Overview
- Global growth is projected to ease from 3.2% in 2025 to 2.9% in 2026, with the IMF and OECD highlighting downside risks tied to trade frictions, debt and financial fragilities.
- U.S. headline data stayed firm in 2025—Q3 GDP rose at a 4.3% annual rate and the S&P 500 gained more than 17%—but unemployment climbed to 4.6% as hiring slowed and job gains concentrated in health care.
- Experts flag an AI risk: outsized tech investment drove much of 2025 U.S. GDP growth and market value, raising concerns that a sharp correction could undercut spending and strain the financial system.
- President Trump’s ‘Liberation Day’ tariffs lifted average U.S. tariff rates to 17.9% and reshaped trade, with a Supreme Court ruling on presidential tariff authority expected in 2026 and a fragile 12‑month U.S.–China truce in place.
- In the UK, higher employer national insurance and a large minimum wage rise lifted costs as inflation peaked at 3.8% and food prices at 4.9%, the Bank of England cut rates to 3.75%, unemployment reached 5.1%, and the OBR upgraded 2025 growth to 1.5%.