US stocks rose in the wake of a trade deal agreed between the country and the UK.
The deal, reached on Thursday (May 8), drops the extra 25 per cent tariffs which were set to be imposed on cars and metals.
However, the 10 per cent levies will remain on most British exports.
Chief executive of the Investment Association, Chris Cummings, called the announcement “welcome news for investors”.
He said: “The US is an important market for our industry, with UK investment managers looking after £770bn on behalf of US clients and investing £1.3tr into US equities.
“This deal will build on and strengthen that relationship, benefiting consumers and businesses in both countries, with the potential to boost trade and create jobs.”
The S&P 500 was up 0.5 per cent this morning. However, Peder Beck-Friis, an economist at Pimco, said the deal is not expected to lead to a noticeable impact on overall UK GDP.
He called it a “very narrow deal” and said ongoing fiscal tightening and Bank of England policy remain much more important drivers of the outlook.
Thomas Moore, senior investment director at Aberdeen, said: “The full details of the US/UK trade deal will emerge gradually over the coming weeks, with specific UK sectors such as automotive and aerospace the clear early beneficiaries.
“Looking more broadly at the implications of the deal, investors should be reassured that the US is signalling its willingness to hammer out more trade deals
“Any thawing in US/China relations would be warmly received by markets. As more deals are signed, this sets up a positive outlook for equity markets as the wall of worry is climbed.”
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