Since the pound has already taken a hit (and slightly recovered) from Brexit, Britons may see an impact on their finances as well. Analysts predict that the following expenses will be affected, either hurting or helping consumers’ budgets. (more…)
As a part of negotiations to disentangle from the EU, Britain will have to broker new trade agreements with not only the EU, but third countries as well. To exacerbate this complex process even more, Britain only has two years to establish these connections. While the full repercussions of Brexit cannot be totally foreseen, industry experts have offered their best estimates for how the decision will affect Britain’s trade with the EU and third countries.
The most pronounced uncertainty concerning Britain’s decision to leave the EU is whether it will be able to retain its competitive international trade and business agreements. Business Secretary Sajid Javid has stated that one of the government’s chief priorities is to ensure that Britain retains its access to the single market. However, retaining access to the single market is just one of many challenges Britain will have to face.
As a result of Britain leaving the EU, highly skilled EU workers will no longer be able to freely enter the country and offer their services. This loss could worsen the skills gap already affecting UK industries. In addition, EU nationals who have already been hired by UK employers and are living in the country will be required to obtain immigration permission under UK immigration rules. However, it is not only EU workers that will be affected by the decision. British workers may lose their jobs due to either their parent company withdrawing its business from Britain or as a result of a stalled economy. This situation could be further worsened by the reduced number of new, incoming foreign direct investments. (more…)
The repercussions of Britain’s decision to leave the EU will undoubtedly have a lasting impact. While many of the long-term effects of Brexit are still only speculative, the more immediate repercussions are clearer.
A pall has been cast over Britain’s economy, with Goldman Sachs predicting a mild recession by early 2017. The initial signs of this forecast can already be observed in the weakened value of the pound, which fell about 12 per cent the day after the vote, bottoming out at a 30-year low. Furthermore, international investors have already begun to withdraw their support from UK businesses.
Despite Britain’s current tumultuous financial environment, SMEs should remain calm. Britain will remain a member of the EU until the negotiations for the terms of its decoupling are finalised. This process will take at least two years, meaning that UK businesses will continue to have access to more than 500 million EU customers. However, that time should additionally be spent finding alternatives to EU suppliers and customers in case Britain is unable to secure access to the single market. (more…)
It is important to plan how your organisation will manage the potential effects of Brexit. To help your company be successful in this process, consult this timeline:
First 100 Days
- Economic: There will be market volatility, and the pound will plummet.
- Business: There will be a delay in investment decisions, and some investors may pull out.
- Legal and regulatory: Nothing will change until Britain submits Article 50, which begins the two-year negotiation to exit from the EU.
- Market access: Market access will remain the same during the negotiation period.
On 23rd June, Britain chose to leave the EU in a historic vote, which has caused shockwaves throughout the world. Britain will remain a part of the EU for at least another two years, during which there will undoubtedly be a period of instability and uncertainty. While Britain’s future remains unclear for the time being, Brexit’s immediate effect on your personal finances are more obvious. Brexit could affect your finances in the following ways: (more…)
Whether or not the outcome of Britain’s decision to leave the EU is in fact as drastic as both campaign sides implied, the results of the historic vote which took place on Thursday 23 June has still left many individuals and businesses reeling.
While primary Leave campaigners have already come under criticism for not offering a “plan” for a British exit, Bank of England Governor, Mark Carney, has offered assurances that UK banks are more resilient that they were in the economic crash of 2008, and has made £250 billion available to steady wavering markets, where the biggest drop in the value of the pound of 31 years is reported.
Having previously warned of increased austerity and an “emergency budget” prior to the referendum, which saw 52% of those voting opting to come out of the EU membership, Chancellor George Osborne seems to be calming fears one day, while alluding to cuts and rising tax the next.
The “period of uncertainty and adjustment” Mark Carney refers has already been felt by everyone in the short amount of time since the results were announced, with most recent reports at the time of writing showing that the index was up 2.75% at 6,146.69, while the FTSE 250 had gained 3.3%. (more…)
In a decision that is sending shockwaves across world markets, Britain has chosen to leave the EU in a historic vote, which will have lasting ramifications. As the country begins to process the surprising results, prudent employers would do well to understand what happened, what happens next, and how they can prepare.
