Stamp Duty Land Tax (SDLT) rates reverted on 1 April 2025 to pre-September 2022 levels
First-time buyers will have to start paying the tax on any home valued above £300,000
Non-first-time buyers will pay SDLT on properties valued above £125,000.
From 1 April 2025, Stamp Duty Land Tax (SDLT) rates revert to the thresholds prevailing before temporary increases were put in place in September 2022. What will it mean for homebuyers?
What are the new thresholds?
Stamp Duty is a government tax paid by house buyers as a lump sum upon completion. It is payable only by buyers purchasing a property or land over a certain price bracket. Currently, existing homebuyers pay no SDLT on properties up to the value of £250,000, while FTBs owe nothing on any purchase below £425,000.
After reverting to their previous levels, however, FTBs will have to start paying the tax on any home valued above £300,000. Everyone else will return to paying Stamp Duty on properties valued above £125,000.
First-time buyers bear the brunt
Whilst this change will impact everyone planning to move, it is arguably FTBs who will be hit hardest. In the heat of the pandemic in 2022, the government announced a temporary change to Stamp Duty to support the housing market and those hoping to get on the housing ladder.
Now, affordability questions will return along with the lower thresholds. As well as adding thousands of pounds in extra costs for many, others will miss out on first-time buyers’ relief when buying a property up to £500,000.
Plan, don’t panic
After the change, fewer than one in 10 buyers will get a Stamp Duty free purchase, compared to a third in the current market, research1 suggests. Analysts also predict fierce competition for properties that fall just below the new thresholds.
Although the new thresholds add an unwelcome price bump to a house purchase, buyers should not panic. The key is to factor in any SDLT costs into your budget and understand how this affects your affordability.
1Yopa, 2025
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. Financial protection policies typically have no cash in value at any time and cover will cease at the end of the term. If premiums stop, then cover will lapse.
Rachel Reeves described two months of falling inflation, along with growth in real wages and GDP, as “encouraging signs”
Keir Starmer has reiterated his commitment to securing “free and open trade” in order to protect the national interest
The UN trade body UNCTAD predicted global economic growth would slow to 2.3% this year, falling below the 2.5% level ‘widely viewed as signalling a global recession’
“A global trade war would create renewed inflation, increasing pressure on British families”
Official data from the Office for National Statistics (ONS) last week showed UK inflation eased in March. The Consumer Prices Index (CPI) rose by 2.6% in the year to March, down from a 2.8% rise in the 12 months to February.
The fall back in inflation can be attributed to a reduction in fuel prices and games, toys and hobbies – in particular computer games. Food inflation also eased from 3.3% to 3% in the month. Services inflation, a key measure of underlying price pressures for rate-setters, slowed more than expected to 4.7% in March from 5% the previous month.
The lowest reading since December and a steeper drop than expected, economists in a Reuters poll had predicted a CPI reading of 2.7% in March. The slight tempering in CPI provided a boost for Chancellor Rachel Reeves, who said that two months of falling inflation, along with growth in real wages and GDP, were “encouraging signs.”
Looking ahead, Research Director at the Resolution Foundation, James Smith said the reduction in CPI“comes among overwhelming uncertainty as to where inflation goes from here.” Expecting a sharp rise in inflation in April, due with the Ofgem price cap increasing, Smith added, “the truth is that the outlook for UK inflation hinges on President Trump’s tariff policies. Global trade uncertainty could drive down our prices, with oil already down more than 10% since the start of April… a global trade war would create renewed inflation, increasing pressure on British families already struggling with the cost of living.”
With the next Monetary Policy Committee (MPC) meeting concluding on 8 May, the Committee have previously signalled their intention to adhere to a “careful and gradual” approach to cutting borrowing costs. The impact of a global trade war will dominate the central bank’s strategy going forward.
