December Investment Market Update

Content

• UK: Inflation eases and growth forecasts improve slightly 

• Europe: Markets hold up, but inflation rises 

• US: Market returns slow as concerns about tech sector growth persist 

• Asia: Inflation trends support China’s outlook but poses challenges for Japan 

• How this affects your investments 

• Looking ahead

In November, global markets were relatively quiet. Some regions saw small gains, others dipped slightly as investors responded to mixed economic news and political developments. In this update, we outline the key themes from the month and what they could mean for your long-term plan. 

Summary 

Global markets slowed in November, delivering only modest moves either up or down. This followed several months of stronger performance and came during a period of mixed economic signals, including budget announcements in the UK, inflation updates across major regions, and uncertainty around US government funding. 

Although November felt subdued, the broader picture for 2025 remains positive. Many of the drivers of long-term growth, such as steady economic expansion and signs of easing inflation, are still in place. As ever, short-term pauses aren’t unusual, and long-term investors typically benefit more from staying invested than reacting to month-by-month changes. 

UK: Inflation eases and growth forecasts improve slightly 

The Autumn Budget arrived late in the month so its full impact will unfold over time. Even so, it brought a mix of encouraging and cautious news for the UK economy. 

Inflation eased to 3.6% in October, its lowest level in four months. The drop was mainly due to slower increases in housing, gas, and electricity costs¹. Lower inflation has prompted many economists to predict that the Bank of England to cut interest rates in December, with further cuts possible in early 2026. The base rate currently sits at 4% and a cut in December would see it fall to 3.75%². 

Growth forecasts have also been adjusted. The UK economy is now expected to expand by 1.4% in 2025, before easing to 1.2% in 2026. These figures are slightly better than earlier estimates and follow the Budget’s announcement of £26 billion in tax increases over the next five years³. 

UK markets had a calm month. The FTSE All-Share Index, which covers around 900 of the country’s largest companies, rose by just 0.4%, held back by weaker consumer sentiment⁴. 

Europe: Markets hold up, but inflation rises 

Europe was one of the stronger-performing regions in November, despite a slight uptick in inflation in several countries. 

Eurozone inflation rose marginally to 2.2%, up from 2.1% in October. Germany saw inflation edge up to 2.6%, while Spain eased to 3.1% and the Netherlands fell to 2.6%. France and Italy continued to record much lower inflation levels⁵. 

Economic growth remained resilient. The Eurozone grew by 1.4% year-on-year, slightly above earlier expectations. This suggests that the region is holding steady despite ongoing geopolitical uncertainty⁶. 

European stock markets reflected this stability. The MSCI Europe ex-UK Index, which tracks large and mid-sized European companies, rose 1.1% in November, making Europe one of the strongest performers of the month⁷. 

US: Market returns slow as concerns about tech sector growth persist 

US markets delivered weaker returns in November. Despite several large companies reporting strong earnings, the S&P 500 rose by only 0.2%. 

One factor behind this muted performance was investor caution. Inflation in the US increased to 3%, its highest level since January⁸, and there were concerns that some of the major technology companies may struggle to maintain the rapid growth rates seen in recent years⁹. 

There was also short-term uncertainty as the US government worked to secure funding to avoid a shutdown. Although this was resolved, it added to the general sense of caution during the month. 

Even so, underling economic data remained encouraging. GDP growth for the third quarter was revised up to 3.8%, marking one of the strongest performances in recent years¹⁰. 

Asia: Inflation trends support China’s outlook but poses challenges for Japan 

Asian markets delivered mixed results in November as inflation trends diverged across the region. 

Japan’s inflation rate rose to 3% in October, slightly up from September and the highest level since July¹¹. Higher inflation and a weaker yen supported Japanese exporters, helping the TOPIX Index, which tracks a broad range of Japanese companies, rise 1.4%, making it one of the strongest global performers for the month. 

China, meanwhile, saw inflation rise by 0.2% following a small decline in September. Although still modest, this could be a positive sign for the country’s economic outlook. 

In contrast, broader Asian markets performed less strongly. The MSCI Asia ex-Japan Index, which covers major Asian markets outside Japan, fell 2.8%, making it the weakest performer of the major global indices for November – though it remains one of the better performers overall for 2025¹². 

How this affects your investments 

Although November brought weaker or flatter market returns, this is a perfectly normal part of long-term investing. Markets often move in phases – periods of strong growth followed by quieter spells driven by short-term news or expectations around inflation and interest rates. 

What matters most is your long-term plan. Many of the key indicators for future growth, such as easing inflation, stable economic fundamentals and the potential for interest rate cuts, remain in place. Your portfolio should be designed to navigate these shifts without needing constant adjustments. 

Looking ahead

The Autumn Budget was delivered on 26 November, and while initial market reactions were muted, its measures could influence markets over the coming weeks. Investors will also be watching inflation data and interest rate decisions in the run-up to the New Year. 

December can be a more active period for markets, and short-term movements should be expected. Regardless of these fluctuations, staying focused on long-term goals remains the best approach

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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 Limited is authorised and regulated by the Financial Conduct Authority. Financial Services Register number 588378. Succession Wealth Management Ltd is registered in England and Wales at The Apex, Brest Road, Derriford Business Park, Derriford, Plymouth PL6 5FL. Registered Number 07882611. 

¹ 03.12.2025 United Kingdom Inflation Rate Trading Economics ² 19.11.2025 Bank of England to cut interest rates in December and again in Q1 2026 Reuters ³ 02.12.2025 Tax rises and tighter spending to hold back UK growth BBC ⁴ 01.12.2025 Review of markets over August 2025 JP Morgan ⁵ 03.12.2025 Euro Area Inflation Rate Trading Economics ⁶ 03.12.2025 Euro Area GDP Growth Rate Trading Economics ⁷ 01.12.2025 Review of markets over August 2025 JP Morgan ⁸ 03.12.2025 United States Inflation Rate Trading Economics ⁹ 01.12.2025 Review of markets over August 2025 JP Morgan ¹⁰ 03.12.2025 United States GDP Growth Rate¹¹ 03.12.2025 Japan Inflation Rate Trading Economics ¹² 03.10.2025 Review of markets over August 2025 JP Morgan

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