What Brexit really means for UK plc25th July 2016
At a HW dinner for Chairs and CEOs, which took place less than a week after the Brexit vote, one of our guests, the CEO of a FTSE 250 business, said , “ It is absolutely crazy ! Our share price is down over 10% , yet 40% of our revenue is in dollars and another 30% in Euros. Can’ t the analysts do the maths on what that means for our profitability with the fall in sterling rather than just lumping us together with other industrial stocks ?”
This seems to nicely sum up the Brexit conundrum. The reality is that UK plc is in pretty good shape. Even with all the uncertainty our productivity and employment rates – with the exception of Germany – remain the envy our European competitors. The strength of UK plc was demonstrated by SoftBank being prepared to pay $32bn for ARM plc this week. With Theresa May in place as the new Prime Minister it is business as usual for the UK. We can look on from the sidelines at the upcoming elections in France and the USA with all the challenges that their economies will face as polling day approaches.
Surely we can now put to bed any fears of an apocalypse post Brexit for UK plc ? The UK has a trade deficit in goods of £62bn pa with the EU so they are not going to pull up the drawbridge. For example, Germany sold us almost one million cars last year making the UK its largest single export market. UK plc needs to now focus on taking advantage of the opportunities out there in global markets which includes the EU. We have been doing this successfully for quite some time and now have the chance to take advantage of our new found freedom. Carpe diem !!!