26/04/2025 by Tony Redondo
Canada goes to the polls on Monday, to elect its next Prime Minister. Will it be Liberal leader and ex-Governor of both the Bank of Canada and the Bank of England, Mark Carney or Conservative leader Pierre Poilievre. YouGov are predicting a tight race with a possible Liberal majority of 21 that would give Mark Carney the win, albeit with a small majority.
On Thursday, 1 May it’s England’s turn with voters due to elect four metro mayors and 1,750 councillors.
YouGov’s latest poll for the four mayoralties to be contested on Thursday show Andrea Jenkyns for Reform ahead on 40% versus the Tory candidate on 25% in Greater Lincolnshire. In Hull and East Yorkshire, Reform are also pulling ahead with Luke Campbell on 35% versus the LibDems on 21% and Labour on 20%. The Tories’ Paul Bristow is leading on Reform in Cambridgeshire and Peterborough by 12 points at 32%. In the West of England race, the Greens are edging ahead of Labour on 27% to 23% with Arron Banks in third on 18%
According to Electoral calculus, Reform are in line to pick up 697 councillors, the Liberal Democrats picking up 127, the Tories losing 732, Labour losing 56 and the Greens 3.
On Saturday, 3 May it’s Australia’s turn. All 150 seats in the House of Representatives and 40 of the 76 seats in the Senate are up for grabs. The Labor government, led by Prime Minister Anthony Albanese, is seeking re-election for a second term. It is being challenged by the Liberal/National Coalition led by opposition leader Peter Dutton, which is attempting to return to government after one term in opposition. The latest YouGov poll reveals the Labor Party leading the Coalition 53.5% to 46.5%.
Currency Exchange Rates Update
The Pound advanced against the US Dollar for eleven consecutive days, its longest streak since January 1971 when the currency switched to the decimal system to hit a seven-month high. The gains are being driven by US dollar weakness as opposed to any Pound strength as concerns over President Trump’s trade policies and their potential impact on the US economy continue to weigh on US assets.
https://www.express.co.uk/news/world/2039872/trump-us-tariff-pause-90-days
The Euro extended its rally against the Dollar to hit its highest level since November 2021 with capital flows from the US to eurozone assets.
What’s in the news?
The latest Moneyfacts UK Mortgage Trends Treasury Report showed the number of low-deposit mortgage deals available at 90% and 95% loan-to-value have hit their highest levels since March 2008.
UK
Good news
Barclays Bank reported that mortgage completions surged by 50% in March, marking the highest increase in over three years as homebuyers rushed to take advantage of stamp duty rates before the increase announced in the last budget kicked in.
The ONS (Office for National Statistics) reported that UK retail sales rose by 0.4% month on month in March and follows a revised 0.7% gain in February. Retail sales have risen for three months in a row, the best streak in sales growth since early 2021 when the economy was recovering from the Covid lockdowns.
Not so good news
Corporate restructuring firm Kroll reported that the UK economy experienced a significant increase in corporate distress in March with company administrations rising by 30.5%. The construction and manufacturing sectors were the hardest hit due to ongoing labour shortages, high material costs and policy changes including the rise in employers’ National Insurance contributions and minimum wage increase.
Over 1,100 companies have faced winding-up orders in the first fifteen weeks of 2025 according to an analysis of published insolvency notices, an increase of nearly 25% compared to last year and the fastest rate of corporate closure since 2010.
Last month, the OBR (Office for Budget Responsibility) slashed its growth forecast for the UK economy in 2025 from 2% to 1% and raised its expectations for rates of unemployment.
This week, the IMF (International Monetary Fund) also slashed the UK’s growth forecast from 1.6% to 1.1%. The IMF also expects the UK economy to grow 1.4% in 2026, lower than its previous prediction. The IMF also warned Rachel Reeves could not single out Donald Trump’s trade war for the downturn, saying the UK government’s policies were stoking price pressures and would push Britain’s inflation rate to the highest in the G7.
The S&P Global flagship latest survey shows one of ‘lowest ever’ PMIs recorded as Rachel Reeves’ tax rises hit the private sector. Private sector output fell in April for the first time in eighteen months as firms reported “more of a struggle” to survive. The service sector hit a 27-month low while manufacturing continued to tumble. Firms also reported that mass job culls across the UK economy have continued as profits were squeezed by NICs and a rise in the national living wage. S&P Global also said that total new work received by UK private sector firms decreased for the fifth month in a row and at its fastest pace for nearly five years as Trump’s tariffs has forced firms to delay spending decisions.
