The outlook for 2026

The outlook for 2026 – Innes Reid Founder and Chartered Financial Planner, Mark Reidford APFS, looks forward to 2026 in his year end blog.

As I say every year, I think it is more useful to look forward than back. However, it is worth noting some of the issues we have experienced in 2025.

Believe it or not, President Trump was only inaugurated in January. That was rapidly followed by his meeting with President Zelensky in February, which was accompanied by the massive increase in spend on security and NATO by countries everywhere. Then the on/off/on introduction of US trade tariffs. The war in Ukraine is ongoing and the Israel / Palestine conflict came to a head.

Notoriously shy…Trump has been at the centre of all of the above events.

Trump certainly divides opinion; some see him as a toddler with a tomahawk whilst others laud him as an advocate for common sense who is challenging the accepted orthodoxy. Whatever your view, it is clear that he is making things happen.

The outlook for 2026

Inflation, which had been largely eradicated by the global financial crisis, inevitably reappeared following COVID and hasn’t gone back to the levels of the 2010s and it is unlikely to do so.

Central banks, such as the Bank of England are walking an interest rate policy tightrope between managing inflation and economic growth. So far, they have done a decent job, but a policy mis-step could mean falling off the tightrope. We believe policy makers should be more concerned about supporting growth and therefore should be cutting rates. UK being top of the list in our view.

We are likely to see a steeper downward path in the US, as the Chair of the Federal Reserve’s tenure ends in February. The new Chair will be a Trump appointee and, in all likelihood, an advocate of lower interest rates. That could lead to stronger growth, and inflation, and lead to some excitement in financial markets.

There is an expectation the global economy will strengthen over the course of 2026 as headwinds from higher tariffs, especially in the US, begin to fade and as various tailwinds kick in. They include the lagged effect of past cuts in interest rates, a modest boost from various governments’ fiscal policy, rising business investment in developing artificial intelligence (AI) and higher household disposable incomes.

We are increasingly conscious of the volume (and speed) of negative news we all continuously encounter in an era where we carry a portal to the world around in our pockets. It is difficult to switch off from the relentless negative noise from media outlets motivated by profits from click through advertising. Emotions can cloud good judgment and even the most resolute investors can find their pursuit of fundamentals tainted by the unstoppable tide of “content”.

We are also very conscious of some commentators referencing markets are at all-time highs and valuations look expensive by long term historical comparison. The commentators who predict a market adjustment will be proven right eventually, just like a broken clock tells the correct time twice a day.

Time in the market, not timing the market

As we always advocate, ignore the noise and it is “time in the market” that delivers results not “timing the market”.

On the back of a good year for investments, we are currently delivering valuations which we are sure you will be happy with and we go into 2026 cautiously optimistic but it is never a smooth ride and expect some shocks along the way.

The key point to remember when there is uncertainty is to think back to your long-term financial plan.  While we cannot control the markets or predict unstable geopolitics, we can choose to stay rational, disciplined and focused on your plan.

Thank you and a Happy New Year

On behalf of all of the Innes Reid team, we would like to thank all our valued clients for your continued support. We wish you a prosperous and enjoyable end to 2025 and a Happy New Year.

Mark Reidford APFS
Founder and Chartered Financial Planner

Please note: This blog is for general information only and does not constitute financial advice, which should be based on your individual circumstances. The information is aimed at retail clients only.

The value of your investments (and any income from them) can go down as well as up, and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.