Last updated on July 6th, 2016 at 06:45 am
This is part four of a five part series on B2B leaders and their opinions of Brexit. Stay tuned for part five, tomorrow at 10am EST.
Part three here.
Mark Carney, the governor of the Bank of England is confident that his institution is ready for a new economy that Brexit could provide. Carney promised that “the Bank of England will continue to peruse relentlessly [their] responsibilities for monetary and financial stability.” He made this announcement after the pound hit a 30 year low on the morning after the Brexit vote results were announced.
The immediate shock to the market is not likely to have long term impacts. In fact, some companies are saying a Brexit could open up long-term opportunity. Neil Woodford of Woodford Investment Management in Oxford, U.K. believes a Brexit is not going to change the fundamental trajectory of the U.K economy over the next three to five years. However, growth will continue to slow in the U.K. economy.
“The markets are reacting negatively, and I think this makes the entire EU very fragile”, said Adam Froman, CEO of Delvinia. The volatility makes it “too early for me to determine what if any impact it will have on our business or the Canadian economy in general.”
As the pound weakens, imports will become more expensive, likely creating higher inflation. The impact of high inflation in the UK on global business is yet to be determined. CEO of Tucows, Elliot Noss, predicts a minimizing effect: “global markets are more likely to move even further to a low growth, low/no interest rate environment. Capital will be plentiful and companies that can deliver growth will be rewarded.”