UK trade talks
During their first call since ‘Liberation Day’ tariff announcements, last week Donald Trump and Keir Starmer conducted “ongoing and productive discussions between the UK and US on trade,” according to a Downing Street spokesperson. The Prime Minister has reiterated his commitment to securing “free and open trade” in order to protect the national interest, following the imposition of 10% tariffs on UK goods and 25% on car, steel and aluminium imports. In addition, the White House confirmed the leaders spoke about security in the Middle East and resolving the Ukraine conflict.
Shrinking global trade and growth expectations
Last week the World Trade Organization (WTO) revised its outlook, forecasting a 0.2% decline in global goods trade in 2025. The downturn is largely attributed to US tariffs, with North America expected to see the steepest fall. WTO Director General Ngozi Okonjo-Iweala expressed concern over the growing “decoupling” between the US and China, saying the “phenomenon” is “really worrying.” The WTO warned of ‘severe downside risks,’ including political instability and reciprocal tariffs, which could result in an even steeper reduction in global trade.
On the same day, the UN trade body UNCTAD predicted global economic growth would slow to 2.3% this year, falling below the 2.5% level ‘widely viewed as signalling a global recession,’ according to the organisation.
Meanwhile, the International Monetary Fund (IMF) Managing Director Kristalina Georgieva, in her keynote speech at the organisation’s spring meeting in Washington, said there will be “notable” markdowns to growth forecasts, in the face of trade policy uncertainty, which she referred to as “literally off the charts.”
ECB reduces key interest rate
The European Central Bank (ECB) cut interest rates for the seventh time since last June, lowering the deposit rate by 0.25% to 2.25%, in line with analyst expectations. The ECB also dropped the term ‘restrictive’ in terms of monetary policy stance from its statement, signalling a shift as trade tensions continue to weigh on Europe’s economy. ECB President Christine Lagarde warned that “downside risks to economic growth have increased,” with the impact of US tariffs still unfolding. She added that escalating global trade tensions are likely to dampen exports and weaken investment and consumption. Lagarde also cautioned that deteriorating market sentiment could tighten financial conditions further.
Here to help
Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
All details are correct at time of writing (23 April 2025)
President Trump paused most tariffs for 90 days, briefly boosting global market confidence amid uncertainty
The UK economy unexpectedly grew 0.5% in February, driven by services, production and construction
The UK economy unexpectedly grew 0.5% in February, driven by services, production and construction
“We want to secure the best deal possible for British jobs and British industry”
After a tumultuous time for global markets following his Liberation Day announcement last Wednesday, President Trump took to social media to reveal a 90-day suspension on most of the tariffs, plus a lowering of reciprocal tariffs.
Despite a lack of clarity over what will happen within the three months, the monumental U-turn initially boosted markets, with Trump saying there will be “fair deals for everybody.”
The White House confirmed a 10% rate on most countries will be maintained, including those in the EU, plus higher 25% taxes on steel, aluminum and cars. Trade tariffs for China were increased to 125%, after they retaliated with elevated import tariffs. Canada and Mexico still face the tariffs imposed in March.
At a cabinet meeting on Thursday, Trump described the turmoil on global markets that led to his decision to delay tariffs as “a big day,” highlighting the record stock market gains in the hours after he announced the U-turn. He added, “We’re working with a lot of different countries, and it’s all going to work out very well… we’re in good shape.”
On home shores, a Downing Street spokesperson said the UK will “coolly and calmly” continue negotiations with the US. Rachel Reeves added, “Of course we want to secure the best deal possible for British jobs and British industry… we are absolutely resolved to do everything we can.”
News came at the end of the week that the Trump administration is exempting imported smartphones, laptops and other electronics from reciprocal tariffs. Market sentiment improved initially following the shifting signals on US trade policy.
UK economy grows
New data from the Office for National Statistics (ONS) shows the UK economy grew by 0.5% in February, beating expectations of 0.1% growth in the period. Contributing factors to the surprise boost in growth include service output (increased by 0.3%, the largest contributor), while production output grew by 1.5% and construction output by 0.4%.
This positive uptick follows no growth in January (revised up from a 0.1% fall). In the three months to February, real GDP is estimated to have grown by 0.6%.
