terms of your Will are informed and understood.

Financial advisers are experts in helping begin these conversations and can explain your financial options and choices. Involving a third party like a financial adviser can help you find common ground quicker and avoid conflict.

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

Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills are not regulated by the Financial Conduct Authority.

Wills and Trusts are not regulated by the Financial Conduct Authority.

Source

¹Office for National Statistics website, past and projected period and cohort life tables: 2020-based, UK, 1981 to 2070.

In The Picture

US markets have dominated headlines as a result of their strong performance in recent years. But on closer inspection, the numbers tell a different tale…

Many gains have been lost as a result of the falling values over the course of 2025, meaning that they’ve evened out to be pretty level with the rest of the world over the past 12 months. Market leadership changes, and chasing past winners isn’t always the winning formula.

St. James’s Place Investment Research Director, Joe Wiggins, explains:

“Although blocking out short-term noise is an essential skill for any long-term investor, the recent shift in market performance patterns is a useful reminder of how unpredictable financial markets are, and how quickly prevailing trends and narratives can change. The truth is that the future is inherently uncertain and ensuring we have a well-diversified portfolio that aligns with our long-run goals is the best protection against this.”

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 17/03/2025

11^th March 2025

Stock Take

Tariffs pile on the pressure

Pressure on the stock markets continued last week as a result of Trump’s ambiguous approach towards tariffs.

In the last seven days, the US government has levied an extra 10% tariff on Chinese imports, on top of existing tariffs. It was also announced that Canadian and Mexican imports would be taxed at 25%, quickly followed by a declaration of an exemption for goods compliant with the United States–Mexico–Canada Agreement (USMCA) until 2^nd April. The USMCA is a free trade deal that Trump signed during his first term and covers many industries, including automobile and dairy.

The Canadian government then announced their own tariffs on US goods. The Chinese followed a similar pattern by placing tariffs on the US on goods that they’re able to source from elsewhere, including meat and logs.

US finances and markets take a hit

Unsurprisingly, the resulting uncertainty is being reflected in US GDP projections. On Thursday, the Federal Reserve Bank of Atlanta revised its first quarter projections for US GDP to -2.4%, compared to the projection of a -1.5% drop in the previous week and positive projections from earlier in 2025.

The trend was also noticeable in the US markets. Both the S&P 500 and the NASDAQ finished the week down more than 5%.

The Investment Research Director for St. James’s Place, Joe Wiggins, said:

“It is important to remember that financial markets are noisy and unpredictable over short-run horizons, a fact exacerbated by some of the extreme policy uncertainty that surrounds the Trump administration.

“Attempting to make decisions based on the near-term fluctuations of markets is a dangerous and unreliable game, and one that comes with particularly acute risks in the current environment. Taking a long-term view based on fundamentals and supported by sensible diversification is the best way to navigate this backdrop.”

Change in Canada

Over the weekend, former Bank of England governor (2013 to 2020) Mark Carney won the race to become the next Canadian prime minister, replacing Justin Trudeau. As soon as Carney enters office, he’ll need to address two clear areas: managing the tariff disputes with the US and getting ready for the general election, which is currently due on or before 20^th October this year.

As part of his opening address, Carney put forward a strong stance on the US–Canadian situation. He stated:

“We didn’t ask for this fight, but Canadians are always ready when someone else drops the gloves.”

European nations keep their heads down

The UK has been able to avoid the tariff spotlight so far; however, last week the FTSE 100 fell, partly due to concerns surrounding the impact of a trade war and the subsequent impact on the global economy.

Across the rest of the continent, there was a positive tale to be told. Equities had another good week, mostly boosted by defence stocks. Additionally, the German market responded brightly after the announcement of a bumper spending pledge. By overhauling current borrowing rules, it’s hoped that the spending will create a €500 billion infrastructure fund, which will ensure that more defence spending can be carried out.

