Empty Promises!                                                                     02 May 2025

This week, Trump International Hotel & Tower, located in Downtown Dubai, was launched, in collaboration between London-listed luxury real estate developer Dar Global and The Trump Organisation. With eighty floors, the tower will be three hundred and fifty mt high and will host two distinctive penthouses, with sky pools, and both having floor-to-ceiling windows, with sweeping views of the Dubai skyline. It will also offer private lounges, personalised service, and other amenities for guests, as well as ‘The Trump’, which is a private, members-only club. The property will feature an exclusive resort-style pool dedicated to residents only, whilst it will boast the highest outdoor pool in the world.

At the launch, the US President’s son, Eric Trump, extolled, (quite rightly) the UAE leadership. He noted that, when comparing the UAE to Europe, “there is no bureaucracy here. If they love an idea, if it’s a good idea, a smart idea, they say yes. We got permits for a building that’s 1,150 feet tall, with the highest swimming pool anywhere in the world, in one month, because they love the concept. They love the idea and they were willing to say yes”.

Another week and another survey, with this one forecasting 300k new residential units over the next four years, including 81.1k this year alone. Only last week, this blog posted on its ‘You Better Get A Move On’ edition that:

‘Property Monitor estimates that over 7.8k residential units were handed over in Q1 and that by the end of this year the number will top 71.3k – and, that being the case, it will be  over 50% more than any other number of annual handovers posted in the past decade; it reckons that in 2026 and 2027, the numbers are expected to be 80.0k and 58.8k, which will be an average annual 70k for the next three years’.

The consultancy expected that over the next three years units would have increased by 210k. The difference between the two is say 20k, 300k (an annual 75k average) and 280k (an average 70k) whilst this blog will be looking at 240k over the next four years. Assuming a 6% population growth, there will be 4.878 million residing in the emirate by the end of 2028, and assuming that the number of units at the end of 2024 was at 860k, there would be 1.11 million units, (860k + 240k), in 2028, split between 900k apartments, (housing 3.870 million), and 210k villas, (housing 1.113 million); this shows that 4.983 million will be housed – a gap of only 105k. However, add in empty properties, (that could be as high as 10%), Airbnb, second homes, units being upgraded etc, then there still will be an inventory shortage in four years’ time. However, it is all but inevitable that this almost five-year bull run will eventually come to a soft landing, as some major global economic event(s) hits consumer/investor confidence.

Provident Estate’s Dubai Property Market Report Q1 2025 notes that there is a healthy supply pipeline, and that the ongoing property boom is driven by investor confidence, strategic urban planning, and a thriving off-plan sector. There was a 50% hike in transaction volumes, to 42.3k, with sales values at US$ 31.10 billion, with the average unit price rising to US$ 736k. Of the total, the off-plan sector dominated with over 25k apartment units and 6.6k townhouse and villa units registered. The consultancy noted that “communities like Jumeirah Village Circle, Business Bay, and Al Furjan are leading the charge, offering diverse opportunities for investors and end-users”. The demand for compact apartments continues, with JVC leading the pack with its studio and one-bedroom units. Over the past six months, there has been a 28.6% increase in the price per sq ft for off-plan apartments – at US$ 525. There was a marked increase in demand in premium off-plan villa communities, such as The Valley and Palm Jebel Ali.

In the luxury sector, villa prices have risen 13% since Q3 2024, driven by demand for spacious, premium residences. Dubai’s luxury market is thriving as high-net-worth individuals seek exclusive properties in prime locations. In the ready property for apartments, one-bedroom units in JVC led transactions, followed by Dubai Marina and Business Bay; for townhouses and villas, Damac Lagoons, Damac Hills 2, and Dubai Hills Estate were popular.

An interesting statistic from the Dubai Land Department reported a 34% annual increase in foreign investments. There is no doubt that Dubai is going all out to make the emirate one of the best places, in the world, to work, live, invest and holiday. Indeed, the 2040 Urban Master Plan aims to enhance liveability and sustainability, with investments in infrastructure and green spaces.

