The modern age is an exciting period for traders and other individuals who benefit from the market-disrupting ideas of entrepreneurs and tech gurus. Since the early years of the 21st century, the market has been a competitive arena for innovative startups from across the globe. This competition has to led to many brilliant ideas that improve the lives of consumers. These new companies also present lucrative opportunities to investors and venture capitalists.
While the financial world offers many opportunities in today’s globalized markets, uncertainty exists everywhere. People who are familiar with the financial world understand that uncertainty is a bad trait for markets. With incomplete information about the future, people tend to avoid taking market-disrupting risks that lead to progress. This uncertainty stagnates trading, and innovation comes to a grinding halt.
What causes this stagnant state of uncertainty? Greg Secker answers that, uncertainty occurs when people are unsure about the outcomes of the market. While people can protect their assets in the market with diverse portfolios, they cannot avoid the risks of political instability, regulations, and other coercive measures. While idealists may hope for a purely capitalist or socialist utopia, the world is truly a sphere where governments and markets interact on a regular basis. Because of this, political instability and other risks of uncertainty are unavoidable. This is the situation of the modern age.
The global economy is plagued by many political woes that cause uncertainty. From Russian trade sanctions to monopoly-creating regulations, many political measures prevent people from benefiting from the gains of trade. The United Kingdom is a center of political uncertainty. The Tories continue to battle the Labour Party for the future of Great Britain. Meanwhile, the issue of Brexit still looms over the country. The best economists and finance professionals cannot predict the outcome of this situation with certainty. However, smart individuals can make wise suggestions based on theory and trends.
By learning about the risks of the future, individuals can protect their assets from uncertainty and financial disasters. Here are some of the most pressing financial issues of 2017 and beyond.
As the United Kingdom continues to be fixed in a situation of political gridlock, Theresa May and the Conservatives are losing their negotiation powers. The European Union sees this divisiveness as British weakness, and they will respond by refusing to offer the Conservatives any concessions. People should not expect the generous trade deals that would come with a soft Brexit. A hard Brexit is becoming more likely as time passes.
Hard Brexit has become a buzz-phrase that is rarely defined in mainstream media outlets. Fortunately, people do not require an economics degree to understand the pros and cons of this kind of separation from the European Union. If a hard Brexit occurs, the United Kingdom will be completely severed from the official influence of the European Union. People with an interest in the world of finance should be concerned by the fact that all industries in the United Kingdom will lose access to the single market of the EU. This means that UK companies will need to deal with special permits, new regulations, tariffs, and bureaucratic red tape to sell goods and services in European markets.
A hard Brexit scenario is the preferred option of far-right Conservatives and British nationalist groups. This situation will grant the United Kingdom total sovereignty, but people should be aware of the costs. Due to the trade barriers and transaction costs that UK companies will face after a hard Brexit, companies may flock to the European Union to keep customers in Europe. This situation is likely to occur. In fact, several companies from London have already moved their headquarters to Dublin to avoid the effects of a hard Brexit. In short, this scenario is good for nationalists and bad for businesses.
It is also important to note that not all UK citizens will be equally affected by the economic woes of a hard Brexit. The cities of Aberdeen and Edinburgh will likely experience financial disasters. Both cities have strong trade-dependent industries that will collapse if trade barriers are erected after a hard Brexit. Furthermore, wealthy British citizens will be insulated from the effects of a hard Brexit. Instead, poor and middle-class people will be affected before the rest of the population. To protect themselves from Brexit, these individuals should secure an additional income with tax-free investment options. The investor Greg Secker suggests Forex trading options.
Sterling Pound Rallies Against the Dollar
Due to some new decisions at the US Federal Reserve, the Sterling pound is increasing in value. This event was triggered by Federal Reserve Chairperson Janet Yellen’s decision to delay US interest rate hikes until 2018. If Americans increased interest rates, currency traders would have flocked to appreciating American assets. In turn, investors would have fled Britain as they pursued more favorable options.
The increasing value of the Sterling Pound is good news for now, but economists do not expect this situation to become a new trend. Investors should remain cautious as they make decisions about the future. However, this situation is neither good nor bad news.
Sluggish Economic Activity
While the pound is appreciating in the UK, overall economic activity is gloomy. According to recent data about the United Kingdom’s gross domestic product, growth has fallen to a mere .3 percent per quarter. This means that the growth rate is below the average target of two percent.
What does this low growth rate reveal about the British economy? Some professionals believe it means that the economy is stagnant. This situation harms investor confidence. Investors may flock to alternative markets in Europe, Asia, and the Americas.
Slow growth means that the UK government is collecting fewer tax funds each quarter. The public sector will need to borrow funds via the Bank of London to maintain spending levels. However, this borrowing trend could prevent investments in the private sector. Perhaps this will lead to budget cuts that reduce public goods and governmental services.
About Greg Secker
This financial outlook was provided by Greg Secker. Greg Secker is an English entrepreneur and investor who has a talent for predicting market trends. He has generated a great amount of income over the years through Forex trading. Secker is a foreign exchange expert who specializes in currency trading and global growth outlooks.
Before becoming a finance professional, Greg Secker studied at the University of Nottingham. Secker uses his wealth for philanthropy. He has shared the secrets of his success in several books.