Markets have responded well to whatever it is that is going on in the world, especially the Middle East, right now. I admit to having lost a little of the current thread because I was out for half a day and that’s all it takes lately to miss a few twists and turns. [ED – openings and closing if Saturday’s news is anything to go by!] Portfolios are looking good though as both the S&P 500 and Nasdaq indices hit all-time highs this week.
This has coincided, more or less, with when markets were at their lowest following the Trump Tariff announcement. So as a reminder [Ed – I doubt it’s needed because you hammer it home every week!] for anyone who might have been tempted to have sold out of the markets a year ago (the Nasdaq fell 22% in two months so there was understandable concern) would have missed the benefit of the bounce we have seen in the last 12 months – up over 54%!! Not only is it up from its Liberation Day woes, its actually up some 20% from its Feb ‘25 highs.
It really is about “time in the market!”
Official figures revealed that the UK economy grew by a “bumper” 0.5% in February. The latest GDP figure from the Office for National Statistics showed an unexpected boost to growth before Trump launched his Iran war. The City had expected a far more modest 0.1% increase in GDP.
Amid the economic turmoil from the Iran war, the Bank of England was “not going to rush to judgements” on interest rate rises, Governor Andrew Bailey told BBC News.
WHY All The Stuff I Say Above Has Happened
According to Rathbones, last week saw another example of how markets react when the news turns for the better. The announcement of a two-week ceasefire and talks between the US and Iran in Islamabad – another example of ‘Trump always chickens out’ (taco), his tendency to pull back from the brink – were greeted with an instant mark-up of most financial assets.
However, President Trump’s blockade on traffic this week through the Strait of Hormuz is a high-risk, high-stakes strategy for the negotiating table. That means risks for markets too, as we explain in their latest Weekly Digest, attached
In summary they conclude that:
- Market volatility continues in light of the continued conflict in Iran.
- Higher global inflation and weaker growth could be on the cards if the Strait of Hormuz remains closed.
- However, US first quarter earnings are expected to be good, driven by strong tech sector growth.
Tatton Investment Management benefit from the timing of their missives coming out on a Friday late afternoon as they capture the announcements that saw the significant single-day upswing in markets. The Tatton Weekly covers the following:
- Getting back on track – Strong upward movement over the week indicated that markets saw a way out of the woods. Friday’s news of the reopening of the Strait of Hormuz seemed to prove their collective foresight.
- Strong bank earnings show no credit contagion – 1st quarter earnings for US banks showed no nasty credit surprises although loan loss estimates did go up – and, in general, consumers are still healthy and spending.
- Middle East war turns up food prices – The conflict has raised fuel prices substantially, but food prices have only risen a little so far. Chances are that they’ll rise further but will they start to hurt long-term inflation expectations?
And I should imagine that Louis Coke, Louis Coke Director of Private Clients at Charles Stanley probably didn’t think he would be quite as busy as he is with his ad-hoc notices, but I have another one to give you this week!
Finally in this section, the Canaccord podcast this week considers whether we riding the oil squeeze into stagflation?
Energy prices remain well above pre‑conflict levels, with disruption through the Strait of Hormuz continuing. That has brought renewed focus on the risk of stagflation – a challenging environment where inflation stays high even as economic growth slows.
Chart of the Week brought to you in association with Marlborough Group
This probably need no explanation!
Notes from a Small Island
About a month ago, the Bank of England announced what would be on the next series of banknotes, comments 7IM. Nature won the public vote, so King Charles will be backed by wildlife of some kind (there’s another vote this summer on which animals).
Source: The Bank of England
But of course, not EVERY pound printed will adopt the new design. Because (as so often), the UK has a wonderfully weird way of doing things.
In most countries, there’s one currency, printed by one central bank*. Nice and simple.
And in England and Wales, that is true – only the Bank of England issues banknotes. But in Scotland and Northern Ireland, several commercial (i.e. high street) banks print pound sterling notes with their own designs and logos.
Which is how money used to work.
Banknotes were originally just a promise to pay, backed by the issuing bank’s reputation and balance sheet. By the mid‑1800s, though, England had hundreds of private banks – many poorly funded, frequently failing, and regularly undermining confidence. Not ideal when you’re trying to finance an Industrial Revolution.
