The news that the UK has voted to leave the EU may have sent shockwaves through the country, the EU and the rest of the world, but what will Brexit now mean for UK businesses and employers?
While many businesses across Britain will be putting into place their prepared contingency plans in case of a Brexit result, some will now be trying to draw up those plans, as many businesses have been following a ‘wait and see’ approach.
Although there are many uncertainties, it is expected that there will be a two year transition out period as Britain finalises its divorce with the EU. Trading conditions will not change straight away, although the London stock market has already plunged more than 8% since the results were announced this morning and the value of the has ‘fallen off a cliff’, according to the managing director of UFX.com.
A priority for businesses will now be to begin lobbying government and Brussels for a business-friendly outcome to the country’s split with the EU.
Pro Brexit businesses may be celebrating the prospect of a split from EU rules and regulations, but as a Brexit becomes a reality, the landscape for UK business is expected to change significantly.
Possible impact of a Brexit on UK industries:
• Financial services are likely to be hit if there is an end to the existing ‘passporting’ rights that have allowed banks and other groups with their headquarters in London to be able to freely do business with the EU.
• The farming industry is expecting to be profoundly hit and there are concerns that many family farms will now no longer be viable.
• Companies like retailers, automotive suppliers and the food and beverage sectors that rely on imports, would be hit hard and face import tariffs into the EU. However some food supplies could be sourced more cheaply from outside the EU.
UK employers could see labour costs significantly increase, if the free movement of workers from around Europe is either reduced or scrapped.
While the country, Europe and the rest of the world comes to terms with the results of yesterday’s vote, how much will change for UK businesses in the long term will greatly depend on what arrangements Britain secures with trading partners inside and outside of the EU.