Back to the future
The British economy, too, is changing at a rapid rate. Brexit has already exacerbated the country’s burdensome productivity problem, and this will only get worse as the process gathers pace to 2019.
Despite Brexiteers’ dreams to the contrary, the British economy has never been renowned for its flexibility and excellence. Britain was the sick man of Europe in the 1960s and 1970s, and joined the EU to boost its skills and markets.
Unexpectedly this also solved another problem. Foreign direct investment flowed into an English-speaking country that gave access to the EU market, and suddenly governments no longer had to worry about sterling weakness every time they tried to boost the economy.
Those deficits and that sterling weakness remain, but the overseas investment may not remain for much longer. Factor investing may not capture these changes and challenges in the way that unconventional thinkers will.
