The launch was perfectly complemented by commentary and insights from our esteemed guest speaker, Andrew Neil who explored the global economic and political climate as a backdrop to day-to-day business. Below, I’d like to touch on just some of the points which were discussed.
Firstly, Andrew Neil noted that the devalued pound is in fact a positive thing for the UK economy as it encourages overseas investment which has triggered several corporate deals to happen in the last half of 2016 and will continue to do so. Our report explores this further, with one of the main themes being the vast rise in foreign interest in almost all of our domestic markets. Will the pound decline further? Perhaps against the dollar which is predicted to strengthen, but with ongoing widespread political uncertainty across Continental Europe, it is unlikely to fall against the euro.
With a new US President and the triggering of Article 50 imminent, he also noted that international trade deals will be a hot topic in 2017. It is apparent that both Trump's transition team & the wider Republican Party want a trade deal with the UK to be decided on quickly, in either 2017 or 2018. However, any free trade deal with the US would not happen unless Britain exited the EU Customs Union which is yet to be negotiated, and the WTO could also interfere with proposals.
The arrival of China in the global economy is also more significant than we think. Our Business Outlook 2017 report refers to this frequently and Chinese money is flowing into almost all of the UK (and increasingly some European) markets in which we operate – particularly hotels, care and childcare. However, as the Asian superpower’s relationship with the US hangs in the balance with a new President who has already hinted that he won’t make life easy for them, this could affect their economic progress greatly.
Finally, the theme of Brexit was also omnipresent. It was noted that when negotiations start it will be important for sectorial arrangements to be made on aspects such as immigration, to enable sectors – such as the vastly under-staffed care sector – to stay afloat. Our Care Consultancy team has released several reports and opinion statements in this area over the past few years and continues to monitor the industry in order to be able to advise operators, investors and policy makers on their plans.
Overall, it was concluded that economically, 2017 will be a strong year and investment will become more aggressive. However, Andrew Neil predicts that the real economic dangers will come at the end of the decade.
I’ll conclude on one of the most common phrases which characterised business in 2016: we will wait and see.