The combination of dark evenings, winter weather, worries about jobs and financial security, and tiered restrictions on going out and even on seeing our loved ones can feel very disheartening. It might look as though we are headed for the type of long, cold, lonely winter that the Beatles sang about.
At Continuum, we believe that although it may not be obvious, we could soon find ourselves with plenty to celebrate.
There have been some grim forecasts about the long-term effects of Covid. The lockdown brought the economy to a virtual halt. Government borrowing is already £394bn, and threatens to grow still further, while analysts have warned that the economy will shrink again in the final months of the year thanks to the new restrictions.
But there may actually be plenty of reasons for optimism.
Here comes the sun
The first positive note may have already been sounded. We were plunged into recession by the economic effects of Covid, but as soon as the lockdown was lifted, the UK economy started growing. In fact, the economy bounced back from recession with record growth of 15.5% in July to September.
The second positive message came from the government. Their commitment to supporting the UK economy with CBILS funding and Bounce Back loans meant that many businesses that might have gone to the wall were ready to reopen. Furlough payments helped employers keep on staff, and helped employees feel more confident about having a job to go back to.
Both the Bank of England and the Treasury have boosted the economy, with loans to businesses, VAT holidays and other concessions helping support both employers and families. They have promised low interest rates and quantitative easing to continue to support recovery
The third piece of good news was surely the announcement of vaccines against Covid. The idea that there was a light at the end of the tunnel, and that life could return to normal provided an immediate lift to markets, and to the morale of virtually everyone.
True, the recovery has not yet been enough to fully reverse the damage caused by the pandemic. The Office for National Statistics (ONS) suggests that the country’s economy is still 8.2% smaller than before the virus struck. The UK unemployment rate has grown.
But on the other hand, Christmas is coming, and there could be a boost to the economy with massive pent-up demand from locked down consumers, fuelled by lockdown savings, and supported by low interest rates.
It even looks as though the season has started early, with September’s retail sales (mainly online) 5.6% higher than a year ago. Helen Dickinson, chief executive of the British Retail Consortium, said this showed “signs that consumers are starting their Christmas shopping earlier this year”
The recovery could be v-shaped, and we may already start to head back up.
What should you do?
Far from a long cold lonely winter, it may be time to start thinking about preparing for an economic spring. A look with an expert at your investment portfolio – if you have one – and your overall financial planning may be the best way to prepare for the future.
A call to us now can give you individual support from an advisor to help you to make the most of a more comfortable economic climate ahead.
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.