What’s going on here?
Britain’s FTSE 100 climbed 1.41% as hopes for a trade deal between the UK and US flourished, lifting market sentiment despite new US tariffs targeting British goods.
What does this mean?
The possibility of easing tariffs between the UK and US has brightened market prospects, with US Vice President JD Vance noting a ‘good chance’ of a deal under UK Prime Minister Keir Starmer. However, Oxford Economics has downgraded the UK’s growth forecast, predicting just a 1% expansion in 2025 and 0.9% in 2026 due to tariff pressures. They also foresee the Bank of England cutting interest rates by 75 basis points this year to cushion a demand shock, setting the Bank Rate at 3.75% by the end of 2025. Meanwhile, the UK’s unemployment rate steadied at 4.4%, with better-than-expected wage data pointing to a cooling job market. Additionally, Wise plc reported a 16% rise in fiscal 2025 underlying income, bolstering its stock.
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