S&P Global chief economist Chris Williamson said “Businesses are reporting more of a struggle to keep their heads above water in April. Job cutting remains aggressive as business optimism about the year ahead sank to a two-and-a-half-year low, and one of the lowest levels yet recorded by the survey, even surpassing the low seen in the immediate aftermath of the Brexit vote in 2016. The biggest concern lies in a slump in exports amid weakened global demand and rising global trade worries, but higher staffing costs have also piled pressure on companies – linked to the national insurance and minimum wage changes that came into effect at the start of the month.”
The ONS reported that UK Government borrowing hit £151.9bn in the year to March. This was £20.7bn up from the year before and exceeds the £137.3bn that had been forecast by the Government’s official forecasters, the OBR. The figures also show that the debt interest paid by the Government increased by £1.3bn to £4.3bn last month.
Goldman Sachs’ most senior banker outside the US is joining the growing ranks of wealthy foreigners leaving the UK to avoid the government’s crackdown on non-doms. Richard Gnodde, the investment banking giant’s vice chairman, is moving to Italy to avoid changes the Chancellor made to the non-dom regime and foreign-held trusts in last October’s Budget.
The Gallup State of the Global Workplace 2025 report lists British employees as the second saddest in Europe in 2024, beaten only by Northern Cyprus. Gallup has tracked global employee wellbeing since 2009.
The NAO (National Audit Office) reported that the UK’s ageing water network would take 700 years to replace at the current rate seen since privatisation.
USA
The US dollar index has tumbled almost 10% during 2025 to date as it faces headwinds from US growth underperformance and capital outflows. Growing concerns over President Donald Trump’s threats to fire Federal Reserve Chairman Jerome Powell have added to the pressure on the Dollar.
Powell told the Economic Club of Chicago “These are very fundamental policy changes. There isn’t a modern experience of how to think about this.” Powell expressed concerns about Trump’s tariff policy, warning the Fed might find itself in a “challenging scenario in which our dual-mandate goals are in tension.” The central bank is tasked with ensuring both stable prices and full employment across the country.
Treasury Secretary Scott Bessent says he expects a ‘de-escalation’ in US-China tariff fight in the ‘very near future’, calling the sky-high tariff fight between Washington and Beijing unsustainable but warned that rebalancing US-China trade could take two to three years, examining multiple factors including non-tariff barriers, government subsidies, and tariffs.
Weekly mortgage demand in the US fell by nearly 13%, as interest rates hit a 2-month high last week.
The US Composite PMI fell in April, marking the slowest private sector growth in 16 months despite an unexpected rise in the manufacturing sector.
Apple aims to source all US iPhones from India in a pivot away from China as soon as next year.
The EU
Bundesbank President Nagel said he couldn’t rule out Germany dropping into recession in 2025 but didn’t think Germany’s fiscal package would be inflationary but remained concerned that overall, the Eurozone could see what amounts to a stagflationary environment this year.
The April PMI for the Eurozone reflect mixed sentiment amid ongoing tariff threats. It dropped to its lowest in four months, though manufacturing showed slight improvement while services weakened. Both Germany and France’s composite PMIs fell below 50, signalling an economic contraction. For the Euro, these developments heighten risks of stagflation.
Germany’s Ifo index improved slightly between March and April driven by stronger current assessments, but business expectations weakened.
The European Union hit Apple and Meta with nearly $800 million in fines for breaching the bloc’s digital competition laws. EU officials said that Apple failed to comply with so-called “anti-steering” obligations under the Digital Markets Act and Meta illegally required users to consent to sharing their data with the company or pay for an ad-free service.
Others
US Vice President JD Vance was in India on a personal trip with second lady Usha Vance and family and met with Indian premier Modi. Vance remains optimistic on a New Delhi-Washington trade deal and the two leaders hailed the “significant” progress made in trade talks between the two sides.
Stranger than fiction
The UK government is set to give the go ahead on a Net Zero plan to blot out the sun using £50m of taxpayer money. Outdoor field trials could include injecting aerosols into the atmosphere or brightening clouds to reflect sunshine are being considered by scientists as a way to prevent climate change. What could possibly go wrong?
Quote
Poet T.S. Eliot, “An election is coming. Universal peace is declared, and the foxes have a sincere interest in prolonging the lives of the poultry.”
