Global Trading: The Future of the UK in the Post-Brexit Era

By Daniel Mayhew, UK Country Manager, Payoneer.

The fear of the unknown in reference to Brexit has been the discussion all throughout 2017. While concerns still remain prevalent, there has been a shift in sentiment from fear to acceptance. As the United Kingdom begins to enter into a new chapter, it’s starting to come to terms with its looming post-Brexit existence, looking at the positives of change as a means of growth, opportunity, and exploration of new trade markets. ‘Going truly global’ has been the talk around town and government rhetoric stresses ‘export UK’ more than ever before. The ‘UK is ready for global trade.’

The fact remains that currently over 40% of UK exports have destinations within the EU.  Outside of the EU, the demand is led largely by North America and Asia, followed by Africa, Central and South America. Brexit leaves a sleeping giant of opportunity to win new markets. Perhaps one day, the UK will stand as a powerhouse of export, expanding its trade to over 60% of the world markets.  What we’ve seen is an increasing demand for quality goods and services, which is generally associated with the ‘made in the UK’ brand. Increased export won’t be on low cost goods, like you see coming out of China, but higher end goods with larger price tags.

A contributing factor of the UK’s growth, of course, is the depreciation of the pound.  The Office of National Statistics (ONS) found a sharp increase in the amount of physical goods exported from the UK’s manufacturing sector, with growth hitting a peak of 9.7% in March 2017.  Additionally, the ONS, shows that UK businesses are not just selling more abroad, partially due to dropping prices, but they are also making more money from each product sold abroad.

On top of that, overseas marketplace adoption is booming with more and more UK businesses signing up to sell globally. These marketplaces facilitate growth by offering fulfilment services, global market access, marketing tools, and intuitive mobile experiences. These platforms ease the barrier of entry into new markets and ease the difficulties of selling direct-to-market. The combination of currency depreciation and marketplace accessibility has led to increased in-country revenue, cash flow, inventory purchases, and sales. This depreciation works in favor of growing UK manufacturing and cross-border business.

The UK is located in between the world’s largest Fintech region and cross border trading hubs. Constant innovation is supported by the endless supply of vendors eager to optimize trade outside of the EU. Given the nature of its geographic isolation, the UK has designed its commerce to support every aspect connected to the cross border eco-system when it comes to trade, payment gateways, technology, FX, shipping, and so on, which in some ways outshines China. The infrastructure is there and compared to China, there’s more room to grow.  Just give it time.

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