The effect of Brexit on UK Market Prospects
The vote for the British exit from the EU was one of the largest economic decisions of 2016.
Many businesses planning to expand into the UK market may be wondering what the repercussions and effects will be in the short and longer term.
One of the prime advantages of Brexit is that it will permit the economy to reboot and start up again – the UK is currently developing self-governing economic policies impartial from EU policies and restrictions that may enable it to bargain better term and conditions. After Brexit, the UK will have the independence to seek new trade deals all over the world.
There are many benefits of the weakening British Pound beside its negative effects on the British economy. It reduces the cost of producing goods and services which makes it possible for the UK’s exporters to compete in the international market through cheaper products in conjunction with enhanced profit margins. It may also help in revitalizing the industrial sector of the country. It’s apparent that as the FTSE 100 are still one of the best performers amongst the world’s leading stock markets (even immediately after the UK’s vote to leave the EU) that the UK market has sustained the trust of investors, and is looking to continue to be a safe place for businesses compared to an arguably crumbling Europe.
There has been no change in the fundamental economic drivers of the UK’s economy because many sectors are not directly affected by it. As mentioned, Brexit will also help reduce the countries rules and regulations, specifically for SME’s (which make up the vast majority of businesses in the UK) and allow for improved profitability at the same time as catching the attention of potential investors.
The UK has framed aggressive policies for regaining the control over its trade and investment agreements and is working to enrich the collaboration of the countries within the commonwealth. It has lowered the rate of corporate taxes to encourage investment in the economy, and as others may be hesitating during this time of uncertainty there is still a very valid opportunity for companies from abroad to act now and establish a solid market position in the UK.
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