As pound falls, BKW Instruments and 3DPRINTUK discuss approaches to Brexit uncertainty
As Theresa May announces a delay to the crucial Parliamentary vote on her Brexit deal, the pound has dropped to its lowest level since April 2017. Sterling had already fallen by one per cent in response to reports of the delay and fell even further as May addressed Parliament. 3DPrintUK and BKW Instruments are both contributors to The Parliamentary Review and discuss their different reactions and responses to Brexit.
As Theresa May announces a delay to parliament’s vote on her Withdrawal Deal, to an as yet unspecified date, the pound has suffered significant falls against both the dollar and the euro. The pound currently stands against the dollar at $1.25385, the lowest it has been since April 2017. It has also fallen against the euro to €1.1034.
This fall reflects concerns about the uncertainty that surrounds the UK’s exit from the European Union. With each delay, this uncertainty only grows and this is reflected in the performance of the pound. Jane Foley, head of foreign exchange strategy at Rabobank, stated that: “Until the market knows what will happen with respect to Brexit one way or the other then they will remain extremely anxious.” She added that “Once we know what is happening, things will be more settled.”
- Pound at $1.25385, lowest since April 2017
- Pound at €1.1034
- May announces deferral of key vote on Brexit deal
- No new date announced as of yet
Theresa May announced the calling off of Tuesday’s vote, stating that it was likely to be “rejected by a significant margin.” During her statement in Parliament which began at 3:30, May announced that she was “deferring the vote” in order to seek assurances from the EU over the backstop arrangement after listening to the “clear concerns” of MPs. Repeatedly rejecting calls for a second referendum, May argued that: “It is the right deal for Britain. I am determined to do all I can to secure the reassurances this House requires, to get this deal over the line and deliver for the British people.”
Theresa May announced the calling off of Tuesday’s vote, stating that it was likely to be “rejected by a significant margin.” During her statement in Parliament which began at 3:30, May announced that she was “deferring the vote” in order to seek assurances from the EU over the backstop arrangement after listening to the “clear concerns” of MPs.
The Parliamentary Review has received a plethora of opinions, responses and strategies relating to Britain’s exit from the European Union. One of the most affected, and indeed discussed, industries in terms of Brexit is manufacturing. Both BKW Instruments and 3DPrintUK contributed to our Manufacturing and Services edition, released in September, and have adopted different strategies to adapt to this uncertainty.
3DPRINTUK are at the forefront of 3D printing development but are heavily reliant on imports as their materials have to be sourced from Germany. They are therefore susceptible to any change in trade relationship, and crucially, the performance of the pound. Chief Executive Nick Allen explained that “Brexit and the value of the pound impact us greatly, as all of our materials and equipment are bought from Germany – this has had a real impact on our manufacturing costs. We’ve taken the hit on behalf of the customer since June 2016 and kept our prices as they are, which is holding us back. Our main issue is that if we increase our prices, we become less viable as an alternative to injection moulding.”
BKW Instruments specialise in supplying pressure, temperature and flow instrumentation. Much like 3DPRINTUK, they were deeply concerned about the uncertainty surrounding Brexit. They have, however, adopted a new strategy to try and minimise the impact of this: what they call the “Brexit “immune strategy.” Company chairman Paul Baker explained that: “After the referendum decision, we were immediately concerned about the impact our business would see, recognising that the uncertainty surrounding Brexit would continue for many years beyond the vote. We have since devised what we term our “Brexit immune strategy” – this involved looking at all UK customers and assessing their exposure to Brexit and European trading. The outcome of our analysis was a move away from all clients that were experiencing European uncertainty, and a focus instead on companies that were and would be less affected by Brexit. While it was a painful move at first, this strategy has meant we can fully concentrate on growing the business without worrying about British negotiations with Europe. The removal of this uncertainty was considered essential for BKW’s continued development and growth.”