Prime Minister of the United Kingdom, Theresa May, has announced her government will formally begin negotiating its exit from the European Union no later than March. Financial markets panicked and the pound dropped sharply to a 30-year low against the dollar. As the fifth largest economy on the globe and the European gateway for the majority of American companies, there are also fears that Britain’s move will have repercussions not only domestically, but for the U.S. and around the world. Here are areas where the Brexit vote may impact businesses in your community and around the country.
The U.K. has traditionally been a headquarters for multinational companies from Europe and beyond, both because of the English language and its access to the rest of the massive E.U. market. If the U.K. loses its right to access the common European market, businesses and thousands of jobs could leave British shores. The anxiety regarding jobs has been palpable: A recent survey by the Chartered Institute of Personnel and Development found that 44 percent of British employees feel pessimistic following the Brexit vote.
Takeaway: Do a story on how Americans who work in London at multinational companies might be affected.
The U.K. receives the third-largest amount of foreign direct investment in the world, after the U.S. and China. Confidence in the U.K. has been shaken since June’s Brexit vote, since no one is certain how the negotiations will turn out or impact the British economy. Foreign companies are becoming hesitant to invest further until they have a clearer indication of where the Brexit talks will go. A September poll by Deloitte indicates that 88 percent of British finance officers feel their business is facing abnormally high levels of uncertainty.
Takeaway: Investigate American companies that do a lot of business in the U.K. and see if their plans for investment and/or expansion have changed since the Brexit vote.
Immigration was a cornerstone of the Brexit campaign, and one that swayed many to cast their ballots for “out”. However, research has shown that immigration is beneficial to the British economy. Thanks to the European Union’s free movement policy, about half the immigrants to the U.K. come from other member states. During upcoming negotiations, the U.K. will try to reach an agreement allowing it to continue selling its goods on the E.U. market while also limiting the number of people immigrating from E.U. states. If no consensus can be reached, there stands a chance that the U.K. could find itself staring at worker shortages. It could also lose the economic benefits that immigrants bring to the British economy including taxes, new businesses and consumer spending.
Takeaway: Do a story on how the upcoming changes in immigration policy will affect international students at British universities.