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CFO+Finance

INEXEC Brexit Breakfast

By | CFO+Finance, Latest News

This October saw Investigo host the latest breakfast seminar in our Executive Leadership Forum series. Held in partnership with KPMG and Lloyds Banking Group, at ‘The Vineyard’, Brexit was the topic tabled for discussion. Providing the insight was Hann-Jo Ho, Senior Economist at Lloyds Banking Group and Brian Connell, one of KPMG’s ‘Brexperts’.

Hann-Ju Ho, is part of the Economics and Market Insight team of Lloyds Bank Commercial Banking. His role requires in-depth analysis and forecasting of key economic data and assessing their impact on central bank policy and financial markets. He was, therefore, ideally placed to provide some insight into the effects that Brexit is having to both our economy and across Europe so far for our gathered guests. From the effects of a weaker pound on imports to household incomes and investment uncertainty. As the negotiations continue and the possibility of either ‘no deal’ or an extension are being tabled as options. Hann-Ju and his team are poised forecasting and reforecasting possible outcomes on the economy based on current trends as the economy responds to each headline. It is, as our speakers said, our “first Brexit” and efforts to negate any negative impacts of Brexit to businesses is at this stage done speculatively.

It was in this theme that Brian Connell one of KPMG’s ‘Brexperts’ addressed the audience. Brian himself comes from a Supply Chain background and is currently supporting a diverse client base. Looking not only at supply chain issues, but also the tax, people and regulatory impacts of Brexit on our businesses. He is also a former Councillor and parliamentary candidate, giving a valuable point of view into the political process.

After the referendum result Brian and his colleagues at KPMG were forecasting three possible outcomes as equally possible at 33.3% each:

A deal is reached. The legalities are agreed before Christmas and we leave March 2019.

Unintentional no deal. Where there is the ambition of a deal but something goes wrong late in the process. (regulations, one side walks away, deal is voted against)

No deal.

Response to the current situation means that this has been revised to reflect the ongoing challenges the British politicians face with ‘No deal’ being forecast as 45% likely.

The preference for businesses, as reflected by clients Brian has consulted with, is that we leave the EU with a deal in place. Preparation for leaving, however, is somewhat varied. As Brian put it “big decisions are not being made”. Why is this? In his experience it is uncertainty alongside unknown workforce restrictions, faith that suppliers/clients are themselves prepared and possible tariff and regulation changes. This combination means many companies remain in a state of limbo when it comes to future plans.

Whilst businesses favour a Brexit deal to be in place before leaving in 2019 they are not the ones at the negotiating table. As a former Councillor, Brian was able to shed some insight into the complexities of the politician’s position. They are limited by their ability to sell a deal to their respective parties, the public and the EU itself. The reality of a ‘no deal’ becomes more plausible because a deal does not exist that meets the requirements of all the groups.

As Brexit negotiations continue we are all left speculating as to whether we leave the EU with or without a deal in place and the impact this will have on us after March 2019. If you would like more information on this session or future InEXEC events hosted by Investigo please contact Giles McIntyre on Giles.McIntyre@investigo.co.uk

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