The world may not actually be getting smaller, but the growth in international trade means global economics has a direct effect on your own finances. We look at the recent G7 summit, what the politics there mean for your money – and how at Continuum we can help keep your own financial outlook positive.
The G7 is an international economic organisation formed of seven of the world’s leading economies, with leaders of Canada, France, Germany, Italy, Japan, the United Kingdom and the United States of America meeting once a year. This year France hosted the meeting in Biarritz.
The summits were started to ‘discuss matters of economic importance’ and to find solutions to global challenges. There have certainly been some challenges to discuss. They range from the confrontation between Iran and the United States over President Trump’s decision to pull out of the 2015 nuclear deal to the environmental crisis in the Amazon basin, the U.S. slowdown and Germany and Italy close to recession.
President of France Emmanuel Macron, who has taken the lead in trying to defuse tensions over Iran, feared a collapse of the nuclear deal could set the Middle East ablaze – while the entire world could be damaged by the real fires in Brazil.
While for most of the world the key question was the US-China trade war, for those of us in the UK, it remains Brexit.
All these challenges have a direct effect on global trade, and global trade has a direct effect on your personal wealth.
Why international trade matters
In the UK we drive German cars, drink French wine, eat fruit and vegetables from Africa and watch TVs made in Korea – and while our phones may appear American, they can actually be manufactured in China. In return our services industry, provides finance and insurance for the world.
This means two things. First, that when we invest in a UK based company we are more than likely investing in an international business. Second, any disruption to international business will disrupt the income we enjoy from those investments.
Your financial future can depend on the decisions made at the G7 summit – and on understanding the impact they will have. At Continuum we are well placed to help provide the expertise you need to build that understanding.
The progress made in Biarritz
So, what was achieved in the G7 meeting?
In his closing press conference, President Macron released a one-page statement. Some of it may be seen as positive. On trade, it endorses fair and open global trade, and calls for reforms of the WTO to boost intellectual property protection and tackle unfair trading practices. He also spoke of a consensus on Iran, talks with Kiev and Russia on the Ukraine, and called for a lasting cease-fire in Libya.
But perhaps of even greater importance than the announcements were the discussions that took place behind closed doors. President Trump spoke of a deal with the EU that would avoid a second front in the trade war, and of optimism about a peace deal with China.
But what about Brexit? Boris Johnson was also involved in behind the scenes conversations and commented that he was struck by the enthusiasm of world leaders to strengthen ties with the UK.
Donald Tusk said that he was “willing to listen to ideas”, although EU officials said there were no new substantive elements from any side, and Johnson himself gave no clues about what was in store.
Clearly, to understand what if anything was discussed about Brexit, it is vital to read between the lines – and build your international expertise.
How we can help
Fortunately, although we may not be privy to the discussions, at Continuum, there is a lot we can do to help you build the international knowledge you need. You can keep up with the latest news with our weekly education mailer, and if you are already an international investor keep track of your portfolio with our Personal Finance Portal.
Even more important, a Continuum financial adviser can give personal, expert advice. Their knowledge could help you see what is going on across global markets and where both threats and potential may lie.
Why not call us today?
The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action.
The value of investments can fall as well as rise and you may get back less than you invested.
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Book an initial consultation with one of our independent financial advisers or call us on 0345 643 0770 if you would like to discuss further.
References:
https://www.wto.org/english/res_e/booksp_e/wtr13-2b_e.pdf
