Analyzing Brexit's Effects on UK Trade and Industry

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ASSESSMENT-2
The impact of Brexit on UK Business.
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Contents
Introduction.................................................................................................................................................3
Findings and discussion...............................................................................................................................4
Conclusion...................................................................................................................................................6
Reference.....................................................................................................................................................7
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Introduction
Since past decades, the decision of United Kingdom to withdraw the membership of EU is
shaping the country's future as well as affect its trading relationships. The process is known as
Brexit. It is overviewed that UK is more dependent on EU than vice versa given that 12.6% of
total GDP of the nation is related with EU exports whereas only 3.1% of GDP among the other
27 Members states is linked to exports to the UK (Dhingra, et. al., 2016). The present report is
based on the impact of Brexit on UK businesses or corporation. Findings will make by analysing
the positive and negative impact of Brexit on business organisations of UK and necessary
strategies should be adopted by these corporations in order to overcome the negative impact of
Brexit. Companies which have global market presence got benefitted from falling in the pound
that resulted in higher revenues while currency is renewed back to sterling.
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Findings and discussion
The result of Britain referendum was put in shock to the entire world. However, it needs to be
understood that an official withdrawal from European Unions will not be taken into account yet
changes in laws, legislation, tax rates and other legal considerations. The United Kingdom was
leaving the EU market likely to mean that UK organisations won't be longer able to trade into
European market on a cross-broader (Cumming and Zahra, 2016). Although there are no
immediate changes in trading practices, UK will be continued as a full-time member of UK for 2
years.
Brexit was passed with a majority of 52%, most of the companies had decided to leave UK due
to the threat of not to deal in EU. But, there is also a benefit for companies that they will be free
from contributing to the common budget. According to a survey, UK contributed £13 billion to
the European Union every year so that the decision to leave the European Union enables to
prevent the UK government from contributing to every year. It also provides an opportunity for
the nation to make business deals or agreements over the world. The legal and regulatory
position of UK will be more complex because each process requires careful analysis thus to
make proper jurisdiction in the absence of newly accessing rights. Along with this, Furthermore,
in order to ensure a successful position in changing markets, it is essential for companies to
restructure or re-examine their culture in the respective terrortities.
The negative impact of Brexit is companies are tending to shift their business in other countries
due to no tariffs imposed on importing and exporting activities. It attracts UK companies; this
kind of shift would highly affect the economic growth and GDP rate of the country
(Kierzenkowski, et. al., 2016). As per the report of Sky News, more than 50% of UK exports go
to EU countries; therefore to stabilize the situation UK government needs to formulate more
flexible laws or legislation related with domestic and international trading. It helps to attract new
businesses to set their corporations’ over there. Furthermore, UK’s status as one of the world’s
biggest financial centres would be diminished if it was no longer seen as a gateway to the EU for
the likes of US banks.
Predictions on how Brexit will affect the businesses rely on four major factors, such as –
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 Whether the European Union will embrace reforms itself.
 The outcome of TTIP and other trade agreements negotiated by EU.
 To what extent the United Kingdom is willing to transform British a dramatically
deregulated free-trading economy
 What types of relations UK will take to ahead in EU markets?
It is predicted that Brexit will help the UK to become a growing and successful economy because
the nation is maintaining a high level of access in a single market. Due to which it is expected
that UK would benefit from Brexit by increasing in 1.6% growth in GDP rate of the nation in
2030. Although the economic crises which were occurred in 2008/09; its impacts are being seen
in various areas of the country thus it can be said that still, UK economy is facing several issues
of economic downturns, such as – low capita income, poor growth of business organisations,
fewer job opportunities and so on (Schoenmaker, 2017). Then, the decision of Brexit was taken
in so small time which forced companies to think that how they will recover their losses and
again obtain a highly competitive edge.
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Conclusion
From this above-mentioned report, it gets comprehended that Brexit is highly affecting the UK
trades and industries but there is a substantial increase in uncertainty. The report has stated the
influences of Brexit on UK economy and business organisations. UK industries, such as –
airlines, retailing, travel and tourism, hospitality, telecommunication, automobile etc. all get
affected the decision of leaving the European Union in a direct and indirect manner. The positive
impact of Brexit is various migrants are looking for jobs outside the UK so that after Brexit
various industries are establishing over the nation; that may raise job opportunities in all
industries. Apart from this, the negative impact of Brexit is raising the cost, extra administration
and lower budgets are the causes of short-term concerns; as the cost of leaving EU is high that is
hindering UK finances and budgets. Furthermore, most of the companies think that Brexit won’t
allow them to trade in European markets; it affects sales and profitability of industries at vast
level because EU market is too large and a great source of earning higher profitability.
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Reference
 Armour, J., 2017. Brexit and financial services. Oxford Review of Economic
Policy, 33(suppl_1), pp.S54-S69.
 Cumming, D.J. and Zahra, S.A., 2016. International business and entrepreneurship
implications of Brexit. British Journal of Management, 27(4), pp.687-692.
 Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., 2016. The impact of Brexit
on foreign investment in the UK. BREXIT 2016, 24.
 Franks, J.R., 2016. Some implications of Brexit for UK agricultural environmental
policy. Centre for Rural Economy.
 Gudgin, G., Coutts, K., Gibson, N. and Buchanan, J., 2018. The macro-economic impact
of Brexit: using the CBR macro-economic model of the UK economy
(UKMOD). Journal of Self-Governance and Management Economics, 6(2), pp.7-49.
 Kierzenkowski, R., Pain, N., Rusticelli, E. and Zwart, S., 2016. The economic
consequences of brexit.
 Schoenmaker, D., 2017. The UK financial sector and EU Integration after Brexit: The
issue of passporting. In The Economics of UK-EU Relations (pp. 119-138). Palgrave
Macmillan, Cham.
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