Brexit Predictions: How the Separation from EU Will Impact UK Businesses

A historic decision was made by the UK to leave the European Union on 23^rd June 2016. Immediately after the results were declared, the world saw the Pound Sterling drop to its lowest since 1985. The world waited with bated breath. What would the decision hold for the future of the UK’s commercial sector? Would it still be the world’s leading economy to target for anyone who wants to start a business?

3 years down the line, with the exit still pending, Wembley Solicitors offers our take on what the future holds for the future of businesses in the UK, if the opportunity of a British Exit does ultimately come to fruition.

Brexit’s Impact on the UK Economy

While pro-Brexit campaigners were pretty optimistic about Britain and our ability to sustain our economy post-separation, the truth is that with the way the European economy is connected, it might be pretty difficult to manage the way trade works in the UK on our own.

Let’s say, that a person was to conduct their business in the UK but are getting their raw materials from an outsourced party in the EU. Since free trade would not exist anymore, the cost of transportation and supplies would go up, the impact of which would be felt across the supply chain.

This has been a major concern for business owners in the UK, especially paired with the fact that the consequent inflation would lead to hiked up prices for everything, from transport and related equipment to manufactured products to food and drinks across the country. This would, in turn, not only lead to greater labour costs, it would also lead to a lack of labour, since many migrants would seek work outside of the EU.

Impact on Exports

UK exports are also predicted to experience a loss of up to £4.5 billion. However, this is only if a new trade agreement is not made with the EU, which is a worst-case scenario. Even if the UK does make a soft leave, the UK may still receive a major hit, since costs and tariffs would spike up. The UK would also become less competitive globally, and with the EU markets as well.

If businesses in the UK want to maintain a stable competitive edge by decreasing their prices, they’d also have to bear lower profits. And that would not help, considering that the UK would lose access to a massive market.

Now, some argue that with Brexit, the UK would save money as well, given that they wouldn’t have to contribute to the European Union Budget each year. However, given that the loss post-Brexit in terms of export and exclusion from this single market is estimated to reach a loss of £75 billion, leaving might just not be worth it, and in fact may lead to many negative consequences.

Managing Your Business in the UK

While the UK still has not reached a decision regarding their Brexit deal, it’s important that if you own a business, you take the right pre-emptive steps to protect your endeavor, just in case. And that’s where we can help!

Wembley Solicitors in London, UK, is a leading law firm that offers affordable legal services to all. If you need help regarding your business, contact Wembley Solicitors today at 020 3417 3700.