Rachel Reeves said the growth figures are an “encouraging sign,” adding “we must go further and faster to kickstart economic growth, provide security for working people and put more money in their pockets.”
This strength in growth is likely to be short-lived, with higher tariffs and business taxes set to impact.
Government gains control of British Steel
On Saturday, MPs had their Easter break interrupted as emergency legislation was rushed through Parliament, allowing the UK government to take control of Chinese-owned British Steel. Business Secretary Jonathan Reynolds said nationalising the Scunthorpe plant, which employs 2,700 people, may be the next step. He sought emergency powers to stop owner Jingye from shutting its blast furnaces, which would end primary steel production in the UK. In a rare move, both Commons and Lords returned for a Saturday sitting to debate the bill, which has now passed and received Royal Assent.
Unemployment stagnant, pay growth strong
The UK’s unemployment rate remained steady at 4.4% in the three months leading up to February 2025, according to latest ONS data released on Tuesday. This stability comes amid signs of a cooling labour market, with job vacancies falling below pre-pandemic levels for the first time since mid-2021 and a decrease of 78,000 in payroll employment during March.
Average weekly earnings, excluding bonuses, increased by 5.9% year-on-year in February. Including bonuses, wage growth held steady at 5.6%. This sustained growth in earnings, particularly in the public sector, has been a key driver. Liz McKeown, Director of Economic Statistics at the ONS said, “Regular pay growth remains strong having increased slightly in the latest period. Growth accelerated in the public sector as previous pay rises fully fed through to our headline figures, while pay in the private sector was little changed. The latest survey results estimate that the unemployment rate is unchanged on the previous three months, while separately the number of employees on payroll fell slightly over the same period.”
Here to help
Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
All details are correct at time of writing (16 April 2025)
With the new tax year allowances in place, now is the time to make smart financial decisions
Taking time to review and refine your financial plan can help you stay on track for the future
Ensure you’re making the most of the opportunities available – your future self will thank you!
The beginning of the new tax year is the perfect opportunity to take control of your finances and set the tone for the months ahead.
By implementing a thoughtful financial plan, you can make the most of your money, achieve your goals and ensure financial peace of mind. Here are just a few key considerations to help you build a solid plan:
Maximise tax-efficient opportunities
The new tax year brings fresh allowances and reliefs potentially available to reduce your tax liability:
Use your ISA allowance
Save or invest up to £20,000 (the current annual limit) in an Individual Savings Account (ISA) to grow funds tax-free
Pension contributions
Maximise pension contributions to benefit from tax relief as well as potentially lowering your taxable income
Capital Gains Tax planning
Make use of your annual exemption to avoid unnecessary tax liabilities.
Build a solid financial plan for a stronger financial future
Why not take time to reset and refocus on your financial goals? With clear objectives, smart tax planning and disciplined financial habits, you can start the new tax year strong and lay the foundation for long-term financial success.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
Spring typically offers an uptick in listings, with 70% of homes listed in February and March completing quickly
Buyers have benefited from stable mortgage rates and a wider selection of homes to offer on
Early preparation is crucial for making informed and successful decisions in a competitive market
As spring gets under way, the UK property market is looking refreshed. Rightmove1 reports the average asking price rose by 1.7% (£5,992) to £366,189 in January 2025, the best start to the year since 2020. This suggests both buyers and sellers are optimistic about the property market this year.
Why is spring popular with buyers and sellers?
Longer daylight hours and blooming gardens make properties more appealing in springtime, boosting seller prospects. Rightmove says nearly 70% of homes listed in February and March go through to completion, with February homes taking an average of just 51 days to find a buyer.
A buyer’s market
With more homes being listed, buyers have more options and better chances of securing a good deal. Sellers are pricing competitively and mortgage rates have stabilised.
How buyers can get a head-start
Acting early can help buyers beat the competition. Securing a mortgage agreement in principle before starting the search strengthens a buyer’s position when making an offer. A clear budget is essential, considering not just the deposit but also legal fees, Stamp Duty, and moving costs. First-time buyers (FTBs) should also be aware of Stamp Duty changes from 1 April affecting properties over £300,000.
