As of the 10th September, Parliament has been officially shut down – a process technically known as “prorogation” and one set to last until the 14th October. While some expect MPs to be off enjoying their summer break, most politicians are working to resolve the Brexit dilemma that has plagued politics and the headlines for the last three and a bit years.
Boris Johnson is still fighting for a General Election which, if successful, could give him a majority in Parliament and allow him to push through a ‘No Deal’ Brexit. This is easier said than done, of course, as opposition MPs have stated their agreement to a GE, however only after a ‘No Deal’ Brexit is legally removed from the table. This is why the house has already rejected his GE demands not once, but twice in the last week, while the PM’s misery was compounded by losing his parliament majority when he ejected 21 Conservative MPs from the party for voting against an election.
These ‘rebels’ and opposition MPs backed a motion to block a ‘No Deal’ Brexit, by requiring Johnson to request a delay from the EU should he fail to engineer a withdrawal agreement with them before the 31st October deadline.
As a result of these events, we once again find ourselves in a state of limbo, not quite knowing if the UK will indeed depart the EU on the 31st October, or whether the preverbal can will be kicked further down the road in pursuit of an extension. Whichever scenario comes to pass, however, could pose problems for UK-based SMEs.
Leaving without a withdrawal agreement on the 31st October effectively means the UK will be trading on WTO rules the very next day. Even the purist of Brexiteers must admit this will cause all kinds of havoc, in the short term at least. That said, businesses are requiring clarity, whether that’s with the UK leaving the bloc without a deal or not. A continuous movement of the Brexit deadline is seen by some to be simply prolonging the uncertainty and leaving SMEs unable to plan how to move forward.
Businesses dealing overseas will need to concentrate their focus on a number of areas going forward, including staff recruitment, small business finance, UK growth and trade agreements.
In addition, they will need to assess how they manage their cross-currency exposure during such volatile times for the foreign exchange market. Many SMEs are run on very tight margins, and if they are heavily exposed to foreign currencies then even small movements for sterling can have serious impacts on their bottom line. Foreign exchange specialists, such as moneycorp, are able to assist with reducing, or eliminating, this risk for businesses.
Businesses are able to fix their foreign exchange costs and enjoy peace of mind with a range of currency tools that provide protection against market movements. Hedging foreign exposure can also be crucial for small and medium-sized organisations, as regardless of the size of business, protecting profits and reducing costs should be of paramount importance.
As a strategic partner of ActionCOACH, we are always happy to take the time to discuss each client’s foreign exchange needs and cashflow, and to offer any guidance needed.
For all enquiries, please email: CorporatePartnerships@moneycorp.com or call +44 (0)203 823 0526 (making sure to quote “ActionCOACH”).
Author: Luke Walden (Luke.Walden@moneycorp.com)
moneycorp is a trading name of TTT Moneycorp Limited, a company registered in England under registration number 738837. Its registered office address is at Floor 5, Zig Zag Building, 70 Victoria Street, London SW1E 6SQ and it is VAT registration number is 897 3934 54. TTT Moneycorp Limited is authorised by the Financial Conduct Authority under the Payment Service Regulation 2017 (firm reference number 308919) for the provision of payment services.