SUMMARY OF QUARTERLY ECONOMIC AND INVESTMENT UPDATE CONFERENCE CALL

The final quarter of 2024 saw the first Budget from the Labour government, in which Chancellor Rachel Reeves outlined tax increases aimed at addressing a revenue shortfall and supporting spending on priorities such as the NHS and education.  There were also policy changes affecting personal financial planning, including adjustments to CGT, IHT, and the inclusion in estates of unused pension benefits.  While some measures took immediate effect, others will be phased in over the coming years, providing time for clients to adjust their financial strategies.

With respect to financial markets during the final quarter of 2024, global stock market returns overall were subdued, with the World Index declining slightly (-0.6%) in US dollar terms.  However, UK investors experienced a 6.5% return in sterling terms due to a rise in the dollar.  For the year as a whole, 2024 ended with a return on the World Index of 20.1% for UK investors.  Sectors such as technology, communications, consumer discretionary, and financials finished the year strongly, while healthcare and consumer staples delivered lower returns.  The strong performance of the technology sector continued to be driven by investor enthusiasm for artificial intelligence (“AI”).  The financials sector also thrived, partly due to market anticipation of a favourable M&A environment under President Trump and the expectation that interest rates could remain elevate.  The healthcare sector faced challenges around the prospective appointment of R. F. Kennedy Jr. as US Health Secretary as he has unorthodox views on some healthcare matters.

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