It’ll get worse before it gets better, say businesses
BUSINESSES in the Henley area appear to be cautiously optimistic about Britain’s long-term prospects outside the
BUSINESSES in the Henley area appear to be cautiously optimistic about Britain’s long-term prospects outside the EU, writes David White.
Gary Reynolds, chief investment officer at investment firm Courtiers based in Hart Street, Henley, said: “The UK now faces a period of great uncertainty and so does the EU.
“Our European partners — I believe I can still call them that for a while longer — will be assessing what this means to them. Our decision will give encouragement to other anti-EU factions, of which there are many. Brexit may trigger a domino effect throughout the continent, which will add to uncertainty.
“This will make it difficult for big UK employers, such as banks, insurers and car manufacturers, to make longer term plans, which may curtail business investment. This will have economic consequences and a UK recession, perhaps spreading throughout Europe, is possible.”
Nick Mustoe, chief investment officer at Invesco Perpetual, said: “Market consensus appears to be clear that, over the short term, the decision to forego EU membership will likely lead to weakening of sterling and impact UK economic growth.
“The extent of such an impact and how long it will last can only be speculated on at this time. The more immediate impact on the UK economy and growth will likely be determined by several domestic and global factors, from trade, productivity and capital investments (domestic and direct foreign) to the direction of central bank monetary policy. Longer term, we believe the UK economy will not only be able to handle the decision to leave the EU but continue to thrive as we remain optimistic about the UK’s growth outlook.”
Mark Barnett, head of UK equities at Invesco, said: “In simple terms, the UK’s vote in favour of Brexit has cast us into uncharted waters with a level of uncertainty we have not experienced for a long time.
“In the coming weeks and months, there may be delays to consumer spending, companies’ recruitment and foreign direct investment as the nation and wider global economy digests the decision. In combination, these factors present substantial short-term headwinds to the UK economy.
“Over the longer term, however, we believe the UK economy can cope with life after Brexit and we remain optimistic about the future outlook. We have a dynamic economy which has adapted to change before â€“ and is now primed to adapt again to whatever change is thrown at us.”
John Board, dean of Henley Business School, said: “Over the past 70 years, 70,000 alumni from 150 countries have successfully passed through our doors, whether in the UK or through our campuses and offices around the globe. Our view is that education is frontier-free.
“We will always be a business school with global ambitions and an international outlook. Our global engagement and student recruitment strategy means we will continue to engage with international partners and students from around the world.”
Lucian Cook, head of residential research at Savills estate agents, said: “It is impossible to predict what will happen to the UK housing market with any great accuracy until we know what Brexit will mean for the wider economy.
“What we do know from lead indicators is that uncertainty pre-referendum impacted on new buyer enquiries. A continuation of that uncertainty is likely to pull back price growth and transactions in the short term.
“The prospect of an increase in mortgage interest rates and a reduction in wage growth is expected to create greater affordability pressures over the medium term, particularly in London where borrowers have stretched themselves further. However, the precise impact depends on how severely these affordability drivers are affected.”
Karen Drakeford-Lewis, sales negotiator at estate agents Peers & Hilton in Duke Street, Henley, said Brexit would affect the market but said property was still the strongest investment.
“People still have to live in houses, it’s not like the housing market is going to disappear,” she said.
“We’re out there still selling houses and still taking houses on. We have got investment buyers, first-time buyers and families in Henley.”
Keith Douglas, chairman of the Henley Business Partnership, said: “I think the business community would welcome some clarity as to what is going to happen next.
“Talking to a few people I know who are in business, they are perplexed. I don’t think anybody’s panicking. It’s very early days still.”
But Gillian Nahum, a fellow director of the Partnership, said her businesses would suffer.
She also owns Henley Sales and Charter and nautical gifts shop Boatique in Friday Street.
Ms Nahum said: “It’s kind of the nail in the coffin really for me. Boatique will be very adversely affected because of the stock. Products are now costing more, a lot more. I’m probably going to close the shop.
“We buy a lot of our stock from the European Union and we also buy boats from France and Germany.
“When buying from Canada we had to use a freight clearance service. We had to pay duty and had to wait while everything was cleared at Heathrow and at Southampton docks, whereas it turned up on a trailer with a piece of paperwork from France — it couldn’t have been easier.
“We were doing quite well with boat sales and immediately after the referendum result one guy cancelled his purchase. We didn’t have a deposit at that stage.
“I don’t know how prices will hold up and we can’t know right now but I think it’s very bad for business.”
A spokeswoman for chemicals company Johnson Matthey, which has a technology centre in Sonning Common, said: “The board believes that Britain exiting the EU will not a have a long-term material impact on the company.”
Giles English, co-founder of Henley watch company Bremont, wrote on Twitter: “Very unexpected — us UK manufacturers now have a lot of weight on our shoulders.”