Content

• Markets summary

• What this means for investors

• UK: Inflation eases, but growth forecasts revised down

• Europe: Low inflation and modest market returns

• US: Markets dip and growth slows

• Asia: Markets continue to deliver standout returns

• Looking ahead

Markets summary

Global markets delivered mixed results in February. Japanese shares were among the strongest performers, while US markets saw modest declines. UK inflation eased slightly, although economic growth expectations have been revised down amid ongoing geopolitical uncertainty.

Short-term volatility is normal in the face of geopolitical shifts. At times like this, as markets continue to react to ongoing developments, it’s important to stay focused on your long-term financial goals.

What this means for investors

Regional performance varied considerably in February, with Japan posting some of the highest returns in recent months, while US markets dipped.

This highlights the importance of maintaining a well-diversified portfolio. Regions can perform very differently over short periods, but diversification helps smooth returns and reduce the impact of market fluctuations.

UK: Inflation eases, but growth forecasts revised down

The UK economy showed mixed signals last month. Inflation eased to its lowest level since March 2025, but economic growth forecasts were lowered amid ongoing geopolitical events.

In the recent Spring Statement, Rachel Reeves confirmed that the UK’s expected economic growth for 2026 has been revised down to 1.1%, compared with the 1.4% forecast in last year’s Autumn Budget. This is largely due to the expected economic consequences of the ongoing conflict in the Middle East and the uncertainty it has created¹.

The latest figures show inflation was 3% in the year to January, down from 3.4% in December. The main downward contributions came from transport costs, as well as food and non-alcoholic drinks².

The Bank of England (BoE) previously indicated that there could be scope for further interest rate cuts this year. However, recent geopolitical developments could influence inflation and economic growth, and the BoE will need to assess the impact before making further decisions³.

UK markets continued their strong start to the year. The FTSE All-Share Index, which tracks around 900 of the UK’s largest listed companies, returned 6.5% in February, and the FTSE 250 delivered a more modest gain of 2.3%⁴.

Europe: Low inflation and modest market returns

Europe continued to experience low inflation, though markets slightly underperformed relative to other regions.

Inflation in the Euro Area rose to 1.9% in February, up from January’s 16-month low of 1.7%. Across Europe, inflation remained relatively low and economic growth continued at a modest pace. Markets delivered positive returns during the month, although they were weaker than some other global regions⁵.

The latest data also shows that the Euro Area economy expanded by 0.3% in the final quarter of 2025. Spain continued to deliver the strongest performance, followed by the Netherlands, Germany, and Italy, while France recorded comparatively weaker growth. In 2025, the region’s economy grew by 1.5%, up from 0.9% in 2024. Growth is forecast to reach around 1.2% in 2026⁶.

European markets delivered positive returns but were the second-weakest performers among major global markets for the month, with the MSCI Europe exUK Index, which tracks large and mid-sized companies across the region, rising by 3.4%⁷.

US: Markets dip and growth slows

US markets were weaker in February, following strong performance earlier in the year. Markets fell in February and the latest readings showed economic growth slowing, though it remains stronger than in other regions.

Inflation eased to 2.4% in January, its lowest level since May 2025, down from 2.7% the previous two months⁸.

The Federal Reserve left the federal funds rate unchanged at a target range of 3.5%–3.75% at its January meeting. Policymakers were divided on the future path of interest rates, reflecting uncertainty about the pace of inflation and employment levels⁹.

The US economy expanded by 1.4% in the fourth quarter of 2025, the slowest rate since the first quarter of last year and a notable slowdown from the 4.4% growth recorded in Q3¹⁰.

Technology stocks experienced some volatility, contributing to weaker overall market performance during the month. The S&P 500 Index, which tracks 500 of the largest and most influential listed companies, was the worst-performing major global market during the month, falling by 0.8%¹¹.

Asia: Markets continue to deliver standout returns

Asian markets continued their strong start to the year.

In Japan, markets reacted positively to the snap election victory of the incumbent Prime Minister. The TOPIX Index, which tracks a broad range of Japanese companies, rose by 10.5% in February, making it the standout performer of the month¹².

Inflation in Japan eased in January, down from 2.1% the previous month and the lowest level since March 2022¹³.

Elsewhere in the region, the MSCI Asia ex-Japan Index, which measures the performance of large and mid-sized companies across Asian markets excluding Japan, rose by 5.9% over the month¹⁴.

In China, inflation slowed to 0.2% in January, down from 0.8% a month earlier and marking the lowest reading since October 2025¹⁵.

Looking ahead

With geopolitical events continuing to evolve, markets may remain sensitive to new developments. However, they have historically shown resilience and recovery in the face of uncertainty, and the long-term trend has been towards growth. So, it’s typically a good idea to maintain a long-term focus, rather than letting short-term movements drive your decisions.

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

¹03.03.26 Reeves says her plan is working as growth forecast cut for this year BBC, ²18.02.26 Consumer price inflation, UK: January 2026 Office for National Statistics, ³05.02.26 Interest rates and Bank Rate: our latest decision Bank of England, ⁴02.03.26 Review of Markets over January JP Morgan, ⁵05.03.26 Euro Area Inflation Rate Trading Economics, ⁶05.03.26 Euro Area GDP Growth Rate Trading Economics, ⁷02.03.26 Review of Markets over 2025 JP Morgan, ⁸05.03.26 United States Inflation Rate Trading Economics, ⁹05.03.26 United States Fed Funds Interest Rate Trading Economics, ¹⁰05.03.26 United States GDP Growth Rate Trading Economics, ¹¹02.03.26 Review of Markets over 2025 JP Morgan, ¹²02.03.26 Review of Markets over 2025 JP Morgan, ¹³05.03.26 Japan Inflation Rate Trading Economics, ¹⁴02.03.26 Review of Markets over 2025 JP Morgan, ¹⁵05.03.26 China Inflation Rate Trading Economics

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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 Limited is registered in England and Wales at The Apex, Brest Road, Derriford Business Park, Derriford, Plymouth PL6 5FL: Registered Number: 07882611.

FP2026-133 - last updated March 2026