I opposed Brexit, though my resources were few and my reach very limited. I sat up all night as the results were declared, as bad news was piled on bad news, until, towards six o’clock in the morning, as dawn broke, Brexit was a done thing. The very first result, in Newcastle, augured poorly for the entire referendum, and the pound fell precipitously within minutes, seeming to fulfil the expectations of the scaremongering Remainers.
But putting aside the emotional scars, which I believe I will survive, how will Brexit affect me and my businesses?
The first falls of the pound and the stock markets were hysterical, and I immediately halted all exchange transactions from GBP into our home, European, currencies. I’m not at all surprised, however, that the stock markets have more than rallied and the pound is back to only about 3% lower than it was (around 1.24 EUR = 1 GBP) before Brexit became real. We may resume exchange a few days from now.
As for my personal savings and possessions, I value my assets in GBP because I plan eventually to live in London. In fact I measure my prosperity against the possibility of buying a two-bedroom flat within a mile and a half of the West End. But my assets are largely located in Europe, and I have some shares in USD, EUR and GBP. So, in terms of personal finance, I’m actually better off after the Brexit referendum. The fall in value of the pound makes the dream of a London flat more realistic. And everyone is saying that UK, particularly London, property prices will fall.
And from the business point of view, the picture is a mixed one. systems@work sells software and services in GBP, largely in the UK market. We price in GBP, so our pricelist now brings us fewer Czech Crowns that a month ago. Our costs are in CZK, so our margin is squeezed. Other parts of the business, such as LLP Group, buy software in GBP, so those parts are better off.
But in any case, now that the hysterical first reactions are over, the exchange rate issue is a smaller one. For now, then, I see no serious immediate issues arising from Brexit. We deferred conversion of GBP to CZK whilst the exchange rate was low, but I believe that in a day or two, with the EUR at 1.20 EUR = 1 GBP we will soon be back to business as usual.
But none of this surprises me. There’s always overreaction. And the economic arguments against Brexit were about the medium and long term, not the few days following. And even if it seems entirely plausible that a mild recession might come in the coming months what will follow is unpredictable. But that’s nothing new.
I was never convinced by the half-truths and half-lies of either Michael Gove or George Osborne, and I feel no sympathy for either of them following their expulsion from the Government. For me the Brexit argument had little to do with economics. It was about European values, joining-in rather than leaving, and accepting that sovereignty, democracy, and global integration aren’t simultaneously attainable in today’s globalised world.
So, so far, from a business and personal point of view, Brexit has done me and my colleagues no harm. I expect mild damage in the medium term, because recession in the UK and Europe is likely. But what the long term promises, economically, I have no idea.
All that said, I think that I will always believe that Brexit is an enormous moral and political mistake.