Content

• UK: Inflation and interest rates remained steady, but markets suffered from geopolitical tensions

• Europe: Inflation increased while economic growth slowed down

• US: The economic outlook is positive and markets show small signs of recovery

• Asia: A strong start to 2026 is short-lived as markets fall and China experiences high inflation

• How this affects your investments

• Looking ahead

Summary

The effects of the ongoing conflict in the Middle East became more noticeable in March. Markets that had previously been resilient, including Japan, fell, and both UK and US markets also declined. Towards the end of the month, however, there were signs of recovery in the US.

Inflation remained steady or fell slightly in most regions, although China saw a more noticeable increase in prices.

Periods like this often bring short-term ups and downs. While this can feel unsettling, it’s important to focus on longer-term trends rather than reacting to day-to-day market movements.

What this means for investors

Markets in most regions fell during the month, which may have affected the value of your portfolio. However, some areas, including the US have already shown signs of recovery.

This is a reminder that market downturns are often temporary. While values can fluctuate in the short term, they have historically increased over longer periods.

UK: Inflation and interest rates remained steady, but markets suffered from geopolitical tensions

At the start of the recent escalation in the Middle East, the UK economy had been relatively resilient. However, rising oil prices have begun to have an impact.

In March, global uncertainty led to a downgrade in UK growth expectations, with forecasts for 2026 reduced to 0.7%¹. Recent figures also show that economic growth remains subdued, with GDP increasing by just 0.1% in the final quarter of 2025².

Inflation remained at 3% in the year to February³. However, rising energy costs may push prices higher in the coming months. In response, the Bank of England kept interest rates unchanged at 3.75% in March⁴. Markets reacted to the increased uncertainty. After positive returns in February, the FTSE All-Share fell by 6.57% in March⁵.

The FTSE 250 posted even greater losses of 9.45%⁶. Despite this, the FTSE All-Share delivered a total return of 2.4% over the first quarter of 2026⁷.

Europe: Inflation increased while economic growth slowed down

European economies were also affected by rising oil prices. inflation increased to 2.5% in March, up from 1.9% in February⁸. Economic growth slowed, with business activity across manufacturing and services easing slightly during the month.

Growth forecasts for 2026 were also revised down in March, reflecting ongoing uncertainty⁹. European markets experienced larger losses than the UK during this period. Over the first quarter, the MSCI Europe (excluding UK) – an index tracking large and mid-sized companies across European markets – fell by 2.3%¹⁰, with further declines in March¹¹.

US: The economic outlook is positive and markets show small signs of recovery

In the US, the economic outlook is more positive, although forecasts may not yet fully reflect the disruption caused by conflict in the Middle East.

Inflation in February remained unchanged at 2.4%, suggesting prices may begin to stabilise¹². However, rising oil prices could still push inflation higher in the months ahead. Despite this, forecasts for 2026 remain encouraging. The Federal Open Market Committee (FOMC) – the body responsible for setting US interest rates – has slightly increased its expectation for economic growth, from 2.3% to 2.4%.

The FOMC also kept interest rates unchanged, maintaining its target range of 3.5-3.75%¹³. While official forecasts are optimistic, markets have shown a more mixed picture. For example, the S&P 500 – an index tracking 500 of the largest US companies – fell by 4.3% in the first quarter of 2026¹⁴.

However, towards the end of March, markets recovered as signs of progress emerged in the conflict. On 31 March, the Dow Jones – an index of 30 major US companies – rose by 2.49%, while the S&P 500 gained 2.91%¹⁵.

As the situation continues to evolve, markets are likely to remain volatile in the short term.

Asia: A strong start to 2026 is short-lived as markets fall and China experiences high inflation

After a strong start to the year, Asian markets slowed in March. The MSCI Asia (excluding Japan) Index – a broad index of companies across the region – fell by more than 100 points¹⁶.

Similarly, Japanese Nikkei index fell by 6.82% in the month to 2 April 2026¹⁷. However, inflation in Japan continued to ease, falling from 1.5% in February to 1.4% in March¹⁸.

The picture in China was different. After falling to 0.2% in January, inflation rose to 1.3% in February 2026¹⁹.

Looking ahead

Geopolitical events can affect global markets and, as the situation continues to change, short term movements can be difficult to predict.

However, history shows that markets have tended to recover from periods like this and grow over the longer term. For this reason, it can be helpful to focus on your longer-term plans rather than short-term market movements.

If you have questions about your portfolio or would like to discuss your plans, your adviser will be happy to help.

¹ 02.04.2026 OECD Economic Outlook, Interim Report March 2026 OECD, ² 02.04.2026 United Kingdom GDP growth rate Trading Economics, ³ 02.04.2026 Consumer price inflation, UK: February 2026 The Office for National Statistics, ⁴02.04.2026 Interest rates and Bank Rate: our latest decision The Bank of England, ⁵ 02.04.2026 FTSE All-Share London Stock Exchange, ⁶02.04.2026 FTSE 250 London Stock Exchange, ⁷ 02.04.2026 Review of markets over the first quarter of 2026 JP Morgan, ⁸ 02.04.2026 Eurozone Inflation Rises Amid Iran War but Will the ECB Raise Rates? Morningstar, ⁹ 02.04.2026 ECB staff macroeconomic projections for the Euro area, March 2026 European Central Bank, ¹⁰ 02.04.2026 Review of markets over the first quarter of 2026 JP Morgan, ¹¹ 02.04. 2026 MSCI Europe ex UK Index MSCI, ¹² 02.04.2026 United States inflation rate Trading Economics, ¹³ 02.04.2026 U.S. FOMC Meeting (March 2026) TD Economics, ¹⁴ 02.04.2026 Review of markets over the first quarter of 2026 JP Morgan, ¹⁵ 02.04.2026 Dow surges 1,100 points, S&P 500 posts best day since May as hopes grow for end of Iran war CNBC, ¹⁶ 02.04.2026 MSCI AC Asia ex Japan Index MSCI, ¹⁷ 02.04.2026 Japan stock market index Trading Economics, ¹⁸ 02.04.2026 Japan Tokyo CPI YoY Trading Economics, ¹⁹ 02.04.2026 China inflation rate Trading Economics

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The value of your investment(s) and the income derived from it, can go down as well as up and you may not get back the full amount you invested.

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

FP2026-180 - last updated April 2026