UK Economy Shows Signs Of Positive Momentum — But It May Not Be Out Of The Woods

U.S. President Donald Trump’s pro-energy policies were meant to speed the construction of the United States’ next generation of energy infrastructure, but many oil and gas pipeline operators would still rather buy than build their way to expansion due to a host of factors impeding large projects.

Trump declared an energy emergency on his first day in office and has issued directives to support exports, reform permitting and roll back environmental standards. Since his November election, a number of large-scale projects have been greenlit, including a liquefied natural gas terminal and a handful of pipelines.

But higher costs from a global trade war sparked by U.S. tariffs, labor shortages, low oil prices, and the risk of legal snags mean many companies are generally reluctant to commit to bold new construction.

Instead, operators see mergers and acquisitions as a more efficient way to grow. In the first quarter of this year, 15 U.S. midstream deals were struck, the highest quarterly number since the final three months of 2021, according to energy tech company Enverus.

“We have spent a lot of time thinking about the buy versus build question and, at this time, we’re seeing more opportunities to buy assets,” said Angelo Acconcia, a partner at ArcLight Capital Partners, which invests in energy infrastructure.

Acconcia said factors including tariffs and high demand for supplies and labor made it challenging to calculate the economics of building a project.

One of the most prevalent trends in dealmaking so far in 2025 has been pipeline companies buying back stakes in joint ventures, previously sold to help fund the initial development costs of prior-year builds.

Targa Resources TRGP.N said in February it would acquire preferred equity in its Targa Badlands pipeline system from Blackstone BX.N for $1.8 billion, while MPLX MPLX.N said in the same month it would buy the 55 per cent interest in the BANGL natural gas pipeline previously owned by WhiteWater Midstream and Diamondback Energy FANG.O for $715 million.

Private equity owners of energy infrastructure are keen sellers, having spent recent years developing systems that are now online.

Northwind Midstream, a New Mexico-focused pipeline operator, is currently being marketed for sale by Five Point Infrastructure, for example.

TARIFFS WEIGH

In recent years, U.S. oil and gas pipeline projects have faced regulatory hurdles and robust environmental opposition, resulting in years of delay and substantial cost overruns.

The Mountain Valley Pipeline, a natural gas conduit owned by an EQT Corp-led group EQT.N, started operating last June but took six years to build and cost more than double its initial $3.5 billion budget.

While the industry has welcomed Trump’s pro-fossil fuel sentiment, some of his other policies - including tariffs on products like steel - are pushing up the cost of new energy projects.

Weak global crude prices have also prompted warnings from U.S. oil and gas producers that they could curtail output growth, making pipeline firms cautious about new spending.

Some companies, including Kinder Morgan KMI.N, said they believe there are better economics in smaller-scale projects that expand existing infrastructure than in big new ones.

Others are wary of even those types of projects.

DT Midstream DTM.N CEO David Slater said last month that while some bite-size expansion may continue on the company’s LEAP system in the Haynesville basin, he wanted to see how local producers react to commodity price movements before considering new plans.

“I think we just need to let the clock run here a little bit, see how the basin responds,” he told analysts on a call.

OPTING TO BUILD

Despite the hurdles, the math still favors new construction for some companies.

Energy Transfer ET.N said it will build the $2.7 billion Hugh Brinson natural gas pipeline in Texas, and Tallgrass Energy plans to construct a pipeline to move natural gas from the Permian to its Rockies Express Pipeline running through Colorado and Wyoming.

“Generally, on buy versus build, if you have the opportunity to build, you build because the returns are largely better,” said Ali Akbar, managing director of energy investment banking at Greenhill, a Mizuho affiliate.

He said buying an asset like a pipeline can sometimes cost two times more than building something similar.

Williams Companies WMB.N unveiled in March its $1.6 billion Socrates project to build natural gas infrastructure to support data center development in Ohio and has said Washington’s newfound support for projects is a welcome change.

“It’s nice to see some people that actually think their job is to help get infrastructure built as opposed to being obstructive,” outgoing CEO Alan Armstrong said on an earnings call this month.

