As we close 2024, the global economy has witnessed a significant divergence in stock market performance across regions. The US equity market, represented by the S&P 500, achieved a remarkable year-to-date gain of nearly 25%, while the STOXX Europe 600 recorded only marginal growth. This disparity, the largest on record, reflects stronger investor confidence in US markets and concerns over potential protectionist policies affecting European exporters. Export-driven sectors in Europe, particularly manufacturing and technology, faced downward pressure due to global trade uncertainties. In contrast, US indices benefited from robust corporate performance in the technology, consumer discretionary, and healthcare sectors.
Inflation remained a central theme throughout 2024, influencing consumer behaviour, government policies, and election outcomes worldwide. Economies experiencing elevated inflation saw significant political changes as voters expressed frustration over rising living costs. Central banks, including the Federal Reserve and the European Central Bank, maintained restrictive monetary policies to address inflation levels that, while moderated, remained above long-term targets. Emerging markets were particularly affected, with rising borrowing costs and currency volatility exacerbating fiscal pressures. High inflation and political turmoil in these regions added uncertainty, deterring foreign investment.
Trade policy emerged as a critical factor in this year’s economic narrative. Concerns about potential new tariffs, especially targeting export-heavy economies in Europe and Asia, dampened growth prospects. Industries relying on global supply chains, including automotive, technology, and manufacturing, reported slower earnings growth due to market uncertainty and geopolitical risks. Investor sentiment reflected these concerns, with capital flows shifting toward perceived safer assets such as US Treasury bonds and gold during heightened uncertainty.
Corporate earnings in 2024 reflected the broader economic environment. US companies generally outperformed their European and Asian counterparts, with technology and healthcare firms driving growth. European firms faced headwinds from weaker export demand and ongoing energy price pressures from geopolitical tensions. Despite fiscal challenges, emerging markets showed resilience in digital infrastructure and renewable energy sectors, indicating long-term growth opportunities amid short-term turbulence.
In the United Kingdom, immigration trends and policies significantly influenced the economic landscape. The government implemented stricter immigration controls, adding more countries to the visa-required list, reflecting a tightening of immigration policies. The UK also introduced the electronic travel authorisation (ETA) system, which requires travellers from previously visa-exempt countries to apply for authorisation before entry. This move aimed to improve border security and manage migration more effectively. Policy changes impacted labour markets, particularly in sectors dependent on foreign workers, such as healthcare and agriculture. Businesses faced challenges in recruitment, leading to calls for more flexible immigration policies to address skill shortages.
Looking ahead to 2025, the UK’s immigration landscape will likely evolve in response to economic needs, political priorities, and global events. Economic recovery and demand from the labour market may prompt the government to adjust immigration policies to address skill shortages and support growth in key sectors such as technology and construction. Ongoing international negotiations could lead to new agreements affecting immigration, potentially influencing visa requirements and work permit regulations. Furthermore, the rise of remote work and digital nomadism may encourage the development of new visa categories or adjustments to existing ones, accommodating professionals who contribute to the economy without traditional residency.
Public opinion and the political climate will continue to play an essential role in shaping immigration policy. Government actions may reflect public sentiment and commitments made during elections, leading to further restrictions or liberalisations. Global health and security concerns could also affect border controls and immigration procedures, highlighting the importance of safety while facilitating necessary travel.
For individuals and businesses planning for 2025, it is crucial to stay informed about policy changes and plan by preparing documentation in advance and considering alternative pathways if needed. Navigating immigration law can be complex, but seeking professional advice can help you understand your options and obligations.
The economic landscape of 2024 highlighted the interconnectedness of politics, immigration policies, and markets. The results of the elections and the policy changes drove both uncertainty and opportunity in the regions. As we approach 2025, businesses and individuals must navigate a complex environment characterised by evolving policy frameworks, economic challenges, and changing global dynamics. Although uncertainties persist, proactive planning and informed decision-making can position you for success in the year ahead. With our support, you can confidently face the changes and make the most of the opportunities that 2025 may bring.
