Leading retail analysts have called for the UK government to help businesses adapt to new market conditions and shore up confidence and stability in the economy in the wake of the EU referendum result.
Yesterday’s historic referendum saw 52% of voters agree to have the UK leave the EU, while the remaining 48% of voters wanted to remain.
The results sparked the London Stock Market to plunge more than 7%, while the value of the pound fell to its lowest rate since 1985.
Helen Dickinson, CEO of the British Retail Consortium said that now that a decision has been made to leave, it is important that the government moves quickly to explain the process of disengagement from the EU.
“Without clarity, retailers, other businesses and hence the economy will suffer from a prolonged period of uncertainty,” she added.
“We are already seeing the commencement of a period of considerable volatility as financial markets react to any emerging information that might indicate how the new relationship to the EU might be shaped. Retailers should be prepared for the possibility of significant swings, particularly in the exchange rate and consumer confidence.”
The Confederation of British Industry’s director-general Carolyn Fairbairn said: “Many businesses will be concerned and need time to assess the implications. But they are used to dealing with challenge and change and we should be confident they will adapt.
“The urgent priority now is to reassure the markets. We need strong and calm leadership from the Government, working with the Bank of England, to shore up confidence and stability in the economy.
“The choices we make over the coming months will affect generations to come. This is not a time for rushed decisions.”
PwC chairman and senior partner Ian Powell said his company is already working with clients to support them as the implications of leaving the EU are understood.
“‘History has taught us that UK business is adaptable and innovative when confronted with new challenges and opportunities.
“There will be significant uncertainty over the coming months as the detailed political and legal issues are worked out, and business confidence may be impacted. PwC is committed to helping its clients as they adapt to new market conditions and opportunities.”
In order to keep prices down and deliver the best possible choice for consumers, retailers’ top priority in the short-term will be to ensure continued ease and minimum additional costs of importing EU goods into the UK for sale to customers, according to Dickinson.
“A prolonged fall in the value of the pound will impact import costs and ultimately consumer prices, but this will take time to feed through. In its exit negotiations the government should aim to ensure that the trade benefits of the Single Market (i.e. the absence of customs duties) are replicated in the UK’s new relationship with the EU.”
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