Ora Developers, a newcomer to the UAE, has revealed plans for a major project, Bayn – a 4.8 million sq mt coastal community development in Ghantoot. The masterplan has been designed to encompass three distinctive urban nuclei – beach shore living, resort living and town living – interlinked with an eco-friendly transportation system, and all connected coherently. Planned to be a multiple-nuclei city, to suit the various need of residents, housing units will cater for diverse segments of Bayn’s new population.

With a twenty-year international track record, Tomorrow World Properties has forayed into the Dubai realty market, with an initial launch of ‘Tomorrow 166’, as part of its broader ME expansion strategy. The company, which has established a regional base in Dubai, has indicated that this will be the first of several planned projects in the country, with further announcements later in the year. Its founder, Xu Ma, noted that “we’re not just entering a new market – we’re setting a new standard”. The development, a boutique low-density residential project, will be located on Dubai Islands. It will also feature exclusive membership access to the Tomorrow World Club, providing residents with privileges including wellness programmes, global brand collaborations, and yachting experiences.

With several EPL teams, including Arsenal, Manchester City, Newcastle, and relegated Leicester, promoting the UAE, this week, Damac Properties joined the club – by teaming up with Chelsea as part of its promotion of its new development – ‘Chelsea Residences by Damac’.  Located in Dubai Maritime City, the project comprises 1.4k residential units. The partnership will also show up in the ‘first-ever Chelsea football club branded residences’. Damac Properties will feature on Chelsea FC men’s and women’s shirts for the remainder of the 2024-25 season.

This week saw another boost for Dubai’s global standing position as a hub, as well as a nod to the growing demand for branded residences in the emirate. 1k investors attended the launch of Saba Properties’ Marriott Residences, Jumeirah Lakes Tower. The attendees were shown detailed architectural renderings, elegant interior designs, and a curated showcase of the amenities that indicated what living in a branded residence would be like. The forty-five-storey development comprises five hundred and thirty-four one to three-bedroom units, with a rooftop sanctuary and 19.5k sq ft of retail space. Other amenities, all managed under Marriott’s supervision, include an open-to-sky gym, an infinity pool, dedicated children’s play areas, tranquil yoga studios, treatment rooms, and a twenty-fourth-floor entertainment hub complete with a games room, theatre, and communal lounge.

According to Global Branded Residences, there was a 43% surge in the number of new branded units last year, bringing the total number to 43k, spread over one hundred and thirty-two developments; it is expected that this number will double over the next five years. There are estimates around that point to a 69% premium, per sq ft, for such residences over ‘normal’ units.

At the start of this week’s ATM, Jumeirah’s announced new developments that will include a hotel and two residential projects, in Dubai; this comes after the hotel group had successfully opened Jumeirah Marsa Al Arab earlier in the year. Jumeirah Asora Bay, located on the peninsula of La Mer South, and developed in partnership with Meraas, will feature a one hundred and three-key hotel, suites, and twenty villas and is scheduled to open in 2029. Meraas will add a residential enclave with twenty-nine units, including apartments, (four-to-six-bedroom apartments and one seven-bedroom penthouse), and six ocean villas. A second project, Jumeirah Residences Emirates Towers, will be located in the emirate’s business sector and will comprise seven hundred and fifty-four units, with a range of one to four-bedroom apartments. These additions are part of its strategy to double the size of its portfolio by 2030. In the coming months, the chain will open Jumeirah The Red Sea in Saudi Arabia and Jumeirah Le Richemond Geneva in Switzerland.

Dubai will create a new exhibition and trade event specifically for the real estate industry – but this will be slightly different to existing events in that ‘Rise’ will be a “hub for those in city planning, new ways to build infrastructure and real estate spanning decades”. Having carried out a complete study of the market, with all stakeholders including exhibition industry players, and the fact that DWTC is “maxed out”, it was decided to further expand with Dubai Exhibition Centre (part of Expo City). Part of the plan is to move specific events – Arab Health, Gulfood and Gitex – to the Dubai Exhibition Centre.

