July 2025 – Market Update and the Importance of Staying the Course
Market Overview
Global markets have continued to experience mixed performance through mid-2025. While volatility remains a feature of the current environment, recent data suggests a more constructive backdrop is emerging. Inflation has cooled for the fifth consecutive month in the U.S., and central banks across major economies are cautiously shifting toward easing cycles. Equity markets have responded positively in some regions, with European indices showing resilience amid stronger fiscal spending and renewed interest in infrastructure and renewables.
In the UK, the Labour government has begun implementing its economic agenda, focusing on public investment, housing, and green energy. While markets initially reacted cautiously, investor sentiment has stabilised as the government has signalled a pragmatic approach to fiscal policy. However, the UK labour market is showing signs of strain: unemployment has risen to 4.7%, vacancies have dropped to their lowest level since early 2021, and wage growth has slowed to 5%. These trends suggest a cooling economy, and the government faces pressure to stimulate productivity and business investment.
Global Geopolitical Influence – Trump’s Return
On the global stage, Donald Trump’s return to the U.S. presidency has reintroduced a degree of unpredictability. His administration has reinstated tariffs on imports from China, Mexico, and Canada, reigniting trade tensions and raising concerns over global supply chains. However, Trump’s foreign policy has also focused on de-escalation, particularly in Ukraine and the Middle East. If successful, this could reduce geopolitical risk and free up government spending globally. Markets remain watchful, balancing the disruptive nature of his policies with the potential for longer-term stability.
The Case for Long-Term Investing
Periods of uncertainty often test investor resolve, but they also reinforce the value of long-term investing. As highlighted in recent economic outlooks, we may be entering a new productivity cycle, supported by AI, automation, and energy transition. Staying invested through these cycles allows investors to benefit from compounding returns and avoid the pitfalls of short-term market timing.
At Loughtons, we continue to build and manage portfolios using a diversified mix of actively managed funds, tailored to each client’s risk profile and financial goals. Our approach ensures exposure across asset classes and geographies, helping to mitigate risk and capture opportunities as they arise. Fund managers, who thrive in volatile conditions, are well-positioned to take advantage of market dislocations to add long-term value.
Conclusion
While headlines may continue to highlight uncertainty, the underlying market fundamentals are showing signs of improvement. By maintaining a disciplined, long-term investment strategy and focusing on your personal financial objectives, you can navigate through short-term noise and work toward a more secure financial future.
For clarification of any points discussed above and any future independent advice regarding your own financial planning, please do contact us on 01626 833225 or email [email protected]
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Important Information
The views and opinions contained herein are those of Loughtons Independent Financial Advisers and may not necessarily represent views expressed or reflected in other economic communications, strategies or funds.
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