The year 2024 saw a mixed global economic performance, with the US thriving while the UK and Europe faced challenges. As 2025 approaches, concerns about economic sustainability linger, particularly in the US where booming stock markets raise questions about potential bubbles. Economists predict modest growth for the UK and slightly better performance for the US, but uncertainties remain regarding the accuracy of these forecasts.
Traders work on the floor of the New York Stock Exchange on the last day of trading for 2024 Is something bad on the way? That is one of the questions posed in the international outlook for 2025, from theThe year 2024 was a mixed one for the global economy , disappointing for the UK and most of Europe, but pretty positive for America.
Here in the UK we have three main inflation statistics, the Consumer Price Index, which was 2.6 per cent in November, the CPIH , which was 3.5 per cent, and the Retail Price Index, which was 3.6 per cent. But the broad trends of inflation follow a pattern that is common to just about the entire developed world. Put simply, at the beginning of last year it was coming down everywhere, it reached 2 per cent or thereabouts in the summer, then it started to climb again.
We know that our economies are resilient. They have had a lot thrown at them in the five years since the pandemic struck, and they have pulled through in OK shape. So they will recover. But whether 2025 turns out to be a year of decent progress, as the official forecasts suggest, or whether there is something bad on the way, will turn more than anything else, on whether the beast of inflation stays locked in its cage.
Now, I am reasonably confident about UK share markets, mostly because they are still undervalued, but also because nearly all the big companies are global entities. I do feel there is a real risk of the US equity bubble bursting, and the price of the most flaky assets collapsing. But maybe there can be a year of sideways movements, rather than a crash.
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