Following a relaxing of tariffs on Europe last month and an agreement between the US and China on Monday to lower their levies against one another, there have been reversals on much of the damage caused by US president Donald Trump’s trade policy. The S&P 500, for instance, has wiped out all its 2025 losses, a sign that traders feel confident in putting their money in businesses again.
Even in Europe, where its strong automotive industry meant the threat of tariffs was felt keenly, new polling suggests a burst in enthusiasm for the continent’s economic outlook.
However, the UK continues to show signs of a slowing economy.
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Jobs market data released by the UK’s Office for National Statistics on Tuesday showed a four-year high in unemployment rate, fewer job openings, and a reduction in pay rises. The news saw a slump in the pound against the euro on Tuesday, which the currency recovered through the day.
None of this paints a rosy picture ahead of the GDP figures due to be published on Thursday. Forecasts predict the UK economy’s growth is slowing and that GDP will expand just 0.1%.
And yet, even with this diminished job market and growth outlook, the Bank of England’s chief economist Huw Pill said that inflation may remain too high for the Monetary Policy Committee to vote through interest rate cuts in the future.
With a low growth at home and a slew of post-tariff trade deals being announced around the world, the pound is at risk of being buffeted by global headwinds daily.
