Challenges Faced by UK after Brexit
Brexit is considered to be a process which is based on the withdrawal of the UK from European Union or the EU. The referendum based on Brexit was thereby signed by the United Kingdom in the year 2016. Most part of the voters have therefore voted against staying in the European Union in the year 2017. The United Kingdom will ultimately leave the EU in 2019 after the agreement will end (Coulter and Hancké 2016). The permanent membership of the European Union is thereby left by the country due to lack of confidence in the policies that have been developed by the body.
The essay will be based on the ways by which the end of membership in the European Union is able to affect the organizations which operate in the United Kingdom. The operations of the business based organizations and the ways by which the companies have changed their policies will be analysed in the essay.
Discussion based on the challenges faced by UK after Brexit
The result which has been developed from the British referendum has been able to shock the entire world and the operations of business organizations in the world as well. The official withdrawal of the country has however not yet taken place from the EU. The different legal conditions cannot be estimated and the ways by which the organizations are affected by the changes also are not estimated in an effective manner. The trade based activities will be affected in a huge manner by the Brexit based referendum (Crafts 2016).
According to Cumming and Zahra (2016), the exit of the United Kingdom from the EU will be able to affect the organizations and their policies. The changes that will take place in the country will not be immediate. The agreements that will thereby be made in the countries will be effective after two years of the actual announcement of Brexit has been made. The actual agreements will thereby be negotiated among the parties after the country has left the European Union. The regulatory laws that have been formed in the United Kingdom need to correspond in an effective manner with the laws that are developed in the European Union.
As discussed by Dhingra, Machin and Overman (2017), the organizations that operate in the United Kingdom will thereby be affected by different factors that include, the increase in levels of bureaucracy and the administrative charges as well. The fluctuations that take place on the exchange based rates are also able to influence the competition based pressure and the pricing of the products and services as well. The revaluation based activities of the supply chains are also an important part of the risk assessment process in the organizations in UK. The logistics based costs of the organizations are also affected in a huge manner by the changes that take place in the United Kingdom due to its exit from the EU.
Impact on Business Organizations
The economy and the organizations in the country are affected in a huge manner by the exit based decision that has been taken by the UK. The interest based rates of the banks have also increased for first time in the last ten years. The growth of wages in the country was however stagnant in nature. The performance that has been depicted by the economy of UK has been affected in an adverse manner after the exit based decision has taken place (Fingleton et al. 2017).
As argued by Hatzigeorgiou and Lodefalk (2016), the country has now become worst performer in the European Union. The government of the country has thereby invested huge amounts in order to boost the economy of the country in an effective manner. The investment that was made in different business organizations has reduced in the year 2017. The expansion of the economy of the UK had taken place by a rate of 0.4% in third quarter of a year.
The different sectors of business have been affected in a huge manner by the exit based decision that has been taken by the UK. The banking sector of the United Kingdom has been affected in an adverse manner after the exit decision has been made. More than 10,000 finance based jobs have been lost after the exit. The financial organization named the Goldman Sachs has been quite vocal about the effects of the exit of UK. The technology based sector of the country has also been affected in an adverse manner by the decision of exit (Howarth and Quaglia 2017).
Many questions have thereby been raised based on the status of the country as technology capital of Europe. The services that are provided to the European clients by the different technology based organizations in the United Kingdom are also affected by the exit of the country from EU. Many different organizations are however still able to endorse London as the technology based hub. The new London based office of Facebook was opened which has been able to add more than 800 jobs in the technology sector of the country. London is thereby being considered as the technology hub for the company outside its operations in the United States (Sampson 2017).
According to Srovnalikova and Razinskaite (2017), the Brexit decision which has thereby been taken by the country has also been able to increase the different tariffs by 4.5 billion Pounds. The proper trade based deals that have thereby been made in the country are able to damage the operations of the industry. The profit based levels in the car industry had been disastrous in nature. The production facilities which are located in the country are also being planned to be shifted in order to regulate the profits and the operations. Brexit has further been able to affect the global construction based industry in the manufacturing based sector.