Researching local property prices and neighbourhoods helps buyers assess fair value. Transport links, schools and shops can impact both lifestyle and long-term investment potential. With high demand expected, scheduling viewings early increases the chances of securing the right home before competition intensifies.
Talk to us about your plans
We can help buyers and sellers create a strategy to manage savings, navigate mortgage options and make informed decisions. With strong market conditions and increased choice, now looks a great time to move onto or up the property ladder.
1Rightmove, 2025
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments.
With the new tax year allowances in place, now is the time to make smart financial decisions
Taking time to review and refine your financial plan can help you stay on track for the future
Ensure you’re making the most of the opportunities available – your future self will thank you!
The new tax year is a great opportunity to take charge of your finances and set yourself up for financial peace of mind by knowing you have a plan in place.
By planning ahead and making the most of available allowances, you can optimise your wealth, reduce tax liabilities and work towards long-term financial security. Here are some key steps to consider:
Take advantage of tax-efficient opportunities
With the new tax year allowances in place, now is the time to make smart financial decisions:
Maximise your ISA allowance
Contribute up to £20,000 (the current annual allowance) into an Individual Savings Account (ISA) and benefit from tax-free growth
Make the most of your Capital Gains Tax allowance
Use your annual exemption to minimise tax on investment profits
Boost your pension contributions
Take advantage of tax relief while also potentially lowering your taxable income
Plan for Inheritance Tax (IHT) efficiently
Lifetime gifting can help reduce the impact of Inheritance Tax, allowing you to pass on more to loved ones.
Build a solid financial plan for a stronger financial future
Taking time to review and refine your financial plan can help you stay on track for the future. With proactive tax planning and disciplined habits, you can build a stronger financial foundation and make informed decisions that align with your long-term goals. Whether you’re looking to grow your savings, invest more efficiently, or plan for retirement, taking action now can make a significant difference. We’re here to help you explore your options and ensure you’re making the most of the opportunities available. Your future self will thank you!
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate tax and trust advice and certain forms of estate planning.
Financial ‘death cleaning’ helps simplify finances, reduce clutter, and ensure loved ones aren’t left with financial burdens
Key steps include closing unused accounts, updating documents, maximizing tax efficiency, and reviewing investments
Open conversations with family about financial plans support intergenerational wealth planning and a smooth legacy transfer
Could your finances benefit from a spring clean? You could take your cue from the Swedes. They believe in ‘döstädning,’ or ‘death cleaning.’ It sounds pessimistic, but it involves decluttering your belongings to reduce the burden you leave behind to loved ones.
The philosophy gained international prominence through a 2018 book called The Gentle Art of Swedish Death Cleaning, by Margareta Magnusson, but many of the methods described to organise your home and belongings can be applied to your finances as well.
Why should you death clean your finances?
First, it can help you feel more in control of your money. Second, it can help you refocus your time (and money) on what matters most to you. And third, taking time to organise your finances now could spare your loved ones from a great deal of emotional and financial stress after you die.
Key steps in a financial spring clean It’s a good idea to make a checklist and work your way through. Key steps include:
Streamline your finances
Close accounts you don’t use, cancel unused subscriptions or memberships, and explore ways to cut back on wasteful spending
Build a document library
Gather all important documents, including Wills, insurance policies, investment portfolios and property deeds. Consider storing documents securely online. Having an easily-accessible document library will help make sure your loved ones can find critical information quickly when needed
Keep beneficiary information up to date
Review and update beneficiary details on life insurance policies, pensions and expressions of wishes to ensure they reflect your current intentions
Revisit your investments
Are your investments still aligned with your long-term goals? Has your attitude to risk altered? Maybe your circumstances have changed? This information is important. We’ll monitor performance and rebalance when necessary; updating us on goals, risk preference and life changes will inform investment recommendations
Maximise tax-efficiency
The new tax year brings new opportunities, allowances and reliefs to take advantage of, to reduce your tax liability. This includes revisiting your Inheritance Tax (IHT) strategy, which can help reduce the liability on your estate
Consider your retirement plan
Are you saving enough into your pension to provide you with the lifestyle you desire in retirement? Are the underlying investments right for you? If you have multiple pension pots, would consolidating them be relevant for your unique requirements?
