The current climate
In the midst of the pandemic, British residents are currently under government advice to engage in social distancing, avoid non-essential travel, and to work from home wherever and whenever possible. The health and economic impacts UK residents are slowly becoming clearer. The government has taken unprecedented action to mitigate these. But it is also an uncertain time for those looking to invest in the UK. The outbreak is no respecter of international boundaries but the responses of governments across the world has shed some light on the benefits of being in certain nations. Welfare support on a scale never seen before to support the economy underline that when it comes to human rights and the protection of citizens, some freedoms are very valuable indeed. Investing in the UK will still be possible and desirable as the virus slows and restrictions will be lifted.
As of the 15th of April, there are over 90,000 confirmed cases in the UK, with deaths reaching 12,000 people. Recent changes in advice have now also included schools closing from Friday the 20th except for children of key workers, stores are limiting the amount of produce able to be bought per customer, and the London transport network is being reduced to all but absolutely necessary travel. The global outbreak has increased to include at least 40 countries. In the UK, the new hospital centres are now admitting patients but data is starting to show a slow-down in admissions.
At the time of writing, the UK government is advising against all non-essential worldwide travel, at least for the next month, which is also taking into consideration that there are international border closures, airline restrictions, and other risks related to certain areas or countries. Despite the increasing uncertainty worldwide regarding travel and finances, economic activity should stabilise in sectors which are booming such as e-commerce and food delivery, and the recent government aid package should assist businesses and industries financially where possible to lessen the impact of the virus. UK interest rates are now also at the lowest ever in the banks 325-year history, along with a package of measures to help businesses and individuals cope with economic damage, which is anticipated to be large but temporary. The U.K. Debt Management Office has said it will issue 156.1 billion pounds ($202 billion) of gilts in the 2020-21 fiscal year, the highest since 2012-2013 with markets not only willing to accept fiscal spending but now actively cheering it. Maturities are long, interest-rate expenses are historically low and refinancing risks are subdued.
Investors must keep a long-term perspective as they monitor their investment portfolios to see if rebalancing is needed. Investing in the UK for a Tier 1 visa is also a long-term decision. Those in a position to invest in these kind of visa will find their rationale strengthened by current international responses and events.