That was always likely to be tested in the middle of a global pandemic, especially given the relative disruption since 2016 with Brexit and Donald Trump’s election. With every passing day it seems an incredible stroke of luck to have had an election producing a stable majority just before Christmas last year. It’s hard to imagine a worse time to have had a hung parliament than in the current crisis.
They say that crises breed unexpected stars, and this appears to have been no different with the new chancellor Rishi Sunak appearing to be the standout performer since the crisis began.
What feels like months have passed since the fresh-faced chancellor, who was promoted under difficult circumstances, announced his unprecedented economic programme to cushion the blow to the economy brought about by a lockdown.
However, given that the chancellor announced the biggest state intervention into the economy in peacetime, costing the treasury potentially trillions of pounds, it has been widely accepted that the measures were not only necessary but quite radical.
With assured, articulate and commanding public appearances, he appears to have won the backing of British business, investors and the public too.
In contrast to the well received messaging of the UK government, countries across Europe and the US have been markedly less successful.
In Spain, March saw the highest increase in unemployment ever recorded. The jobless number increased by 9.3% taking the total number to 3.5 million across the country.
Despite the Spanish government announcing large stimulus and job protection packages, the message didn’t seem to filter through to investors or business confidence, and an economy that relies heavily on services and tourism appears set to be hit hard.
The picture is slightly more mixed in the US, who by all measures have a much more complicated economic picture in terms of their output, but who were no less hammered by the unemployment figures this week as over 6 million filed for unemployment, breaking all records, but a record which was set the week before when over 3 million filed.
This means that an absolutely enormous 10 million filed for unemployment over a 2-week period, leading the Bank of America to predict that US unemployment could reach 15% as this crisis peaks.
Of course, the mitigation for this is that many are simply furloughed and will be re-employed when the crisis is brought under control, however, for now the impact appears to be huge and also seems to have made investors more hesitant.
In comparison the UK economy appears to be coping comparatively well. Despite a spike in claims for Universal Credit, this can be mitigated by the fact that the benefit isn’t an unemployment benefit in itself, but more of a safety net for a drop in income.
Rather than scaring the market, much like the European and American response, Sunak’s statement appears to have calmed nerves and the Bank of England’s rate cut to 0.1% also appears to have boosted investors’ confidence.
There was already strong evidence that the UK property market was holding up well with, for example, there were record mortgage acceptances last month and property prices have remained strong throughout.
Similarly, despite early turbulence, the FTSE 100 appears to be weathering the storm fairly well compared to European compatriots.
Of course it has to be said that we’re still relatively early into this crisis but if we’re to extrapolate the early news and statistics it must be said that the UK and, by extension, the UK property market appear to be holding the line well, and with investors seeking safe haven this appears to be an attractive destination for people to invest.
Government bonds and corporate bonds are bringing historically low yields, and economic measures put in place by the chancellor appear to have stabilised the market.
Nobody has a crystal ball, but it appears the UK is in safe hands at the moment. Are you looking to invest in the UK? Browse through our range of developments here!