Richard Tall, national head of financial services at DWF Law LLP, explores why feelings of economic uncertainty are highest amongst execs working in financial services
With Brexit on the horizon, the City, which has enjoyed being the financial capital of Europe since its deregulation, is facing a dilemma that could change its position forever.
New research from a survey of 150 senior executives, including 25 CFOs, from FTSE 100 companies headquartered in the capital, revealed that feelings of economic uncertainty are highest among those working in financial services and banking, with 75% of respondents citing uncertainty as a top barrier to growth.
From where the UK stands now, particularly ahead of the outcome of a General Election in a matter of days, the impact of Brexit remains uncertain – a known unknown on the horizon.
Collectively, we have upset our European neighbours and politically, the country is doing nothing to smooth down their ruffled feathers. But even when the realpolitik starts and the extraction of the UK from the economic bloc begins, the picture will remain uncertain.
The research from DWF shows that over 70% of senior leaders believe it will be harder to raise capital post-Brexit.
Growth and the availability of capital are inescapably linked and without ready access to capital in its various forms, investment stalls, as seen in the banking crisis of 2008.
It’s unsurprising, then, that 53% of C-Suite executives working in the banking sector say they will invest less if the UK does not retain access to the single market.
When it comes to the negotiation of the UK’s separation from Europe, nearly half of the senior leaders surveyed believe that London’s economic interests will not be protected.
The Government’s stance is that businesses need to not only present problems, but suggest solutions for them, if not, businesses become part of the problem.
To effectively and collegiately manage risk, any issue should be accompanied by a cogent analysis of it, together with a suitable range of solutions.
If businesses in London are concerned about their economic interests, they should be getting front of Government and influencing the direction of Brexit, which in turn could alleviate some anxiety.
But until the outcome of the General Election is resolved, the City continues to hold its breath. Only once the uncertainty of which party will lead the UK through the Brexit process is lifted, will the sector really be able to commit to planning for the future.
Richard Tall is national head of financial services at DWF Law LLP