The election has been and gone, another may follow soon. Malcolm Durham from Flexible Directors takes a look from a business perspective.
In an election, we have two choices:
- You can choose the person to lead the country; or
- You can choose the policies that seem right to you.
The recent election proved no different, with evasions and seductions reminiscent of the Brexit campaign, in which the choice was reduced, by some, to whether we wanted £280m a week back to use in the NHS, or not. At the moment we don’t know whether we will get that back, after paying for our liabilities, or not, (although I’m not placing any bets on it). But what we DO know is that this seemingly large sum (well actually a large sum for an individual but not as large for 65m people) is not the main economic effect of the decision to govern ourselves independently of the EU. The main effects of Brexit have been, and will largely continue to be, as follows:
- Our exchange rate has reduced, boosting exports and inflation;
- Our capital markets went up, due largely to the fact that a lot of their value is derived from overseas and a cheaper pound means that, arithmetically, they are more valuable in pound terms;
- Uncertainty of how our trading relationships will change has caused a lot of expansion to be delayed, thereby reducing growth.
So, come the next polling day, don’t just look at the claimed benefits of each manifesto. If you want strong and stable leadership for the many not the few, without unintended consequences, consider the financial credibility of your choice.
Malcolm Durham, is the co-founder, WealthBeing