Business Report: Analyzing the Impact of Brexit on UK Businesses

This report examines the multifaceted impact of Brexit on UK businesses, focusing on the economic and financial implications. The report begins with an introduction to the subject and a brief overview of the Brexit vote. It then explores the specific effects on various sectors, including rising material and fuel costs, trade deficits, and changes in currency value. The analysis delves into the impact on supply chains, investment, and the overall economic growth rate of the UK. The report also discusses potential opportunities for domestic companies, the challenges related to skilled labor, and the need for businesses to adapt their production methods and strategies. The report concludes by highlighting the importance of proactive planning and efficient operations to navigate the changes brought about by Brexit, referencing various academic sources.

Foundations of
MIS
& CBT

Table of Contents
INTRODUCTION...........................................................................................................................1
BREXIT BRITAIN: THE IMPACT ON UK BUSINESSES..........................................................2
REFERENCES................................................................................................................................4

INTRODUCTION
In 23rd June, 2016 Britain voted to leave the European Union. It shows the negative
impact in the currency of Europe. As a result, pound fell down since 1985 when the result had
been declared. For staring a business, UK is considered as a best country but due to changes with
unknown effects and Brexit could bring. Brexit campaigners gave optimistic predictions for
business which are situated in Britain. On the other hand, there are some people who believe that
it was big mistake for Britain, because it make negative impact by various kinds of factors. There
are various kinds of raw material which are traded by Germany, but due to end of relationship
with UK and EU, cost of supplies has been hiked. On the other hand, UK's export goes up
because of their higher cost and tariffs. It can be said that all these make great impact in the
supply chain of the country. The present report describe the impact of Brexit in business of UK.
By analysing the various factors and collected data many conclusion are to be taken in the report.
1

BREXIT BRITAIN: THE IMPACT ON UK BUSINESSES
Britain voted to leave European Union in June 2016 which has a greater impact on UK
businesses. According to Office For National Statistics (ONS) that the prices of materials and
fuel have risen up by 7.6% which are purchased by the producers of UK (Coulter and Hancké,
2016). Further, Hitachi capital, a famous company in UK, have put its investment of £65.5
billion on hold due to Brexit shock waves. It has created trade deficit in UK which is impacting
the business to the core (Dhingra and et.al., 2016).
Analysts have experienced that it will slow down the growth rate of Britain's economy
by 0.3% which was 0.7% in previous quarters. It also slowed down the growth of
manufacturing sec or by 1% which has given rise to import cost giving shrink to producer's
output. It is due to weak currency experienced by Britain in comparison to the other.
Decrease in production of various businesses has resulted in reduced revenues which
required special attention from the side of government. However, the enterprises having in-
house production in UK hold strong position in its market and overseas buyers are looking
forward to buying from these companies in order to take benefits of reduced currency.
Brexit is also giving opportunities to the domestic companies which can be helpful for
every size of business running in UK. However, it can result in limiting the skilled labour that
the companies get from foreign countries if any impact is faced on immigration (Dhingra and
et.al., 2016). On the other hand it will attract the brightest talent and recruit fresh individuals
from the country itself by improving the benefits given to the employees at workplace.
Since the cost of importing products is on higher side, industrial sector of the country is
advised to examine its production methods and the way it works. It will help in assessing the
areas it can efficiently utilize its resources and generate profits (Ebell and Warren, 2016). The
companies in UK are set to open their own supply chains in order to produce which is basically
imported by the country. It has grown an opportunity in production sector of UK. It has reduced
foreign direct investment of the country due to weak current and high import cost.
The rising costs in the production sector may act as a barrier which requires that the
company plan its spendings in order to maximize its profits. Businesses have to estimate their
profits again based on the current market price of the products which have raised due to Brexit
2

(Jensen and Snaith, 201). There is a greater impact on various businesses and entities have to
prepare better strategies in order to deal with it. After the voting of Brexit, the price of pound
fell in lower level. The Bank of England believes that the inflation rate will be increase with 2%
in early 2017 and reaches to 3% at the end of the year. All the manufactured products will goes
increases with 2.6% Transport equipment increases with 2.7%. Rule related to the food products
which increased with 1.1%. Rate of tobacco and alcohol was increased with 2.2%. There was
changes with 1.6% for petroleum products. As per the cost predictions, it shows that the future
would not be so rosy. It means that 20% charges in food and drink industry. Rate on auto
mobile industry was increased with 10%
Examining the current production methods and ways of working could offer potential
areas to maximise profits. While Brexit may seem like a long way off, all the above can be
implemented by business immediately to prepare them for the eventual EU exit. It also offers a
chance to review and strip-back processes to create more efficient ways of working, which is
ultimately benefit for the small business. As Theresa May has hammered home time and time
again, Brexit means Brexit. It is not enough for businesses to stagnate; change is imminent and
businesses need to be proactive to ensure that both they and the UK economy thrives once
Britain leaves the EU (Jensen and Snaith, 2016).
3

4

REFERENCES
Coulter, S. and Hancké, B., 2016. A bonfire of the regulations, or business as usual? The UK
labour market and the political economy of Brexit. The Political Quarterly. 87(2). pp.148-156.
Dhingra, S. and et.al., 2016. The consequences of Brexit for UK trade and living standards.
Dhingra, S. and et.al., 2016. The impact of Brexit on foreign investment in the UK. BREXIT
2016, p.24.
Ebell, M. and Warren, J., 2016. The long-term economic impact of leaving the EU. National
Institute Economic Review. 236(1). pp.121-138.
Jensen, M. D. and Snaith, H., 2016. When politics prevails: the political economy of a Brexit.
Journal of European Public Policy. 23(9). pp.1302-1310.
5