A Report on the Impact of Brexit on Various UK Business Sectors

This report delves into the multifaceted impacts of Brexit on UK businesses, with a particular focus on the financial and retail sectors. It begins by defining Brexit and its implications, including the immediate economic shocks following the 2016 referendum. The report identifies service industries, such as financial services, as being at the highest risk, detailing the significant role of the UK's financial sector within the EU and the potential disruptions caused by changes in regulations and passporting rights. The report also explores the effects of Brexit on retail businesses, highlighting the impact of currency fluctuations, rising import costs, and shifts in consumer spending. It further examines challenges related to supply chains and skills shortages. The conclusion emphasizes the mixed effects of Brexit, acknowledging both negative impacts and potential opportunities, and the importance of adapting to the changing economic landscape. The report references several academic journals and online resources to support its findings.

Brexit impacts businesses

Table of Contents
INTRODUCTION ..........................................................................................................................1
FINDING & DISCUSSIONS..........................................................................................................1
Industries that are affected by Brexit and how............................................................................1
CONCLUSION ...............................................................................................................................3
REFERENCES................................................................................................................................4

INTRODUCTION
A name given to the United Kingdom's departure from the European Union is known as
Brexit and it is the combination of Britain and Exit. In other words, Brexit is described as a
shorthand way of saying the UK leaving EU. Britain voted to leave EU in 2016 and after that the
pound fell to its lowest since 1985, immediately after the results were declared. As UK is termed
as the best countries to start a business, but that changed because of the unknown influence
Brexit could bring. Therefore, the report will describe the findings based on Impact of BREXIT
on businesses in UK. Further, it will cover current news, events and position of UK government
and Parliament. The reason behind this is that the result of the British referendum has shocked
the entire world. As stated by experts, that they have anticipated the trade volume between both
UK and EU to around 1196 billions euros before exit.
FINDING & DISCUSSIONS
Industries that are affected by Brexit and how.
The industries experiencing the highest risks overall, and likely to be the toughest hit by a
no-deal Brexit, are service industries like; professionals, scientific, administrative and technical
services. Others in danger involve wholesale trades, legal and technical services, retail,
warehousing, land transport services and activities that support financial services. More than 1
million people are employed by financial service sector and accounted for 6.5% of the value
created in the UK economy in 2017. The UK's financial sector's relevance to the rest of the EU is
also pronounced. Around $1.4 trillion is lent by British banks to EU organisations and
government authorities (Livingston, 2018).
Based on some estimated, a quarter of the financial service sector's annual revenue comes
from business associated to the EU. It was calculated by the Institute for Fiscal Studies that EU
business is particularly crucial in banking and investment, with over 40% of UK export in these
parts heading to the continent. It is not only the link between the UK and EU that will alter
change after Brexit. The reason behind this is that, six trillion euros or it can be said that 37% of
Europe's financial assets are controlled in London. Post- Brexit is one of the dilemma which is
faced by UK financial institutions right now. In addition, there is a risk that EU may choose not
to do so or that it may be delayed in its determination, as the procedure for evaluating
equivalence is considered as the lengthy one. Based on the present pass-porting rights, finance
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companies can provide financial services to corporate customers across all EU state through one
local licence. This is the major concern for banking sector, because it means that they will be
required to acquire additional authorisation in the parts they operate. However, it has been
discovered that the influence of Brexit is not necessarily going to be negative all around. For
example, some of the investors and lenders may turn their backs on what they fear is a sinking
Britain. On the other hand, opportunistic investors may look for UK properties or shares (Lim,
2018).
Another sector on which Brexit has been given negative as well as positive impacts. The
major impact has been seen of Brexit on retail businesses is deterioration of the sterling that is
businesses degrade their quality because of the high prices of raw materials (Yueh, 2017). Due to
which many of the customers switch to one company to another. This effect of this has driven up
import process, meaning retailers are faced with the choice of absorbing costs or raising their
prices. All these affect change the prices or tariff plans of the products or services. Due to Brexit
or the pressure on consumer spending has hit the market of retail very hard (Brexit & retail in
2018). Particularly on non-food sector.
It has been seen that impact of Brexit affect the margins and sales volume of the drivers
of the vote leave camp, immigration in 2018 (Thompson and McLarney, 2017. overall, it affects
the overall industry in order to final outcomes of the companies. Due to high prices of the
product customers not any interest to buy those services or products. Another impact of Brexit is
financial unavailability due to which companies fails to full fill the customer demands as well as
company operational needs. Moreover, it takes better services and long term growth in order to
meet out the best possible action plan.
Brexit is clearly affecting the supply chain of retail sector due to which company fails to
meet out the needs and goals. During the time of Brexit, retail sector businesses also facing
issues or shortage of skills shortage, new professionals to enter the sector to help manage stores,
warehouse deliveries and support the customer satisfaction and growth.
For retail sector or businesses has facing troubles in 2017 due to which many of the
businesses quit the market. After taking some steps and solutions UK retailers identifies the new
emerging growth or the development facts. This will work more in an attractive way by adopting
the shopper demand. After the companies get to know that with the help of some new ways or
technologies. Retail businesses can easily cope up with the impact of Brexit. It affects the
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business into more appropriate manner and growth. For stabling the market growth, it also
necessary for the company to improve better quality or innovative products to deal with best
possible manner (Hendry and et.al., 2018). Over the next year, retail businesses has found out the
another solutions of alternatives revenues which added events and entertainment in their stores.
There are so many issues that company facing due to EU Referendum such as companies
businesses loose their potential employees due to partition of Europe from UK. Another impact
is low availability of financial position, liquidity positions and new funding sources.
CONCLUSION
On the basis of above section it has been concluded that, The UK's financial sector's
relevance to the rest of the EU is also pronounced. On the other hand, The major impact has
been seen of Brexit on retail businesses. Overall, study given the history of Brexit and how they
affect the financial services and retail businesses. It has been cleared out that company affect
different sectors in both positive and negative manner.
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REFERENCES
Books & Journals
Hendry, L. C. and et.al., 2018. Local food supply chain resilience to constitutional change: the
Brexit effect. International Journal of Operations & Production Management.
Lim, W. M., 2018. Exiting supranational unions and the corresponding impact on tourism: Some
insights from a rejoinder to Brexit. Current Issues in Tourism. 21(9). pp.970-974.
Livingston, D., 2018. Failing Financial Institutions: How Will Brexit Impact Cross-border
Cooperation in Recovery, Reconstruction and Insolvency Processes?.
Thompson, J. and McLarney, C., 2017. What effects will the strategy changes undertaken by
next Plc have on themselves and their competition in the UK Clothing Retail
Market?. Journal of Commerce and Management Thought. 8(2). p.234.
Yueh, L., 2017. Britain's Economic Outlook after Brexit. Global Policy. 8. pp.54-61.
Online
Brexit & retail in 2018. 2018. [Online]. Available
through :<https://www.retailgazette.co.uk/blog/2018/02/brexit-and-retail-in-2018-will-the-high-
street-turn-into-fury-road/>.
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