WITH May Day done, the starting gun has been fired on what will surely be another Scottish impersonation of summer, primarily lacking sun.
Meanwhile, incoming economic data tell us that the economy looks similarly Vitamin-D deficient, with consumer credit growth wilting and the residential housing market with it.
If that wasn’t enough for patriotic capital markets investors, the UK’s stock market has been one of the World’s least-loved, as its relative slump illustrates, and you will still incur a real loss by lending to the Government for 10 years.
Admittedly, we are not expecting the economic backdrop to improve dramatically in the coming weeks and months.
Progress has been made on the terms of Brexit, but sufficient uncertainty lingers to influence some corporate decision making. However, life is getting a little better for the UK consumer. The economy has almost digested the imported hump in inflation, leaving the UK consumer’s real wage growth back in positive territory.
Longer term, the threats and opportunities for the UK economy remain roughly the same. Even after the likely painful process of disentangling the UK from its largest trading partner, the economy should continue to benefit from a flexible and growing workforce, first-rate institutions and a stable rule of law.
These will remain important considerations in the perpetual battle to attract international investment and capital flows.
On the other hand, it would be suicidally inept for the EU to allow the UK to leave its club with better or even the same terms of trade that it enjoyed while it was on the inside.
Alongside that extra friction with our most important trading partner in both goods and services, the UK’s trend growth rate should also be crimped by the lower levels of immigration long promised by this Conservative government.
Migration is certainly controversial from a political standpoint as the last few years have amply demonstrated. Through an economic lens the picture is much clearer, however, as the evidence points to migration being a net benefit for the native population.
High-skilled migrants bring diverse talent and expertise, while low-skilled migrants fill essential occupations for which natives are in short supply, allowing natives to be employed at higher-skilled jobs.
Ironically, the UK may well find that immigration from the EU drops fairly dramatically in coming years with or without Brexit, as some of the principal drivers of the surge in EU immigration seen over the last decade continue to wane.
A failure to introduce transitional controls to A10 accession countries in 2004 saw migrants from the former Soviet Union pulled to the UK by the promise of higher wages.
However, with income levels in Eastern Europe converging with the wider European Union and the UK economy likely entering a softer spell, some of the motivation for this migration may recede.
Alongside this, the terrible economic privations suffered by peripheral Europe in the aftermath of the Great Recession that helped drive many of their more mobile workers to emigrate are also fading fast.
Much like its weather, the outlook for the UK economy remains murkier than for many of its peers.
Disentangling the UK from the EU will be costly and likely more time consuming than many currently assume. The political backdrop could easily get less helpful too.
However, remembering that the UK’s corporate sector tends to be more adaptable and resilient than feared, forged as it has been in the white heat of global competition, provides important investing context.
The UK stock market sits low down the pecking order of our developed world favourites at the moment, but that should not deter the longer-term investor from having at least some exposure.
Craig Jamieson is regional director for wealth management at Barclays.
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