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

“Germany is in the midst of a huge and historic policy u-turn. After many years of espousing fiscal prudence, the spending package announced is unprecedented in size and could amount to as much as 3% of GDP on an annual basis. The path to approval is not easy – the lame-duck government must rush this through while it has a two-thirds majority, and a challenge via the Constitutional Court cannot be ruled out. A key question for investors is whether other countries in Europe can similarly rise to the challenge posed by geopolitical tensions.”

Wealth Check 

10 steps to protecting your family and assets

Here at Wellesley, we believe that financial planning and advice is a family affair.

When you have a clear idea of what’s the right choice for you and your family, it becomes a lot easier to create a financial plan that will work for all parties and continues to work after your lifetime.

We’ve created a financial to-do list, which covers the steps you can take to get started on your effective plan to protect your family and its assets.

1. Consider your long- and short-term plans – Are there immediate goals that you want to save for? A family holiday, a wedding or school fees? Or maybe you’re planning for life events that may seem far away? Reducing your work hours? Need help paying for social care?
2. Calculate how much you’re worth – Make a list of the amount of pension pots you may have. If you’ve changed jobs, find share certificates and check in on ISAs and savings accounts.
3. Prepare for emergencies – Ensure you have an easy-to-access cash fund, just in case! This should be enough to keep you supported for six months.
4. Protect your loved ones, your family home and lifestyle – Taking out an insurance policy could be a huge benefit to your family.
5. Encourage good money habits early on – Help your children to embrace healthy money behaviours by teaching them to save and budget.
6. Leave a legacy – What legacy would you like to leave and to which people? Small steps taken early can make a big impact on your family.
7. Create (or review) your Will – This is particularly important if you have children or there’s a change in your family situation. This legal document is one of the most important you’ll ever write to ensure that your family’s future is secure.
8. Set up a Power of Attorney (PoA) – This is someone you trust who can make financial or welfare decisions for you should you lose mental or physical capacity.
9. Think about what’s most important to you and your family – Understanding personal values will help you set clear financial goals.
10. Get talking! – Make sure you discuss your short- and long-term plans with your family, involving them in decisions and plans going forward.

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.

Will writing and Powers of Attorney involve the referral to a service that is separate and distinct to those offered by St. James’s Place and are not regulated by the Financial Conduct Authority.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 10/03/2025

4^th March 2025

Stock Take

Getting defensive on the political stage

European defence company shares surged last week following faltering US–Ukraine talks, prompting Europe to rethink its defence strategy.

When the meeting between Ukrainian President Volodymyr Zelenskyy and US President Donald Trump turned sour, numerous European leaders called for a stronger defence policy – one that can stand more independently of the US. As a result, share prices leapt for European defence companies, with Rheinmetall and BAE Systems soaring over 20% on Friday.

Although talks have begun between European governments, they still face significant pressure before being able to implement these plans. Economic growth across the continent is still low and many nations are facing many fiscal challenges. To effectively increase defence spending, it’s highly probable that cuts will need to be made elsewhere.

UK defence plans

One of the ways in which the UK government is trying to allocate for this is by reducing the foreign aid budget. In addition, Chancellor Rachel Reeves announced plans to change the remit of the National Wealth Fund to free up more money to spend on defence. Further reports have also come to light indicating that money that’s been budgeted for ‘green’ projects will be redirected for defence spending.

In the short term, this is likely to help boost defence stocks, but the same can’t be said for the long term. The Head of Economic Research at St. James’s Place, Hetal Mehta, notes:

“Defence spending is less likely to be economically productive for an economy’s long term output potential. This might be hard to measure in the near term, but if we’re still talking about the productivity puzzle in years to come, this could serve to make the situation worse.”

German election yields good market response

Even before the rises in defence companies, there were some pockets of brightness across the continent. There was positive market reaction to the German election results from the prior weekend and saw Friedrich Merz’s conservative Christian Democratic Union (CDU) party gain the most seats – but not enough to gain a majority. Merz is still in the process of trying to form a coalition government with the centre-left Social Democrat party.

