Brexit

In June 2016, the UK went to the polls to vote on whether to remain part of the European Union, deciding 52/48 to quit the world’s largest trading bloc.

After almost four years of tense negotiations – and three UK Prime Ministers – the two sides settled on a withdrawal agreement. However, a final trade deal has still not been forthcoming, meaning the UK faces a “no-deal” Brexit scenario, leaving the EU with no trading relationship in place after December 31.

Should this happen, the UK and the EU’s trading relationship will be on World Trade Organization terms, meaning tariffs on food and other goods imported from the continent – although these terms are usually seen as a starting point for international trade.

Companies from around the globe have been assessing their options in Europe and how the UK can be factored in or focused on. This has led to new offices opening in both the EU and the UK to support the continuation of business as close to ‘usual’ as possible.

It will take some time for companies to get used to the new landscape, and in the meantime, there could be further changes to regulations as EU rules either become part of the UK rulebook or are removed.

Although the UK is no longer in the EU, there will continue to be trading between the two regardless of what the final deal looks like. The companies that can best navigate this tricky period will be the ones to watch.

While a huge amount of work has been done over the past four years by companies in preparation for Brexit, it won’t be until the UK is fully out of the EU that it will become clear whether this preparation is enough to survive and thrive in this new world.

In the coming months there are plenty of rollercoaster moments to be expected as plans meet the reality of the UK post-Brexit.

While companies doing business across borders might be challenged, there will be opportunities in areas such as technology and environmental services, as the government has highlighted these sectors as crucial for the UK in the future.

Exchange rates could settle to a ‘new normal’ as relationships are confirmed, with winners and losers from the movements to find this level. And don’t forget that cryptoassets were invented as an alternative to a government or central bank-controlled monetary system.

Whatever happens, through the eToro platform, you can be ready to take advantage of upswings on stock and currency markets and use our risk management tools to limit the downswings.