Making your plans known to others
Discussing your financial arrangements with trusted family members and keeping them updated on changes you’ve made, is an important part of the process too. Intergenerational financial planning involves managing wealth and financial strategies across multiple generations of a family, focusing on ensuring financial security, preserving assets and facilitating smooth wealth transfer while considering tax implications, estate planning and family values. They’re really valuable conversations to have.
Take control
Spring cleaning your finances is about more than just getting organised, it’s about simplifying your life, taking control and leaving the best possible legacy for loved ones. Maybe those Swedes really are on to something. We can help you get organised so you can focus on enjoying life.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.
The Chancellor cut welfare and departmental spending to restore a fiscal buffer, but risks to forecasts remain high
Inflation dipped unexpectedly but is expected to rise again due to higher energy, taxes and wage costs
Business and retail activity showed resilience, but weak manufacturing and trade tensions cloud economic prospects
Chancellor trims spending plans
Rachel Reeves delivered her Spring Statement on 26 March, unveiling welfare cuts and spending reductions in order to balance the government’s books in the face of a worsening fiscal outlook.
The new spending plans were required to ensure the Chancellor stays on track to meet her two self-imposed fiscal rules, which she confirmed remain “non-negotiable.” An updated forecast produced by the Office for Budget Responsibility (OBR) had more than wiped out the Chancellor’s previous £9.9bn fiscal buffer announced in last October’s Budget due to a combination of higher debt interest costs and lower economic growth.
Several policy changes announced in the Spring Statement, including welfare reforms and day-to-day departmental spending reductions, restored the buffer back to its October level. The OBR did, however, note that its size remains historically low and that the buffer therefore provides only a small margin of error against the risk of future economic shocks.
Speaking after Ms Reeves delivered her statement, OBR Chair Richard Hughes also acknowledged the precarious nature of economic forecasting and admitted there were many factors that could once again “wipe out” the Chancellor’s fiscal headroom; these include an escalating trade war, a small downgrade to growth forecasts or a rise in interest rates.
This vulnerability was vividly highlighted just hours after the Chancellor finished her speech, with President Trump’s announcement of a new 25% tariff on cars and car parts coming into the US – a move which is widely expected to hit global growth prospects.
Analysis by the Institute for Fiscal Studies (IFS) also concluded that the Chancellor’s headroom is ‘very small.’ IFS Director Paul Johnson added there was a “good chance” economic forecasts would deteriorate significantly before the Autumn Budget which could leave the government facing months of damaging speculation about what taxes might need to be increased.
Inflation dips but fresh climb predicted
While the latest batch of inflation statistics did reveal a larger than expected monthly decline in the headline rate, economists continue to warn that price rises are likely to accelerate again soon.
Figures published last month by the Office for National Statistics (ONS) showed the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – dropped to 2.8% in February from 3.0% the previous month. This rate was just below economists’ expectations, with a Reuters poll predicting a reading of 2.9%.
ONS said February’s decline was primarily driven by lower clothing and footwear prices which fell for the first time in over three years, partly due to an unusually high number of sales during the month. This unseasonal clothes discounting offset small price increases from a number of other categories, including alcoholic drinks.
Despite the monthly dip, economists still expect a fresh pick-up in the CPI rate over the coming months. Indeed, a number of near-term price rises, such as energy, Council Tax and water bill increases, are already baked in, while surveys suggest many businesses will look to raise prices in response to April’s National Insurance and Living Wage increases.
