Brexit for Breakfast: Unpredictable with a hint of confidence

Kiran D Patel BA(Hon.) FCA, Director, Albury Associates, Chartered Accountants Tuesday 12th February 2019 06:09 EST
 
 

The weather in Britain is often defined as unpredictable (in particular the winter months), mainly due to the location and the fact that the cold polar air from the north and warm air from the tropics push against each other to create a changeable climate and unpredictable winters. The economy and politics sit on the same seat.

Britain has been notorious, historically, for its unpredictability and yet it provides an atmosphere of stability and confidence.

In my line of work, I often speak to potential investors from as far afield as the Middle East, Australia, Africa, South America and Asia. More recently, the question that I pose before even thinking about advising them is, “In Britain we are in the process of leaving Europe, which makes our journey completely unpredictable and erratic, with the prospect of substantial losses in the property values and currency fluctuations. Why do you see Britain as a place that you want to invest in?” More often than not the answer is, “Britain, however unstable it may sometimes seem, is more stable than other economies in the world.” In my opinion this is how the 'small' international investor sees our wonderful economy. 

What makes us different? What makes us stable? What makes us attractive? These are questions that I have often pondered over. The answer lies somewhere within the British way of life.

When it comes to property ownership, we have seen excessive boom and bust fluctuations but the underlying trend over a longer period of time has always been an increase in wealth. In Britain, if you own a property, provided you have settled your dues and complied with the law of the land, it will never be taken away from you. This is more than we can say for other economies. Governments, historically have encouraged property ownership by fiscal and taxation policies and ensured that there is a fair prospect of widespread ownership. Again, this is not always the case elsewhere in the world. Although there is a substantial amount of short-term volatility, with buyers dragging their feet and sellers desperately trying to complete transactions, the underlying trend is one of stability.

As a small Practitioner, if there are to be any effects of Brexit, they certainly have not filtered through to the economy that I work in. Clients are still enthusiastic about doing business both within the United Kingdom and overseas, albeit a bit more cautiously. Retail clients are still showing trends of stable business, providers of services are still busy and banks and lending institutions are still open for business. My assessment may be a bit premature given that the full effects of Brexit may not have hit the economy but given historical trends of economic cycles, Great Britain does have a bright future whether a Deal or No Deal Brexit takes place or if the process is delayed. Great Britain plc will always bounce back. That is the beauty of Britain, we soldier on and make it work.

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What makes us different? What makes us stable? What makes us attractive? These are questions that I have often pondered over. The answer lies somewhere within the British way of life.

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