Patrick Mill, Wealthtime CEO

This article is intended for regulated financial advisers and investment professionals only. Wealthtime does not provide financial advice. This information is not intended as financial advice and should not be interpreted as such.

Well, we certainly live in interesting times. We’re only halfway through the year, but 2025 has already set a new standard in US political policy creating global market and economic uncertainty.

Tariffs and turbulence

After the frenzy of tax year end advisers hoping for a relaxing start to the new tax year had to contend with the fallout of ‘Liberation Day’. On 2 April, President Trump imposed sweeping 10% tariffs on all US imports, with higher rates targeting specific countries. The announcement led to immediate market volatility, with the FTSE All Share by 4.8%, the S&P 500 falling by 6.0%, the Nikkei 225 by 7.8%, the Hang Seng by 13.2% and the DAX by 5.0%[1].

Since the initial announcement, we’ve had a rollercoaster ride of pauses, escalations and rollbacks, with many suggesting the seemingly chaotic process is all part of Trump’s ‘art of the deal’ negotiating tactics. As the quarter closed, the US Court of International Trade ruled that the President had exceeded his authority in using emergency powers to unilaterally impose tariffs, although this judgement is (as I write) being reviewed by the Court of Appeal.

Markets have largely recovered from the initial falls, but the situation has broader implications for global trade and diplomatic relationships going forward. You can read more about Trump’s tactics and the potential impact on markets from my colleague Richard Warne at Copia Capital.

UK economic picture

As a result of the US tariffs, the OECD has just revised its global GDP growth forecast downward to 2.9% for both 2025 and 2026, with the UK expected to see its GDP growth decline to 1.3% in 2025, down from the previous 1.4% forecast[2].

The outlook for the UK is complex, with GDP growth actually recovering, albeit very slowly, in recent months^[3]. However, inflation remains persistent with an unexpected increase in April due to higher energy and food prices compounded by wage growth. However, despite the recent uptick, inflation is well down on the highs of over 10% in 2022 and the Bank of England forecasts that it will peak at around 3.5% in Q3 before gradually declining to its 2% target by early 2027[4]. As a result, most analysts currently forecast another rate cut later this year.

The government has put economic growth firmly on its agenda but is hampered by limited headroom for investment in trade and infrastructure. There speculation of changes to pension tax relief to boost governmental coffers, following an HMRC study into salary sacrifice, although the consensus is that an announcement is unlikely before the Autumn Budget.

The Chancellor’s plans to reform pensions in another direction are, however, gathering momentum. The proposed Pension Schemes Bill will require all multi-employer DC schemes and local government pension scheme pools to operate at “megafund level” with assets of at least £25 billion by 2030. Pension funds of this size can more easily invest in large long-term projects, and the government expects more money to be channelled into UK infrastructure as a result.

The recent Mansion House Accord shows that providers are willing to support this. In May, 17 major workplace pension providers committed to allocating at least 10% of their default funds to private market investments by 2030, with half earmarked for UK-based assets.

What’s on at Wealthtime

Work with Wipro and GBST on our platform transformation is progressing and we’ll update you further in due course.

While that happens in the background, we’re continuing to improve the existing platform functionality to help you deliver the best possible outcomes for investors. In Q2, we implemented various regulatory changes to our illustrations, as well as enhancements to the user interface.  We also supported changes to Just’s Secure Lifetime Income (SLI) product, which is available on the Wealthtime platform, with enhancements to death benefits and valuations.

As we head into the third quarter, we’ll be keeping a close eye on the Chancellor’s aforementioned Spending Review, as well as the evolving US trade situation.

In the meantime, we hope you find some time for a well-earned break over the summer. Here’s wishing you a positive, productive start to Q3 – and perhaps even a few days of sunshine.

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[1] Market Watch

[2] https://www.oecd.org/en/publications/oecd-economic-outlook-volume-2025-issue-1_83363382-en.html

[3] https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/gdpmonthlyestimateuk/march2025

[4] https://www.bankofengland.co.uk/monetary-policy-summary-and-minutes/2025/may-2025