The Storm is blowing - It may be hard to prepare

The business of Brexit seems to have reached a lull just as two former cabinet ministers have finished jockeying for position to become the next British prime minister. The winners strong EU rhetoric, tailored to their Conservative Party electorate, while predictable is not realistic. A deadline of 31st October looms sandwiched between the recess and newly appointed European Commission delegates starting 1st November. The British public and parliament are hopelessly divided contrasting with the currently solid Europeans.

Large and medium UK Businesses have been fervently preparing, each with their own unique plan and actions. Preparations already made for the original March deadline are being tuned ready for October. Smaller businesses generally have not been as diligent, due the high costs and lack of available finance as with banks reviewing exposure to the potential outcomes.

Whatever the size of business, preparing for known outcomes is usually easy to accomplish. The business of Brexit however brings with it too many unknowns and ideologies clouded by opinions. Each extreme option will have a dramatic effect on most businesses, even rowing back from the current position to remaining in the EU.

Capital equipment manufacturers, diesel generators (http://www.what-is-a-diesel-generator.com) are currently protected from the storm by the low sterling exchange rate. World markets are weakening and returning to the EU will jolt us back to current reality. Welland Power for example (http://bit.ly/WP-DG), a UK high growth business and current holder of the Queens Award has suffered a 30% drop - the first for five years. Its range of generators (http://bit.ly/PDgens), failing to impress a relentlessly competitive market. Others are likely to fair even less well.

The lull is the eye of the storm. Whichever way the wind is blowing after the UK has crossed the eye wall, businesses will find themselves on the rocks and there are limited options to save them. The engine of the world economy, China, which is being starved of the fuel it needs to grow. Iran tensions are also building, increasing the prices of Petrol and diesel at the pumps. These increases will hit already stretched consumers and its hard to see how the spending that is driving our economy can continue to grow.

The Bank of England has also got little ammunition with interest rates are only just above zero. While there is scope to inflate the economy with more QE, will this be compatible with a falling pound and likely higher inflation. Choices will be hard, but in the current political climate it is easy to see how the Bank could make the wrong decision, even given its independence.

Trump across the other side of the pond may prove an unreliable partner, lets hope he has some room in his boat to save us from the coming storm.