Stock market performance for the year to date has been dominated by the potential impact of US trade tariffs. US markets had initially risen following Donald Trump’s inauguration, buoyed by his “America First” policy programme. These gains were short-lived, as US markets then declined sharply during February. Investors remain worried that tariffs will stoke inflationary pressures in the US, keeping interest rates higher for longer.
The technology sector had already dipped sharply as the release of DeepSeek, a Chinese Artificial Intelligence (AI) app, triggered concerns over the long-term prospects of more established players. Nvidia’s resulting share price drop of 17% in one day was widely reported as the biggest ever market cap loss for a US company.
The Dow Jones Industrial Average Index rose by 4.7% over January as a whole, and then fell by 1.6% over February. The technology-heavy Nasdaq Index rose by 1.6% over January, but then dropped by 4% over February.
Having cut UK interest rates twice in 2024, the Bank of England (BoE) announced its first cut of 2025 at the Monetary Policy Committee’s (MPC’s) February meeting. Policymakers voted by seven to two in favour of a cut of 25 basis points, reducing the base rate to 4.5%, although two MPC members voted for a larger reduction of 50 basis points.
UK interest rates are projected to fall more slowly than previously forecast; rising energy prices are expected to push up inflation to 3.7% later this year, and inflation is now expected to remain above its 2% target until the start of 2028. The BoE reported that a growing number of UK businesses regard the October 2024 Budget as “a deterrent to investment”, with respondents citing the impact of business asset relief, inheritance tax and higher employers’ National Insurance contributions.
In an address to the European Parliament, European Central Bank President Christine Lagarde reiterated that inflationary pressures in the eurozone were continuing to ease but also warned that greater friction in global trade would make the region’s inflation outlook “more uncertain”.
Closer to home, the average house price in Northern Ireland rose by 9% during 2024 to just over £183,000, according to figures from the Northern Ireland Statistics and Research Agency (NISRA). This is the highest average price since early 2008, when the Global Financial Crisis triggered a significant decline.
The average price at the end of 2024 ranged from £161,000 in Mid and East Antrim to £218,000 in Lisburn and Castlereagh.
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The value of your investment can go down as well as up and you may not get back as much as you originally invested.