Barely a week goes by in which Brexit doesn’t loom large on the political agenda.
It looks like the road ahead will be a long and challenging one, but what exactly does this mean for UK businesses? asks Tom Williams, Managing Director at Williams Wealth Management.
All the signposts indicate the UK is likely to experience disruption from a ‘hard’ Brexit.
This may manifest itself in issues around customs checks or a slowdown of investment while the UK adjusts to its new trading arrangement.
John Springford, Deputy Director of the Centre for European Reform in London, reports that there is talk in Brussels of imposing ‘stricter rules’ on financial centres outside the EU – in other words, the Square Mile.
‘Generally, there is a sign that the EU is likely to go back to being more extra-territorial in its financial regulation.’
Rebecca Harding, CEO of Equant Analytics, a trade and finance specialist, believes that the UK’s departure will prompt the EU to become a ‘more cohesive group of nations’. A key question will be the extent to which UK businesses are able to access the single market with a minimum of friction and continue their integration into European supply chains.
Meanwhile, observers see Brexit as an opportunity for the UK to start afresh, especially on regulations. The pound’s depreciation in value in the wake of Brexit may provide a fresh wave of inward investment, thus creating other avenues for growth. The fluctuating exchange rates have made British goods and services more affordable for international buyers, which provides additional opportunities for businesses who export their goods and services abroad.
In fact, one in four SMEs report having enjoyed improved returns from exporting post-Brexit. This is further backed up by research from PayPal, which revealed that SMEs saw international sales treble due to the post-Brexit currency slump.
The UK government is hoping for the best of both worlds after Brexit: the continuation of existing trade with the EU, and also greater freedom to strike trade deals with other nations, such as the US, China, India, Australia and New Zealand.
With this in mind, our impending divorce from the EU could act as a motivator for UK SMEs to expand into the international markets, taking advantage of the undervalued pound while it is low to reach an entirely new customer base.
Smaller businesses can prepare for this opportunity by adapting their online presence to allow international customers to browse in their own language and pay in their own currency. Now is the time for our entrepreneurs and small business owners to make the most of the growth opportunities presented by this upcoming sea-change.