Having reviewed the DWTC’s 2024 Economic Impact Assessment Report, Sheikh Hamdan bin Mohammed confirmed that the Dubai World Trade Centre generated an economic output exceeding US$ 6.09 billion in 2024. Of this total, US$ 3.55 billion, (58.3%), was retained as Gross Value Added to the emirate’s GDP, reinforcing the significant value retained within the local economy. Dubai’s Crown Prince also noted DWTC’s growing role as a key driver of the emirate’s economy. The report indicated that it hosted over one hundred major events in 2024 – 32.0% higher than a year earlier – which attracted two million participants – both locally and internationally, with the latter attracting 936.1k, or 47% of the total. It is estimated that these events created 85.5k jobs across the MICE (meetings, incentives, exhibitions, conferences) and allied sectors. Sheikh Hamdan also noted that, “these figures reflect Dubai’s leadership and position as a global capital for business and innovation and consolidate the centre’s position not only as a platform for hosting the most important exhibitions and conferences, but also as a driver of comprehensive development and a key supporter of the Dubai Economic Agenda D33.”

Sectors that saw marked increases include:

business entertainment          US$ 485 million          36%
retail trade                              US$ 719 million          34%
restaurants/F&B                    US$ 608 million          30%
hotel accommodation             US$ 929 million          15%
air travel/local transport        US$ 779 million            8%

This week, Sheikh Ahmed bin Saeed Al Maktoum, the Chief Executive of Emirates Airline and Group, confirmed that the Dubai government had started awarding contracts, from over a year ago, for Al Maktoum International – which, as most of Dubai knows, will be the world’s largest airport upon completion. The facility will have a final capacity of two hundred and sixty million. It is expected that, within the next decade, the current DXB facility will be completely closed down and operations transferred to the US$ 35 billion new airport. Until then, DXB will continue to serve as the primary hub.

Sheikh Ahmed also said that 2024-25 will be “another record year” for Emirates Group, with its best ever profit, 71% higher on the year, at US$ 5.09 billion. Group revenue jumped 15% to a record of US$ 37.52 billion, as it ended its fiscal year, (31 March), with a new high of US$ 12.83 billion. He also noted that the airline did very well when hedging fuel and commented that the airline is retrofitting 90% of its fleet, adding that “we have two hundred and sixty-one aircraft, we have over three hundred as a new order coming to the team,” and “there will be some new announcements at the Dubai Airshow”.

At this week’s ATM, Emirates received four awards at the Business Traveller Middle East 2025 awards including:

• ‘Best Airline Worldwide’ for the twelfth consecutive year
• ‘Best First Class’
• ‘Best Premium Economy Class’
• ‘Best Airport Lounge in the Middle East’

Currently with four thousand, six hundred pilots, (spanning one hundred and twelve nationalities), Emirates is planning to employ five hundred and fifty new pilots this year and a further nine hundred and fifty in 2026, as part of its ongoing growth strategy. Positions include Direct Entry Captains, Accelerated Command (fast-tracked First Officers), Type-Rated First Officers, and Non-Type Rated First Officers. The airline has a wide-body fleet of two hundred and sixty-one planes, including Airbus A380s, Boeing 777s, and newly delivered A350s.

Last month, Brand Finance posted that Emirates’ brand value doubled to US$ 8.4 billion in 2024, up 27% over the previous year, as traveller preferences continue to evolve towards more premium experiences. The latest rankings have also placed it amongst the top five most valuable airline brands in the world, the most valuable airline brand outside the US, as well as the most valuable ME Airline brand.

In Q1, 23.4 million passengers went through Dubai International Airport, reinforcing its position as the world’s leading international airport; numbers were 1.5% higher on the year. January, with 8.5 million, saw the highest monthly traffic ever recorded at DXB. India, Saudi Arabia, UK, Pakistan, US and Germany were the six leading destination countries, with totals of 3.0 million, 1.9 million, 1.5 million, 1.0 million, 804k and 738k. By city level, London maintained its leading position with 935k guests, followed by Riyadh, Jeddah, Mumbai and New Delhi – 759k, 627k, 615k and 564k. Double-digit growth was noted to destinations such as Vietnam and Spain. Cargo volume dipped 3.6%, with DXB handling 517k tonnes of cargo. The number of flight numbers rose 1.9% to 111k, with an average 215 per flight and twenty-one million bags were processed – with a 99.8% success rate.

