Question

You are a consultant for a global financial firm that has its headquarters in London, England. The firm is considering whether it should stay in the United Kingdom or if it should relocate to Europe. Using your knowledge of regional economic integration and BREXIT, the firm has asked you to make a broad analysis of BREXIT and if they should relocate or not. In your answer consider the short-term and long-term impacts of BREXIT. Use examples where appropriate.

Answer 1

Answer: Britain's exit from one the most successful regional organisation named as European Union has opened the flood gates of economic, social as well as political uncertainty in the Britain in particular and Europe in general.

According to given case study question above,the firm has asked Consultant to make a broad analysis of BREXIT and if they should relocate or not.For this we must take account the effects of short term and long term impacts of Brexit.

SHORT TERM IMPACTS:

1.Financial sector into period of uncertainty: As Financial integration in one the many advantages of EU and its many policies.Hence no doubt this sector has been hit hard.

Firms are already evaluating the pros and cons of remaining in U.K. and many have already shifted their business to EU member countries.

2.London , though a important financial centre has been affected as immediate aftermath of the Brexit vote was by all accounts bleak like as consumers confidence took a big hit hence stock market plunged and sterling suffered.

3.Regulatory atmosphere remains uncertain, which is not at all good for Ease of doing business in U.K..As businesses can not thrive in uncertain atmosphere.

4.Problem of brain drain is started showing its sign as firms are relocating in other parts hence skilled workforce .

LONG TERM IMPACTS:

1.Britain will have to sign many bilateral FTAs , PTAs and various agreements to ensure ease of doing business in country.Though it will take strong discussions and great amount of diplomatic efforts to gain edge over EU.

2.Though effectiveness of London as financial centre will decline, still it will reamin relevant as it is one of most experienced work force in it.

3.Due to restricted mobility and departure from single market, brain drain will be a serious concern as opportunities will be less in one country compared to a large market of EU.

4 Trade restrictions in form of tariffs and barriers will be more which will hamper business.

Hence it will be advisable for the firm to crack a good deal with new cities like paris , Frankfurt etc which are presenting great deals for newfirms which are wishing to locate there and shift business or open subsidiary accordingly.

Hope it helps.

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