Brexit Body Count Reduced, Firms Should Sustain Cash Flow

20th April 2018.

The City may lose fewer jobs before Britain leaves the EU than previously expected, the Bank of England said.

Despite the doom and gloom that was expected to result from Brexit, it seems the future is not so bleak. Previous reports of firms ‘jumping ship’ seem to have been overestimated. The Bank further stated that the amount of jobs transferring across the continent is now towards the “lower end of the spectrum”, putting the amount around 5,000 to 10,000. The Bank’s deputy governor, Sam Woods, awaits a definitive trade deal with Brussels, believing that no long-term effects can be accurately estimated until such a deal is struck.

This uncertainty has haunted the business world since the referendum, and business owners must prepare for the possibility of both a positive and negative conclusion. Whether businesses experience further job losses or see some workers return, credit control procedures should be tweaked and credit checks conducted.

At the Credit Protection Association, our debt recovery services have been used to fund expansion projects or to facilitate a more efficient hiring process. Employment levels are improving, and if employers are sustain it, a positive cash flow would be a good place to start.

While the UK and EU have agreed a 21-month transition after Brexit, the City watchdog said it was preparing for no such period. Speaking alongside Mr Woods, Andrew Bailey, chief executive of the Financial Conduct Authority, welcomed the intention for a transition but reiterated that “nothing’s agreed before everything is agreed” during Brexit talks.

Les Échos, the French newspaper, said this week that JP Morgan could relocate almost 200 banking jobs from London to Paris after Brexit.

Megan Butler, director of supervision at the FCA, also warned about the potential impact of Brexit on the asset management industry.

Until Brexit transition deals are set in stone, the business world will remain in an uncertain state. While fewer jobs will be lost as predicted, the current business climate of company closures is far from positive. In order to survive the next quarter, business owners need to take control of their financial future. Firms should set some money aside in the event of any further economic downturns, such as a hike in interest rates or skyrocketing inflation. Keeping the capital’s competitive edge is also essential, as we remain one of the largest economies in the world, and businesses should be encouraged to compete with others on the market. Investing in new technology, equipment and offices is a good place to start, particularly before more of the competition flees overseas.

At the Credit Protection Association, our debt recovery services free up the necessary cash flow to introduce training schemes, management initiatives, as well as open days to encourage new talent. Our collections team will chase down unpaid invoices, recover old debt, and restore the financial security that we need to get to that Brexit deadline next year.