Brexit - 5 things to consider as the dust settles

There is no doubt that last few weeks has changed the UK for better or worse in ways we have yet to understand and discover.

As a business with clients in the UK and US, and staff in the UK and Europe I suspect the next few months will start to outline what the future may have in store.

Personally, I proudly voted remain, for both personal and business reasons. I still believe that we are stronger in a union of other countries and I fear we have become a less tolerant society after this vote.

Currency rates

I suspect these may be rollercoaster-like over the next few months as we start to understand the true implications of an exit. The dollar/pound rate is at 30 year lows, although the pound did not drop as far as I expected it to against the Euro. Not because the markets think that sterling is a safe currency but, in my opinion, because the Euro may now be doomed if several other countries run similar exit referendums.

Short term we often take forwards, locking a rate in and guaranteeing a sum over a period of months. Over the years I have discovered we are a far better agency than currency speculator and have often managed to call the highs and lows of the market from the wrong perspective! We have decided that with salaries to pay in euros being able to lock a rate in is more important than ever.

There are also a number of other exchange rate products available, and we will need to plan further in respect of our long term requirements.

Hosting/data and data protection

We have always used premium UK or US data centres for our respective clients, with backups stored in Germany. Although we have a few years to plan after we leave the EU I suspect that we will need to store our backups in the UK or the US.

Although a minor inconvenience for our business, the FT has suggested that cloud and SAAS providers may have the challenge to store data in a jurisdiction that is acceptable for the UK and European authorities.

It also calls into question the replacement of the first EU Data Protection Directive (1995) with a new, stronger regulation being developed now for implementation in 2017.

Office space

We need more office space and this is one area I suspect that Brexit will be an advantage as there are some suggestions that commercial rents might drop 18%. If there is a widespread relocation of companies to “safer” European locations there may be a fair amount of unused office space in London. 

EU staff

Over the years we have been lucky enough to have staff join us from a variety of European countries. At the very least I expect any current residents will be ok. Over the Brexit weekend, the FT suggested we have 3m EU workers in the UK with 70% having been here for over five years so able to apply for permanent residence. Hopefully, freedom of movement will remain after exit as it makes our company a richer and more exciting place to work when we can draw on different cultures to build our team.

Fear and uncertainty

Several large scale capital projects have been called into question, and I suspect a lot of companies may be adopting a 'wait and see attitude' in regards to undertaking projects. We are exploring our export options as we are now considerably cheaper for US clients than we were two weeks ago. We are also lucky that our services are quite diverse - from bespoke software development to marketing products and services. It may be that companies need to increase their market spend if other businesses and consumers cancel or delay purchasing decisions.

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