Economy’s ‘sick man’ now strong
family, our client base is expanding and production is increasing. It’s a very exciting time for the brewery as we plan to open our tap room full time later this year.”
BEF group chief executive Stephen Waud said the business lender was seeing an increase in demand for start-up loans and finance as the micro-brewing industry continued to grow across the UK.
He said: “The craft brewing industry is booming and never more than in Yorkshire and the North East. BEF has the funding and the expertise to play an instrumental role in supporting the expansion of several breweries which have true entrepreneurial spirit at their heart and a real head for business.
“We’re simply facilitating their growth and looking forward to watching their continued success in this incredibly competitive market place.” ONE of the biggest surprises in markets in 2017 has been the weakness of the US dollar, especially against its major currency cross partner the Euro.
However, the US dollar has been the weakest of the major currencies in 2017. What has changed?
US data in the first half of the year has been more disappointing than was expected. It is also unlikely that the US economy will materially break the 2-2.5% GDP growth range over the next three years.
Politics have also taken a turn for the worse.
Donald Trump made a number of promises at the start of his presidency but, so far, his attempts to push through legislation have been thwarted.
This has subsequently led investors to question the ability of the President to enact his policies of tax cuts, extra spending and deregulation – policies that should have led to higher US growth estimates and probably a stronger dollar.
The main beneficiary of dollar weakness has been the Euro. The European economy, which has been seen as the “sick man” of global economies for some time, is now showing a strong performance.
Updated estimates for the growth of economies from the IMF for July showed the European economy growing in line with other advanced economies, a major achievement given the various obstacles Europe has faced in the recent past.
As a result, the central bank is expected to tighten its very loose monetary policy in the near term. Also, concerns over a break-up of the Euro from populist politicians such as France’s Marine Le Pen have diminished.
For investors, currencies have made a significant difference to returns in 2017.
Despite the US providing the highest equity returns in developed markets in 2017, Sterling investors have faced lower returns as the US dollar has weakened.
We believe that it is very difficult to consistently make abnormal returns from currency positioning given the tendency for exchange rates to frequently trade away from fair value.
Over time, gaining exposure to different economic areas should lead to currency returns balancing out (given that it is a zero sum game).