Business Sectors Affected by Brexit
The movement of labour in a free manner gas been restricted which has been able to affect the profitability based levels of the organizations in the manufacturing sector. The construction based workers have started leaving the United Kingdom after the Brexit based decision has been taken. The loss of access of Britain from the European market has led to the loss of jobs in an effective manner. Another industry which has been affected by the Brexit decision is the drinks and food based industry of the country (Independent.co.uk, 2018). The organizations have thereby started reducing the sizes of the products. The portion based sizes of the products have been reduced by the organizations. The prices have remained the same and the portions have been reduced in the process as well.
For example, the organization named Jaffa Cakes in some of the boxes in the month of September. The Freddo bars of Cadbury’s and the Haribo has also become much more expensive in nature. The prices of food in the UK based restaurants have also increased due to the rise in the costs based on imports by around 20%. The pharmaceutical industry of the country has been affected in a huge manner by the regulations which have been developed after implementation of Brexit. Many concerns have thereby been raised after the implementation of Brexit related to the rise in prices in the development of different areas (Independent.co.uk, 2018).
The design and architecture industry has been affected after the decision related to exit which has been taken by the United Kingdom. The export based activities have been reduced after the United Kingdom had decided to exit from the EU. The British organizations had also lost more than 73 million pounds of the export based earnings. The sector will be affected in a huge manner by the ways by which the United Kingdom had made an exit from the European Union (Independent.co.uk, 2018). The position that has been developed by the United Kingdom as the global hub of architecture has been jeopardised in a huge manner by the exit which has taken place by the country. The export based earnings of the country has thereby been lost due to the exit.
The different sectors of the United Kingdom and their business activities have been affected by the Brexit based decision. The economy of the country also has been affected in an adverse manner by the decision of leaving the membership of EU. The trade related activities will be reduced and profitability has also been reduced in a huge manner. The per capita based income of the country has also been reduced in a huge manner by the Brexit related decision (Srovnalikova and Razinskaite 2017).
Conclusion
The essay can be concluded by stating that the Brexit based decision that has been taken by the United Kingdom has affected different business based sectors of the country. On the other hand, the economy of the country has been affected in a negative manner due to the lack of effective profitability. The lack of income based levels of the country have been able to cause major issues in the ways by which the economy operates. The trade activities in the country have also reduced in the process.
References
Coulter, S. and Hancké, B., 2016. A bonfire of the regulations, or business as usual? The UK labour market and the political economy of Brexit. The Political Quarterly, 87(2), pp.148-156.
Crafts, N., 2016. The Growth Effects of EU Membership for the UK: a Review of the Evidence. University of Warwick CAGE Working Paper, 280.
Cumming, D.J. and Zahra, S.A., 2016. International business and entrepreneurship implications of Brexit. British Journal of Management, 27(4), pp.687-692.
Dhingra, S., Machin, S. and Overman, H., 2017. Local economic effects of Brexit. National Institute Economic Review, 242(1), pp.R24-R36.
Dhingra, S., Ottaviano, G., Rappoport, V., Sampson, T. and Thomas, C., 2018. UK trade and FDI: A post?Brexit perspective. Papers in Regional Science, 97(1), pp.9-24.
Dhingra, S., Ottaviano, G., Sampson, T. and Van Reenen, J., 2016. The impact of Brexit on foreign investment in the UK. BREXIT 2016, 24.
Fingleton, J., Fletcher, A., Forwood, N., Nikpay, A., Turner, J., Vickers, J. and Whish, R., 2017. The implications of Brexit for UK competition law and policy. Journal of Competition Law & Economics, 13(3), pp.389-422.
Hatzigeorgiou, A. and Lodefalk, M., 2016. The Brexit Trade Disruption Revisited. The Estey Journal of International Law and Trade Policy, 17(1), pp.41-58.
Howarth, D. and Quaglia, L., 2017. Brexit and the single European financial market. JCMS: Journal of Common Market Studies, 55, pp.149-164.
Independent.co.uk (2018). This is how Brexit has impacted the business world in 2017. [online] The Independent. Available at: https://www.independent.co.uk/news/business/news/brexit-economy-sterling-currency-investment-cost-impact-business-financial-banks-insurance-retail-a7695486.html [Accessed 16 Sep. 2018].
Sampson, T., 2017. Brexit: the economics of international disintegration. Journal of Economic Perspectives, 31(4), pp.163-84.
Srovnalikova, P. and Razinskaite, J., 2017. THE EUROZONE CRISIS AND THE EFFECT OF BREXIT. Journal of Management, (1), p.30.
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