The Fund Manager for European Equities at Schroders, Martin Skanberg, commented on the results, saying:

“There has been consensus building for some time that Germany needs reforms to increase its competitiveness, although the specifics of this will take some time to be negotiated. Merz’s CDU has indicated an intention to drive through reforms and pursue a pro-growth agenda, which should be good for German corporates.

“German equities had been underperforming the rest of Europe in recent years, but that pattern changed in late 2024 and the stronger performance of German equities has continued into 2025. Hopes of reform could lead to an increase in positive sentiment towards German equities, and Europe more broadly.”

US tariffs time

In the UK, it was a positive five days for the FTSE 500 following seemingly productive talks between Prime Minister Keir Starmer and Trump. It seems that the UK may avoid US tariffs, which could stand us in good stead over the next four years.

However, this wasn’t the case for other nations as Trump has continued to outline his plans for Mexico, Canada, China and the EU over the past week. The tariffs for Mexico, Canada and China came into effect today.

US markets struggle

Thursday was a day the tech stocks would rather forget… Nvidia dropped over 6% and there were further small falls across the rest of the Magnificent Seven. Although Nvidia had posted fairly strong results that day, investors still spotted a slip in margins.

Overall, US markets continue to be wary of the talks surrounding tariffs and the weakening economic data. The latter of which included an unexpected drop in consumer spending in January as well as surveys indicating a fall in consumer sentiment.

Wealth Check 

Using pensions and ISAs to reduce your tax bill

Increased tax bills are likely to be the case for many of us this year. With the personal allowance frozen until 2027/28 and the additional rate threshold having dropped to £125,140, more people will find themselves in the higher tax band – particularly if they receive a pay rise or a bonus.

Additionally, the Autumn Budget announced that the £40 billion ‘black hole’ in the nation’s finances will be addressed by increases in Capital Gains Tax, Inheritance Tax and employee National Insurance contributions for businesses.

How you can balance investments with taxes

Due to the changes in taxation, you’re likely to need to invest more money in order to maintain your long-term financial goals. Now’s the time to ensure that your financial plan optimises your pension and ISA allowances so that every penny counts.

Pensions

Of the two options, pensions are the most tax-efficient option for long-term investments. The basic-rate tax relief guarantees a 20% cash boost from the government on the contributions you make (subject to certain limits). A powerful persuader for why a pension should be part of your overall long-term financial planning!

A £60,000 annual allowance for pension contributions is in place and covers any personal and employer contributions. Furthermore, tax relief on personal contributions is limited to the higher 100% of your earnings in the tax year or £3,600 – but it remains a fantastic tax incentive. Personal pensions can be accessed from the age of 55, but bear in mind that this is set to rise to 57 in 2028.

ISAs

These offer a tax-efficient, simple and flexible way to save money. You don’t pay tax on the interest from a Cash ISA or capital gains from a Stocks and Shares ISA, so you’re not required to declare them on your tax return.

You’re allowed to invest a maximum of £20,000 per year in an ISA or combination of ISAs. You could put half in a Cash ISA and half in a Stocks and Shares ISA. In comparison to pensions, ISAs have no age restrictions limiting you on when you can access your money. This means that you’re granted a better degree of flexibility with your finances – cash can be ready for rainy days or covering immediate spends like holidays or a new car.

Explore more with pensions and ISAs with Wellesley

Using a combination of pensions and ISAs is a smart way to plan your finances for both the short term and long term. Get in touch with our financial advisers today and we’ll guide you through the process.

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.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 03/03/2025

25^th February 2025

Stock Take

Germany’s results are in – is this the start of tensions easing?

The German election results brought some ease to the political uncertainty over the weekend, resulting in the country’s equities to open the week higher.

The biggest party to emerge was Friedrich Merz’s conservatives, which placed Merz as the next chancellor. The far-right Alternative for Germany (AfD) also had a strong night, winning a record number of seats and finishing second. Olaf Scholz and the Social Democrat Party (SPD) faced disappointment by coming in third.

