The unexpected result of the General Election has had consequences in the corridors of power and in the financial markets. Theresa May is clinging on to power, the legitimacy of Conservative Party rule shored up by the promise of votes from Northern Ireland’s Democratic Unionist Party. The formal agreement between the parties will likely have an impact on the Brexit negotiations that are due to start next week. We keep a keen eye on such matters, as international exports are an important part of our business model. Right now, we are delighted to say, export orders are up. Let’s take a look at why and see how we are prepared for future changes in the political landscape.
Hard or Soft Brexit?
Until last week, the nation looked set on a path to a hard Brexit. This would mean departure from the EU, as requested by over half the voters in last year’s referendum, but also from the single market and other pan-European agreements and contracts that the public weren’t consulted about. The general election result may mean that the UK negotiates a soft Brexit – leaving the EU, but perhaps staying in the single market.
Influence of the DUP
The reason for this abrupt change of tack is the influence of the DUP. The Conservative Party need their 10 votes in order to pass legislation. The DUP favour a soft Brexit because Northern Ireland has a land border with the Republic of Ireland – an EU country – and they don’t want customs and immigration barriers to spring up along its length.
Market Reactions
Uncertainty at the helm of power leads to uncertainty in the financial markets. The moment the exit polls were announced last Thursday, the pound dropped in value. Losing about two cents against both the dollar and the euro. Bad news for holiday makers, but a weaker pound is good news for exporters. One of the factors that international companies will take into account when placing orders is the value of the currency in the country of manufacture. At Coda Plastics Ltd, we have seen an increase in our export orders.
Future-Proofing our Company
We are set up to take payments in three major international currencies. Our clients can pay us in pounds sterling, euros or dollars. We have worked hard to develop our export trade and we are extremely proud of our partnerships with companies based in over a dozen countries. Some, like France and Poland, are firmly inside the EU. Others, like Turkey and India, are well outside that trading bloc. We plan to keep up all of these international relationships in a post-Brexit scenario.
The most important factor for us is always ensuring that we continue to produce high-quality innovative plastic packaging products. That way, we will always remain competitive in a changing political and economic landscape.
If you have a plastic product or packaging concept that you would like manufactured at our Norfolk facility, please get in touch. You can call us on +44 1692 501020 or email sales@coda-plastics.co.uk.
What changes to the political and economic landscape do you think are coming? Let us know on Twitter.