So June the 8th has come and gone. In the days immediately following the General Election the media was filled with tales of chaos and uncertainty. With Brexit negotiations kicking off in June as well, there’s been quite a lot to think about for British businesses, particularly those with export strategies, currency fluctuations and international sentiment to consider.
So how are things looking now the dust has settled, one month on from the election?
The impact on currency
The news of a hung parliament had a significant and arguably predictable effect on the pound, which fell dramatically against a whole host of other currencies as the election results were revealed. Immediately after the news broke, sterling lost as much as 2.3 per cent against the US dollar, prompting many strategists to warn of deep uncertainty for British businesses in the near future.
Thankfully it now looks to be recovering, albeit slowly, and forecasts are lifting for the pound against the dollar. However, the economy is still in great need of support from the government if UK businesses are to truly flourish in increasingly expensive overseas markets.
The Confederation of British Industry (CBI) is among those calling on the government to prioritise the establishment of a strong economy to ensure the pervasive atmosphere of uncertainty does not have too great of an impact on British companies, particularly in light of Brexit negotiations.
“This is a serious moment for the UK economy,” said Carolyn Fairbairn, director general of the CBI. “The priority must be for politicians to get their house in order and form a functioning government, reassure the markets and protect our resilient economy.”
The battle with Brussels
The result of the election prompted some businesses to call for Brexit negotiations to be delayed, but on 19th June they began as planned in Brussels.
Some saw the prompt start to the talks and the hung parliament that faced Theresa May as a sign that a soft Brexit would be more likely. However, even in this scenario it won’t be easy for businesses to plan for the future.
There is still uncertainty surrounding supply chains and export markets, which could have a significant impact on many companies’ international sales growth depending on the final agreement between Britain and the EU.
Ms Fairbairn added: “For the next government, the need and opportunity to deliver an open, competitive and fair post-Brexit economy that works for everyone across all our nations and regions has never been more important.”
Of course, there is always a possibility that no deal will be agreed at all and the UK will be pushed into a hard Brexit, in which case British businesses could face an even greater challenge when dealing with EU markets.
Whatever the outcome, it’s time to be prepared. Britain and British businesses need to be talking to our partners and customers in Europe now more than ever if we’re to maintain relations.
Unfortunately, talking to people in their own language isn’t a traditional British strength. In fact the Institute of Translation and Interpreting has suggested that Brexit could expose a significant lack of language skills among UK firms.
If your international team isn’t too confident of their language skills, now is not the time to test them out. Use a professional translation service to ensure you get the right message across when negotiating and presenting to your European customers in these uncertain times.