Source: BNN BIoomberg

The recent decline in the US Dollar isn’t happening in a vacuum. Several factors contribute to its current weakness, primarily centered around concerns regarding the nation’s Fiscal Health and monetary policy expectations.

• Fiscal Health Concerns: A major driver is worry over the growing US national debt and budget deficits. High levels of government spending and borrowing can erode confidence in a currency’s long-term stability. Investors look at a nation’s ability to manage its finances, and increasing debt loads raise questions about future economic growth and potential inflation.
• Monetary Policy Outlook: Expectations about the Federal Reserve’s future interest rate decisions also play a big role. If the market anticipates rate cuts sooner or more aggressively than previously thought, it can make holding Dollar-denominated assets less attractive compared to currencies where rates might remain higher or rise.
• Inflation Dynamics: While inflation has cooled from its peaks, its path remains uncertain. Persistent inflation, coupled with fiscal spending, can further pressure a currency’s purchasing power.
• Relative Economic Performance: Compared to other major economies, particularly in the Eurozone, the perceived relative strength or weakness can influence currency flows.

These factors combine to create a less favorable environment for the US Dollar on the international stage.

How is the Euro Gaining Ground?

As the US Dollar faces challenges, the Euro has been a beneficiary, showing resilience and gaining value against the greenback. What’s behind the Euro’s recent strength?

• European Central Bank (ECB) Stance: The ECB’s communication regarding future monetary policy has been a key factor. While global central banks are navigating similar inflationary pressures, the market’s interpretation of the ECB’s potential path for interest rates relative to the Fed can boost the Euro.
• Improved Economic Sentiment: Recent economic data out of the Eurozone, while still facing challenges, has shown some signs of stabilization or slight improvement, contributing to more positive sentiment towards the Euro.
• Reduced Energy Price Shocks: The Eurozone was heavily impacted by energy price spikes. As these pressures have eased somewhat, it has provided a degree of relief to the region’s economy, indirectly supporting the Euro.
• Safe-Haven Flows (Relative): In times of global uncertainty, capital flows seek perceived safety. While the Dollar traditionally holds this role, shifts in confidence can see other major currencies like the Euro attract flows, especially when the Dollar’s own fundamentals are questioned.

The interplay between these factors creates a dynamic where the Currency Exchange rate between the USD and EUR shifts, reflecting changing market perceptions and economic realities.

What Do Forex Market Shifts Mean for Crypto Investors?

You might wonder why movements in traditional currencies matter if you’re focused on digital assets. Here’s the connection:

• Liquidity and Capital Flows: Major fiat currencies are the on-ramps and off-ramps for the crypto market. When the US Dollar weakens, it can sometimes signal a broader shift away from Dollar-denominated assets, potentially leading investors to look for alternatives, including cryptocurrencies.
• Investor Sentiment: Weakness in a major currency like the Dollar can reflect underlying concerns about the global economy or specific fiscal policies. This sentiment can spill over into riskier assets like crypto, though the direction of impact can vary. Sometimes it drives investors towards crypto as a hedge; other times, it can increase risk aversion across the board.
• Inflation Expectations: If Dollar weakness is driven by inflation fears stemming from Fiscal Health issues, it reinforces the narrative of Bitcoin as a potential inflation hedge, potentially attracting capital.
• Relative Value: For investors holding assets in different currencies, changes in the Currency Exchange rate between the Dollar and the Euro directly impact the value of those assets when converted back to their home currency.

Understanding these connections helps you see the bigger picture beyond just crypto charts.

Understanding Fiscal Health and its Broader Impact

The concept of Fiscal Health is central to a nation’s economic stability and, by extension, its currency’s value. It refers to the condition of a government’s finances, looking at its revenues (taxes) versus its expenditures (spending), and the resulting debt levels.

