Top Tips: 5 ways you can take advantage of the current and future economic climate
Every time there is a change in the economic climate, there are always winners and losers. What may benefit one person will disadvantage another. However, one way to stay on top of the economy is to assess the current economic climate and take advantage of the available opportunities. This article will assess five current and future economic situations and the opportunities that are or may become available.
1. Low interest rates
The economy since the start of the pandemic has shrunk. Economic growth is starting to recover albeit very slowly. When the economy is in decline, one way the government can encourage growth is by cutting interest rates. This means that the cost of borrowing falls, therefore you can borrow more money at a lower cost. Low interest rates also discourage keeping hoards of money in saving accounts as the return on interest is very low.
Opportunity: Take advantage of the cheaper interest rates and invest in your company without paying huge amounts of interest on loans/credit. For example, you could take out a business loan to run a marketing campaign to increase your market share.
However, it is important to assess the risk of the investment and you should be confident that in the future, you will be able to repay your debts.
As the furlough scheme in the UK is winding down, unfortunately, many people are set to lose their jobs and unemployment is likely to increase once again. As unemployment rises, the jobs market will become more saturated and more competitive as there will be more people applying for the same number of jobs.
Opportunity: With the traditional jobs market looking likely to be very bleak, now is the perfect time to explore other forms of employment. The freelance market is growing and with the recent boom in the remote working industry, it has opened up a lot of great opportunities for people looking to diversify how they earn an income.
3. Postcode lottery
It is clear that in the UK there is a huge disparity of opportunities depending on where you live. The majority of wealth within the UK is located within London and the South East. For your average in-person employment this is great as there are a wealth of opportunities but if you happen to live outside this bubble of opportunity, it can be a struggle to find quality employment with salaries that compliment your skill set.
Opportunity: Freelancing online simply has no geographical boundaries as it can be done remotely (providing you have a good internet connection!). It doesn’t matter if you live in the centre of London or in the Scottish highlands, you can access the same opportunities from the comfort of your own home without having to worry about relocating as technically, the jobs come to you.
4. Strong Pound
Over the last year, the pound has appreciated slightly against currencies such as the US dollar, Euro and Chinese Yuan. This suggests that the UK pound is growing in value. In simple terms, when the UK pound is strong, we can import goods and services from abroad inexpensively but are less competitive in the export market. On the other hand, when the pound is weaker it makes the export market more attractive for those purchasing from the UK abroad but makes importing goods into the UK more expensive.
Opportunity: This really only applies if you rely heavily on buying or selling abroad. At the moment, due to the strong nature of the pound, importing from abroad is cheaper but if you sell abroad, it may be worth focusing on the UK market if possible as your prices would not be competitive abroad.
It is important to note that exchange rates fluctuate due to numerous factors. Things can change quickly so it is always a good idea to keep track of the current exchange rate to assess the situation. For example, after the UK voted to leave the European Union, the pound weakened significantly in a very short period of time.
5. Cryptocurrency revolution
As a relatively new concept to the economy, cryptocurrencies can seem risky but year on year cryptocurrencies have shown to be growing in popularity and there seems to be no sign of this trend slowing down. With countries such as El Salvador being one of the first nations to accept Bitcoin as legal tender- will other countries follow suit?
Opportunity: Become educated on cryptocurrencies and the political situation surrounding them and be familiar with how they work as in the future, they may become a greater part of everyday life and could directly affect you and your business.
Hopefully, these 5 tips have helped you understand the economy a bit more and how you can take advantage of the current economic opportunities for yourself and your business. No one can predict the future but having a basic understanding of how the economy affects you and taking note of economic forecasts could end up helping you in the long run. Remember, knowledge is power.
Head on over to Revolancer Magazine to read more insightful, exclusive articles.
With a similar topic to this article, we would recommend reading ‘Which businesses should you start in 2022‘.
Freelance marketplace: Revolancer