4 Where to invest in the UK?

In the current climate of widespread financial uncertainty, knowing exactly what to do with your money can be particularly tricky. The impact of the continuing economic slump on the various parts of the UK has varied from region to region. While some areas have held up reasonably well in the face of weak consumer demand domestically and the long-running crisis in Europe, others have seen a sharp fall in economic activity. It’s important, then, to think carefully about exactly where you invest so that you can guarantee at least a reasonable return.

Perhaps the most obvious place to park your money in the face of economic weakness is the buoyant London property market, which continues to demonstrate considerable strength. Demand for high-end property has rocketed, as many of Europe’s wealthy seek places to park their money, well away from the deepening crisis in Europe. It has to be said that London is pretty much propping up the wider British property market almost single-handed. In some parts of the country, property prices have plummeted since the initial onset of the current crisis. The old adage that ‘you can’t go wrong with bricks and mortar’ remains a popular one, but even London’s property market isn’t necessarily a guaranteed banker. Still, there are few signs of a rapid fall in the city’s property prices in the short to medium term.

The hubbub surrounding the Olympics has also provided London property with a shot in the arm, but the wider economic impact of the Games and its long-term legacy remains to be seen. Previous host cities such as Los Angeles and Sydney have been singled out as examples of the positive lasting effect the Olympics can bring,

but the experience of other locations, specifically Atlanta and Athens, has been mixed. Nevertheless, there is a considerable chance that the Games will have at least some impact on the national retail sector over the coming weeks.

There’s been much talk about the regional disparities across the UK, particularly in recent years. Northern England, in particular, has been hit hard by the post-2008 crisis – with Britain’s recent return to recession adding to its problems – and cuts to public sector jobs are yet to be compensated for by private sector investment. What remains of the north’s manufacturing industry has struggled in the face of falling demand, while cuts in skilled jobs have been replaced to an extent by low-skilled roles. However, there are opportunities in the north for those who care to seek them out. Cities such as Manchester and Leeds have remained reasonably robust, having enjoyed healthy growth during the boom years. The outlook for the wider regional economy, however, remains uncertain.

Scotland’s economic showing, however, has been somewhat more encouraging, even if it has lagged behind London and the south-east. With oil prices having been elevated for most of the last two years, north-eastern Scotland – particularly the area surrounding Aberdeen – has continued to prosper, and there remains healthy investment. While Scotland remains dependent to an extent on a large public sector, there are some causes for optimism over the years ahead.