Last month also saw interest rates remain on hold, following the latest meeting of the Bank of England’s interest-rate setting committee. At its 19 March meeting, the Bank’s nine-member Monetary Policy Committee (MPC) voted by an 8-1 majority to leave Bank Rate unchanged at 4.5%; the one dissenting voice preferred a 0.25 percentage point reduction.
Commenting after announcing the decision, Bank Governor Andrew Bailey said he still believed rates were on a “gradually declining path” but noted that increasing geopolitical and global trade uncertainties meant the Bank would have to be “careful” when considering future cuts. The next MPC announcement is scheduled for 8 May.
Markets
At the end of March, concerns weighed on financial markets, days before Donald Trump’s tariff plans are due to take effect. Investors are braced for a broad set of tariffs, set to be unveiled on April 2 – described as ‘Liberation Day’ by the President.
In the UK, the FTSE 100 index closed the month on 8,582.81, a loss of 2.58%. The mid-cap focused FTSE 250 closed the month down 4.19% on 19,475.48, while the FTSE AIM closed on 681.99, a loss of 3.10%.
Across the pond, the Dow closed March down 4.20% on 42,001.76, while the tech-orientated NASDAQ closed the month down 8.21% on 17,299.29. On the continent, the Euro Stoxx 50 closed March 3.94% lower on 5,248.39. In Japan, the Nikkei 225 ended the month on 35,617.56, a monthly loss of 4.14%.
On the foreign exchanges, the euro closed the month at €1.19 against sterling. The US dollar closed at $1.29 against sterling and at $1.08 against the euro.
Brent Crude closed March trading at around $74 a barrel, a monthly gain of just over 7.0%. Oil moved higher after Donald Trump suggested that the US could impose secondary tariffs on Russia, a major exporter. The OPEC+ producer’s crude exports hit a five-month high in March. Gold closed the month trading around $3,149 a troy ounce, a monthly gain of almost 10.00%. The gold price reached a trading high on 31 March as concerns intensified over an escalating trade war, prompting investors to flock to the safe-haven asset.
Survey reports uptick in business activity
Although the latest monthly economic growth statistics did reveal an unexpected contraction at the start of the year, more recent survey evidence points to a “modest expansion” in March.
Figures published last month by ONS showed the UK economy shrank by 0.1% in January, driven by a sharp decline in manufacturing output; in contrast, a Reuters poll had predicted a monthly growth rate of 0.1%, following December’s 0.4% expansion. While ONS said the economy was still estimated to have grown by 0.2% across the three months to January, it also noted the overall picture was one of ‘weak growth.’
Data from the recently released S&P Global/CIPS UK Purchasing Managers’ Index (PMI) does point to a subsequent pick-up in activity, with March’s preliminary headline growth indicator hitting a six-month high of 52.0. This upturn, though, was driven by only small pockets of growth, most notably in financial services, with manufacturers continuing to struggle.
S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said, “The signal from the flash PMI is an economy eking out a modest expansion in March, consistent with quarterly GDP growth of just 0.1%. However, just as one swallow does not a summer make, one good PMI doesn’t signal a recovery.”
Retail sales unexpectedly rise
The latest official retail sales statistics showed that sales volumes defied analysts’ expectations by rising in February, while survey evidence points to a continuing modest pick-up in consumer sentiment.
Figures released last month by ONS revealed that retail sales volumes grew by 1.0% in February, with broad-based strength reported across all major categories except food stores sales. This loosening of consumer purse-strings came as a surprise to most analysts, with a Reuters poll of economists actually predicting a 0.4% monthly contraction.
Data from GfK’s most recent consumer confidence survey also reported further modest improvement in the overall level of consumer sentiment. While March’s headline figure remained below the survey’s long-run average of -10, consumer morale was buoyed by greater optimism in economic prospects and ticked up to a three-month high of -19.
Evidence from the latest CBI Distributive Trades Survey, however, shows the retail environment remains challenging. According to the survey, annual sales volumes fell ‘markedly’ in March with retailers predicting a further decline, albeit at a slower pace, in April too. Firms across the retail and wholesale sectors suggested ‘global trade tensions,’ as well as last Autumn’s Budget decisions, were weighing on confidence and leading to a reduction in demand.
