Market-moving events

Central banks stay on hold.

The Federal Reserve and Bank of England both held interest rates steady, even as inflation remained above target. While the Fed kept its range at 4.25% to 4.5%, it reiterated that cuts are likely later this year. The Bank of England also paused, with persistent inflation fuelling expectations rates may stay higher for longer.

Tariff tensions escalate.

Trade policy took centre stage again as Trump confirmed a fresh round of tariffs, sparking fears of a deeper global slowdown. The EU responded with duties on €26bn of US goods, while China’s economic data held up despite growing trade friction. Markets were rattled by the uncertainty, particularly in the US.

UK resilience tested.

Despite falling inflation and strong wage growth, the UK economy contracted in January. The Spring Statement offered little near-term stimulus, with welfare cuts offset by increased defence spending. Business surveys showed tentative signs of recovery, but sentiment remains fragile amid ongoing global and domestic pressures

Investment highlights

A challenging month for equity markets.

Donald Trump’s tariff announcements, combined with softer US economic data, weakening consumer sentiment and rising inflation expectations, weighed heavily on equities. The bigger story is one of rotation – US equities just recorded their worst quarter relative to global peers since the 2002 accounting scandals.

Germany announces a significant fiscal plan.

The focus is on infrastructure, but rising geopolitical risks have pushed defence spending up the agenda. While this won’t materially affect growth in 2025, it should from 2026. Other euro area countries are expected to increase military spending too, though most lack Germany’s fiscal headroom.

We maintain cautious positioning.

We remain modestly overweight bonds and slightly underweight US equities. These moves haven’t changed our core views. We still expect falling inflation and that the interest rate cycle has peaked – but see a higher-than-usual risk of a deeper recession

Issued by Omnis Investments, which is authorised and regulated by the Financial Conduct Authority. Registered address: Auckland House, Lydiard Fields, Swindon SN5 8UB. This update reflects our view at the time of writing and is subject to change. The document is for informational purposes only and is not investment advice. We recommend you discuss any investment decisions with your financial adviser. Omnis Investments is unable to provide investment advice. Every effort is made to ensure the accuracy of the information but no assurance or warranties are given. Past performance should not be considered as a guide to future performance. Approved by Omnis Investments on 1 April 2025.

Email info@thepennygroup.co.uk or call 0207 061 2345 if you have any questions or should you wish to speak to one of our advisers.

Omnis Agility update: April 2025