Weekly market news: 5 May 2025
Markets are treading cautiously this week, with central banks, trade tensions, and fresh economic data all vying for investors’ attention.
Top of the agenda is Thursday’s Bank of England interest rate decision. Markets are betting on a 0.25 percentage point cut – the first in over a year – as policymakers respond to signs of a slowing economy and weakening consumer sentiment. UK inflation has eased faster than expected in recent months, while surveys show British manufacturers are facing the steepest decline in exports and jobs among major economies.
Across the Atlantic, fallout from the Trump administration’s proposed tariffs continues to make headlines. The US president hit pause on a widely criticised plan to introduce 100% tariffs on certain foreign-made goods – including electronics – after pushback from trade partners and US corporations.
But the uncertainty has already taken its toll; profit warnings have surged, and consumer confidence has dropped to its lowest level since December 2022.
Meanwhile, attention is also on the US Federal Reserve. Fed Chair Jerome Powell reiterated the central bank’s cautious stance, warning that recent economic data doesn’t yet justify rate cuts. There will be an announcement on Wednesday 7 May where we’ll know more. Outside of that, traders will be keeping a close eye on this week’s jobless claims and consumer sentiment figures for further clues on the US growth outlook.
Coming up this week
Monday
- UK early May bank holiday (markets closed)
Tuesday
- US trade balance (March) – difference between the value of US exports and imports
- Eurozone retail sales (March) – monthly change in consumer spending across member states
Wednesday
- China exports and imports (April) – value of goods shipped and received by China
- US consumer credit (March) – change in loans and credit card debt held by consumers
- US interest rate decision – Federal Reserve meeting on US interest rates
Thursday
- UK interest rate decision – Bank of England’s announcement on borrowing costs
- US initial jobless claims – weekly count of new unemployment benefit claims
Friday
- UK GDP (March) – month-on-month change in economic output
- US consumer sentiment (May, preliminary) – consumers’ views on the economy for the month ahead
Fund closures
Here are upcoming fund closures for this week. The funds listed will be closed for dealing on that day, and buys and sells will be executed on the next working day.
- Friday 9 May, HSBC Islamic Global Shares
Why it matters
Central banks are walking a tightrope. While inflation is cooling, growth remains fragile – especially in the UK, where businesses are increasingly wary of global trade risks. The Bank of England’s interest rate decision this week could set the tone for the summer.
In the US, a resilient labour market is giving the Fed room to hold steady for now, but signs of stress in consumer spending could shift the picture. Meanwhile, with President Trump’s trade policies still evolving, volatility may remain high. Investors should be prepared for sudden shifts in sentiment as new headlines emerge.
The bottom line? Rate decisions, trade policy, and consumer resilience are all in focus – and any surprises could spark big moves in the markets.
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