Despite this, there are still plenty of opportunities to trade internationally, both in and beyond the EU. Here we take a look at the key points over the last six months, and how businesses can find their feet in a post-Brexit landscape. 

Customs

After months and years of negotiations the Brexit deal finally came to fruition, bringing a somewhat end to the uncertainty businesses faced. January 2021 however was not the best of starts as firms struggled to adapt to the new trade rules, customs and additional paperwork, with a 42% slump in its exports to the EU alone. However, more recent figures have shown UK monthly exports to the EU jump by 46.6% up to£11.6bn in February 2021 and both the ONS and business analysts believe the drop in trade flow was caused by stockpiling in December 2020 as firms tried to get ahead of the introduction of new rules, hence leading to a decrease in trade for January. 

We are still yet to see the full impact of Brexit on UK trade as the pandemic has overshadowed much else, and this is likely to remain the case until the UK and EU members countries are in a more stable position following the massive and universal impact of the Covid-19 pandemic.

Financial services sector

In a moneycorp webinar, Chief Economic Advisor Vicky Pryce stated that ‘so far in the agreement with the EU, the financial sector has been more or less forgotten…and we’ve already seen how much money is moving to other centres in Europe.’ So, while the impact of Brexit on the financial services sector is still relatively unknown because those aspects of the deal are still being finalised, it’ll be interesting to see whether money moves to other centres within Europe, if at all. International investors should monitor how this progresses over the coming months as an agreement that allows financial institutions to trade across the continent as before will dispel uncertainty.

Economic recovery 

Uncertainty around Brexit and political instability has curbed the UK property market since 2016. The deal being struck at the end of 2020 meant both parties were not facing a no-deal exit, reducing the threat of disruption to the economy to an extent. While the deal may have prevented an economic fallout, it still means that businesses can look at opportunities outside of Europe, as well as refine their imports and exports within the EU. 

British exports are found right across the world, yet an estimated 19% of UK SMEs have the potential to export but do not, despite a YouGov survey showing that 42% of exporters increase profits by up to 20% and a further 9% reporting an increase over 20%. Key concerns for SMEs not currently exporting include export procedures and red tape, late payments and international payment processes.

Money movements

If we cast out eyes back to just before the Brexit vote, sterling was held up at just over €1.40 against the euro and $1.50 against the US dollar, and we have seen sterling fall to a low of €1.0608 and $1.1485 over the last 12 months, showing just how much of a hit sterling has taken.

Most importantly is that businesses understand the true effect of currency movements, and the risk to their bottom line.  It’s very easy for a business to just look at the currency figure, €1.10 or €1.15, but not really comprehend what the sterling cost equates to for the business.

If we look at the last 12 months, we have seen sterling move by 9%, so for a business importing €500,000 from the EU, their costs have fluctuated by £40,975. Currency movements can easily wipe out a large proportion of profit in a deal, or worse case, profit for the whole business if not managed correctly, which is why it’s crucial to manage risk when doing business internationally. 

Helping businesses keep an eye on risks associated with the financial markets and to plan ahead as the world eases out of Covid-19 restrictions and into a post-Brexit landscape, moneycorp offers a number of tools to assist with international payments and foreign exchange.