James Pinchbeck: Brexit from an American perspective

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Last week I was in the US attending a meeting of accountancy firms from across the globe, all of which, including Streets, are members of a network of international firms.

The contrast in weather now back in the UK is as stark and as contrasting as the political landscape just a week later, with the result of the US Presidential Election.

Many of the electorate and others across the world are taken aback as much as the UK was following the EU referendum on June 23 resulting in Brexit.

As the UK member firm of this international network we were asked to present on life after Brexit and the state of the UK economy both now and in the future.

The differing perspectives on Brexit from the across the globe were most interesting. Certainly the basis of the decision by the UK to leave the EU was one of the themes of Donald Trump’s campaign, with his belief that the US should follow our lead in ‘regaining control’ and deal with issues around immigration.

Whilst only one of the key messages offered up by Mr Trump, it certainly seems Brexit helped him win over voters on his journey to becoming the 45th President of the United States.

Putting the election result and what Trump’s presidency may mean for the US and the rest of the world aside, it was interesting to hear the views of other countries and especially our European counterparts on Brexit.

It seems to be the case that whilst we are still in the EU and we haven’t yet invoked Article 50, the sense and feeling is that we have already left. On the other hand some feel we may not leave, with delays to the process, political instability and perhaps even a general election putting our exit on hold.

Given the outcome of the referendum we advised that it is unlikely for our MPs to stall or halt our exit, not least because such an approach may come home to roost in the next general election.

Much talk also took place around the UK’s exit negotiations and the deal we might get.

The consensus was that given a number of other European Union member countries have intimated they may follow suit with a referendum and with political unrest in the part of the EU, it seems unlikely that we will secure a deal that would fuel other member states to leave. The deal therefore is at best to achieve status quo, appeasing the UK and member states.

With talk of multi-nationals considering relocating their HQ elsewhere, if the UK goes for a hard Brexit and lose the benefits of the Single Market, a number of countries, particularly Germany, were looking at the attractiveness of their country becoming the home such businesses.

In terms of trade, whilst the decline in the value of the pound has been a boost for UK exporters, it seems overseas customers are placing pressure on suppliers to cut prices and not to reap the benefits of enhanced margins. The converse is the fact that the cost of imports of goods and services in the UK are not benefiting from such reductions.

Whilst reassuring delegates from around the world that the UK economy is in good shape, despite possible blips in growth etc, uncertainty around the Brexit process does seem to give rise to caution about investing in the UK.

However, perhaps following the US election result the shift in focus will move away from the UK.