Think of it like a household budget, but on a massive scale. If a household consistently spends more than it earns, it accumulates debt. Too much debt can lead to difficulties paying it back, higher interest costs, and reduced financial flexibility. For a country, poor Fiscal Health can lead to:

• Higher borrowing costs for the government.
• Potential cuts to public services or increased taxes in the future.
• Reduced confidence from international investors.
• Pressure on the national currency’s value.

When the market perceives a decline in a nation’s Fiscal Health, it often reacts by selling that nation’s currency, as seen with the recent pressure on the US Dollar.

The Role of Currency Exchange in Global Finance

Currency Exchange rates are the bedrock of international trade and finance. They determine how much one currency is worth in terms of another. These rates are constantly fluctuating in the Forex Market, influenced by a complex mix of economic indicators, central bank policies, political stability, and market sentiment.

Here’s a simplified view:

The recent movements between the US Dollar and the Euro are a direct result of the market weighing these factors for both economies and adjusting the Currency Exchange rate accordingly.

Given these shifts, what can you, as a crypto investor, take away?

• Stay Informed: Keep an eye on major economic news, central bank announcements, and reports on national debt. These aren’t just abstract numbers; they impact the financial world you operate in.
• Consider Diversification: While crypto offers diversification from traditional assets, understanding currency movements is key if you hold assets denominated in different currencies or if your investment thesis involves hedging against fiat instability.
• Watch Capital Flows: Significant shifts in the Forex Market can sometimes precede or coincide with movements in the crypto market as large investors reallocate capital.
• Evaluate Your Fiat On/Off Ramps: If you frequently move between fiat and crypto, be aware of the current Currency Exchange rates, especially if you deal with both USD and EUR or other major currencies.

The decline of the US Dollar and the rise of the Euro are significant events in the global financial system, driven by complex factors including concerns about Fiscal Health and monetary policy divergence. These shifts in the Forex Market highlight the interconnectedness of traditional finance and the crypto world. While crypto charts are your primary focus, understanding these macro-level Currency Exchange dynamics provides a crucial layer of context, potentially offering insights into broader market sentiment and capital movements that can influence your crypto investments. Staying informed about these fundamental economic indicators is part of being a well-rounded investor in any asset class.

Source: CryptoSlate

Former President Joe Biden's administration aimed to lower Americans' monthly student debt payments and maximize loan forgiveness opportunities. President Donald Trump's administration seems more focused on ensuring all those loans are repaid.

A harsh reality could be on the way for borrowers who have gotten used to leeway in the federal student loan system, or are struggling to make payments: An estimated 1 in 12 Americans will face "negative" financial consequences in the coming months, finds a new report by the University of California Student Law Initiative, researched in conjunction with the left-leaning nonprofit Student Borrower Protection Center.

Some student loan borrowers are already experiencing credit score drops. Others will face involuntary debt collection this summer, the Department of Education announced. Many of the 43 million Americans with student debt are already struggling financially: Nearly 30% of borrowers report, at some point, having gone without food, medication or other necessities to make their student loan payment, a 2024 Consumer Financial Protection Bureau survey found.

In response to a request for comment, a U.S. Department of Education spokesperson pointed CNBC Make It to a statement made by Secretary of Education Linda McMahon on April 21.

"The Department of Education, in conjunction with the Department of Treasury, will shepherd the student loan program responsibly and according to the law, which means helping borrowers return to repayment — both for the sake of their own financial health and our nation's economic outlook," McMahon said.

The University of California report says that three particular groups, totaling 20 million student loan borrowers, risk deepening their financial challenges this summer:

Borrowers behind on monthly payments

Over 7 million borrowers were behind on their monthly payments as of March 31, according to Department of Education data. Most of them — nearly 6 million — were between 91 and 180 days past due on their payments, the data says. The rest were at least 31 days behind.

Once a loan is 90 days past due, the loan servicer reports the delinquency to the credit reporting bureaus, which can lower the borrower's credit score and leave a negative mark on their credit report. Trump's first presidential administration paused delinquency reporting to credit bureaus, along with monthly payments, in March 2020 when the Covid-19 pandemic hit.

