It is likely that 2025 will go down in history as a year of dramatic changes in the global economy. Donald Trump becoming President of the USA led to the introduction of transactional agreements and unilaterally imposed tariffs that increased uncertainty and started to dismantle the existing rules-based order. Russia’s war in Ukraine continued, and this combined with US pressure to drive members of the European Union to increase their spending on defence rapidly, though this was difficult because of the size of their public sector debts. In such an environment, a carefully considered monetary policy is of particular importance.