All details are correct at the time of writing (01 April 2025)
It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission.
US President Trump disrupted the global trade system by introducing tariffs on ‘Liberation Day’
Global markets continue to be highly volatile following the announcement
The government is to help the UK car industry cope with tariffs by relaxing electric vehicle (EV) sales targets
“This is one of the most important days… in American history. It’s our declaration of economic independence”
On what Trump called ‘Liberation Day’ last Wednesday, the US president disrupted the global trade system by introducing tariffs of more than 40% on key trading partners. From 5 April, most countries trading with the US faced a minimum tariff of 10%. Some will be hit much harder, with rates rising as high as 50%. Trump professed, “This is one of the most important days… in American history. It’s our declaration of economic independence.”
These new measures follow earlier tariff announcements, meaning Chinese goods will now face combined duties of 54% from 9 April. Other countries affected include the European Union, with tariffs of 20%, Japan at 24%, South Africa at 30%, Vietnam at 46% and Thailand at 36%. The UK is subject to the baseline 10% tariff. Other countries facing the 10% baseline tariff include Australia, New Zealand, Argentina, Brazil, the United Arab Emirates and Turkey.
Global stock markets volatile as Trump stays firm
More than $5trn was wiped off the value of the S&P 500 index last Thursday and Friday, marking the worst week for US stocks since the start of the pandemic in 2020. When asked about the steep falls, Trump said, “Sometimes you have to take medicine to fix something.” The sharp losses suffered by global stock markets continued on Monday after Trump said he would not soften his stance on trade, despite growing concerns about a possible global recession.
Markets were highly volatile again on Monday trading, with the FTSE 100 dropping by 5.1% and Hong Kong’s Hang Seng index falling by more than 13%, its steepest one-day drop this century.
US stocks sank sharply again on Tuesday despite starting off the session with decent gains, sending the S&P 500 to its lowest close in 14 months.
In recent days, investors have turned to safe-haven assets, pushing bond prices higher and yields lower. Commodity markets were also under pressure, with Brent crude, the international benchmark, falling by around 2%. Copper, a key industrial metal often seen as a barometer of global economic health, dropped 4%.
Goldman Sachs raised the odds of a US recession from 35% to 45%, citing ‘a sharp tightening in financial conditions’ since the tariffs were announced.
Extra 50% tariff on China
In retaliation, China announced a 34% duty on US goods on Friday. However, on Monday, President Trump said he would impose additional 50% tariffs on all goods from China, if Beijing did not withdraw its 34% retaliatory tariffs. The response to that from China was, ‘If the US insists on its own way, China will fight to the end.’
According to a spokesperson at the Ministry of Commerce, China has filed a lawsuit with the World Trade Organization (WTO), saying the tariffs violate WTO rules and undermine ‘the rules-based multilateral trading system and the international economic and trade order.’
UK to relax electric car rules as US tariffs hit
The government announced plans to help the UK car industry cope with trade tariffs by relaxing electric vehicle (EV) sales targets. While the ban on selling new petrol and diesel cars will still be introduced from 2030, manufacturers will now have more flexibility on annual sales targets and face lower fines for missing them.
The US has imposed a 25% tariff on cars imported from the UK, affecting one of the UK motor industry’s most important export markets. This came into effect last week and is in addition to a 10% tariff on nearly all UK goods announced on Wednesday.
Transport Secretary Heidi Alexander said the move was not a “silver bullet”, but part of a wider strategy to respond to the tariffs. Although a consultation on the EV rules closed in mid-February, Alexander told the BBC the government had fast-tracked the changes because of the latest trade developments.
Speaking at a Jaguar Land Rover plant in the West Midlands, Prime Minister Keir Starmer said Trump’s decision to increase tariffs posed “a huge challenge for our future” but said his government would “shelter British business from the storm” with a more active industrial policy.
Here to help
Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have.