Indian businessman, Abu Sabah, has been convicted, along with thirty-two other individuals, including his son, for operating a criminal network. They were accused of being involved in a large-scale money laundering operation that laundered millions through shell companies and suspicious financial transfers. US$ 41 million, along with electronic devices, documents and phones used in the scheme, have been confiscated.  Several companies involved in the case were fined US$ 14 million. B.S.S., widely known as Abu Sabah, was jailed for five years, fined US$ 136k and ordered to forfeit US$ 41 million in illegal funds. He was known for his high-profile lifestyle and property investments, and in 2016 paid US$ 9 million for car plate ‘5’.

Over the past twelve months, two hundred and sixty Indian companies opened offices in the DMCC – and now account for 16% of the total 26k entities, at around 4k, in the free zone. There is no doubt that one of the main drivers has been the 2022 signing of the bilateral Comprehensive Economic Partnership Agreement. At the time the DMCC called on Indian businesses to leverage the momentum brought by the CEPA. Earlier this month, Dubai’s Crown Prince undertook a very successful formal three-day visit to India, indicating that the bilateral relationship is entering a defining new phase. Trade between the two nations exceeded US$ 85 billion in 2024.

IHC, ADQ, and First Abu Dhabi Bank (FAB) have announced plans to launch a new stablecoin backed by dirhams. The stablecoin will be fully regulated by the Central Bank of the United Arab Emirates (CBUAE) and issued by the UAE’s largest bank, First Abu Dhabi Bank, (subject to regulatory approval). State-owned ADQ, (Abu Dhabi Developmental Holding Company) and a family office of the royal office, (International Holding Company), are also involved. The dirham-backed stablecoin is designed to enable secure, verifiable payments in a world where identity, governance, and value flow freely, and is aimed at revolutionising the ease of making payments and doing business, both locally and globally.

Almost nine years ago, the federal government liberalised fuel prices so that they could be aligned with market rates until the onset of the pandemic which saw prices frozen by the Fuel Price Committee, in 2020. The controls were removed in March 2021 to reflect the movement of the market once again. May retail fuel prices have all risen by US$ 0.0027, (AED 1), whilst diesel has declined by US$ 0.03, (AED 11) have declined, compared to April prices. The breakdown of fuel prices for a litre for May is as follows:

Super 98     US$ 0.703 from US$ 0.700       in May        down     1.1% YTD US$ 0.711     

Special 95   US$ 0.673 from US$ 0.670      in May         down     1.1% YTD US$ 0.681        

E-plus 91     US$ 0.651 from US$ 0.649      in May         down     1.7% YTD US$ 0.662

Diesel           US$ 0.687 from US$ 0.717      in  May        down      5.9% YTD US$ 0.730

Late last week, Commercial Bank of Dubai posted its Q1 results, with profit after tax 18.1% higher, on the year, at US$ 226 million, attributable to strong growth in loans and current and savings accounts, driven by robust net interest outcome, supported by lower cost of risk; operating income  came in at US$ 374 million, and with operating expenses up 17.5% to US$ 101 million, operating income was US$ 272 million – 5.3% lower on the year. The net impairment loss was down by 68.3% to US$ 25 million, with corporate tax expenses 18.8% higher at US$ 22 million. The bank’s capital ratios were well in excess of regulatory requirements, with a capital adequacy ratio, Tier 1 ratio and Common Equity Tier 1 ratio recorded at 15.31%, 14.18% and 12.28%. Gross loans, of US$ 278 million, rose 3.9% on the quarter.

Mashreq has kicked off 2025 with a strong set of first-quarter results, reporting a net profit before tax of US$ 572 million (US$ 490 million after tax), and operating income rose to US$ 847 million. Operating profit came in at US$ 599 million, while the bank’s cost-to-income ratio remained among the lowest in the industry at 29%. Provisioning stayed low at US$ 28 million. Mashreq’s return on equity was at a healthy 21%, (attributable to double-digit loan growth, a robust capital base, and disciplined cost control), and net margin at 3.3%. Its balance sheet saw the bank’s total assets grow 9.0% to US$ 74.39 billion, with loans/advances and customer deposits increasing by 14% and 10%, on the year.

