Snapshot into St. James’s Place WeekWatch for 19th May 2025

Thank you, St. James’s Place Asia and Middle East, for sharing the latest 📈 Economic and Market Highlights.

UK Economy

• Strong Q1 Growth: UK GDP grew by 0.7% in Q1 2025, up from 0.1% in Q4 2024, making the UK the fastest-growing G7 economy.

• Equity Markets:

  • FTSE 100: +1.52%

  • FTSE 250: +2.28%

• New UK-EU Trade Deal: Recently signed, details pending, but expected to boost UK economic growth further.

• Job Market Weakness: Job vacancies fell to 761,000 in April, possibly influenced by increased National Insurance and minimum wage rises.

US Economy

• Economic Slowdown: Concerns over a mild recession linked to the US-China tariff dispute.

• Credit Rating Downgrade: Moody’s downgraded the US to Aa1 due to rising government debt — symbolic as other major agencies had already downgraded.

• De-escalation of Tariffs: A 90-day pause on tariffs between the US and China lifted market sentiment.

• Market Performance:

  • S&P 500: +5.3% for the week

  • US Dollar: Weakened — reducing returns for UK-based investors in USD assets.

Asia-Pacific

• Shanghai Composite: +0.76% (1.66% in GBP terms)

• Hang Seng: +2.09% (2.15% in GBP terms)

• Nikkei 225: +0.32% (in GBP terms)

Europe

• MSCI Europe ex UK: +1.53% (GBP terms), buoyed by optimism from US-China trade progress.

🧠 Wealth & Mental Health – Financial Health Report 2025

• Anxiety & Finances:

  • 25% of people feel anxious about the year ahead.

  • 28% are worried about rising energy bills.

  • 20% fear they aren’t saving enough for financial security.

• Advice & Wellbeing:
  Access to financial advice can ease anxiety, help with planning, and improve financial confidence.

• Call to Action: Speak with a financial adviser to build control and clarity around financial decisions.

📉 Interest Rates & Global Central Bank Moves

• Bank of England: Has now cut rates four times in a year.

  • Good for: Borrowers and equities (cheaper credit for business growth).

  • Bad for: Savers (lower interest returns).

  • Mortgage market: 2-year fixed rates are now at their lowest since 2022.

• ECB (Europe): Most aggressive in cutting rates – driven by slow growth and cooling inflation.

• US Federal Reserve: Holding rates steady — cautious due to tariff-related uncertainty.

• Central Bank Divergence: Expected to shape markets in the months ahead.

🧭 Investment Outlook

• Volatility is the “New Normal”: Tariff disputes, political shifts, and rapid economic changes make short-term predictions difficult.

• Long-term Strategy: Sticking to a diversified, long-term investment plan is recommended.

• Avoid Emotional Decisions: Investors should ignore market noise and avoid reacting impulsively to short-term stressors.

“Periods of heightened uncertainty are challenging not because of the issue itself, but how investors respond.”
— Joe Wiggins, SJP Investment Research Director