One year on from the Brexit vote: what next for UK Business?

UK Chancellor, Philip Hammond, has been vocal on wanting a prompt agreement in principle to create a transitional period for UK businesses, to try to scotch fears over the UK “falling off a cliff-edge”.

“We believe from our discussions with UK businesses that efforts are being made across the board to ensure this will not be the case,” comments David Johnson, founding director at currency specialist, Halo Financial. “Many businesses are forging their own path, cementing EU relationships, establishing a foothold in Europe and seeking new markets as governmental negotiations get underway.”

“We have seen manufacturing and engineering companies, in particular, rolling up their sleeves and getting on with the matter in hand: securing new business from a wide range of territories,” continues Johnson.

“For example, some Sheffield-based steel companies trade with Canadian businesses sourcing steel from other countries. There are also significant opportunities in the major infrastructure projects in the USA and increasing emerging opportunities in the Middle East.”

“We increased market share outside the EU, offering a buffer against EU volatility”

A well-established UK manufacturer we spoke with at a recent roundtable held with solicitors, Irwin Mitchell, suggested that they were not as concerned as they might have been a few years ago about the future of their business post-Brexit. Until recently, the company relied heavily on contracts related to civil structures in countries across the EU. These have been affected by spending cutbacks. This prompted the manufacturer to expand their market share outside the EU, allowing the business to insulate its operations against purely EU based market volatility.

“We actually think there are increased opportunities for EU business.”

For a smaller, Sheffield-based engineering company, the months following the vote to leave the EU led to an increase in business with EU countries, who make up the firm’s main business partners. The reliance on those relationships means that the business is sensitive to variations within the EU market; the recent upturn in business could have come from increased stability and apparent recovery in the EU. The strategy adopted by the company’s management after the Leave vote has been that of reassurance and strengthening relationships with clients in the EU.

Laurence Gavin, Partner at Irwin Mitchell, commented, “It is important that individual businesses pursue their own agenda to ensure the best outcomes in the long-term. Businesses should focus on regional promotion and target foreign business directly without waiting for the lengthy process of government negotiated trade agreements. The next few months will be crucial for shaping the tone of the negotiations to come.”

Gavin continues, “The UK has always been an open, outward looking economy and the positive side of Brexit may be that it will prove to be a greater encouragement for building trade relationships and the reinvigoration of the ties with the Commonwealth, along with opportunities in new territories.”

“Although we do not have any real facts about the outcomes for businesses at this stage, we have consulted a range of advisors and experts to look at areas to plan and allow for change. We discuss a range of perspectives on this and other important aspects of Brexit for both UK businesses and individuals in our new publication, Vision: Brexit, concludes David Johnson.

You can find Vision and more insights at www.halofinancial.com/news

You can also read more UK industry perspectives in Brexit: Manufacturing the way forward