Now that he’s officially the leader of the largest party, Merz will be looking to form a coalition government. He’s ruled out working with the AfD, meaning that it’s probable that he’ll seek out a coalition with the SPD. With their results combined, the two parties will have a small majority, having 328 out of the 630 parliamentary seats.

How will the German political results impact national and international markets?

While the immediate focus will be on coalition negotiations, a possible consequence could be an increase in European defence spending. This was implied in Merz’s victory speech, where he stated:

“Step by step, we can really achieve independence from the US.”

However, the reality of being able to make impactful fiscal changes in Germany – and influencing the wider European market – may be quite limited due to Germany’s sluggish economic performance. Plus, Merz’s conservative party and the SPD don’t have the two-thirds majority required to overturn the constitutionally enshrined debt brake, giving the government little fiscal flexibility.

UK deflated by latest inflation figures

Last week, January’s CPI inflation figures were released and revealed a 3% increase in prices over the previous 12 months – this was up from 2.5% in December.

Since September, UK inflation has been steadily rising, and January marked the first time CPI inflation hit 3% since March 2024. The cost of living continued to increase as a result of rising food prices, plane fares and the introduction of 20% VAT on public school fees, which was brought in at the start of 2025.

There has been little to no economic growth in the last few months, prompting fears of possible stagflation (a period of high inflation alongside weak growth). Commenting after the data was revealed, the Governor of the Bank of England, Andrew Bailey, said:

“It’s quite hard to work out to what extent the weaker growth story is a result of supply-side weakness or supply-and-demand-side weakness.”

As the government contemplate the situation and form their response, Chief Investment Officer at BlueBay Mark Dowding sees the UK’s current economic position as rather bleak:

“As it stands, we would assess the UK is already at risk of breaching its OBR rules on the budget, and this assessment itself is heavily dependent on eye-wateringly optimistic projections for rapid productivity growth. Consequently, this leaves the government with little room for manoeuvre or scope to massage the calculations to paint a rosier picture.”

With the likelihood of higher inflation figures on the horizon, it came as little surprise that the FTSE 100 fell 0.84% last week.

Uncertainty in the US

US equities struggled significantly last week. The S&P 500 suffered its worst day of the year on Friday when it dropped by 1.7%. In sterling terms, the S&P 500 was down 1.8% by the end of the week, and there was a fall of 2.65% for the tech-heavy NASDAQ Composite.

The USA’s own markets suffered from weakened business sentiment, which came about as a result of disappointing inflation figures from the previous week. Plus, the continuous uncertainty surrounding possible tariffs fuelled concerns about the nation’s economic strength.

Continued Chinese market success

China started the year off strongly and have sustained it. The Shanghai Composite rose by 0.96%, with tech and auto companies leading the rally.

The Head of Asia & Middle East Investment Advisory at St. James’s Place, Martin Henecke, commented on the figures. He said:

“The China tech stock rally serves as a good reminder that unpopular markets can experience turnarounds swiftly. The stars aligned for this sector last week, from Xi Jinping taking a more supportive stance – and meeting executives including Jack Ma – to strong earnings reports. However, investors might be well advised to manage concentration risk carefully by considering opportunities beyond just technology and AI.”

Wealth Check 

Balancing present and future financial plans

We always want to ensure that we’re making the right financial decisions that will benefit our loved ones – both now and later in life when we’re no longer around. Later-life and legacy planning can often make you feel like you’re being pulled in multiple directions! While it’s important to plan ahead for the future, we also need to focus on the present.

Assisting loved ones when there’s more pressure on household budgets is great, but this needs to be balanced with ensuring that you have enough money yourself to be financially secure as you get older.

This can feel like a bit of headache, but with diligent planning and advice, you may be surprised at how much can be achieved.

Adapting to make your financial plans a reality

As part of the Autumn Budget, it was announced by the Chancellor that unspent pensions pots are now proposed to be counted as part of an estate and taxed. For many, they had planned to pass these on tax-free and as a result could face higher Inheritance Tax bills than they first thought.

