Global Markets Update – May 2025

What rising inflation, public borrowing, and shifting US fiscal policy mean for private clients

In today’s uncertain global economy, market signals matter more than ever—especially for high-net-worth individuals looking to safeguard and grow their wealth. This month’s developments in the UK and US reflect a broader theme: inflationary pressures, growing public sector deficits, and political shifts are creating an increasingly complex environment for financial planning.

UK Inflation Higher Than Expected

According to the latest figures from the Office for National Statistics (ONS), UK inflation rose to 3.5% in April, defying market forecasts of 3.3%. The surprise was driven by a combination of higher energy prices, increased water bills, and recent tax changes. Even more concerning was services inflation, which climbed to 5.4%—far above the Bank of England’s forecast of 4.8%—marking a continuing trend of stubbornly elevated core inflation.

These figures have already begun to influence interest rate expectations. Where markets previously anticipated two rate cuts in 2025, they now price in just one. The implications for savers, borrowers, and investors are significant—particularly for those relying on fixed income or planning large capital expenditures in the year ahead.

Meanwhile, the British pound surged to $1.347 against the US dollar—its highest level since 2022—before retreating slightly. Currency fluctuations like these can have a material impact on international portfolios and cross-border financial arrangements.

UK Government Borrowing Rises Unexpectedly

The ONS also reported a surprise rise in UK public borrowing, which hit £20.2 billion in April—up from £19.1 billion a year earlier and well above the expected £17.9 billion. The increase was largely attributed to higher spending on public services and welfare benefits, which more than offset the uplift in national insurance receipts.

This comes at a politically sensitive time, with the government walking back plans to end winter fuel payments for pensioners and opposition MPs calling for revised welfare and tax measures in the upcoming autumn budget. For investors, this raises the likelihood of new fiscal policies that could affect income tax thresholds, capital gains, or estate planning in the months ahead.

US Markets Wobble Amid Tax Cut Debate

Across the Atlantic, financial markets responded to growing fiscal concerns in the United States. Investors digested news of a proposed extension to former President Trump’s 2017 tax cuts—a move expected to add $3 trillion to national debt over the next decade.

On Wednesday, the S&P 500 fell 1.6%, and US Treasury yields rose as investors priced in the potential long-term impact. The bill passed on Thursday by a narrow margin, including cuts to state-backed healthcare and green energy credits, suggesting that future spending priorities may shift further.

With fiscal uncertainty clouding the horizon in both the UK and the US, navigating volatile markets will demand more than passive portfolio management—it requires strategic oversight and global expertise.

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What This Means for Our Clients

At NBC Global Services, we understand that macroeconomic shifts—whether related to inflation, taxation, or government policy—can dramatically alter the financial landscape for private clients, entrepreneurs, and international families.

Our bespoke wealth and investment strategies are designed to adapt to these challenges, helping you:

Protect and preserve assets through inflation-resilient investments and structured products

Optimise cross-border tax planning to reduce exposure and unlock new efficiencies

Plan succession and intergenerational transfers in line with changing legal and fiscal environments

Access global investment opportunities while staying compliant in multiple jurisdictions

Let’s Talk

Whether you’re re-evaluating your asset allocation or preparing for potential tax changes, our team of experts is here to help. Get in touch today to arrange a confidential consultation.

What This Means for Our Clients

At NBC Global Services, we understand that macroeconomic shifts—whether related to inflation, taxation, or government policy—can dramatically alter the financial landscape for private clients, entrepreneurs, and international families.

Our bespoke wealth and investment strategies are designed to adapt to these challenges, helping you:

Protect and preserve assets through inflation-resilient investments and structured products

Optimise cross-border tax planning to reduce exposure and unlock new efficiencies

Plan succession and intergenerational transfers in line with changing legal and fiscal environments

Access global investment opportunities while staying compliant in multiple jurisdictions

Let’s Talk

Whether you’re re-evaluating your asset allocation or preparing for potential tax changes, our team of experts is here to help. Get in touch today to arrange a confidential consultation.

Start your investment journey with NBC Global Services

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Whether you’re a new entrepreneur or an established business expanding into the UAE, NBC Global provides the expertise and resources you need for a successful setup. From initial company formation to banking, visa, and beyond, our services are designed to simplify your entry into the UAE market and drive long-term growth.

Contact NBC Global today to learn how we can help you achieve a seamless business setup in Dubai and across the UAE.

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Business Owners, UK and Dubai
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UK and Dubai
Nitin and NBC Global have been instrumental in my family’s relocation from the UK to Dubai over the past six years. His expertise made our move seamless, handling everything from visa arrangements and schooling support to setting up our businesses in the UAE. Nitin provides ongoing weekly and monthly assistance with accounting and tax needs, always going the extra mile to help. His knowledge and experience are unmatched, making him the best choice for anyone looking to relocate to Dubai. I wholeheartedly recommend Nitin and his team for a smooth transition.

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CEO & MD, Noble Group, Dubai
Nitin comes highly recommended for his exceptional guidance and support during the transition from the UK to Dubai. His extensive knowledge and network have been invaluable in navigating company setup, banking, and securing competitive foreign exchange providers. Over the past year, he has consistently offered insightful advice amidst the changing business landscape in both regions. With a blend of professional qualifications and real-world experience as a successful entrepreneur, Nitin is well-equipped to address both traditional accounting needs and complex corporate structures and tax planning.

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Chief Financial Officer, Allag Care Limited, UK
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Managing Director, Head of Investment Advisory UAE
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UK
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Professional Accountant & SARS registered Tax Practitioner, Firefly Accounting Solutions (Pty)Ltd, South Africa
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Bespoke Handbag Manufacturers, UK
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RSLI BSL Sign Language Interpreter, UK
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