At 52% to 48%, the UK recently voted to leave the EU (often referred to as ‘Brexit’). Commercial Domestic Investigations understands that many small to medium-sized enterprise (SME) owners are concerned that this may negatively impact their financial situations. A number of authoritative UK institutions have now spoken out to explain how Brexit could affect UK SMEs.
Determining economic prospects
In a statement, Bank of England Governor Mark Carney said: “A few months ago, the bank judged that the risks around the referendum were the most significant, near-term domestic risks to financial stability. To mitigate them, the Bank of England has put in place extensive contingency plans. These begin with ensuring that the core of our financial system is well-capitalised, liquid and strong.
“This resilience is backed up by the Bank of England’s liquidity facilities in sterling and foreign currencies. All these resources will support orderly market functioning in the face of any short-term volatility. The bank will continue to consult and cooperate with all relevant domestic and international authorities to ensure that the UK financial system can absorb any stresses and can concentrate on serving the real economy. That economy will adjust to new trading relationships that will be put in place over time. It is these public and private decisions that will determine the UK’s long-term economic prospects.”
Guidelines on regulation
Explaining how Brexit may impact business regulation, the Financial Conduct Authority (FCA) noted: “Much financial regulation currently applicable in the UK derives from EU legislation. This regulation will remain applicable until any changes are made, which will be a matter for government and Parliament. Firms must continue to abide by their obligations under UK law, including those derived from EU law and continue with implementation plans for legislation that is still to come into effect.
“Consumers’ rights and protections, including any derived from EU legislation, are unaffected by the result of the referendum and will remain unchanged unless and until the Government changes the applicable legislation. The longer term impacts of the decision to leave the EU on the overall regulatory framework for the UK will depend, in part, on the relationship that the UK seeks with the EU in the future. We will work closely with the government as it confirms the arrangements for the UK’s future relationship with the EU.”
Shaping future prosperity
Revealing her thoughts on Brexit, Confederation of British Industry (CBI) Director General Carolyn Fairbairn commented: “Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt. The urgent priority now is to reassure the markets.
“We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy. The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions. The CBI will be consulting its members and business is committed to working with Government to shape the best possible conditions for future prosperity.”
It is unclear what the ramifications of Brexit will be for UK SMEs. According to Small Business, experts suggest that Brexit could result in a period of “uncertainty and potential regulation change” for the UK’s smaller companies. It is more important than ever in this uncertain economic climate that SMEs focus on recovering payments, to ensure they have the steady cash flow required to prosper.
About Commercial Domestic Investigations
Commercial Domestic Investigations are regarded within the debt collection and credit control industry as one of the best credit management companies in the UK. Established in 1988 to support and service all sizes of companies in the field of Credit Management.
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We now boast a national client base in excess of 30,000 companies. Commercial Domestic Investigations has grown by listening to clients’ requirements and adapting our services to meet all companies’ needs from Sole Traders, SMES, Ltd and Plus. Please contact us on 08444 159200 for more information.