But there are still ways you can leave your money to younger generations. Here are our tips:

• Take advantage of your annual gifting allowance. You can gift up to £3,000 per year (£6,000 for couples) tax-free, which can help reduce the size of your estate over time.
• You can make a gift of over £3,000, but be aware that if you pass away within seven years of the gift, it may still be considered part of your estate.
• Regularly support your loved ones. Contributions to help with childcare or school fees gifted from disposable income can be Inheritance Tax-free.
• Take out a Lifetime Assurance policy. This can help cover any eventual Inheritance Tax bill.
• Utilise trusts. These not only offer tax advantages, but they also allow you to maintain control and protect family wealth from risks like divorce, bankruptcy or irresponsible spending.

Many are exploring regular gifting as a way to move money across generations. This type of ongoing gifting is a thoughtful, practical way to help out during your lifetime, while reducing the size of your estate.

Getting support and advice from a financial adviser can help you feel confident you’re making the right decisions – for now and the future.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

In The Picture

Increased inflation and pint price. Are your savings keeping up?

Inflation dropped in 2024, but now it’s increasing again – the effect of which means that over the past 20 years, household items have more than doubled in price.

During this period, it’s unlikely that cash ISA interest rates have kept up with inflation, meaning that the purchasing power of your savings may be fading away.

Investing in a diversified portfolio of assets, including equities and bonds, has shown to be the best way to outpace inflation over longer periods of time. But it’s always key to remember that investing comes with risk.

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 24/02/2025

18^th February 2025

Stock Take

Little boosts mean a lot

There was some good news last week for the British government – the UK economy grew by 0.1% in the three months to December 2024. Growth this small isn’t usually that thrilling, but it exceeded expectations, which had predicted a 0.1% fall rather than a rise.

This growth was spurred by a 0.4% increase in GDP in December, which mostly came about as a result of improvements in the services sector.

In her comments on the latest figures, the Head of Economic Research at St. James’s Place, Hetal Mehta, said:

“Consumer spending was flat, and investment shrank. It is government spending that kept the economy going in the last three months of the year. The slightly better fourth-quarter growth won’t prevent the need for the Chancellor to make some difficult decisions in the coming months.”

The Spring Statement is due to be delivered by Chancellor Rachel Reeves towards the end of March. While this statement isn’t intended to look like a budget, due to the poor economic performance as of late, Reeves may be forced to act.

Hope of peace benefitting markets

The small lift in GDP helped lift the FTSE by 0.4% over the course of the week. Developments in Ukraine also gave markets a boost, due to US President Donald Trump’s pledge to bring about a quick and peaceful settlement.

This hope also extended to and boosted wider European equities. For example, German industrials have been highly affected by the high energy costs that the Ukraine war has caused. If the war were to end, gas prices could drop, reducing costs for companies all across Europe.

The Head of DFM Research at St. James’s Place, Peter McLoughlin, said:

“European markets are showing signs of stabilisation amid mounting optimism over a potential Russia-Ukraine ceasefire agreement. European equities were also supported by improved market sentiment. This was in turn bolstered by easing credit conditions and expectations that the recent euro weakness would moderate.

“Large company stocks continued to lead, while smaller companies are underperforming in the current environment. However, further easing in credit conditions could potentially reverse this trend.”

Even though peace talks are underway, European defence companies are still performing well. With US defence strategy shifting its focus away from Europe and homing in on its own borders and Asia, it’s likely that there will be a natural increase in European defence spending.

The MSCI Europe ex UK finished last week up 2.2%. In the year to date, European equities have performed strongly – the index is currently up over 10% and has outperformed the S&P 500 and NASDAQ so far this year.

US keeping monetary policy on the straight and narrow

Last week, the US received somewhat of a surprise when it was revealed that Consumer Price Index (CPI) inflation had climbed to 3% in January – the highest level recorded in six months. Although the inflation figures were generally high, one of the most notable price surges was in eggs. Prices jumped 15.2% over the course of the month as supply was impacted by avian flu.

