Beveridge notes that the UK imports somewhere in the ballpark of 70 billion more in sterling that it exports with a slight offset of about 15 billion sterling in services associated with banking and other financial services. He says, “We are a very important country for EU markets particularly for Germany, Italy and France. While it may sound stereotypical, we look to those countries for our cars, furniture and wine and cheese. That’s the reality … those countries will want to continue to trade with the UK. I don’t think they are apt to make life too difficult for us on the export side in terms of tariffs and the like. This is going to be what one calls a ‘velvet divorce’ done on a pretty agreeable basis.”
As for any aftermath brought on by the Brexit, Beveridge explains, “I’m not that concerned; any short-term dislocation will be just that -- short term -- and it could provide some opportunities for ABLs.”
In the meantime, a recent survey issued by the National Center for the Middle Market (NCMM) noted that upon exiting the EU, the United Kingdom will likely require its own shipping procedures to which middle-market executives in the U.S. expressed concerns over the potential of red tape for their trading partners.
The survey notes that Brexit reactions from the middle-market are divided overall. Half of all middle-market firms (51%) predict no significant impact on their business, while the remaining 49% anticipate a somewhat to extremely significant impact on their operations. Yet, as one survey respondent commented, “This is politics, trade must go on.”
Beveridge sees things similarly. From where he sits, it’s important to put Brexit into historical perspective. “We’ve only been in the EU [European Community] for 43 years and we weren’t in it for hundreds of years before. Our country has always been a trading nation and we’re trading as we’ve always done. Change makes people uncomfortable but as a country, we’ll soon get used to it.”
As a parting thought, we asked Beveridge if he expects London to lose some of its luster as a global financial hub. Ever sanguine, he concludes, “I think London will come under some pressure from Paris and Frankfurt as they’ll seek to grab some of the activity. But London is ideally situated both in terms of time zone and geography and there are hundreds of thousands of people in the financial services. They’ve been around a long time and have a great deal of experience. There may be some leaks, but we’re pretty resilient.”