Monthly payments resumed in October 2023 under the Biden administration, and delinquency reporting resumed in January 2025 under Trump. The move may have happened regardless of the 2024 presidential election's results: In October, the Biden administration announced plans to resume delinquency reporting in January.

Nine million borrowers could see their credit scores drop from delinquency reporting, according to analysis from Federal Reserve Bank of New York economists. Since January, some borrowers on social media have reported seeing declines of more than 100 points, which could make it more difficult for them to get approved for new loans or credit cards, get a lease on a home or activate utilities services.

If you're delinquent on your loan, paying your past-due amount or getting on a payment plan can bring your account into good standing.

Borrowers who are in default

Loans that go 270 days past due without a payment are considered in default. More than 5 million borrowers have at least one federal loan in this situation, according to the researchers' analysis of Federal Student Aid data.

Before the pandemic, those borrowers would've seen their tax refunds and federal benefits, including portions of their Social Security checks, seized by the federal government in a process known as "Treasury offset." Additionally, their wages would've been be subject to garnishment, meaning the government would take money — up to 15% of disposable income — out of their paychecks to repay the defaulted loans.

Trump's first administration paused Treasury offset and wage garnishment during the pandemic. The Biden administration maintained those pauses, planning to restart Treasury offset in July 2025 and wage garnishment in October 2025 — with an emphasis on trying to decrease the number of impacted borrowers — according to a January 13 Department of Education memo.

The Trump administration instead restarted Treasury offsets in early May, notifying borrowers whose federal benefits may be impacted. People facing wage garnishment will be contacted later this summer, the Department said in an April 21 press release. The federal government is required to provide borrowers with a 60-day notice before reducing their benefits or wages.

If you fall into either category, your benefits or wages will return to normal once your debt is repaid, you enter a rehabilitation agreement that includes a payment plan or you request a hearing to determine whether you're exempt from some or all wage garnishment.

Borrowers enrolled in the SAVE plan

At least 8 million borrowers are currently in an administrative forbearance because they enrolled in the Saving on a Valuable Education (SAVE) plan, an income-driven repayment plan created under the Biden Administration. That plan is temporarily blocked by federal courts after multiple Republican-led states sued to prohibit its enactment.

These borrowers may not be required to make payments for now. But when they are, their payments will likely be higher than they'd have been on the SAVE plan. Under currently available income-driven repayment plans, borrowers' monthly payments can be up to 20% of their discretionary income, compared with a 5% cap under the SAVE plan.

The SAVE plan's legal challenges began during the Biden administration, which sought to defend it in court — something the Trump administration is unlikely to do.

In Trump's "big, beautiful" tax bill, which narrowly passed the U.S. House of Representatives on Thursday, Republicans proposed creating a new income-driven repayment plan and eliminating the existing repayment options for loans disbursed on or after July 1, 2026.

The proposal — which includes a new repayment path called the Repayment Assistance Plan — would set minimum monthly payments at $10 for low-income borrowers, as opposed to no monthly payments under the SAVE plan. It's unclear whether the Repayment Assistance Plan will be included in the version of the bill that gets voted on in the Senate.

Source: CNBC

Global investors admit to flying blind in markets roiled by erratic U.S. trade rhetoric and chaotic economic forecasting, stressing that placing long-term bets was harder now than at any time since the 2020 COVID-19 crisis.

Anxieties over whether a 90-day White House-China tariff truce will hold, plus U.S. budget gaps and whipsawing currencies have made investors extremely cautious about where to put their money.Markets have been on a rollercoaster ride for weeks, with world stocks rallying 20% (.MIWD00000PU), from more than one-year lows hit after U.S. President Donald Trump's April 2 tariff bombshell, after slumping 15% in three sessions.

The turbulence continued on Friday with a sudden selloff in stocks after Trump said he was recommending a straight 50% tariff on goods from the European Union. A day earlier, government debt saw a sudden slump, spooking long-term investors out of markets that they fear have lost the anchoring force of consensus forecasts.

