On June 23, 2016, the British people voted in a referendum to end 43 years of membership of the EU. The result of the referendum came as a shock to many – not least to global financial markets. Within hours of the announcement of the referendum result, the value of sterling tumbled more than 10% to its weakest level against the US dollar since September 1985.
Now, the business world is preparing for what will be a period of considerable uncertainty – as no country has left the EU before. The fall in sterling could work in favour of UK textile and clothing exporters, as it provides them with the option of maintaining their sterling prices in order to increase their sales volumes or increasing their prices to improve their margins. Also, the fall in sterling is likely to make UK textile and clothing imports more expensive and this could encourage UK retailers to source more from within the UK – with the added bonus of easier quality control and easier monitoring of compliance with environmental and employment standards.
On the other hand, the fall in sterling could cause imports of raw materials to become more expensive. Another concern is the impact of Brexit on the UK automotive industry – which has thrived in recent years – and the potential knock-on effect this could have on the UK textile industry.
There are also concerns among foreign suppliers of textiles and clothing about the loss of preferential access to the UK market under the EU's Generalised Scheme of Preferences (GSP) Everything But Arms (EBA) and GSP+ arrangements.
In this report, Robin Anson discusses Brexit and what it could mean to the UK economy, the UK textile and clothing industry and foreign suppliers of textiles and clothing to the UK market.
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Publisher: Textiles Intelligence
6 pages, published August 2016
Report price: Euro 150.00; US$ 195.00
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