Timeline 24 June 2016 – The United Kingdom votes to leave the EU; the value of sterling falls to its lowest level since 1985, the FTSE suffers its biggest fall since 2008, stock markets around the world have fallen, house-building shares have dropped like a brick.
Time line 21 July 2016 – Sterling trades at $1.31, compared to $1.46 on 21 June. Yes, imports will be more costly, irrespective of any EU tariff decisions, but exports are immediately more attractive to world markets. The FTSE has gained some 12% from 5,982 on 27 June, to 6,728, a level not seen since August last year. Taylor Wimpey, a house builder, shares traded at £1.92 a month ago, fell to £1.16, and now trade at £1.51. Like many in the sector, they have had a good run over the last 18 months, and shares are now trading at 2014 levels. The Bank of England ‘hold’ interest rates, and report no ‘clear evidence of slowing economic activity following Britain’s vote to leave the EU’. Global markets fell initially, yet have recovered and trade generally some 10% higher than a month ago. Kuenssberg and Peston are household names.
Much has been said and done. Some good, some bad. Some positive, much negative as regards the UK, its prospects politically, economically and social. We have a new Prime Minister and she already has swept aside many familiar faces; a ‘new broom’ is in place and ‘change’ is in the air. The European Union ‘elite’ are puffing their chests; many see the UK as the ‘enemy’ to their empire, when reality is that many people across Europe consider the EU as it stands as ‘broken’. The Brits said, and had the opportunity, to say as much. And we didn’t want to win the Euros anyways!
What next? We’ve had our say, and now it’s up to the politicians to do their ‘job’. Much will doubtless stay the same for many businesses over the coming months. However, as one door may be pulled to, another may open. There will be opportunities for new markets and a different way of doing business. Those who take a look ‘outside the box’ and pursue such opportunities, may well reap the rewards. Brexit, as with any ‘change’, can be a catalyst for business, and not simply ‘the end’.
If the prospects for your business post Brexit are giving you cause for concern, then for a no obligation discussion free of charge, please contact us.