"There is no macroeconomic visibility," said Francesco Sandrini, Italy CIO at Europe's biggest asset manager Amundi.He said he was following short-term speculative market trends instead of taking a stance on the global outlook.

"You may be right on the end-game for economics and valuations in the long term but the risk is that it is going to be very painful in the short term."

Other money managers said they had shifted global portfolios onto neutral settings, which ensure the balance of investments is not tilted towards any particular scenario, because even if their views were right, assets were not trading reliably.

"There is no reward for taking any risk at the moment," Lombard Odier Investment Managers head of macro Florian Ielpo said.

CTA hedge funds, which mirror prevailing market trends, are also not taking strong directional bets on stocks or bonds right now, J.P. Morgan data on Tuesday showed.

UNPREDICTABLE

This week, yields on 30-year U.S. Treasuries , rocketed to 5.013% from just 4.84% two weeks ago and equivalent Japanese yields hit record highs, in abrupt moves that analysts have struggled to define exact reasons for.

Earlier this month, trade war tremors also sparked a speculative buying frenzy of Taiwan's dollar which rose 8% against the U.S. dollar in two days.

John Roe, head of multi-asset funds at Britain's biggest investor L&G, said 2020's pandemic-induced market was "the last time things were so totally unpredictable."

He said he had briefly bought Wall Street stocks in early April, then reverted to a neutral stance on global equities and government bonds earlier this month.Economists back in early April were inputting U.S.-China trade war scenarios into their models which produced global recession forecasts, Columbia Threadneedle Investments senior economist Anthony Willis said.

Then, the White House and Beijing agreed to suspend reciprocal levies cheering markets. But the nervousness resurfaced this week after U.S. Treasury Secretary Scott Bessent threatened unspecified trading partners with maximum tariffs.

"We've got all these scenarios and then it turns out a week later you might as well just chuck them into the bin," Willis said.

Barclays, for example, last week scrapped its forecast for the U.S. to enter recession this year.

Economic modeling following the COVID-19 was in some ways easier, said Willis, because events such as the arrival of vaccines provided "clear signals" for the economic outlook.WHIPSAWED

HSBC Asset Management global chief strategist Joe Little expected further bursts of unusual price action in "whipsawed" markets.

"This makes it very difficult (for long-term investors) in terms of running positions and maintaining conviction," he said.

Amundi's Sandrini said he saw the risk of markets moving in "very harmful swings," because of debt-fuelled speculation.

Flows into leveraged equity index trackers, which deploy borrowed capital in a manner that amplifies market gains and losses, hit a record high in late April as U.S. stocks surged, LSEG Lipper data showed.

Citi strategists said trading in risky U.S. derivatives dubbed zero-day options, which offer cheap exposure to stock market moves and can exacerbate market routs, has also hit a record high.

"The most dangerous thing that could have happened in markets was the (equity) rebound," said Pictet Wealth Management CIO César Pérez Ruiz, arguing this had lured in amateur traders who might panic sell at the first sign of a U.S. downturn.

The Bank for International Settlements warned, opens new tab in March that macro-economic U.S. surprises were "inducing larger market responses abroad."

But bearish long-term investors also faced stampedes of retail investors and trend-following hedge funds moving against them each time markets turned briefly positive, Lombard Odier's Ielpo argued.

"We need to acknowledge that what we know about investing does not apply at the moment," he said.

Source: Kitco

The plan, which aims to have clean sources produce at least 95% of GB’s power by 2030, up from 60% in 2023, is expected to significantly increase the country’s renewable energy capacity.

The current capacity of 46GW of wind and solar is expected to rise to 117-126GW, with offshore wind capacity alone increasing from 14GW to 43-50GW.

According to Bernstein, the impact of higher investments in grids and renewables under various scenarios has been quantified. In their base-case model, they anticipate wholesale charges to fall by 47% due to a normalisation of wholesale gas and power prices to pre-crisis levels.

Network (LON:NETW) charges are expected to rise by 27%, led by the investment in transmission networks. Transmission charges currently constitute around 5% of the customer bill, but are forecasted to make up about 10% of the overall bill by 2030.

