Well, what an intriguing last few days we have had!
On Friday, 9th June, a hung parliament was confirmed; the British people had spoken and had given Prime Minister Theresa May a resounding raspberry.
And despite her gamble backfiring – in no small part to a woefully run and poorly advised campaign – she blundered on to formally form a government (with the gleeful help of the Northern Irish DUP who are expecting to extract significant concessions for supporting the government under a so called “confidence and supply agreement”).
A couple of days later and her 2 joint chiefs of staff resign or, perhaps more correctly, were ‘jettisoned’ .
Then the back stabbing and jockeying for position began. Although, for now, there seems little appetite among Conservative backbenchers for another general election following her apologies to both her Cabinet and to the 1922 Committee.
Winston Churchill postulated when talking about the office of Prime Minister:
“If he trips he must be sustained.
If he makes mistakes, they must be covered.
If he sleeps he must not be wantonly disturbed.
If he is no good, be must be poleaxed.”
Strong and Stable this is not. And it is, in our view, only a matter of time until May is poleaxed.
The Clash’ song “Should I stay or should I go?” continues ominously:
“If I go, there will be trouble
And if I stay, it will be double!”
With the critical Brexit negotiations starting in a matter of days Britain looks very shaky indeed – and whether May stays or May goes, we are in for some form of trouble or very possibly trouble².
At Tectona, we do not believe that any one party – with a majority government or not – should be given our authority to negotiate something as critical as Brexit. We favour a cross party negotiating team.
So now we have uncertainty – with bucket loads more to come. This has a number of implications for you if you are running a business.
Let’s look at the effect on the £. We believe that in the next 3 to 6 months Sterling will remain under pressure; and markets will wait and see what our Brexit negotiating team looks like before deciding how aggressively to sell Sterling.
After that, who knows? But the Brexit negotiations are likely to mean that the £ is going to remain weak for the foreseeable future.
Solutions to navigate through uncertainty
To help companies determine how best to respond accordingly, we have worked with one of our key partners, Smart Currency Business, to describe the conundrum surrounding currencies, and how best to manage the currency climate as it shifts.
Ultimately, our research and findings have culminated in a guide that will help you and your business navigate through the uncertainty.
‘The Currency Conundrum’ is part of our series of Entrepreneur Guides. It tells you why you should be worried, explains what to do to protect your business and the solutions that are available to you, and suggests what you might do now.
An interactive tool is available, which shows you how much you could have lost had you not protected yourself against the fall in sterling after the UK voted to leave the EU, and we also give you a few Tectona tips.
You can also book a free Currency Health Check with one of the Smart Currency Business’ risk management specialists.
So click to download the guide, have a read through it, and see how best to protect your margins in these uncertain times.