Take Two: Stocks rise on tariff dispute; IMF upgrades UK GDP forecast

What do you need to know?

Stocks rose last week after a US court attempted to block President Donald Trump’s Liberation Day tariffs. The Manhattan-based Court of International Trade ruled that Trump did not have the sole authority to impose such wide-ranging levies. However, the tariffs were temporarily reinstated after an appeals court agreed to pause the ruling while the White House’s appeal is examined. Over the week to Thursday’s close the S&P 500 and MSCI World indices each rose by 1%.* Meanwhile, US GDP growth contracted at an annualised rate of -0.2% in the first quarter, (Q1) better than the initial estimate of -0.3%, although components showed softer underlying growth.

*Factset, as at 29 May 2025 (USD terms)

Around the world

The International Monetary Fund (IMF) has marginally upgraded its UK GDP growth forecast for 2025 and now expects growth of 1.2%, up from its April estimation of 1.1%. However, it left its forecast for next year unchanged at 1.4%, citing that global trade tensions will lower the level of UK GDP by 0.3% by 2026. While the UK was the first country to secure a US trade deal with the US since Donald Trump returned to the White House, the IMF warned that “persistent global trade uncertainty could further weigh on UK growth”. AXA IM forecasts growth of 0.9% and 1.1% respectively.

Figure in focus: 20 million

Electric car sales are forecast to surpass 20 million globally in 2025, accounting for more than one-quarter of cars sold worldwide, according to the International Energy Agency's (IEA) Global Electric Vehicle Outlook. The report showed sales were up by 35% year on year in the first three months of 2025. The IEA highlighted that, while the 2025 outlook for sales in the US is uncertain based on current policies, they are “expected to maintain the 10% growth observed in the first quarter”. Despite uncertainties the IEA expects the share of electric cars in total car sales is on course to exceed 40% by 2030.

Words of wisdom

Choose Europe to Start and Scale: A new European Commission (EC) initiative which aims to make Europe a “powerhouse” in terms of starting and growing global technology-driven companies. The strategy forms part of the broader and recently launched ‘Choose Europe’ scheme, which seeks to strengthen European competitiveness. Having recognised the importance of startups and scaleups in Europe’s future, the initiative will address the key challenges these companies face. It will focus on five key areas for action – fostering an innovation-friendly environment, better financing, supporting market uptake and expansion, attracting and retaining top talent and facilitating access to infrastructure, networks and services.

What’s coming up?

On Tuesday, the Reserve Bank of Australia publishes the minutes from its latest policy meeting while flash inflation data for the Eurozone is also issued. The Bank of Canada meets to decide on monetary policy on Wednesday, when several Purchasing Managers Indices, including those for the Eurozone, US, UK and Japan are also posted. European Central Bank (ECB) policymakers hold their own interest-rate setting meeting on Thursday - officials chose to cut rates by 25 basis points at their previous meeting, bringing borrowing costs down to 2.25%. On Friday the latest Eurozone economic growth estimate is reported as well as the latest US employment report.