In the weeks since British voters elected to leave the European Union there’s been a great deal of speculation regarding what happens next and how the economic climate will be affected. But one thing is clear -- Britain is still an important market and a good place to do business.
Yes, much remains to be clarified as politicians work to choose the new leaders who will take the country forward. There will be continued uncertainty as we learn when Britain will formally apply to withdraw from the EU and the outcome of any resulting negotiation.
This won’t be a quick process. But here are five things to understand if you’re wondering when and whether to do business in the UK:
The UK is still a big market
With a population of 63 million, the UK is the second-largest English-speaking market after the United States. It’s the fifth-largest economy in the world by GDP at around $2.85 trillion. With its 8.6 million residents, London is the fifth-largest metropolitan economy in the world. Simply put, there is a lot of activity here.
Brexit will take time
Theresa May is expected to take the reins this week as the new British prime minister, and she promises to proceed with Brexit. Once Article 50, the formal application to leave the EU, is triggered, a two-year clock will begin to tick on a British exit and any future change in the country’s status in relation to the EU.
Until then, Britain remains part of the EU with all of the associated advantages and benefits. Many start-ups will be launched, grow and see their shareholders enjoy their own exit before Britain leaves the EU. Waiting for the future to be completely clarified is rarely a good entrepreneurial strategy. Nimble digital companies will make adjustments as developments warrant.
The cost of doing business in the UK has rarely been cheaper
With the weakening of the pound in the wake of the Brexit vote, the US dollar goes much further in Britain than it did just a few months ago. There’s been a more than 10 percent improvement, and the consensus amongst economists is that the pound is likely to fall further -- to perhaps $1.20 by the end of the year, and maybe even to parity with the dollar. If you were thinking of spending to grow a UK business initiative, or to acquire UK assets, you are going to get more bang for your buck than you might have thought possible earlier this year.
The UK still has a favourable business climate
There’s no denying that the Brexit vote sent shock waves through the markets and throughout the EU and beyond. However, the UK sits on a strong foundation of common law that makes it a stable place to do business. It has an infrastructure that can support continued growth of digital industries. Although the UK’s relationship with its neighbours may change, those factors won’t.
In short, there will be some exciting, uncertain and fascinating times ahead. Perfect conditions for entrepreneurs to look for disruptive opportunities and competitive advantages. Contact us at Atlantic Leap if you’d like to discuss how to sail forward.