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Brexit takes centre stage for the Channel in wake of election

Jonathan Easton
Brexit takes centre stage for the Channel in wake of election

If you are to take Mrs May at her word, yesterday's general election was called to bring an end to the "political game-playing", and to give her a mandate on the Brexit negotiations, negotiations that will have a momentous impact on the Channel

After months of stating that she wouldn't call an election, the PM pulled the trigger – coincidentally when the polls showed that the Tories were about 20 points ahead of Labour. It was a sure thing, we were going to have another Conservative government with a majority reinforced over the slim lead it gained two years prior.

Seven weeks and several policy u-turns later we find ourselves in the position we are in now: the Conservatives ahead, but without enough seats to form a majority government, the party fractured and looking to form something of a partnership with the Northern Irish DUP – a partnership looking even more suspect based on the latter party's insistence on a soft border with the Republic. 

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But in all of this, how will the election result effect the UK tech Channel?

Well, it's not done any good and uncertainty is the word of the moment. "The new layer of uncertainty will damage us all," said Westcoast MD Alex Tatham. "The hubris of Teresa May has come home to roost." 

His sentiment is echoed by former Entatech boss and now managing director of GNR Technology Dave Stevinson: “Last night’s results throws more uncertainty on the Brexit process, something which was not needed.”

The pound has already sunk due to the political uncertainty, which looks likely to have a damaging effect on a sector that has already been hit hard by Brexit. Prices that have already been inflated due to currency valuation changes will be hit harder.

"The financial markets do not like instability," noted Context's Jonathan Wagstaff. "The first consequence of the hung parliament has been drops in the FX rate for the pound vs the dollar and euro. Should the new government prove weak and Teresa May is pushed out as leader we would expect these to continue to be adversely hit. If this were to become a trend we may see further vendor price rises in Q3 for the UK, and more stalled deployments from larger enterprise customers."

Outside of the pure financials of it, the type of Brexit – firm, soft, medium rare, soggy with a buttery biscuit base – has been thrown up in the air. Ray Gaul, VP of research and analytics, said, "Our view is that hard is off the table and the most likely situation will be a conservative-led Parliament with a medium Brexit negotiating position (a toned down version of Theresa May’s original stance)."

Ultimately though, while positions on Brexit may be up in the air, business will carry on. “Just as the economy bounced back from the referendum vote, so will the channel remain strong despite a hung parliament," said OnBuy managing director Cas Paton. "In the field of e-commerce in particular we will see businesses continue to focus on the UK to guard against whatever might happen next."

And that's exactly it. Right now we don't know who will be leading the government and for how long. The likelihood of us being in this exact same situation in a few months looks likely. For now, we'll just have to wait and carry on as normal. 

Tags: Channel, Westcoast, context, Opinion, dave stevinson, Alex Tatham, OnBuy, Cas Paton, Jonathan Wagstaff, Brexit, GNR Technology, Ray Gaul

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