In recent time, like the previous couple of years has been depressing for the domestic economy. Furthermore it has been stated that government plan to offer minimal support via funding. This resulted in George Osbourne being put under pressure by the IMF (International monetary fund). IMF is an organization created by all nations of the United Nations, and Republic of Kosovo.
George Osborne recently has been under a ton of scrutiny from rest of members due to plans of UK’s biggest growth downgrade of any of the developed countries in 2013/14. Chief economist for the IMF, Oliver Blanchard, believes UK’s actions and intentions are far too aggressive to mend the deficit reduction, and likely to get them in more trouble.
Secondly George Osborne resorted to a tired and tested response/technique as usual. George Osborne new help to buy scheme will be introduced to complement the existing buy scheme. Allowing all homebuyers rather than just first time buyers to take advantage of shared equity loans of up to 20% of new build home’s value, making initial deposits more tolerable. This scheme does have its positives allowing young individuals to get on the property ladder with more ease, and offering help for brand new properties valued up to £600,000, if they can put down 5% themselves.
Problem with this new property scheme is the interest rates of 0.5% base rate means the last property bubble hasn’t even properly burst yet, putting young buyers in a massive conundrum.
The national consensus on investments and finances within the UK is to pour money into the property market, which in an essence is not a bad idea due to the rise in population, and guaranteed demand. However in order to make money at a faster rate, and higher margins, with far less risk, and less association with Banks, its recommended for investors to move towards emerging markets with lower economically developed countries whom are now having a shot at being more economically stable.
Therefore if the more developed countries are stepping away from development responsibilities,, it has fallen to the emerging markets to fund euro economy in order to get it out of the red. This chain of events has resulted in Bank of England contemplating two plans of action to resolve Britain’s financial issues, one being investing 25 billion pounds of bonds. Majority of economists believe the central banks to restart asset purchases later this year in the face of a stagnant economy.
Ideally results from this action would be positive for the British public. Economists agreed to wait and show faith in recent economical actions, therefore leaving current interest rates at 0.5%. Asset purchasing project is far from full proof also, experts have predicted more stimuli could exacerbate a recent upward drift in inflation expectations, as well as weaken sterling further.
Consequently why not invest in what the governments are relying on, emerging markets, such as gold, silver, and infrastructure projects in Ghana. Same projects existent in Peru, Mexico and Singapore. Variety of companies focus all business transactions into companies which are on the way up, just to get that head start when the economy finally gets back to normal.