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Blaming it on the Brexit!

As we begin the New Year and the inexorable march towards actual Brexit, we still seem no closer to securing a good deal when Britain leaves the European Union and most of us are still uncertain about what Brexit will actually look like.  The government is in turmoil as the prime minister and conservative MPs struggle to come to agreements and make the necessary deals that would ensure that the future looks brighter for the UK.  However, for most of us who look on in horror as the debacle unfolds, the signs are not looking great.  Indeed, as we go to press, the government’s business secretary is threatening to resign unless a “no deal Brexit” is taken off the table and a compromise package agreed within two weeks.

The Referendum on this took place back in June, 2016, so the government has had more than two years to plan and organise for Brexit.   However, most of us, including the UK’s army of SME owners on whom our economy is so dependent, still have very little idea of what Brexit will look like and how it will affect us.  Many of us have already felt the effects of the decision made by the electorate back in 2016.  Business leaders have seen a lack of inward investment, with some companies planning to leave the UK in order to weather the negative effects, we’ve seen price rises in consumer goods and anybody who regularly travels overseas will have felt the punch in their pockets as a result of unfavourable exchange rates on sterling.

The fluctuating exchange rates have also resulted in lower profitability for businesses who deal with overseas customers on a regular basis.  We now live in a truly global society, thanks to digital technology and many businesses have seized this opportunity to widen their customer bases and trade overseas.  Brexit uncertainty has cancelled out many of the advantages that this global market has brought to business owners.

Despite record employment levels, Britain’s household debt has reached a new high, with the average household now owing more than £15,000 to banks, credit card companies and other lenders.  This is considered one of the most serious problems facing the UK economy right now.  Whilst debt is not always considered a bad thing, debt has been commoditised in a manner that means it is now key to economic growth, with a move from a collective to an individual increase in borrowing – households borrow more whilst the government, thanks to cutting back on essential services, is borrowing less.  As household debt has increased, so has wealth at the very top – the average CEO of a FTSE 1000 company took just four days to earn the equivalent annual take-home pay of the average full-time worker.  This can hardly be viewed as an “economy that works for everyone”, as Philip Hammond so proudly claims.

Over the coming weeks and months, as Brexit looms ever closer, we’ll be keeping an eye on the relevant news and developments that are likely to affect SME owners across the UK.  Don’t miss out on the information, you can follow us on Facebook and Twitter to get a notification as it happens.