2025 in a nutshell: A year of political theatre, economic muddling-through, and surprisingly resilient markets.
After a year of elections, politicians actually had to govern. In the US, Trump’s return brought headline-grabbing tariffs (unveiled with game-show flair), global panic, and then a predictable climbdown into watered-down deals. Alongside this came a pro-growth, pro-business tax and deregulation package – great for profits, less great for government borrowing.
The UK and Europe faced a different problem: how to fund higher spending with weak growth. The answer was fairly blunt – higher taxes. Europe surprised on the upside by loosening fiscal rules and spending more on defence and infrastructure, helping confidence. Growth slowed everywhere but recession was avoided, while inflation stayed just sticky enough to keep central banks cautious on rate cuts.
Despite all the noise, markets behaved well.
Equities delivered solid double-digit returns globally, though the journey was bumpy – including a sharp tariff-driven sell-off followed by a powerful rebound. Crucially, 2025 rewarded diversification: the US lagged, while the UK, Europe, Japan and emerging markets all outperformed. Bonds quietly did their job again, delivering decent income and reminding investors why fixed income still matters.
Real assets told a mixed story.
Gold and silver shone amid geopolitics and central bank buying, oil slumped, infrastructure benefited from AI and energy-transition spending, and property continued to struggle under higher rates and work-from-home trends.
Looking to 2026: politics stays unsettled, budgets are tight, and the US market looks expensive and concentrated. Nothing is screaming crisis – but nothing is cheap either. In that environment, boring but sensible ideas like diversification, income and balance are likely to remain investors’ best friends.
Click here to read the 2025 Investment Review & 2026 Outlook