How much progress has the UK made since voting to leave the EU? What will be the next topic in negotiations? Will the UK experience a hard or a soft Brexit? How
much will the divorce bill amount to? And will UK businesses be able to access the Single Market and Customs Union after 2019? There are plenty of questions surrounding the decision to leave the European Union, and more are likely to arise as negotiations continue.
If your business has a foreign exchange requirement, you will have no doubt noticed the extreme Pound exchange rate fluctuations since the initial Brexit referendum in June 2016 and had to navigate the market accordingly since. Your Guide to Brexit is designed to highlight the timescales of negotiations and developments, as well as offering up some key bits of information to give you some insight on how Brexit may affect you and your company.
23 June 2016 – Brexit Referendum
24th June 2016 - David Cameron steps down
13th July 2016 - Theresa May sworn in
17th January 2017 – Theresa May says UK will walk away from bad deal
29th March 2017 – Article 50 triggered
29th April 2017 – Other EU members take on negotiating guidelines
18th April 2017 - Snap election called
8th June 2017 - UK general election takes place – May wins election but loses
power, GBP/EUR slips
19th June 2017 – Formal Brexit negotiations begin
July talks 2017 – Rights of EU citizens in Britain and Brits abroad, Northern Ireland
border, separation concerns, money
12th September 2017 – British Brexit bill backed by a majority – 326 to 290 in the
House of Commons to give clarity and certainty throughout Brexit process
1st-4th October 2017 – Conservative Party annual conference
October-December 2017 – Target for the agreement of the basic divorce deal, so
trade discussions can take place
October 2018 – Michel Barnier’s deadline for a deal to be agreed – ratification
March 29th 2019 – Britain’s last day in the European Union Although the UK voted to leave the European Union on 23rd June 2016, little has really been achieved since. Speculation as to how the British economy might perform outside of the EU has increased, economic figures have begun to note a Brexit related slowdown, and political quips have been thrown from both sides. And let’s not forget the UK has witnessed further political instability because of the snap election.
Hard or Soft Brexit?
As negotiations recommence in October following a summer break, European leaders such as Angela Merkel and Emmanuel Macron will be asking questions and
expecting firm answers. One of the most important queries will be whether a hard or soft Brexit will take place. May could try and steer the UK out of the European Union quickly (a hard Brexit), or take several years to leave (a soft Brexit).
A hard Brexit would see the UK leave everything – the European Union; the Single Market which allows the free movement of people, goods, services and money; and the Customs Union which allows EU member states to buy goods from one another with no taxes. This would allow Britain to make trade deals with other nations such as the US and China, on its own terms, whilst also having control of immigration, borders, and employment rights.
Meanwhile a soft Brexit could see Britain gain special access to the Single Market at the cost of more fluid movement for EU nationals and the possibility of remaining within the Customs Union. However, it’s worth noting that remaining in the Customs Union would restrict the UK making its own trade deals with other nations such as the US and China, as EU trade laws would still be in place.
What needs to happen?
There are over 759 treaties to cover before the UK can exit the EU and it looks set to be one of the most intricate and complicated negotiations the world has ever witnessed. Following Brexit, the UK will lose hundreds of international agreements, meaning that aspects in trade, regulations and cooperation, and other areas such as agriculture, transport, customs, and nuclear will all need to be re-organised.
Things to watch out for
If your business has a forex requirement there are plenty of questions that cannot be answered at this early stage. However, key areas to watch for will be free movement of people; access to the Single Market, Customs Union, and European Free Trade Association; business developments which may cause some companies to relocate overseas; and any changes to the Single Euro Payments Area and UK access to euro payment systems.
Your International Money Transfers and Hedging Requirements
Whether your business sends money abroad regularly or needs to make sporadic one-off currency purchases, it has never been more important to plan ahead to maximise your funds. Global Reach Partners assigns you with your own dedicated Dealer who can help you hedge your currency requirements and offer you specialist market insight into the best ways to protect your funds amid Brexit negotiations and the UK’s transition away from the EU. Additionally, we have a host of qualified FX Options specialists available through our subsidiary, Global Reach Markets.
For more information contact Nick Coombs, Strategic Partnerships of Global Reach Partners
0203 805 1693 or email firstname.lastname@example.org