4 May 2021: Argyll opens Leeds office

17 Jun 2020: TPR updates Contribution Deferral guidance

5 Aug 2019: TPR's tougher stance on recovery plans

7 Mar 2019: TPR’s Annual Funding Statement a game-changer

7 Dec 2018: DWP publishes superfund consultation

26 Jun 2017: TPR agrees settlement with Coats

30 Apr 2017: PM promises TPR M&A powers

28 Feb 2017: TPR agrees settlement with Sir Philip Green

9 Nov 2016: Brexit so far

8 Nov 2016: BHS ripple effect

2 Nov 2016: Sir Philip Green sent warning notice

1 Nov 2016: Argyll Financial becomes Argyll Covenant

3 Oct 2016: Tata Steel update

2 Jun 2016: BHS to be liquidated

29 Mar 2016: Tata plans sale of UK Steel

3 Sep 2015: TPR takes dim view of late valuations

13 Aug 2015: New TPR covenant guidance

28 May 2015: Contribution notice in Carrington Wire case

22 Dec 2014: Third warning notice for Guinness Peat

18 Dec 2014: New PPF rules for Asset-Backed Contributions

19 Aug 2014: TPR announces Lehman Brothers settlement

10 Jun 2014: TPR publishes revised funding code

27 Mar 2014: EC postpones holistic balance sheet

20 Mar 2014: PPF announces new insolvency risk model

17 Mar 2014: PPF guarantees harder to certify

7 Feb 2014: Argyll Financial submits consultation response

2 Dec 2013: Regulator publishes new draft funding code

19 Nov 2013: Asset-backed contributions guidance from TPR

22 Oct 2013: FSD warning helps MF Global scheme buyout

10 Sep 2013: TPR supportive of Kodak restructuring

31 Jul 2013: Schneider Electric acquires Invensys for £3.4bn

24 Jul 2013: Supreme Court overturns FSD super-priority

8 May 2013: Support for employers in TPR's Statement

9 Nov 2016: Brexit so far
On 23 June, 52% of the British population (or at least the 72% that voted) elected to leave the European Union.  The formalities of the process are still being debated, indeed the Prime Minister’s deadline of March next year for triggering Article 50 was called into question following last week’s High Court ruling that Parliament must be consulted.  Nonetheless it should be assumed that some form of Brexit will take place given the mandate from the electorate.

Many commentators prior to the Referendum had been predicting an immediate and significant negative impact on the UK economy.  We did see an immediate fall in the pound against most other currencies, with the pound falling 10% against the Euro by 6 July and 13% against the US dollar.  To date the falls have stretched to 14% and 16% respectively.  Broadly, exchange rate movements will have helped exporters but increased costs for businesses relying on imported goods.  Global businesses outside the UK (and therefore report in currencies other than sterling) will want to pass on the exchange rate effect of goods sold in the UK, as highlighted by the recent dispute between Tesco and Unilever.

The fall in sterling has boosted the FTSE100 index despite an initial 5% fall in the days following the Referendum.  Given the index comprises companies that generate around 70% of income overseas it is not surprising that the index has been performing strongly.  The FTSE250 index, comprising smaller UK-centric companies, showed a larger 14% fall in the days following the Referendum, but it too has recovered although more slowly than the FTSE100.

Post-Brexit concerns for financial services centre on the potential loss of so-called ‘passport rights’ which allow banks, asset managers and insurers to operate freely across the EU.  If the exit terms negotiated by the UK involve the loss of these rights then there will be pressure on these businesses to relocate some operations from the City to a territory within the EU.  Several large banks (eg HSBC and JP Morgan) have already publicly indicated their readiness to relocate.  If the UK does lose the rights and the sector follows through on its threat, then the Treasury could take a material hit.

Prior to the Referendum concerns for the construction industry, in particular the level of overseas investment, were highlighted by Remain supporters.  The industry, despite showing significant recovery following the recession, had already been cooling pre-Referendum and the Markit/CIPS UK Construction Purchasing Managers' Index was 45.9 in July (any value below 50 indicating contraction).  Since then however the index has rebounded to 52.6 supported by housing activity, allowing the industry to shrug off Brexit worries for now.

We have seen the Bank of England take steps to shore up the economy with an interest rate cut from 0.5% to 0.25% in August and the resumption of quantitative easing.  The effect on gilt yields, and therefore defined benefit pension deficits, has been well–reported.

The Office for National Statistics has said that “data so far have shown an economy largely undisrupted by the UK's decision to leave the EU.”  GDP growth for Q3 2016 was estimated at 0.5%, slightly lower than the 0.7% in the previous quarter.  The Bank of England improved its 2017 GDP forecast 1.4%, compared to 0.8% previously, although the European Commission cut its 2017 GDP forecast from 1.8% to 1.0% citing uncertainty around Brexit.

What can we make of all this?

Those looking for clear answers as to the impact of Brexit will be disappointed, which is hardly surprising given we do not know the terms on which the UK will leave.  Much of the initial uncertainty seems to have abated with little sign yet of any catastrophe to come, with only the current low pound as the starkest reminder of the June vote.  Clarity may also take some time to emerge given the UK has yet to trigger Article 50, or even agree on how that should be done.  
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