It’s been another busy week for the Wetherall’s team, with numerous client review meetings held via Zoom and another round of updates to our website completed. (If you fancy a nosey you can do so here – www.wetheralls.co.uk )
We are now entering the final month of the business year, with September 1st marking the beginning of our seventh year in business. I cannot believe how quickly the time has passed and it doesn’t feel like long ago that we were embarking on the adventure of setting up a new practice.
Since then the business has flourished thanks to the hard work of our dedicated team and the continued support of our clients. Whether you were with us from the beginning, or have joined us more recently, we thank you for placing your trust in Wetherall’s to help you manage your finances and plan for your future. We love our work and it really is our pleasure.
Hot spots in Spain
Having just returned from a break in Spain two weeks ago and witnessed a country largely returning to normal, it was surprising to see a shock resurgence of Covid-19 cases in some parts of the country.
Spain's rate of infection jumped in recent days and although the outbreak seems to remain supressed in many parts of the country, hot spots have sprung up in areas such as Catalonia in the north-east and the neighbouring region of Aragón which have seen spikes in the infection rate.
The UK Government responded swiftly by reinstating it’s quarantine measures for travellers returning from Spain, much to the chagrin of Spanish officials who insist that the virus is under control and at the very least want certain areas exempt. Spain is a country particularly dependent on foreign travellers and the latest measures do little to help it’s embattled tourism industry.
It sets a worrying precedent and is a clear indication of the challenges that all countries face as they grapple with the dilemma of ensuring the safety of their citizens, whilst desperately trying to restart and reinvigorate their badly damaged economies.
Closer to home, a sudden (and poorly communicated) announcement last night saw millions of people in parts of northern England waking up to new restrictions today, with separate households again banned from meeting each other at home after a spike in Covid-19 cases. The rules impact people in Greater Manchester, east Lancashire and parts of West Yorkshire and the health secretary declared that it was largely due to the virus being passed on by people visiting friends and relatives.
With concerns rising about infection rates rising again – which would be a disaster for an ailing economy – further restrictions and regional lockdowns seem likely over the weeks and months to come. Hopefully such measures will be an exception, not the new rule, and will help prevent a significant second wave of infections without causing too much disruption. For now we can be thankful at least that UK businesses have had time to adapt to the new environment, having put in place measures to either continue their operations adapted to enable social distancing, or allowing their people to work from home.
Race for the White House heats up
Whilst many European nations were grappling with the challenges of how of deal with regional Covid hot spots, things were also heating up in US politics. We are now just three months from the presidential election and whilst early indications suggested Donald Trump might be on course for a second term, his approval ratings have suffered in recent months due to his handling of Coronavirus and the Black Lives Matter campaign in the US. Voter intention polls are increasingly pointing towards Democratic candidate Joe Biden as being the favourite. A change of president is a major event in itself, but a change of president and political party is about as significant as it gets.
As with many of the populist leaders and figureheads that have enjoyed the lime light in recent years, Trump is a particularly divisive and provocative character. Whatever your opinion of him, he has undeniably been good for the US economy, if not always the rest of the world. His "America First" economic strategy which began in early 2017, was based on the fundamental concept that "Every decision on trade, on taxes, on immigration, on foreign affairs, will be made to benefit American workers and American families." As a result of this for much of his presidency the US stock market boomed, outperforming many other global indices, until an inevitable retrace in recent months due to the impact of Coronavirus.
Although geographically far from our shores, economic prosperity and stability in the US is something that has a major impact on us as UK investors and the global economy at large. The old axiom ‘when America sneezes, the world catches a cold’ seems particularly apt at this time and not just metaphorically. As the world’s largest economy, America’s foreign and economic policy – and the movement of it’s stock market - has a huge impact on global trade.
In recent years Trump’s escalating row and resulting trade war with China was destabilising markets even before the humanitarian crisis of Covid-19 emerged. In this new environment relations seem to have soured even further. Having the world’s two largest economies at each other’s throats is unlikely to be good for anyone.
Could things change if Joe Biden were to win the presidency? He certainly has an immense amount of experience in matters of foreign policy, with decades served in the Senate Foreign Relations Committee and a track record as one of the key policy advisers to President Barack Obama. However, Biden has also previously shown a tough stance on China himself, a vocal decrier of their human rights violations and aggressive competition with the United States. Whilst we cannot say for certain, with China a key concern for many voters, neither candidate is likely to be taking a softer line any time soon.
We are in for an interesting three months and will be continuing to monitor the US political landscape closely. For those curious to learn more, the Financial Times has an excellent voter intention tracker which you can find via the link below:
https://ig.ft.com/us-election-2020/
I think that about covers things for this week. If you have any questions about the information contained in this bulletin, or would like to review your financial plans, please feel free to get in touch.