Tecom posted a 23.4% hike in Q1 net profits to US$ 98 million, as revenue climbed 21.0% to US$ 185 million. Over the quarter, its customer base grew by 6.0% to over 12k, ‘supported by strong demand for commercial, industrial, and land lease assets’. One of Dubai’s biggest commercial real estate landlords, Tecom has benefitted from the increased demand, across the board, for office, warehousing and industrial space. At Dubai Industrial City, more than US$ 95 million of investments came in from F&B businesses in 2024, whilst in Dubai Design District, there will be six additional Grade A buildings, together creating over 500k sq ft of leasable area and ready by H1-2028. Tecom’s lofty plan is to make d3 a ‘destination of choice for creative minds from around the world’.

DFM posted good Q1 results with revenue 25.9% higher at US$ 51 million, split between operating income of US$ 24 million and investment returns/other income of US$ 27 million. With total expenses, excluding tax, 1.7% lower at US$ 14 million, net profit before tax came in 41.1% to the good on US$ 37 million, driven by record trading activity and sustained investor engagement.  Total market capitalisation was US$ 244.41 billion – 1.0% lower on the year, with average daily trades 33.0% higher at 13.4k trades. During the period, it achieved its record Average Daily Trading Value, (US$ 181 million), with a 60.8% surge in total traded value at US$ 11.17 billion. 86% of the 19.4k new investors were foreign nationals, with that sector contributing 53% of total trading value; foreign ownership of the market cap remained flat at 21%.

The DFM opened the week, on Monday 28 April, three hundred and twelve points higher, (6.5%), the previous three weeks, gained one hundred and twenty-five points (2.4%), to close the trading week on 5,291 points, by Friday 03 May 2025. Emaar Properties, US$ 0.30 higher the previous three weeks, gained US$ 0.12, closing on US$ 3.65 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.72, US$ 5.49 US$ 2.03 and US$ 0.37 and closed on US$ 0.73, US$ 5.64 US$ 2.08 and US$ 0.39. On 02 May, trading was at one hundred and thirty-eight million shares, with a value of US$ one hundred and twenty-two million dollars, compared to one hundred and thirty-two million shares, with a value of US$ one hundred and nineteen million dollars, on 02 May 2025.

The bourse had opened the year on 4,063 points and, having closed on 30 April at 5,307 was 1,244 points (30.6%) higher YTD. Emaar had started the year with a 01 January 2025 opening figure of US$ 2.16, and had gained US$ 1.41, to close on 30 April at US$ 3.57. Four other bellwether stocks, DEWA, Emirates NBD, DIB and DFM started 2025 on US$ 0.67, US$ 4.70, US$ 1.56 and US$ 0.38 and closed April 2025 at US$ 0.73, US$ 5.60, US$ 2.06 and US$ 0.37.

By Friday, 02 May 2025, Brent, US$ 1.02 lower (1.4%) the previous week, shed US$ 5.63 (8.5%) to close on US$ 61.24. Gold, US$ 42 (10.5%) lower the previous week, shed US$ 68 (2.1%) to end the week’s trading at US$ 3,231 on 02 May.

Brent started the year on US$ 74.81 and shed US$ 13.75 (18.4%), to close 30 April 2025 on US$ 61.06. Gold started the year trading at US$ 2,624, and by the end of April, the yellow metal had gained US$ 646 (24.6%) and was trading at US$ 3,270.

On Monday, Deliveroo shares surged by 17%, after its US rival DoorDash offered to pay US$ 3.61 billion in a takeover bid. After the market had closed for the weekend, it was reported that, last Friday,  talks had been ongoing since 05 April. The meal delivery platform had then intimated that it was likely the US$ 2.41 per share offer would be recommended, though full terms were yet to be agreed. Before trading started on Monday, Deliveroo decided to suspend its US$ 134 million share buyback programme. With a disastrous IPO in March 2021, debut shares were sold at US$ 5.21-a-piece, with Deliveroo valued at around US$ 10.16 billion, indicating a 64.5% slump, if sold at US$ 3.61 billion. If the deal went through, it would be another blow for the UK economy and the London Stock Exchange which seems to be losing more companies than it is gaining, as the number of tech companies listed in London continues to dwindle.

