After the surprise Brexit vote in June, many financial experts and business leaders warned of tough times ahead for British businesses. As costs for imports rose and the pound fell sharply, many businesses worried about how to deal with the coming months and years as we negotiated our exit from the European Union.
However, a recent survey from insolvency trade body R3 has found that three out of four businesses have not yet felt any financial impact as a result of the vote. For many businesses, it is quite literally business as usual as there has been no changes, positively and negatively, on their finances.
R3 found that 16% of the businesses surveyed stated that the vote has had a negative impact on their business finances. Whereas five percent said the referendum outcome had been a positive for their financial outlook.
President of R3, Andrew Tate, spoke about the survey’s findings; “The immediate shock of the referendum result was much briefer than expected, and many businesses – and importantly, consumers – have adopted a business as usual approach since then. That said, Brexit will be causing genuine problems for a significant minority of companies, and it will be benefitting others.”
While those importing goods for sale or raw materials to use in production may be struggling slightly, as they are paying a higher rate due to a fall in the pound, those exporting are revelling in the improved market for their business. As the pound fell, goods may have become cheaper but that means demand for our exports has risen.
Mr Tate mentioned that some important deals may be put on hold due to the uncertainty of future relations between the UK and the EU. However, many businesses are likely to carry on trading with businesses in the EU after Brexit and just make the situation work for them.
Another point to highlight from R3’s survey findings relates to the size of the business as it is mainly large companies, employing 251 people or more, who have seen a negative financial impact on their businesses.
Small businesses were the ones that were thought to be the most likely to take a significant hit as a result of the decision to leave Europe and the single market. However, the opposite seems to be the case and it is larger businesses that may need to think about starting to prepare themselves for Brexit if they haven’t already.
This new research shows plenty of positive news for businesses in the UK despite a difficult six months; however it remains to be seen whether the triggering of Article 50 and our separating from the EU will have a significant effect, negative or otherwise, on businesses and their finances.