Businesses Wary Of Second Brexit

The historic decision of Great Britain to exit from European Union (EU) has changed the dynamics of the business world. Many businesses need to shift their headquarters in countries that are part of EU. Moreover, the policies and regulations will be updated after the exit and companies need to change their business models based on those changes. As businesses have been trying to adapt after Brexit, there are speculations and debates over the reversal of Brexit vote. Some speculators argued that there will be a second vote and the decision to exit might be reversed. However, some experts have denied the possibility of the second vote. Though business organizations and companies have criticized the exit openly, they need to adapt according to the reality. The lawmakers in Britain have been rallying up for the second referendum, but they may face an opposition from business leaders. The prolonged uncertainty is causing more problems for them than the Brexit itself.

Miles Celic, the Chief Executive Officer of TheCityUK, said in an interview with Bloomberg News, “Business likes certainty and I can’t see how discussion of a second referendum helps create that certainty when the negotiations are not even concluded.”

There will be a vote on the final split deal, which Prime Minister Theresa May will bring back from Brussels later in 2018. Two recent polls in Britain indicated that there will be a support for a vote on the terms of the split. Though there are speculations that there will be another vote about exit from EU, it is uncertain whether there will be a majority in parliament to send citizens to the ballot box again. Moreover, it is uncertain whether there will be a different result after the second vote.

There was an agreement stating that there will be a 21-month transition period on Brexit day in March 2019. This will give companies more time to prepare. According to the survey by Deloitte, the corporate uncertainty has reached to two-year low and concerns regarding effects of Brexit on hiring and spending have subsided. Along with businesses, investors are also wary of the second vote. There will be changes in prices of Pound. As the price reaches the highest post-Brexit, the reversal of vote will send prices back to pre-Brexit levels.

“Businesses are uninterested in politics. They want commercial predictability,” said Paul Hardy, Brexit director at law firm DLA Piper. “Those who have spent a lot of money on it are ready to deal with it.”

The opposition from businesses is evident as the uncertainty would cause volatility and make the transition more difficult than it currently is. In addition, EU has clarified that it would welcome Britain back into the union if the country changes its mind. But this would lead to chaos as companies have been planning long-term strategies based on the Brexit. From shifting headquarters to adapting according to the new terms, businesses need to shift their models and adopt various strategies to achieve profitability. The lack of reversal of vote would help them in easing up the transition and implement strategies efficiently. The change in the Brexit vote would result in uncertainty, which is unfavorable for the smooth operation of businesses.