Guest Post

At one point it was at its lowest level in 30 years. While it may have recently seen a slight resurgence in the past few weeks, its value is still down heavily compared to pre-Brexit levels. From shoppers to holidaymakers, this has affected many people and it especially continues to impact strongly on businesses in many ways.

Importing and Exporting

Part of the reason for the resurgent pound has been that the UK's manufacturing activity has received a boost. This is mainly because with a weaker pound, exports have become a lot cheaper, meaning there is more demand for their products abroad.

On the other hand, this has increased the costs for a lot of businesses that rely on importing to receive the parts needed to produce their products and other essential items to run their own companies. If the pound continues to drop or remain low then businesses that need imports, from retail to manufacturers, will continue to struggle.  

Increasing Number of Takeovers

British companies are now a lot cheaper for foreign investors to buy a stake in and launch potential takeover attempts with the pound's lower value. It has opened up many opportunities for US and Far East investors, such as the recent £24 billion takeover of a UK technology firm by a Japanese buyer.    

This has left many British businesses worried that they too could soon be subject to potential takeover bids from foreign investors. There could be positives, such as the chance to grow into an international market and receive increased investments, but the uncertainty will worry a lot and could damage the economy in the long run.

Trading

A lower pound and the effects of Brexit could make it a lot harder for UK businesses to trade with foreign companies. As well as the impact on imports and exports, it will make it more appealing for individuals and businesses in certain countries to trade with and invest in UK businesses.

For larger companies that exchange currency, brokers such as Sucden Financial can help increase profits by moving money between stronger markets. Despite a poor forecast, post-referendum, the latest forecasts have shown that the pound is now increasing at a better rate than expected, which will provide many opportunities for these companies.

Workers

Higher costs and the pound's lower value means some businesses were struggling as soon as the Brexit result was announced. Many companies have already had to cut back as they simply cannot compete on the international markets, resulting in workers being let go.

While profits may look like they are staying the same, or even dropping, they will in fact be relatively lower. This can also lead to worker dissatisfaction and more businesses finding it hard to recruit as a lot of workers seek better opportunities elsewhere. Unless the pound bounces back significantly, the future doesn't look too bright for British businesses.