The latest economic news and market highlights from the UK and abroad.
This week's headlines:
- Peace hopes support markets – equity markets have risen as a ceasefire has taken hold and dialogue between the parties continues. Iran has announced that the Strait of Hormuz is now completely open for commercial traffic, providing the ceasefire in Lebanon holds.
- Strong UK economic growth – UK GDP rose by 0.5% in February, higher than expectations of just 0.1% growth. However, Prime Minister Starmer has warned the impacts of the war will be significant, and the International Monetary Fund (IMF) predicts the UK economy will be hardest hit amongst G7 nations.
- US production plummets – industrial production in the US dropped 0.5% in March, the biggest monthly fall in industrial activity since September 2024. Despite the sharp monthly decline, industrial production was still up 0.7% year‑on‑year.
- US job market holds steady – new filings for US unemployment fell to 207,000 last week from 218,000 the week prior. This represents the largest weekly decline since February, signalling that layoffs remain limited. Continuing claims rose to 1.82m, an increase of 31,000.
- Exports drive China – China’s economy expanded by 5% year-on-year in Q1, accelerating from 4.5% in Q4 and beating forecasts of 4.8%. It marked the fastest annual growth in three quarters, supported largely by resilient export performance. Despite the stronger start, economists expect China’s growth momentum to weaken over the rest of the year, particularly if the Middle East crisis is prolonged.
What this means for financial advisers and clients
The IMF predicts that global growth will slow to around 3.1% this year if the conflict is limited in duration and scope, a 0.3% hit compared to if the war hadn't happened. They also think global inflation will be around 0.7% higher at 4.4% as a consequence of the supply chain disruptions.
The war has already weighed on the global economy, but markets can still function constructively, often looking beyond near-term uncertainty - especially where there are signs of a path toward resolution.
The possibility remains that a deal isn't as straightforward to conclude as President Trump is signalling, but so long as there is movement towards the Strait of Hormuz reopening there is scope for optimism amongst investors.
The turnaround in equities this week shows the importance of staying invested, at the right level of risk across diversified assets, for the long-term.
Chart of the week - Gulf oil production shut‑ins
Source: US Energy Information Administration (April 2026 Short Term Energy Outlook), Parmenion. Chart reconstructed from EIA published production shut-in estimates assuming gradual reopening of the Strait of Hormuz. For illustrative use; reflects EIA modelling assumptions, not a forecast guarantee.
Why’s this worth sharing?
Oil production shut‑ins refer to the intentional, temporary reduction or suspension of crude oil output at producing fields. They're a physical operating decision taken by producers when continuing to produce is uneconomic, unsafe, or impossible.
The chart above shows the levels of Gulf oil production shut-ins, shown in millions of barrels per day, as estimated by the US Energy Information Administration, based on the assumption that the conflict doesn’t persist past this month.
This is important because, even if the US and Iran were to secure a permanent agreement today that would reopen the Strait of Hormuz, it would still take time for traffic and oil production to resume.
The delay in returning to full oil supply is likely to cause disruption, but equities are long-term investments, priced on expectations for growth and cashflows over years and even decades.
In that context, short-term interruptions such as these matter less when viewed through a long-term lens. Markets can be volatile in the moment, often reacting sharply to shifting sentiment, but they are also capable of looking through periods of disruption, provided there is confidence in a return to more normal conditions. As a result, it's entirely plausible to see temporary disruption for consumers and the wider economy, while equity markets continue to perform as they anticipate recovery and stabilisation ahead.
The Markets
UK large caps struggle
The FTSE 100 hovered near recent highs but ultimately lost momentum. Investor concern over potential UK electricity market reforms triggered notable weakness in utility names, whilst mining stocks also weighed on the index amid softer commodity sentiment.
UK mid-caps outperform
In contrast, the mid-cap FTSE 250 edged higher and is on track for a third consecutive weekly gain, supported by improving risk sentiment and easing oil prices earlier in the week. The mid-cap space has benefited from its greater sensitivity to domestic conditions and interest rate expectations, alongside idiosyncratic earnings upgrades for names such as Rank Group and Saga.
US stocks shine
The S&P 500 is looking to close its third consecutive week of 3% gains, with tech stocks leading the way. Mega‑cap AI beneficiaries such as Nvidia, Microsoft, Meta and Broadcom delivered mid-single-digit gains. Financial heavyweights Blackrock and JP Morgan also saw modest gains on the back of strong earnings.
Emerging markets recover
A sharp rally in AI‑linked Asian stocks boosted emerging markets returns this week. TSMC shares rose around 7%, fuelled by record quarterly profits. Taiwan's stock market has now surpassed the UK's to become the world's seventh largest by total market cap.
Oil plummets
After gaining close to 4% on Thursday, oil prices have sunk almost 10% after the news broke that Iran have agreed to reopen the Strait of Hormuz.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | -0.06% | 7.83% |
| FTSE 250 | 2.02% | 2.41% |
| S&P 500 | 2.85% | 2.57% |
| NASDAQ | 4.43% | 3.94% |
| FTSE Developed Europe Ex-UK | 0.35% | 3.55% |
| FTSE Emerging Markets | 2.30% | 7.76% |
| FTSE Japan | 1.68% | 10.75% |
| Brent Crude | 3.73% | 61.01% |
| Gold Spot | 0.44% | 10.14% |
| UK 10yr Gilt yield | +4bps | +40bps |
| US 10yr Treasury yield | -1bps | +16bps |
Source: Morningstar, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 16th April 2026.
Want to know more?
If you’d like to explore these themes in more depth, our investment team has set out their latest thinking in our article, “Uncertainty in markets, certainty in what we’re doing”, which you can read here: Uncertainty in markets, certainty in what we’re doing.
You can also hear directly from the team in our upcoming Let’s Talk Markets webinar next Thursday 23rd April. They’ll be discussing recent market developments, key drivers behind portfolio performance, and the outlook for the months ahead. Save your spot here.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
