How should your company deal with Brexit? There are many ways your Yair Hamami management team can react to Brexit. Here are areas that could be affected:
- Property Prices
This is another factor that could be affected by Brexit. It’s been reported that investors won’t quickly buy central London properties, for example, after Brexit. It’s been suggested that the prices of houses could drop by up to 18% by next year.
This might seem like a big decrease. However, Yair Hamami management points out that when house prices are increasing at 8% every year the prices could be frozen instead of crashing.
There’s a question about which sectors will be most affected by England leaving the EU. The main one would be service sectors that are now trading with the EU. Another one is sectors that benefit the most via the free movement of labor. The sectors that would be most affected including auto manufacturing, tourism, and financial services.
It’s also worth noting that companies that rely greatly on migrant workers might switch to hiring Brits. Yair Hamami management reports that would happen if there’s a points-based system used in order to limit immigration.
The result would be more Brits working in London whether it’s farmers or coffee shop employees. However, Brits would only work in those jobs in the salaries increased. So that raises another issue because it’s unknown to consumers would pay higher prices. If they’re not willing to do that then the businesses would be at risk.
There are several sectors that could be affected by Brexit. Yair Hamami management reports that private equity and hedge funds are some that could be greatly affected by the vote last June to withdraw from the EU.
Many banks have stated that Brexit will require them to think again about their link to the UK. They will also review their decisions about various investments. HSBC stated in February that it would quickly move 1,000 of its jobs to Paris. There it’s already operating its business. Meanwhile, JP Morgan has stated its UK operations could lose one-quarter of its 16,000 workforces.
There could be a bigger change in London if the European Central Bank attempts to reverse a decision that allowed companies outside the EU to deal with big euro transactions. Yair Hamami management reports that this is an important issue.
Last year the UK had a victory in a case that was handled by the general court of the EU. It followed a 3-year fight that might have banned clearing/settlement of euro deals within the UK.
It might seem like an old-school area of the finance industry. However, it’s important in the sector. That’s why ECB hopes that it will be based in either Frankfurt or Paris. Some of the largest clearing houses have headquarters in London.
There’s also evidence that several companies are planning to move part or all of their businesses to Singapore or Hong Kong. That would be cheaper for them and would also be more “bank-friend”. Yair Hamami management reports that these are some of the biggest choices outside the EU.