9th December 2016
Whilst the legal and political worlds battle over the Brexit question, my personal view is that SME’s seem to be maintaining a swan-like approach to the changing currents beneath.
We know that the toughest times may be yet to come as far as the longer-term impacts of Brexit are concerned, but having spoken to clients and contacts at networking events, it would appear that the majority of local businesses are weathering the uncertainty well. The volatile nature of currency since the referendum is by far the biggest issue most have had to face. For manufacturing clients buying in components or raw materials from overseas, the increased costs have been painful; but whilst the Brexit referendum may have been the initial cause of a wobble on international money markets, other political events in Europe and (dare I mention) the US have compounded this and so Brexit is not solely to blame. Rates seem to be recovering gradually, the Euro is nearly back to its pre-June level, and whilst the drop in the value of the pound has helped the big international firms based in the UK with overseas operations, the engine room of Britain (small businesses) has borne the bulk of the pressure of fluctuating currency values.
In recent days, largely forced by opposition pressure and the ongoing legal battle, the Government has somewhat begrudgingly agreed to publicise the backbone of its plans for Brexit. I think this can only help to reduce the impact of the unravelling process and should avoid a ‘cliff edge’ announcement in our decree nisi with the EU.
Putting my international accounting hat on, I will be following trade announcements closely as the UK Government sets out its negotiating position on free movement and trade tariffs. However, as much as I am concerned about the impact of Brexit on tariffs, we should not forget the US President elect’s campaign rhetoric regarding trade agreements and the affect these could have on the sale and movement of goods around the world.
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