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.
All details are correct at time of writing (9 April 2025)
Chancellor Rachel Reeves announced spending cuts but no tax increases, aiming to save £14bn by 2029/30
The UK growth forecast was revised to 1% in 2025, with improvements expected later in the decade
UK retail sales fell for a sixth month and looming US tariffs threaten the car industry
“The global economy has become more uncertain”
Chancellor Rachel Reeves delivered the government’s Spring Statement on 26 March, with spending cuts taking centre stage – and no further tax rises announced.
As had been widely expected, Ms Reeves announced further reductions to welfare spending within a package of reforms designed to raise £14bn by 2029/30. According to forecasts by the Office for Budget Responsibility (OBR), welfare cuts are estimated to save £4.8bn.
Meanwhile, an additional £2.2bn of funding was made available for the Ministry of Defence in 2025/26, such that the government will increase defence spending to 2.5% of GDP; Ms Reeves pledged “to make the UK a defence industrial superpower.” To compensate for the rising defence budget, overseas aid has fallen to 0.3% of Gross National Income, as had been set out prior to the Spring Statement.
The government also released confirmation that it is considering reforms to Individual Savings Accounts (ISAs). The plans would seek to boost savers’ returns and the government’s growth goals, for example by nudging more savers from Cash ISAs to Stocks & Shares ISAs. Specifically, the government is reportedly weighing up a split to the current £20,000 allowance for all ISAs into targeted caps, though no changes have been made for now.
The Chancellor outlined the OBR’s latest assessment of the UK economy, notably a revised growth forecast of just 1% for 2025. Despite the poor short-term forecast, the OBR’s estimates now look brighter for the rest of the decade, with increases to growth figures for each of the subsequent four years.
In a separate release last week, the latest inflation figures from the Office for National Statistics (ONS) revealed that prices in the UK rose by 2.8% in the 12 months to February. Ms Reeves expressed disappointment with the growth data but noted that the latest spending cuts have restored the government’s planned headroom, with a surplus of £9.9bn still expected in 2029/30.
Other key measures announced included:
Confirmation of a new £3.25bn fund to support the reform of public services and seize opportunities from digital technology and Artificial Intelligence (AI)
Plans to increase the number of tax fraudsters charged every year by 20%
Confirmation of an additional £2bn in social and affordable housing in 2026/27.
“The global economy has become more uncertain,” remarked Ms Reeves during her Statement, “as trading patterns become more unstable and borrowing costs rise for many major economies.”
She added, “The job of a responsible government is not simply to watch this change. This moment demands an active government.”
Government support urged for UK car makers
UK car firms reportedly met with industry minister Sarah Jones on Friday, faced with the looming threat of 25% tariffs on US car imports set to come into force at midnight on 3 April.
Hopes of a deal with President Donald Trump over import levies have faded in recent weeks, leaving car companies scrambling for government reassurances that they will have access to support. Mr Trump has been explicit in saying that there will be no carve-outs for car imports.
Official figures put the cost of US tariffs on the UK economy at a 1% reduction in growth in a worst-case scenario.
Another decline in UK retail sales
Retail sales in the UK dropped sharply in March, according to the latest Distributive Trades Survey released last week by the Confederation of British Industry (CBI), a sixth consecutive month of falling volumes.
In total, sales volumes dropped by a weighted balance of -41% in March, down further from -23% in February. Although the downturn is expected to ease slightly in April, sales volumes are still expected to decline by -30%.
UK housing affordability improves in 2024
In more positive economic news, the house price-to-income ratio in England and Wales returned to pre-pandemic levels, according to newly released government data. While house prices have risen by 1% since 2021, average earnings have grown by 20% over the same time span, the ONS’ annual housing affordability report found, providing a welcome boost to homebuyers.
Specifically, the median average home in England in 2024 (£290,000) cost 7.7 times the median average earnings of a full-time employee (£37,600), meaning that affordability has returned to its pre-pandemic range.
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All details are correct at time of writing (2 April 2025)
