Brexit on UK Business
As one of the North East of England’s most respected accounting services, we are proud to work with a variety of businesses of all sizes and niches. As well as keeping up to date with the latest in accounting, the business world and economic environment are two areas that we keep a close eye on to ensure we can deliver the best possible service to our clients.
Brexit is an event that hasn’t left the headlines since the EU referendum last year, and with article 50 now triggered and negotiations underway, many businesses are wondering what the future has in store for them. In this blog post, we take a closer look at the impact of Brexit on businesses in the UK.
Increasing confidence nationwide
Almost immediately after the outcome of the Brexit vote was revealed, the pound took a dramatic hit but almost one year on confidence is rising. Whilst the pound still hasn’t returned to its pre-Brexit best – the Sterling exchange rate is still 14% lower than it was on 23rd June 2016 – more and more individuals and businesses alike are feeling assured that it can make a full recovery.
Everyone is braced for change
There’s no denying that there will be some difficult decisions to make and a number of challenges to face as we leave the European Union and take on independence. Inflation may be increasing – rising from 1% to 2% in early 2017 and up to 3% by the end of 2017 – and output prices following the same upward trend but positivity is prevailing and businesses are accepting that our journey out of the EU will be a difficult one.
Opportunities on the horizon
While Brexit may mean a potential reduction in investment from foreign resources and the loss of access to the single market, the financial savings made by the government could present more opportunities for UK based businesses. According to recent research, the UK government contributed some £13 billion to the EU budget in 2015, a figure that could see us save £8.5 billion per year. Where the money saved will be spent is still unknown but many think that the government will provide greater financial support to the business community.
Greater freedom for businesses
There were some trade agreements that were strictly off limit due to our EU membership, however as the UK will have to make business deals from scratch, the globe is quite literally the UK business world’s oyster. China and Australia have already shown interest in making free trade deals, and more countries are set to follow. Freedom from regulations associated with EU membership could also mean better prospects for UK businesses.