In his testimony before Congress on Wednesday, Federal Reserve Chair Jerome Powell said that while positive steps have been made to reduce inflation by the central bank, there’s still a lot of work to do. Consequently, Powell suggested that monetary policy would still be restrictive for the near future.

The prospect of continued elevated US interest rates had little effect on feelings towards US equities. There were rises in both the S&P 500 and NASDAQ over the week and both ended the week within 1.0% of their record highs.

However, January’s inflation figures don’t include the potential effect of Trump’s tariffs. The US President re-emphasised his plans for a 25% tariff on steel and aluminium, as well as his proposal for retaliatory tariffs. It’s likely that these will put more inflationary pressure on the US economy.

Asia continuing a year of growth

It remained a strong start to 2025 for Asia. Chinese equities grew over the week and the Shanghai SE Composite Index is up over 16% this year in local currency. This is a big boost after a weak 2024, which saw a double-digit decline in the index.

Wealth Check 

Why set up a pension if you’re self-employed?

There’s been a large increase in self-employment, people running their own businesses or having portfolio careers – meaning that taking personal responsibility for pensions has never been more important.

Personal pensions are portable and flexible, meaning that whichever career path someone chooses, no matter how many employers you have and however many businesses you launch, your pension can follow too.

Set up your personal pension today

It’s tempting to wait until middle age to start a pension, but the sooner you begin, the more time you give your investments to grow until you reach retirement.

There are many pension options and investment choices and with the help of a financial adviser, they can help you set up a personal pension.

How do I plan for a retirement when self-employed?

Retirement planning is in your hands if you’re self-employed or non-working. Most people in the UK will receive a state pension (depending on National Insurance contributions) but most people still want an additional income and financial freedom for later life.

A tax-efficient way to save for retirement is your pension. All pensions qualify for tax relief – every eligible contribution gets an automatic 20% cash boost from the government. If you’re a higher or additional rate taxpayer, the percentage is higher. At retirement, you can usually take up to 25% tax-free – up to a maximum value of £268,275. Any tax relief over the basic rate is claimed via your annual tax return.

Optimising pension savings and contributions

Many people make monthly payments into their pensions; it can be difficult to motivate saving for old age while you’re still in your 20s or 30s, particularly if money gets tight. But the golden rule remains ‘a little and often’ and starting early is key.

If you get a pay rise, it’s highly recommended that you increase your contributions or adjust them depending on inflation figures.

Accessing and enjoying your pension

Personal pensions can usually be accessed when you turn 55, but this will increase to 57 from 6^th April 2028. When you withdraw your pension, there are also lots of options: a lump sum, a series of lump sums or a regular income.

Ensuring that you’re well set up to enjoy your retirement doesn’t happen overnight, it takes careful planning, and setting up a personal pension is one of the wisest financial plans you can make. Wellesley are here to help – get in touch with our financial advisers today to get started.

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. The value of any tax relief depends on individual circumstances.

In The Picture

Rising tariffs mean a shift in trade balance – and markets are watching.

US President Donald Trump has announced several tariffs. The chart reveals the US’s trade balance with key global partners. Countries like China, where the US imports more than it exports, are on the left side and nations such as the Netherlands, where the US exports more than it imports, are towards the right side.

Countries that sit on the left side are more likely to have tariffs imposed on them, therefore shifting the trade balance. But why is this important for investors?

Tariffs can cause varying degrees of disruption to global supply chains, raise production costs and possibly slow economic growth in regions or sectors. Tariffs can also result in retaliation and increase market volatility.

Mehta explains:

“Trade imbalances and policies like tariffs can affect global markets, from currency movements to company profits. These are the kinds of shifts we monitor closely to help ensure our clients’ portfolios remain well-positioned in a changing global landscape.”

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.

© S&P Dow Jones LLC 2025; all rights reserved.

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 17/02/2025