Pyrford Perspectives: Brexit here, civil unrest elsewhere

October saw civil unrest erupt in many parts of the world, while Brexit rumbled on closer to home.
November 2019


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Our forlorn hope that the Brexit saga might be over by the time we came to pen this update was just that – forlorn. A general election has now been called for 12 December and the EU has agreed to delay Brexit until 31 January, but large waves of uncertainty still surround the entire issue. Predicting election results is pure folly but particularly so in this case as it follows ugly rancour and in-Party divisions – the likes of which we have rarely seen. The election campaign will be bitter and full of the usual half and quarter truths. Never let the facts get in the way of electioneering spiel! If Brexit does occur, it seems it will be with a “deal” but perhaps even that may change. So, the whole sorry mess has to be endured for another few months.

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Past performance is not a guide to future performance. The value of investments and any income derived from them can go down as well as up and investors may not get back the original amount invested.

October was unfortunately marked by civil unrest of a significant scale erupting in many parts of the world. Barcelona was again the focus of major protests in relation to the Catalan separatist movement, while Santiago in Chile witnessed serious riots following an initiative to increase subway fares. The riots quickly morphed into protests about nearly everything but particularly the government, wages, pensions and the cost of living. Ecuador, Indonesia, France, Russia, the UK and Lebanon all experienced major unrest, while Hong Kong continued with its daily street protests, which have increasingly turned nasty. And, virtually everywhere, we saw demonstrations organised by Extinction Rebellion, with their own particular version of “We’re all doomed”.
It seems everyone is unhappy or angry about almost everything. Those of us who have witnessed every decade since the Second World War find this puzzling as there has been a most astonishing rise in the average standard of living in most parts of the world. Certainly, much poverty remains but it is shrinking rapidly as a proportion of the whole. Advances in medicine, sanitation, nutrition, technology, infrastructure et al. have been quite remarkable.
On this same theme we can quote developments in China, where average wages have risen an extraordinary 38 times since 1990, while averages in Beijing have risen an even more extraordinary 55 times (CEIC data). The rate of annual compound growth has been around 14%. Lest you think that inflation has largely eroded these nominal gains we can report that apart from a serious spike in the mid-1990s, inflation has averaged around 3% for much of the period. And this progress has been achieved in a country with a trifling 1.4 billion people –almost one-fifth of the global population.
We have no insight as to where all the unrest is heading but doubt that it is going away soon. Social media helps stoke the flames but rarely seems to inject elements of common sense and objectivity. The formal media also struggles with those two words as it thrives on controversy. Even we find that any attempt at carefully considered comment on emotive issues such as climate change or Brexit can result in howls of outrage.
The information, opinions, estimates or forecasts contained in this document were obtained from sources reasonably believed to be reliable and are subject to change at any time.

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