British exit from European Union (BREXIT)
As the dust begins to settle on the UK referendum on European Union (EU) membership I thought it would be useful to share some thoughts on the implications of a British exit from the EU.
The first point to make is that, for the time being, nothing has changed and all of the systems of the UK and the EU continue to function as usual. That will be the case for at least another two years.
That will remain to be the case at the macro level for the entire period of informal negotiation prior to triggering the departure and the formal negotiations afterwards. The environment around each of the systems and relationships will however gradually change to account for the new paradigm. In practical terms that means investment, market confidence, interest rates and a long list of other elements surrounding the system will change as the shape of the new relationships becomes clear.
In the short term the most notable effect will be on Sterling and it is likely that it, and to a lesser extent, the Euro will weaken and fall against other currencies especially the traditional refuges for investors including the US dollar. This has no downside for EPP as our supply chains are short and mostly in the UK and our clients are overwhelmingly international. Indeed for most of our clients it will make our services less expensive.
The other point worth drawing attention to is the nature of OECD GLP and the Mutual Acceptance of Data (MAD) arrangements that form the standards behind our GLP activity. Both of these are independent of the EU but have been adopted by the EU to underpin the quality and validity of data generated in the testing of chemicals. Or put another way, the UK leaving the EU does not undermine the UK’s adherence to and participation in OECD and MAD agreements.
My final point is that EPP has successfully operated in support of heavily regulated activity for more than two decades and we have deliberately developed our business to be dynamic and responsive to these changes; indeed there are changes to this environment almost monthly. Whilst the possible changes that could result from Brexit may be bigger in scale and will certainly be covered to a much greater extent in the newspapers they are in essence no different to the changes we have routinely adapted to over all these years. In fact we are quicker to adapt than most and so feel very confident that we’ll be able to make the most of this bold new Europe.