For the fifth consecutive quarter, Starbucks posted declines in global sales, with Q1 being the latest showing a 0.1% dip, not helped by weakness in the US market, offset to some extent by rising sales in Canada and China. Its chief executive, Brian Niccol, had already taken steps to turn the business around, as it faces the problems of declining consumer spending and rising operating costs. Some steps, such as the introduction of automation, at the expense of less labour, have had limited success. Niccol’s latest solutions are to hire more baristas and slow down automation plans, by pulling back from deploying its Siren Craft System, its suite of technology and equipment that was introduced in 2022 to streamline drink-making. Starbucks is also revamping its coffee shops, menus and the company’s dress code, with baristas wearing dark, single coloured shirts to “allow our iconic green apron to shine and create a sense of familiarity for our customers”. Earlier in the year, he also also reversed rules for its cafes in N America that allowed people to use their facilities even if they had not bought anything. The market was not too impressed with its share value slumping 6.5% on the news.

Q1 was disappointing for McDonald’s reporting its biggest decline in US sales since the height of the pandemic and putting the blame on customers’ concerns over the US economy, with chief executive, Chris Kempczinski, commenting they were “grappling with uncertainty”. It is reported that outlets, that have been open for more than a year, have posted an average 3.6% dip in revenue. Maybe it was more than a coincidence that this came while the US economy had fallen 0.3% – the first quarterly decline since 2022.

Embattled Aston Martin will have an interesting AGM next week, as influential proxy voting adviser ISS will be urging investors to vote against both of Aston Martin Lagonda Global Holdings’ remuneration votes. ISS is not happy with the proposals that would see marked hikes to potential bonus awards to Adrian Hallmark, the company’s new chief executive. The adviser said, “concerns are raised regarding the increased bonus maximums, which are built upon competitively[1]positioned salary levels and do not appear appropriate given the company’s recent performance”.  On top of that, there are the problems that have arisen from Trump’s tariffs. Over the past twelve months, the company’s shares have halved to US$ 877 million.

In the UK, Nationwide has posted that April house prices fell 0.6%, on the month, at US$ 359.7k, mainly down to changes to stamp duty thresholds kicking in on 01 April; prices are still 3.4% higher on the year. In Rachel Reeves’ October budget, the stamp duty threshold was halved to US$ 166k, (GBP 125k) and for first-time buyers, it was lowered 29.4% to US$ 399k, (GBP 300k). The  soft market will probably nudge higher, with the possibility of rate summer rate cuts and earnings moving higher. It Is expected that annual rises will hover around 3.5% this year, moving higher in 2026.

Recent days have seen cyber attacks on electricity supplies in the Iberian Peninsula and on major UK retailers, including Marks & Spencer, Co-op Group and Harrods, with the former unable to accept online orders for the last week and having major supply chain problems. This could be the start of not only a summer of discontent but further larger and more damaging hacking incidents.

With an emergency economic package, including reducing gasoline prices to US$ 0.07 a litre, and to partially cover electricity bills for three months from July, Japan’s Prime Minister, Shigeru Ishiba, is aiming to alleviate any impact on industries and households from new US import tariffs. He has also extended the number of companies to be eligible for low-interest loans extended by government-backed banks. This package should not impact the budget since funds will be drawn from a reserve fund. At a tariff task force meeting, he said, “I have instructed cabinet members to make the utmost efforts to aid firms and households that have been worried about tariff impact.” The PM is understood to have considered further measures to boost domestic consumption, if so required. Japan is in serious negotiations about the existing tariffs – 25% on cars and trucks and the 24% tariff on all Japanese exports to the US, (subsequently cut to 10% for ninety days).

With its nominal GDP reaching US$ 4.10 trillion, last year, California has become the world’s fourth-largest economy, only behind US, China and Germany in global rankings, but pushing Japan’s GDP of US$ 4.02 trillion into fifth place. The state, with its real estate, finance and technology sectors among the top contributors, accounts for some 14% of the US economy. Last year, the state saw its population grow by 250k, after years of declines, attributable to a rebound in births and gains from international migration. However, the IMF sees India overtaking California next year. As its governor, Gavin Newsom boasted – “California isn’t just keeping pace with the world – we’re setting the pace”.

