The Influence of Brexit on UK Businesses: A Comprehensive Analysis

This report examines the multifaceted impact of Brexit on UK businesses, exploring both the challenges and opportunities it presents. It analyzes the effects on trade, tariffs, currency exchange rates, and labor markets, highlighting potential impacts across various sectors such as agriculture, automot...Read More

Impact on UK
businesses caused by Brexit

TABLE OF CONTENTS
INTRODUCTION................................................................................................................................3
FINDINGS AND DISCUSSION.........................................................................................................3
CONCLUSION....................................................................................................................................5
REFERENCES.....................................................................................................................................7

INTRODUCTION
UK is considered to be as one of the best country to starting business but that fact could be
change due to unknown effect of Brexit. The UK decision related to leave has lead to the political
instability in the country which has highly influenced the growth of companies all most in all
sectors. After Brexit trade between UK and EU does not exit any more. In addition to this, there has
been increase in cost of suppliers which has direct as well as significant effect on the profitability of
firms. Due to Brexit, many companies in different sectors are experiencing the effect of changes in
currency rate as well as labour market on their business.
The report will have focus on identifying the effect of Brexit on business in UK. It will
emphasise on analysing the perception of different authors as well as scholar about the effect of
Brexit on business. Study will include argument on the topic that whether Brexit have positive or
negative effect on UK businesses.
FINDINGS AND DISCUSSION
As per the statistical data of 2015, The United kingdom mainly exports pound 133 billion
worth products to Europe which is equal to half of the international products exports. After Brexit,
companies established in UK and exporting goods to EU have to face loss of approx. pound 4.5
billion annually. Such type of looses firms might have to face if in case UK leave EU without
facilitating new trade agreements (Ziv, Larcom and Tanentzap, 2018.). Brexit can have direct as
well as negative effect on export business. Due to increase in tariff, is the major issues which is
faced by the companies after Brexit. Trade restrictions might have negative impact on the
profitability of business. If enterprises chooses to maintain competitiveness by reducing the prices
of products or services, still companies will not be able to generate profit. In addition to this, there
will be great decline in exports of goods and services (Lim, 2018.). Due to Brexit, companies
operating business in UK might have to lose their access to the single market which can lead to
decline in their market share. Few economists perceives that business entities in UK might have to
suffer a loss of pound seventy five billion if they get excluded from single market. Some
researchers have stated that few of the companies in UK might face difficulty in responding to the
cautioners queries due to Brexit. According to the report of federation of small business which
reveals that confidence in small sector will be declined. In addition to this, there will be sudden rise
in prices of products or services which will further lead to the decline in the demand of goods or
services. After Brexit, due to restriction of immigration, companies might have to face difficulty in
hiring the talented as well as skilled workforce. In addition to this, some economists also believes
that there can be increase in the cost of importing as well as exporting of goods due to which

business entities might face difficulty in maintaining their profit margin. In addition to this, they
also state that the Brexit might make UK less attractive location for the foreign direct investments
which might have negative effect on the growth of firm (Impact of Brexit on Businesses in the UK,
2018). But effects of Brexit is completely based on the changes that will take place in the business
environment.
Some authors argue that the Brexit will have positive impact on UK businesses. Few
scholars perceives that the service sector will get the most benefit from the Brexit. They stated that
Brexit will reduce trade barriers especially for the companies operating business in UK service
sector such as insurance, banking etc. As per the opinion of Hamilton and Webster, (2018),
organisations in UK will be free to trade and facilitate negotiation with business entities located in
different nations.
In addition, this, according to the analysis of some people those haver different perceptions
related to the post Brexit. Most of the people in UK have focus on different factors such as global
supply chain connections and competitive edge. They perceive that global supply chain
connections and competitive edge are the two important variables which make United Kingdom
attractive destination for investment. According to the few economists, the uncertainty in context of
businesses will prevail at least for the two years until United kingdom facilitates negotiations with
EU before executing section 50 in Lisbon treaty (Holmes, 2018). Some business analyst perceives
Illustration 1: Impact of Brexit on business
(Sources: Impact of Brexit on Businesses in the UK, 2018)

that supply chain might get effected by tariffs which government in UK might imposed after Brexit.
In addition to this, companies dealing with or depended on cross border transactions might have to
face additional hurdles. After Brexit, it has been predicted that there will be changes in currency
rate and there will lots of mergers will take place at global level. Specifically automotive and
agricultural sector might have to face many challenges due to Brexit.
CONCLUSION
It has been concluded from the study that Brexit have both positive and negative effect on
UK business. The other fact which has been found is that all the sectors such as agriculture,
automotive, service, manufacturing industry will get impacted by Brexit. It has been concluded
from the assignment that mainly companies engage in the export and import business will get
highly effected by the Brexit. The effect that Brexit will have on the UK enterprise will complete
based on the changes that will take place in business environment. It has been concluded that
companies might have to face various issues such as inflation, issues in hiring the skilled
workforce , decline in profitability etc. because of Brexit.
The UK has been provided with recommendation that it should adopt Australian based
system for immigration.

REFERENCES
Books and Journals:
Ziv, G., Larcom, S.T. and Tanentzap, A.J., 2018. The potential impact of Brexit on the energy, water
and food nexus in the UK: A fuzzy cognitive mapping approach. Applied Energy, 210,
pp.487-498.
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.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Holmes, B., 2018. Speaking to a Global Future: The Increasing Value of Language and Culture to
British Business Post-Brexit. In Languages after Brexit (pp. 61-74). Palgrave Macmillan,
Cham.
Online:
Impact of Brexit on Businesses in the UK. 2018. [Online]. Available through: <https://www.market-
inspector.co.uk/blog/2016/10/impact-of-brexit-on-businesses-in-the-uk> .
8 ways Brexit will affect businesses. 2018. . [Online]. Available through: < https://www.burges-
salmon.com/brexit/>.