So, Parliament stepped in. The Bank Charter Act of 1844 began the long process of centralising note issuance under the Bank of England. Scotland and Northern Ireland were treated differently. Their banking systems were judged to be more stable — fewer banks, better capitalised, and less prone to collapse. If it ain’t broke…
And so, more than 150 years later, there are still six issuers outside the Bank of England, quite literally making money:
Royal Bank of Scotland,
Bank of Scotland,
Clydesdale Bank,
Bank of Ireland,
Ulster Bank,
and our personal favourite …
Danske Bank.
Yup. A publicly listed Danish bank printing ten and twenty pound sterling banknotes. Only in Britain.
Source: Danske Bank
Try spending one of these at a shop outside of Northern Ireland!
*The notable exceptions are Hong Kong and Macau, who have their own thing going on with China.
Miscellaneous
HMRC will start clawing back Winter Fuel Payments from hundreds of thousands of pensioners this month, according to MoneyWeek. More than one million pensioners are being contacted by email or letter in April 2026, informing them of changes to their tax code if they received a Winter Fuel Payment last winter and their annual total income was over £35,000. Around 2.2 million pensioners, including 1.3 million on PAYE, are expected to have to pay back their Winter Fuel Payment from 2025/26, according to government figures.
Reported across the financial services press, Standard Life has bought rival life company Aegon UK £2bn, forming the UK’s largest retirement savings and income business with 16 million customers and assets under management of £480bn. As ever, what it means for those customers remains to be seen.
The number of probate cases taking almost two years to be finalised has more than doubled since 2020/21, according to Freedom of Information data from the Ministry of Justice and published in MoneyWeek. In a significant worsening of delays, the share of probate cases taking between 21 and 23 months to be granted has risen by 131% (from 88 to 203) in the past five years. And whilst I have been talking about it, there are actual financial experts warning the situation is likely to worsen further when pensions are brought into the scope of inheritance tax (IHT) from April 2027. They (and me!) are urging people to take action now to reduce complexity for those left behind and avoid probate disputes and delays.
HMRC has clarified that they consider that where BR qualifying AIM shares are sold and replaced by BR qualifying unquoted shares, the relief is restricted to 50% until the investor has lived for two years. Whether the transactions were pre or post 5 April 2026 doesn’t change the outcome. I won’t go into why that is interesting [Ed – relevant
Industry commentators have called on the government to look at the bigger picture and address unresolved taxation and immigration issues as the chancellor mulls changes to double taxation rules to attract individuals with US interests to the UK, say commentators at Investment International. Following the abolition of the non-dom regime a year ago, individuals receiving income from a US limited liability company (LLC) who move to the UK must pay tax on both sides of the Atlantic. Rachel Reeves is seeking to make amends with internationally mobile professionals, such as American citizens who have left the Gulf but are reluctant to move back to the US, positioning the UK economy as a haven. Marc Acheson, global wealth specialist at Utmost, welcomed the move but caveated that more needs to be done to attract and retain high net worth individuals. “Any shift in government thinking in repositioning the UK as a ‘safe harbour’ for wealth is to be welcomed and this upcoming consultation on proposed changes to double taxation for UK/US residents is a start,” he said. “However, such measures shouldn’t be considered in isolation, and the UK needs to do more to attract a broader range of wealthy families and offer them an incentive to stay long-term.
Advisers have seen an increase in the number of clients accessing tax-free lump sums from their pensions. According to Lubbock Fine Wealth Management and reported in FT Adviser, some 116,100 people aged 55 withdrew a total of £2.3bn in 2024/25, a five-year high. That was an increase from 110,200 people aged 55 withdrawing £2.1bn in 2023/24, and 99,400 withdrawing £1.9bn in 2022/23. This comes as some clients seek to avoid inheritance tax for their beneficiaries, with pensions set to be included in estates for inheritance tax purposes from April 2027. If you are considering taxing your tax-free lump sum, please speak to your usual JB Wealth Advisor first.
British pensioners planning to retire overseas this tax year could miss out on more than £77,000 in state pension income over 20 years if they move to certain countries due to the UK’s frozen pension policy, according to Rathbones. Under the UK’s triple lock policy, the state pension rises each year by the highest of inflation, average earnings growth or 2.5%. However, Rathbones’ analysis shows for retirees who move abroad to several countries – including Canada, Australia and New Zealand – state pension payments are frozen at the rate first received, with no future increases.
My neighbours are starting to weed the ‘flower’ bed we share so I had better go and help them. Who knows I might even find out which plants are supposed to be there! I wonder if they fancy a picket-fence? Anyway, I hope to catch up with you next time.