Today, it seems like there are very few durable, robust economies out there. There’s a stagnant period for just about everybody right now; a period of waiting to see the outcome of seismic shifts that politics and missed investment opportunities have enabled. For now, at least, an air of uncertainty lingers.
While many financial problems can be solved by borrowing what’s needed, it’s not the answer to every issue a nation has. Eventually debt starts to accumulate, birthing even more financial hardships along the way. In the end, a workable and permanent fix needs to be found.
Consequently, it’s worth asking; what is the main threat to the economy?
It’s no secret that the world has been embroiled with trade tensions for a while now. In the case of Brexit, a no deal or bad deal is, frankly, a very real possibility.
Not only would these outcomes affect Britain’s standing with the EU, but it can also affect just how appealing Britain looks on the global stage too. Opportunities for trade will be thinner and far fewer, and the UK would likely take a substantial hit in every market and industry. In time things could certainly get better, but the road to get there is extremely difficult for any country to traverse.
Of course, we’re starting to see some of the negative effects already. After all, the economy came to a near standstill at the end of 2018, with the blame put solely on Brexit. Many businesses have packed up and left British soil for fear of the impact Brexit will bring, while others fail to prepare entirely. In fairness, most of them don’t know what to prepare for. Still, the economy is particularly vulnerable to these events.
Of course, eventually political turmoil influences businesses and investment opportunities. In 2017, investment in Fintech startups had dropped by a third since the Brexit vote, due to the fact that uncertainty is always a bad factor when it comes to investment opportunities.
However, Fintech has hit a boom globally in recent times, revolutionising the way people manage their finances and wealth. Still, that doesn’t make Fintech immune to reproach, with critics highlighting that fintech startups have put numerous banks under pressure, “capitalising on weaknesses and gaps left by established companies” for their own gain.
Fintech startups are highly agile and are not bogged down or burdened by the typical corporate lag. Therefore, situating themselves in a Brexit ridden Britain would be highly unwise. They innovate, create, make money and move onto the next thing swiftly, without having to answer to numerous regulations or be locked into using older tech. They can pump out digital products extremely quickly via their own means and it’s highly impressive; only a bad Brexit economy would struggle to keep up and match that speed and expense.
Eventually, Fintech talent would pack up and head for where the opportunity lies, further damaging the British economy. When talent is accumulating in a nation that wouldn’t allow their thriving growth, the natural inclination thereafter is to leave.