Falling pound and 'soft Brexit' hopes: How will election results impact the industry?

Robert Hutchins

By Robert Hutchins

June 9th 2017 at 11:36AM
UPDATED June 9th 2017 at 12:28PM
Falling pound and 'soft Brexit' hopes: How will election results impact the industry?

Industry experts have voiced optimism over what the result could mean as the UK prepares to enter Brexit negotiations in just ten days.

Theresa May’s calamitous result of yesterday’s General Election is likely to see the UK’s economy slow further, but offer hope in the UK’s Brexit line.

The pound has already fallen further still against the dollar and the euro while economic experts wait for the dust to settle over the unexpected outcome of May’s election.

Azad Zangana, senior European economist at the investment firm Schroders has said that UK households and businesses will be concerned by the increased political uncertainty following today’s result.

“At the same time, the paralysis in Westminster will mean fewer changes to fiscal and economic policy,” he said.

“Despite this, we expect a pull back in household spending and business investment which will exacerbate the slowdown currently being experienced.”

In the hours following the shock result, placing May at the centre of a ‘disastrous’ turn of events for the Conservative government, industry experts have voiced optimism over what the result could mean as the UK prepares to enter Brexit negotiations in just ten days.

In what looks to be an increasingly likely scenario, a coalition government formed between the Tories and DUP would mean a softened approach towards Brexit that offers hope in the nation’s businesses’ access to the single market.

Kelvyn Gardner is the head of the UK division of the Licensing Industry Merchandiser’s Association (LIMA) and has already voiced the industry body’s optimism over the predicted outcome.

“The DUP is pro-Brexit, but wants to maintain an open border with the Republic of Ireland, and no customs or tariff barrier with its neighbour. Coupled with Theresa May’s weakened personal position, this may well ‘soften’ her line on Brexit and lead to the UK’s continued access to the single market, with some necessary compromises on our side,” he told ToyNews.

“Business in general wants to maintain single-market access and an agreement on this will also safeguard, at least to some extent, value chains throughout Europe, which includes licensing.

“I am slightly more optimistic as a result of the election that this is good news for licensing in the UK and throughout the world.”

Meanwhile, the impact on consumer spending and retailer confidence has already been noted as GlobalData’s UK retail research director, Patrick O’Brien now expects to see many retailers delaying their big ticket purchases in the coming months.

‘While we are none the wiser as to which policies will be implemented over the next five years, we can see that uncertainty is damaging to the economy and retail in the short term,’ he writes.

‘The uncertainty over how Brexit will be handled and who will be in power may see a drop in consumer confidence, if people perceive that their financial position could be affected. Many may be delaying making big ticket purchases in the coming months.’

How will the General Election outcome affect your business? Get in touch with ToyNews and have your say.