Global equity markets generally rose during May, boosted by continuing demand for AI-related stocks. The price of Brent crude oil rose as high as US$115 in May, but ended the month at US$92, as the US and Iran inched closer to an agreement that could reopen the Strait of Hormuz. Optimism was tempered, however, by wider uncertainties about the outlook for inflation and monetary policy alongside some concerns over tech-related valuations.
Over May as a whole, the Dow Jones Industrial Average Index rose by 2.8% while the Nasdaq Index climbed by 8.4%. However, increasing energy prices have stoked the annualised rate of US inflation, with CPI (Consumer Price Index) inflation increasing from 3.3% in March to 3.8% in April and then 4.2% in May.
In the UK, sentiment was dampened by rising domestic political uncertainties, with the resignation of Sir Keir Starmer now paving the way for the seventh prime minister – and potentially nineth Chancellor – since the Brexit vote 10 years ago. The FTSE 100 Index edged 0.3% higher during May, while the FTSE 250 Index rose by 4.3%.
The annualised rate of UK CPI fell from 3.3% in March to 2.8% during April, its lowest level in over a year. UK CPI remained at 2.8% in May, but inflationary pressures are considered likely to gather pace in response to an expected rise in household energy bills. The International Monetary Fund (IMF) upgraded its forecast for UK economic growth this year from 0.8% to 1%, but cautioned that activity could be undermined by both global and domestic uncertainty.
The European Central Bank warned that “acute geoeconomic stress” was being exacerbated by ongoing uncertainties around global trade and international cooperation, particularly with regard to US policy. The European Commission’s Spring Economic Forecast revised down growth expectations for the eurozone to 0.9% this year and 1.2% next year, citing the impact of the Middle East conflict on energy prices. Inflation in the euro area is predicted to average 3.0% in 2026 – compared with a previous forecast of 2.1% – easing to 2.3% in 2027.
Japanese equities hit new highs in May, buoyed by interest in the technology sector. Against a backdrop of AI-related optimism, Japan’s Softbank Group surged during the month, helping to propel the Nikkei 225 Index to a fresh all-time high. Over May as a whole, the Nikkei 225 Index soared by 11.9%.
Closer to home, the average house price in Northern Ireland is expected to pass £200,000 this year, for the first time since the first quarter of 2008. Figures published by the Northern Ireland Statistics and Research Agency (NISRA) confirmed that the average price increased in the first quarter of 2026 by 1.5% to just over £198,000, with the highest average (£233,000) in Lisburn & Castlereagh and the lowest (£174,000) in Mid & East Antrim.
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