The official results were announced Friday morning and, while it was a close race, in the end Britain backed Brexit. Despite bad weather and floods causing travel disruptions, voter turnout was high—72.2 per cent of eligible voters cast their ballot in Thursday’s referendum, which amounts to about 33.5 million votes.
Referendum results paint a picture of a strongly polarised country. The official results are Remain 48 per cent, Leave 52 per cent. Remain areas came in more strongly than expected, and the same is true for Leave, according to Guardian results. As expected, Scotland and London voted overwhelmingly for Remain. But, outside the capital, every English region had a majority for Leave.
Adding to the uncertainty Friday morning, David Cameron announced that he would resign as Prime Minister by October, stressing that he would do everything he could to ‘steady the ship’ over the next several months but that ‘fresh leadership’ was needed, according to the BBC.
Cameron’s announcement helped momentarily calm turbulent markets and halt a rapidly plunging pound. However, the change in leadership will not be a cure-all, and Bank of England (BoE) Governor Mark Carney cautioned that ‘inevitably, there will be a period of uncertainty and adjustment following this result’. Carney was careful to stress that UK banks are more resilient since the 2008 financial crisis, and that the BoE will implement contingency plans. Carney pledged to make £250 billion available to banks to help steady volatile post-Brexit markets. And, for good reason, since the FTSE 100 fell 8 per cent, losing £100 billion in the process, and the pound dipped to a 31-year low, according to Reuters. As banks grapple with chaotic markets and a weak, but recovering pound, uncertainty will be the norm for now.
What Happens Next? (more…)
Preparing your business for a possible Brexit is vital. If you have not started, you are not alone—April research from the Chartered Institute of Internal Auditors found that only 21 per cent of FTSE 250 companies had made or were currently making contingency plans for Brexit.
It is never too late to begin planning for Brexit. To assess the impact on your business, do the following: (more…)
Each Brexit model is complex and carries with it much uncertainty. However, Brexit’s general pros and cons for businesses are more straightforward and less contingent on unknown circumstances:
- Out of the EU, the United Kingdom will have less control over EU legislation that it may still have to apply if it wants access to the Single Market.
- Companies may have to pay new taxes and customs costs as well as deal with slower administration processes for conducting business with suppliers in continental Europe.
- Companies may have difficulty hiring qualified employees from outside the United Kingdom to address the skills shortage, and employees who are non-British nationals may be required to obtain a visa or work permit in order to keep working in the United Kingdom.
- Other countries may be hesitant to invest in the United Kingdom until it is clear that the UK economy can be successful while independent of the EU, which could weaken the pound.
- Britain’s trade relationship with the EU could sour if Brexit negotiations go poorly. This situation could be further exacerbated if the United Kingdom is unable to secure beneficial trade deals with other countries.
As the government’s 23rd June referendum to decide whether the United Kingdom will remain in the EU looms closer, the outcome still remains uncertain.
Until recently, polling has generally favoured the United Kingdom remaining in the EU, but the margins are so tight that most experts agree it will be too close to call—with the still-undecided voters likely to determine the result. However, multiple sources have recently reported a slight swing towards the ‘Leave’ camp. A 3rd June YouGov poll found 45 per cent favour leaving, while 41 per cent favour staying. A 5th June Opinium poll found 43 per cent want to leave and 40 per cent want to stay. And a 6th June ICM poll found 48 to 43 per cent in favour of leaving.
A Brexit outcome would usher in a minimum two-year period during which the United Kingdom would slowly disentangle itself from the EU and negotiate a complex withdrawal agreement. Whatever the outcome on 23rd June, proactive UK employers would do well to understand what Brexit would look like, the general pros and cons, and how they can prepare their businesses for leaving the EU.
What Would Brexit Look Like? (more…)