How Political Uncertainty Is Affecting the Economy In 2019

When looking into the close connection between the economy and politics, it is clear to see that one is affected by the other. As we experience uncertainty in our own political system with Brexit as well as rising tensions in Iran, there is reason to suggest that this could cause fluctuations in the economy. Though it may seem tempting to apply now for bad credit loans if you are short on money, it is important to remember that they should be used for financial emergencies only. Alternative funding will, therefore, be needed to pay for days out or the weekly food shop. In this article, we are going to look into how political uncertainty can have a knock-on effect on the British economy.

Fluctuations in Trading Markets

When looking into the way that political uncertainty has affected the economy, there is no denying that there have been fluctuations in forex trading as well as other international markets. With many becoming hesitant to invest in the UK during this time of political uncertainty, we have seen the economy coming to a slow halt. Though this has not caused major backlash as of yet, there is evidence to suggest that this could negatively impact the economy if not monitored properly.

Changes in Power

Another common aspect that is affecting the economy is the changes in power that we are experiencing in the UK. With the resignation of two Prime Ministers (David Cameron and Theresa May) as well as the appointment of Boris as the new Prime Minister, a change in power has a significant effect on the economy. Whether this is a small change in overall investment numbers, or a recession based off of a political decision that has been past, this can all have an effect on the economy. One of the most recent examples of this is the effect that the Brexit referendum is having on the value of the pound.

Businesses Withdrawing Investment

In light of the shock referendum result in 2016, there have been a number of companies, particularly in the automotive industry, that has begun to withdraw investments and move headquarters to outside of the UK due to the ongoing political uncertainty. Though this may have been a direct backlash of the result, only time will tell as to the effects Brexit will have on a number of industries following the October 31^st deadline. However, of the prospect of a No Deal Brexit were to come into fruition, the likelihood of another recession looks all the more likely should we not have trade agreements in place.

Fall in Currency Value

The final way that political uncertainty has affected the economy is through a decrease in the value of the pound. Though this has since recovered slightly since the initial drop in 2016, political uncertainty has continued to have a dramatic effect on the price of the pound as a whole. Though there may be a few changes depending on the result of the referendum, only time will tell whether the value of the pound will increase as a result when the referendum ends.

With this in mind, there are a number of ways that the economy is affected by the ongoing political uncertainty both in the UK and around the world. But how will 2019 end in terms of financial stability for many? That all depends on the Brexit result.