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Please see the below article from EPIC Investment Partners detailing their thoughts on global markets and AI. Received this morning 28/06/2024.

With the UK election fast approaching, we thought we’d step away from the political arguments and negative commentary about the UK and focus on a brighter side of the economy.

The UK runs a sizeable current account deficit of just under 3% of GDP. In terms of goods exports, the UK ranks a lowly 13th place in the world, just behind Belgium.

Things would be a lot worse were it not for the UK’s sizeable surplus in services. The UK is the second largest exporter of services in the world, accounting for an impressive 7% of world service exports. A crucial driver behind this growth is the substantial investment in artificial intelligence (AI) and related technologies. According to the OECD, the UK ranks third globally, following the US and China, for venture capital invested in AI and data start-ups. This is a testament to the country’s commitment to innovation and technological advancement.

The UK’s AI sector benefits from a well-established ecosystem that includes world-renowned universities, a skilled workforce, and supportive government policies. This environment has fostered numerous successful AI start-ups and attracted significant international investment. Moreover, the UK government has been proactive in promoting AI and tech development. Initiatives like the AI Sector Deal, part of the UK’s Industrial Strategy, aim to boost AI research and application across various industries. The strategy includes substantial funding for AI research, fostering public-private partnerships, and developing a skilled workforce to support the AI sector’s growth.

The emphasis on AI and technology not only strengthens the UK’s service exports but also positions the country well for future economic challenges and opportunities. The continued investment in AI could lead to significant advancements in various sectors, including healthcare, finance, and transportation, further enhancing the UK’s competitive edge in global markets.

Talking of brighter sides, England did at least manage to top the group at the Euros. Before the competition started, we decided that our NFA result predictor should favour the Wealthy Nations. Whilst the individual results have shown mixed results, the 3*+ countries have dominated the tables. Of the 12 qualifiers who topped the six groups, 10 countries are rated 3* or better with only Spain and Portugal (both 2*) bucking the trend.

Slovakia scraped in as one of the best 3rd placed teams and are also rated 2* so, based on NFA scores, England (4*) should comfortably beat Slovakia. However, having watched England’s first three games, one might be forgiven for tempering expectations.

Please continue to check our blogs for advice, planning issues and the latest investment, market and economic updates from leading investment houses.

Alex Clare