Plan for ‘no-deal’
In parallel, it will be important to continue to have plans to respond to a ‘no-deal’ situation. As we saw in Q1 2019, there is a risk of an increase in stockpiling in the autumn if a ‘no-deal’ starts to appear likely. This will most probably be more challenging and disruptive than the previous effort as Christmas places additional pressure on supply chains.
Vision is also vital
Evidence is mounting that the UK economy is in transition.
EY’s 2019 UK Attractiveness Survey showed how Brexit has impacted Foreign Direct investment (FDI) flows with significant reductions in manufacturing projects (35% down on 2018) and R&D investments (down 17%). With trade under pressure globally and Brexit likely to weaken the UK’s trading arrangements for a period, if not permanently, change is inevitable.
On a more positive note, EY research on investors in both FDI and M&A continues to show how strong the digital opportunity is in the UK and investment flows reflect this.
Whatever the short-term noise, businesses should now start thinking seriously about their medium to longer-term strategy for the UK and how it fits into their overall portfolio. Technology, demographics, climate change and global trade developments will all drive change in the UK, potentially — when we factor in Brexit — on a scale not seen for at least four decades.
At the same time as ensuring that a business can ride out any short-term shocks, developing a vision for the future is essential.
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