Q1 saw the US economy shrink 0.3%, due to a drop in government spending, a 1.8% rise in consumer spending, and a 40% surge in imports, as firms raised inventory levels ahead of tariffs; this follows a 2.4% hike in the previous quarter. It is too early to see the impact of Donald Trump’s recent introduction of import taxes, which has caused so much turbulence and uncertainty in global trade. 101 Economics dictate that imports usually reduces growth in a country’s GDP – and if imports were at a higher level, the impact would be greater and be skewed higher in one month; however, it is highly likely that imports will even out in the coming months. Furthermore, business investment surprisingly rose, as did consumer spending – the primary driver of the US economy – albeit at a slower pace than Q1 2024. Over the coming months, the economy will be battered by the likes of uncertainty, tariffs, supply chain problems and tighter financial market conditions.

The US President has eased the impact of new tariffs on the car making industry, allowing companies with US factories to reduce, over the next two years, the amount they pay in import taxes on foreign parts, using a formula tied to how many cars they sell and the price. In addition, companies that have to pay tariffs on cars and parts would not be charged other duties the administration has imposed on steel, aluminium and goods from Canada and Mexico.

The US Labor Department confirmed that April hiring in the country remained robust with employers adding 177k jobs in the month; the market was not expecting such a high figure, with so much uncertainty in the post-tariff era of Donald Trump. The unemployment rate remined flat at 4.2%. Average hourly pay rose 3.8% over the last twelve months. Hiring last month was led by healthcare, warehousing and transportation firms, offset by federal government redundancies. There is no doubt that over recent years, the US economy has been a beacon of resilience, with consumer spending continuing unabated, despite the double whammy of rising prices and high interest rates. However, nobody really knows how Trump’s tariffs will impact the US economy and only when the full consequences work themselves out.

UK food inflation has risen to its highest-level during April, at 2.6%, 0,2% higher on the month and its highest level since May 2023. The British Retail Consortium also warned it could easily go higher, attributable to the retail sector being impacted by rising costs including a whopping US$ 9.39 billion of tax increases this year due to Rachel Reeve’s now infamous October budget. One factor that could keep prices in check is the ongoing supermarket price war. Kantar Worldpanel, which tracks trends and prices, said spending on promotions reached its highest level this year at almost 30% of total sales over the four weeks to 20 April. It estimated that up to 20% of sales, at the leading two retailers, Tesco and Sainsbury’s, were via price cuts, mainly through loyalty cards.

Returning from her trip to the US this weekend, the last thing Rachel Reeves probably wanted to hear was the EY ITEM club intimating that UK economic growth could be “postponed” for two years. The economic forecasting group, which utilises the Treasury’s economic modelling, downgraded expectations for output this year, (0.8% growth, down from 1.0%) and in 2026, (0.9% – 0.6% lower). It reckons that the main drivers would be as a result of weaker sentiment, among both households and businesses, given the surge in uncertainty, and the impact of global growth caused by the imposition of tariffs. Although it estimates that rate cuts may help somewhat, it also warns of a direct hit from the global trade war and the economic problems from persistent high inflation in the economy. This comes on the back of the IMF accusing the Chancellor and her minions of an own goal through the chancellor’s tax increases on business, which came into effect on 01 April; add into the mix, households are grappling a surge in bills, including those for energy, water and council tax, along with sharp increases in the number of firms in “critical” financial distress and going to the wall, then all is not well in Whitehall and the country. It noted that 16% of UK exports are bound for the US and there would be a negative impact because of the 10% levy across the board and 25% on steel and aluminium. EY concluded that the weaker global economic backdrop and spiralling levels of uncertainty would weigh on both families and businesses, as well as the continuing pressures on household budgets, further limiting demand for major purchases.

Ahead of tomorrow’s general election, it seems that current prime minister, Anthony Albanese, has received a hammer blow from of all people, S&P Global. Earlier in the week, the ratings agency commented that election spending promises could jeopardise Australia’s prized AAA sovereign credit rating.  It also noted that the country’s public spending was at “post-war highs” and warned both major parties that the country’s rating was at risk if savings were not found.  It cites concerns that “larger, structural deficits”, coupled with more volatility in the global economy, could threaten Australia’s AAA credit rating – the highest tier. As usual, in most democratic elections, there are always promises of increased public spending and/or tax cuts, and in this one, more so because of the on-going cost of living crisis. Indeed, both parties have promised billions of dollars for housing, healthcare and energy .  .  . if they are elected.  Maybe they have read and learnt from Kier Starmer’s 2024 political manifesto – Empty Promises!