The policy costs are projected to rise from 22% to 38% of the bill, driven by the expansion of renewables and a fall in wholesale power prices. Although renewable contracts for difference (CfD) charges are expected to increase from £31/year today to £194/year by 2030, only £71/year would be from new renewable capacity yet to be contracted.

The rest of the increase is from existing capacity and already contracted capacity.

Based on these assumptions, Bernstein finds that the overall bills will rise at about 1.5% p.a. by 2030, or £81/year. This analysis does not assume any increase in power demand at the system or typical customer bill level.

The bill structure in 2030 will be far more resilient to commodity price shocks than in 2022, due to the CfD scheme.

Bernstein also ran several sensitivities on their analysis. They found that if there is a 2% p.a. growth in demand, bills will remain at current levels due to higher fixed system cost absorption, which would make up about 60% of the bill by 2030.

In a lower renewable growth scenario, with 81GW renewable capacity and 35GW offshore, bill increases are limited to 0.7% p.a., or £35/year. If no new renewable capacity is contracted from now on, bills will remain flat.

Higher wholesale prices would result in higher bills; however, due to the CfD scheme, the overall impact on bills would be a 2.2% growth p.a., or £121/year. Assuming new offshore wind clears at 24% higher than AR6 (versus 10% in the base case), bill increases would be 1.7% p.a., or £91/year.

Bernstein’s analysis indicates that likely bill rises under the CPP 2030 will be at 1.5-2.2% p.a. and come with a number of strategic benefits to the U.K., including resilience to external commodity price shocks, lower gas imports, industrial policy benefits, and a very low carbon power system that can decarbonize other sectors such as transport and heating.

However, they believe that unless there is strong evidence of demand growth, the extremely ambitious renewable expansion targets should be moderated to limit price increases for consumers while still providing ample opportunities for renewables growth.

In terms of investment implications, Bernstein rates SSE PLC (LON:SSE) and National Grid PLC (LON:NG) as Outperform, while RWE AG (OTC:RWEOY) (ETR:RWEG) ST O.N. (BIT:RWE), Iberdrola (OTC:IBDRY) (BME:IBE), and Oersted AS (CSE:ORSTED) are rated as Market-Perform.

These ratings are based on the companies’ heavy investments into U.K. grids and renewables.

Source: Investing

All the economy is a stage this week. The “big, beautiful” tax bill passed the US House of Representatives in the wee hours of Thursday morning, and millions of college graduates got their diplomas and set off into the job market, competing with an ever-growing army of robot workers.

In the second episode of Everybody’s Business from Bloomberg Businessweek, hosts Stacey Vanek Smith and Max Chafkin dive into the Republican tax bill, the artificial intelligence job threat and the turning of (actual) lead into (actual) gold.

The tax cut extension still has to pass the Senate, but the House version would add roughly $4 trillion to the deficit over the next decade and would be, by far, the most expensive policy the Trump administration has enacted. In spite of this, the legislation hasn’t gotten nearly the attention of other policies, including the “Department of Government Efficiency” (its cuts, many of which are the subject of litigation, have not amounted to even 1% of the federal budget). But all the sound and fury signifying a rounding error is by design, according to author and economic journalist Kyla Scanlon. Scanlon, author of In this Economy? , says you can learn a lot about the Trump Administration’s economic policies by watching WrestleMania.

She argues that Trump’s dramatic, often erratic moves serve to create an emotional arc: Extreme fear of a 245% tariffs on Chinese goods, extreme relief when the tariffs drop to 30% and a perceived triumph that a “deal” has been made. Scanlon points out the president is no stranger to professional wrestling. He used to be a regular guest on WWE.

Then Bloomberg reporter Sarah Frier joins to talk about AI and jobs. Fears are growing in the US workforce that jobs are being lost to AI, and a new study estimates that up to one-third of positions in developed countries will be “transformed” by it. Frier looks at what jobs might be under threat and how real the worries are.

Source: Bloomberg Europe