Content

• UK: Inflation rose and markets lagged, while economic growth was better than expected

• Europe: Inflation increased and growth slowed

• US: Inflation rose sharply, but economic growth was solid and markets delivered strong returns

• Asia: Markets delivered strong returns while inflation remained low

• How this affects your investments

• Looking ahead

Summary

Global markets delivered positive returns in April, though performance varied considerably, with the UK lagging behind other countries.

Inflation rose in several regions, largely due to the conflict in the Middle East, and economic growth could also slow as a result.

Amid rising inflation, market investments are typically the most effective way to help your money keep pace with increasing costs over the long term. With returns varying across regions, portfolio diversification also remains key.

UK: Inflation and interest rates remained steady, but markets suffered from geopolitical tensions

In the UK, economic growth was stronger than expected, though market returns were relatively low and inflation crept up.

The latest data shows that the UK economy grew by 0.5% in February, marking its strongest performance for over two years. Growth estimates from January were also revised up, from 0% to 0.1%. However, these figures predate the outbreak of the conflict in the Middle East, and the forecasts for annual UK growth have been revised down to 0.8% from 1.3%¹.

Inflation rose to 3.3% in March, up from 3% in February, with fuel being the main driver of the increase². In response to rising inflation, the Bank of England held the base rate at 3.75% at its April meeting and said that inflation is likely to rise further amid the ongoing geopolitical tensions³.

Why does this matter for investors? Stronger economic growth is generally good news for businesses and markets, but rising inflation can reduce sending power and keep interest rates higher for longer. Markets tend to look ahead, so investors are often focused less on where inflation is today and more on whether it is moving in the right direction. This is one reason why market performance can sometimes feel out of step with wider economic headlines.

In the markets, the UK had a comparatively slow month. The FTSE All-Share, which tracks around 900 of the UK’s largest listed companies, returned 2.8% in April, making it the month’s weakest performer among global indices⁴.

Europe: Inflation increased while economic growth slowed down

Europe experienced a more challenging month, with inflation rising further while economic growth continued to slow. 

Euro area inflation increased to 3% in April 2026, up from 2.6% in March, marking its highest level since September 2023. Much of the increase was linked to higher energy prices following ongoing tensions in the Middle East⁵ and disruption across energy markets.  

At the same time, economic growth across the region remained subdued, with GDP rising by just 0.1% in Q1 2026, down from 0.2% in the previous quarter.⁶ 

For investors, this combination of weaker growth and rising inflation can create uncertainty. Slower growth can weigh on company earnings, while persistent inflation may limit how quickly central banks are able to reduce interest rates. This has contributed to more cautious sentiment across European markets in recent months. 

Despite this backdrop, European equities still delivered positive returns in April, although they lagged behind several other major regions. The MSCI Europe ex-UK Index, which tracks large- and mid-cap companies across the region, returned 5.7% for the month⁷. 

US: The economic outlook is positive and markets show small signs of recovery

The US economy remained resilient in April, with strong growth and continued market momentum despite ongoing inflation concerns.

Inflation rose to 3.3% in March, up from 2.4% in February⁸, reinforcing expectations that interest rates may stay higher for longer. In response, the Federal Reserve kept interest rates unchanged at 3.5%–3.75% for the third consecutive meeting. However, policymakers appeared divided on the outlook, with some favouring earlier rate cuts, while others remained cautious about easing policy too quickly⁹.

Despite this uncertainty, US economic growth remained strong. GDP expanded at an annual rate of 2% in Q1 2026, supported by consumer spending and continued business investment¹⁰.

For investors, the key theme remains confidence in the strength of the US economy and corporate earnings, particularly within large technology companies. Markets have continued to respond positively to signs that businesses and consumers are coping relatively well with higher borrowing costs, even as expectations around future interest rate cuts shift.

US markets performed strongly over April, with the S&P 500 returning 10.5%, led by particularly strong gains in the technology and financial sectors¹¹.

Asia: A strong start to 2026 is short-lived as markets fall and China experiences high inflation

Asian markets continued their strong start to the year, with technology-focused markets and emerging economies among the standout performers in April.

