So the UK has voted, by a narrow margin, to Brexit.

What does this mean and how will this impact UK companies going forward?

As previously predicted, there has been a fall in the pound. This will push up prices in the short term, causing a potential inflationary spike.  This will have a slight impact on people’s day to day lives as certain things become more expensive.

Another short term issue may be many investors holding off making investing decisions.  Investor’s may look at the current uncertainty and decide to wait for some clarity as to the UK’s future to make key investment decisions.  This doesn’t necessarily mean just professional investors, but also individuals looking to buy their first home, for example.  This could cause some serious short term economic pain, with certain economic sectors slowing significantly, whilst waiting for some clarity.

We can see a period of time where people decide against buying their first home, for example, as they hope for prices to fall, resulting in fewer home sales over the coming months.  This can often force down the price of property as certain sellers will be in a forced sale position, creating the lower prices.

Brexit negotiations

Over the coming months and years, the UK will be negotiating its future relationship with the EU. Mid Group previously identified that the quality of the debate may be governed by the emotion felt by the break-up.

Initial feedback from Europe has been somewhat defiant, leading to many bold statements about the need to hurry.  These statements appear to be driven by a fear of Brexit contagion across other EU countries.

The current delay in the negotiations, as the Conservative party chooses its new leader, will potentially lead to the heat being taken out of the discussion.  It should also allow the Government and its advisers time to formulate a clear plan and strategy, as well as allowing a significant amount of dialogue with European counterparts.

Future

The future of the UK is likely to somewhat different from that today, but will it be significantly better or worse?

We foresee a period of short term pain for the UK, whilst the nature of the UK’s relationship with the EU and the rest of the world is bottomed out.

In the longer term, if a good, open trading relationship with the EU can be maintained and then strengthened by better global relationships, the possibilities are limitless.

In short, the negotiations are key.  The nature of the negotiations means those taking them forward will require exceptional leadership, first class negotiation skills and visionary thinking.  We can only hope that those appointed over the coming weeks to fulfil the task have the skills required.

Mid Group

Mid Contracting and Consulting is the UK trading business of the Mid Group, focused on the delivery of new projects using the best in off-site construction methods and modern technology.

The Mid Group is a dynamic construction, investment and development company, dedicated to providing enhanced value for clients and partners across the UK and Middle East through innovation and professionalism.