As of April 2025, the global economy presents a highly fragmented picture, with the United States leading in late-cycle expansion, China experiencing a moderated recovery, and both the United Kingdom and Eurozone effectively stalling at the peak of their cycles. Understanding where each of these major economies lies within the business cycle is critical for traders, investors, and policymakers alike. This article draws on the latest data from central banks, the IMF, OECD, and leading economic research to assess the real-time business cycle positioning of these four key economies.

United States: Late-Cycle Expansion Nearing Its Peak

The United States remains the cycle leader in 2025, firmly in the expansion phase but showing signs of reaching a cyclical peak. The economy grew at a robust pace of 2.8% in 2024, above the country’s long-term potential. Strong consumer spending, a resilient labour market, and moderating inflation have kept the momentum going.

The unemployment rate remains near historic lows around 3.7%, indicating labour market tightness. Wages are rising modestly, supporting household demand. Inflation has cooled significantly from its 2022 highs, with headline CPI falling to the 3% range, though core inflation is proving stickier than expected. The Federal Reserve has maintained a restrictive monetary stance, holding rates steady above 5% and signalling caution about premature rate cuts.

Business and consumer confidence remains solid, though forward-looking indicators like the Conference Board’s Leading Economic Index suggest slowing growth ahead. The U.S. is therefore classified as being in a late-stage expansion, with some indicators pointing to a forthcoming plateau, but no immediate recession risk.

China: A Recovery That’s Lost Momentum

China’s post-COVID rebound appears to be losing steam, placing the economy in a mid-expansion phase but with significant headwinds. After expanding 5.2% in 2023, growth slowed to 4.7% year-on-year by Q3 2024. Domestic consumption has remained subdued due to fragile consumer confidence and continued weakness in the property sector.

Industrial output has shown mixed signals. While March 2025 data revealed a short-term boost in exports and manufacturing PMI rising to 51.2, these gains are likely temporary due to front-loading ahead of new U.S. tariffs. Inflation remains nearly flat, with consumer prices hovering around 1% and producer prices experiencing deflation—suggesting slack in the economy.

To support growth, the People’s Bank of China has adopted an accommodative policy stance, cutting interest rates and encouraging fiscal stimulus. Despite this, downside risks remain high. China is best characterised as being in a recovery-driven expansion, still below potential output with limited domestic momentum.

United Kingdom: At a Peak with No Real Growth

The United Kingdom is arguably in the most precarious position of the four economies. The nation finds itself at a cycle peak, but with virtually no economic growth to show for it. GDP increased by a meagre 0.3% in 2023 and was flat in the final two quarters of 2024.

While the unemployment rate remains around 4%, the labour market is starting to soften. Inflation, which peaked at over 11% in 2022, has now fallen back to 2.5%, allowing the Bank of England to initiate a dovish pivot. In February 2025, it cut the base rate to 4.5%, the first rate reduction of the cycle.

Business investment remains sluggish due to elevated uncertainty, particularly around Brexit impacts and weak demand. Consumer confidence has not fully recovered from the cost-of-living crisis, and manufacturing remains in recession. The UK is no longer expanding and is not yet in outright contraction, placing it squarely in a stalled peak phase, with high sensitivity to external shocks.

Eurozone: Stagnation at the Cycle Plateau

The Eurozone mirrors the UK’s situation closely but benefits from a slightly broader base of support. GDP growth was 0.5% in 2023 and expected to rise only modestly to around 0.7% in 2024. The ECB recently confirmed that the economy stagnated in Q4 2024, with manufacturing remaining weak and services barely holding growth above zero.

Consumer and business confidence remain fragile. The bloc is still digesting the effects of the 2022 energy shock and dealing with external uncertainties, particularly weakening demand from China and potential fallout from global trade disputes.

Inflation has declined from double-digit levels to around 5%, and the ECB has begun easing policy, cutting rates by 25 basis points in January 2025. Labour markets remain surprisingly resilient, with unemployment near record lows at 6.3%, but overall demand is tepid.

The Eurozone economy is best described as being in a late-cycle stagnation, with expectations of a mild recovery later in 2025 if inflation continues to ease and domestic demand improves.

Comparative Business Cycle Overview (April 2025)

Conclusion

The global economic cycle in 2025 is profoundly fragmented. The United States continues to lead, but is now clearly at the late stages of its expansion, with tight monetary policy and forward indicators pointing to a peak. China, while not in recession, is undergoing a slower expansion phase, still recovering from pandemic and structural drags. Meanwhile, the UK and Eurozone are essentially stalling at their cycle peaks, with no strong growth momentum and growing reliance on policy support to avoid recession.

Understanding these dynamics is essential for global macro traders and policymakers navigating the uneven recovery paths and monetary policy divergences across the world. Traders in particular should take note of these cycle positions to adjust expectations for interest rate differentials, currency volatility, and equity sector performance.

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