This is one of the frequently asked questions asked of Independent Financial Advisors up and down the land. IFA’s at Enable know that even though the UK is not in the euro, it has still been lending money to troubled economies as part of bail-out packages. With various countries in Europe needing financial help to deal with the debt crisis, there is always a tab that needs to be picked up somewhere.
For example, the UK has contributed more than a billion euros to the European Financial Stabilisation Mechanism. This has been used for loans to bail out the Irish Republic and Portugal. The UK's maximum possible contribution is 7.5bn euros (£6.5bn). There is also the UK's loan to the International Monetary Fund (IMF) - more than 10 billion euros a year - that is also used to fund the bail-outs, although it is paid interest on this. The UK also made a bilateral loan of £3.2bn to Ireland, because it is seen as such a key trading partner.
The trouble is that slowdowns in economies across Europe means less trading between these countries and the UK which in other words slows down our economy, meaning they are less likely to buy things made, and services provided, in the UK, and things the UK buys from them could become more expensive in the long run. Enable are here to help you talk through any of your investment worries.
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