One friend of mine, a lifelong Tory activist who has been both a district and county councillor, has said she is no longer prepared to read newspapers or watch or listen to the national news broadcasts. I can’t say I blame her. While the eventual outcome will have consequences for investors, the seemingly endless speculation on what might happen is far from helpful.
Fortunately Brexit is not the only game in town. It is to what is happening overseas that investors should be turning. The World Economic Forum taking place in Davos is a case in point. A major theme this year is globalisation – an interesting choice, given the rise of populism and fears of increasing protectionism. Certainly, further moves towards a more global economy appear to have stalled, with the Chinese/US trade talks still failing to make progress.
Against this background we learned recently that economic growth in China has fallen to its lowest level in nearly three decades. True, the rise in GDP for 2018 of more than 6% would have most countries feeling pretty positive, but the fact that China enjoyed double digit growth for some years does rather put the slowdown into perspective. And with China the world’s second largest economy and the principal buyer of luxury goods in the world, this is not welcome news.
Unsurprisingly, the International Monetary Fund and the Organisation for Economic Co-operation and Development have lowered expectations for global growth in the years ahead, with warnings of further economic contraction in Europe in particular. It seems the peak of the post financial crisis recovery has been passed, with more consumer nervousness impacting on demand. Despite this, employment in this country has hit an all-time high. Mind you, I can’t help but think that this might be a consequence of EU workers deciding to return home ahead of the proposed exit day.
Yet stock markets have held up remarkably well. Our own FTSE hovers close to the 7000 level, well off its high point last year but hardly in bear territory. The constituent companies in this benchmark index are more attuned to the health of the global economy than what is happening in Westminster or Brussels, though the eventual outcome will have economic consequences. We probably need to be more concerned over the outcome of the trade talks between China and the US, but perhaps I can be excused for hoping an acceptable solution will be found for Brexit - quietly.