Date07 August 2017
Published date07 August 2017
AuthorNick French
The new world of politics and economics
What a difference a day makes! (Traditional UK adage).
It is funny how quickly things change. If international readers will forgive me being UK
centric for a while, the last week has been cataclysmic in UK politics. As I write this, it is just
four days after the conservative majority government under Teresa Mays leadership
changed into a majority government in the gift of the Northern Irish DUP. As someone who
has predicted the last seven elections and referenda correctly, that was an outcome that was
way beyond my powers as an oracle.
last year, we are now in a world of more and more uncertainty. Everything that we
thought that we knew has been turned on its head and the only certainty is that
everything is changing.
And for the property world, that is the worse outcome. It is often thought, in the UK, that
labour governments are bad for property but history suggests differently. There may be a
move from private sector activity to local and national government activities, but there is
still activity. The worse outcome is one of uncertainty. The irony is that Mays mantra was
strong and stableand she has delivered the opposite. Brexit is not the issue; it is the
continuing political uncertainty that leads to economic uncertainty that leads to less
activity. That is what will hurt the UK economy and the UK property market.
But, in fairness, it is the same the world over. Last year, everything was uncertain in
Europe and it was possible that Brexit would be the first of many other exits. In fact, it is my
contention that this would have happened if not for the trumpeffect. Both the Dutch and
French elections would have had even more of an anti-Europe turnout had it not been for the
electorate looking across the Atlantic at the turmoil and uncertainty with the American
presidency and voting for normality, even if the French has disguised this as a new party.
Again, this is not a political statement for or against Trump; it is the reality of world politics
and economics. Everything is uncertain and the electorate in continental Europe may finally
be seeing substance in the status quo, regardless of the warts and all. But, give it a day
and that will change again. Looking at this journal, we have been publishing papers on
forecasting and econometrics for decades. But, it would be a brave forecaster who has
unerring confidence in their forecasts. There is no certainty.
And so world property markets are crying out for certainty. Uncertainty delays
decisions, uncertainty impacts on prices, uncertainty affects funding and development.
Uncertainty is uncertain. We are in a new world of politics and economics and that has
ramifications for the property world. But, having said that, maybe that new world is
actually a return to what has gone before. To paraphrase Herakleitos from 500 BC,
Everything changes and nothing stands still.
Nick French
Journal of Property Investment &
Vol. 35 No. 5, 2017
p. 438
© Emerald PublishingLimited
DOI 10.1108/JPIF-07-2017-0048

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