The MSCI Asia ex-Japan Index, which measures the performance of large and mid-sized companies across Asian markets excluding Japan, returned 16.3% over the month, while the MSCI Emerging Markets Index delivered returns of 14.7%. Much of this strength came from Taiwan and South Korea, where markets have benefited from continued global demand for AI-related technology and semiconductor production¹².

For investors, Asia remains an important region because it includes many of the companies involved in the global technology supply chain. Continued enthusiasm around artificial intelligence and digital infrastructure has helped support market performance, particularly in sectors linked to chip manufacturing and advanced technology.

Japan also continued to perform well, with the TOPIX Index, which tracks a broad range of Japanese companies, rising 6.6% in April¹³. Inflation in Japan edged higher to 1.5% in March, driven partly by rising energy costs, although inflation remains lower than in many Western economies¹⁴.

In contrast, China presented a more mixed picture. Inflation eased to 1% in March from 1.3% in February, reflecting softer domestic demand and ongoing questions around the pace of the country’s economic recovery¹⁵.

How this affects your investments and long-term plans

April was a reminder that economies and markets do not always move in the same direction at the same time. While inflation remained stubborn in several regions, markets continued to deliver positive returns overall, particularly in areas linked to technology and artificial intelligence.

For investors, this reinforces the importance of diversification. Different regions, sectors and asset types can perform very differently depending on economic conditions, interest rates and investor sentiment. A well-diversified portfolio helps spread risk while ensuring you remain exposed to areas of long-term growth.

It is also a reminder that successful investing is rarely about reacting to short-term headlines. Markets will continue to respond to inflation data, central bank decisions and geopolitical events, but maintaining a clear long-term plan remains one of the most important factors in achieving positive outcomes over time.

Looking Ahead

Looking ahead, investors are likely to remain focused on inflation, interest rates and the resilience of global economic growth. Central banks continue to balance the challenge of controlling inflation without slowing economies too sharply, while geopolitical tensions in the Middle East and elsewhere may continue to create periods of market volatility.

At the same time, many markets have continued to demonstrate resilience, supported by strong corporate earnings, technological innovation and ongoing investor confidence. While short-term market movements can feel unsettling, history shows that markets have repeatedly recovered from periods of uncertainty over the long term.

For most investors, staying focused on long-term objectives rather than reacting to short-term events remains the most effective approach.

¹ 16.04.26 UK economy grew faster than expected in February ahead of Iran war BBC, ² 22.04.26 Consumer price inflation, UK: March 2026 ONS, ³ 30.04.26 Interest rates and Bank Rate: our latest decision Bank of England, ⁴ 01.05.26 Review of Markets over January JP Morgan, ⁵ 05.05.26 Euro Area Inflation Rate Trading Economics, ⁶ 05.05.26 Euro Area GDP Growth Rate Trading Economics, ⁷ 01.05.26 Review of Markets over 2025 JP Morgan, ⁸ 05.05.26 United States Inflation Rate Trading Economics, ⁹ 05.05.26 United States Fed Funds Interest Rate Trading Economics, ¹⁰ 05.05.26 United States GDP Growth Rate Trading Economics, ¹¹ 01.05.26 Review of Markets over 2025 JP Morgan, ¹² 01.05.26 Review of Markets over 2025 JP Morgan, ¹³ 01.05.26 Review of Markets over 2025 JP Morgan, ¹⁴ 05.05.26 Japan Inflation Rate Trading Economics, ¹⁵ 05.05.26 China Inflation Rate Trading Economics

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The value of your investment(s) and the income derived from it, can go down as well as up and you may not get back the full amount you invested.

This guide is for general information only and does not constitute advice. The information is aimed at retail clients only. The content of this guide was accurate at the time of writing. While information is considered to be true and correct at the date of publication, changes in circumstances, regulation, and legislation after the time of publication may affect the accuracy of the guide.

Succession Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority. Financial Services Register number 588378. Succession Wealth Management Limited is registered in England and Wales at The Apex, Brest Road, Derriford Business Park, Derriford, Plymouth PL6 5FL

EX01 - last updated May 2026