Brexit – what does this mean for your Business?

Brexit – what does this mean for your Business?

Published 27th June 2016, by Adam Goulding

In short, most businesses do not know yet as it will be a long while before the dust settles from last week’s EU referendum result, particularly in the Financial Services Market amid continued economic volatility and political uncertainty.

Brave words were issued from our Chancellor George Osbourne Monday morning suggesting that despite his initial warning pre-referendum, the UK will work from a “position of strength” given our standing in the global markets and that no emergency budget or no drastic action will be taken.

Monday morning’s attempt to calm the markets has had some effect however it still remains slightly volatile with Asia issuing concerns; the trading markets will be very interesting over the coming months to say the least. The pound is still fluctuating and whilst the drop vs the Euro is obviously not as drastic it is significantly weaker vs the Asia and American markets with no signs of recovery like we observed in the FTSE. Banks have been severely hit as was widely reported, with RBS seeing a further drop of 9% Monday morning but many other industries suffered also before some overall recovery was observed. I think everyone will hope that this continues.

Friday biggest fallers – FTSE 100

  • Taylor Wimpey -27.91%
  • Persimmon -25.98%
  • Barratt Developments -23.12%
  • International Consolidated Airlines -20.42%
  • Lloyds Banking Group -19.93%
  • Berkeley Group -19.18%
  • ITV -19.07%
  • British Land -18.30%
  • Legal & General -17.47%
  • Standard Life -17.16%
FTSE-Brexit

FTSE GRAPHIC AND FRIDAY 24TH JUNE 2016 BIGGEST FALLERS

Warnings have been bullishly issued from other senior EU members about the position the UK will have in the European and subsequently the global markets and German Chancellor Angela Merkel and French President Francois Hollande are apparently in “full agreement” on how to deal with UK’s decision to leave the European Union. What this agreement will look like remains unclear but whatever it is and with the vultures circling London looking for opportunities to take a larger slice of the Financial Services market for themselves, the UK has to come out fighting.

The belief of the Chancellor is that we are in a strong position to do so and that during the long negotiations there will be no change to working rights and to “the way our goods and services are traded or to the way our economy and financial system is regulated.”

So this means business as usual surely…at least for now?

Maybe. Hopefully…

Financial-Area

Some leading figures in The City have suggested that markets are a little calmer Monday morning and some recovery has been observed following the Bank of England stating that it would safeguard the country’s financial stability. The FTSE has demonstrated its robustness with gains in some areas…and people have shown up for work!

However, make no mistake the significant losses seen by the global banking industry in particular on Friday 24th June will have a huge impact on the market as whole as the future still remains uncertain.

As this week and the coming months progress more will become clear and markets should hopefully calm further. The key negotiation for the Finance industry is on whether the UK will remain or at least “passport” in the EU Single market – this is the key factor for all of London’s FS industry and that will not become clear for a long time yet so for now, the show simply must go on.

So, how does brexit impact on your business at this stage?

We would like to hear your views on the impact for your business and also welcome you to get in touch with your consultant contact for information on wider market conditions as we see it and advice on what the job market is looking like.

For now there are still plenty of excellent people looking for a new challenge and still plenty of firms looking to hire so please get in touch for any information or any needs you may have.

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