Three and a half years on from the referendum, which saw 51.9% of UK voters opt to leave the European Union (EU) compared to the 48.1% who wanted to remain, the nation continues to be shrouded in a fog of uncertainty around Brexit and how it will shape our future.
December’s huge victory for the Conservative party in the general election gave Prime Minister Boris Johnson the mandate he needed to push through his Withdrawal Agreement Bill, which has passed through Parliament and has received Royal Assent ahead of the UK’s scheduled exit from the EU at the end of January.
But even as that deadline fast approaches, there still remains a huge deal of doubt and ambiguity around what the departure will mean for the UK’s economy. Amid such a seismic change in the political and financial landscape, all companies – whether fledgling or firmly established – have plenty of considerations to take into account.
So, what are the challenges facing business owners and are there any opportunities they can take advantage of?
The Challenges
In October 2019, it was reported that the uncertainty around Brexit was having a detrimental impact on the jobs market, with employment figures dropping by 56,000 across June, July and August, caused partly by a spate of redundancies in the manufacturing industry. There was also a steady fall in the number of vacancies, from 861,000 at the start of 2019 to 813,000 by the end of August.
With an increasing number of EU citizens not deemed eligible for settled status in the UK, many are opting to leave ahead of the January 31 deadline in case any new legislation is not favourable towards their situation. This trend has hit certain industries hard with the hospitality, care, agriculture and retail sectors suffering as a result of losing significant numbers from their workforce.
And the rise in fuel prices can also cause problems for business owners, who need to factor in transport costs if they are to deliver their goods around the country quickly and effectively. Increased outlays on petrol and diesel may mean companies are forced to review the efficiency of their practices.
The Opportunities
With interest rates currently low, any businesses seeking funding in order to expand may wish to do so now, before the rates rise again, as is predicted once the UK does leave the EU. If possible, fixed-rate borrowing could prove a prudent choice for any owners looking to capitalise on the lower tariffs we’re presently seeing.
The weakening of the pound does not necessarily represent an adverse position for new UK businesses, who instead may be able to turn it to their advantage. For example, it may encourage investment in the UK economy as international companies seek to capitalise on the drop in the value of the pound, while enterprises can look to export their products abroad and enter a wider range of markets.
There’s no denying that there is a lot for new and existing businesses to consider as the UK prepares to leave the EU and take a step into the relative unknown. With that in mind, it’s crucial that decision-makers gain as much insight as possible, which is where firms like Withers can be invaluable in offering expert advice and guidance to help navigate all the difficulties and complexities of Brexit.
