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Benefitting from an Open Economy?

The UK economy is seen as relatively open, with trade options virtually across the globe. Is this openness a good thing? Well according to the Bank of England’s MPC member Ben Broadbent, the answer is both yes and no.

 In a speech given at the end of May, Mr Broadbent commented that the benefits of an open economy such as the ability to buy goods and services that might be more costly to produce in the UK, or the ease of access to new technologies, shouldn’t be under-appreciated. An open economy can also help to alleviate domestic shocks with a shift in the balance of global trade. On the other hand, he also cautioned that openness could leave the economy more vulnerable to global shocks.

 With the UK economy being so open and potentially reactive to global trade, does this mean that investors can afford to centre their investments in the UK? Well, even though there may be some interactivity, the best investment advice is still to look to invest across regions of the globe and across business sectors in order to spread risk.

 If you are looking for advice on investments or if your situation has changed and you may therefore need to review your existing pensions or investments, contact Beckworth by using one of the links on our website.