Britain votes to exit EU, signalling a volatile period for the industry
loading...
London - The UK had voted to exit the European Union in the landmark EU Referendum which occurred on Thursday. Prime Minister David Cameron, who was in favour of the UK remaining in the EU, is set to step down from office following the results of the referendum which saw the Leave campaign secure 52 percent of the vote.
David Cameron to step down as Prime Minister following Brexit
In a speech given outside 10 Downing Street, Cameron announced his decision to exit his position by October. "I was absolutely clear [in the referendum] about my belief that Britain is stronger, safer and better off inside the European Union. And I made clear the referendum was about this and this alone, not the future of any single politician, including myself," said Cameron.
"But the British people have made a very clear decision to take a different path and as such I think the country requires fresh leadership to take it in this direction. I will do everything I can as prime minister to steady the ship over the coming weeks and months. But I do not think it would be right for me to try to be the captain that steers our country to its next destination."
"This is not a decision I have taken lightly. But I do believe it’s in the national interest to have a period of stability and then the new leadership required." The hope is to have a new Prime Minister in place by the start of the Conservative Party conference later this autumn. In the meantime, Cameron will continue to serve in his post with the cabinet for the next coming months.
Cameron also noted that he will not immediately instigate Article 50 of the Treaty of Lisbon, which is the formal notification of the country's intention to pull out the European Union and begins the two year countdown. "I would also reassure Brits in European countries and EU citizens living here that there will be no immediate changes in your circumstances. There will be no initial change in how we can travel, how our services and goods can move. we must now prepare for a negotiation with the EU."
FTSE 100 Index sees over 122 billion scrapped off its value
Since news of the Brexit broke, the FTSE 100 Index has seen over 122 billion pounds axed off the value of its fundamental companies, marking one of the largest drops in the index's 32 year history. The value of the pound has dropped to the lowest level on record since 1985, earning Friday the nickname of Black Friday. The Bank of England has pledged to "take all steps necessary" to ensure financial stability in the UK in the wake of the Brexit.
Mark Carney, the governor of the Bank of England, has assured investors that although some volatility can be expected, the UK is "well prepared" for a Brexit. "Some market and economic volatility can be expected as this process unfolds. But we are well prepared for this," said Carney in a speech.
At the moment the exact impact the Brexit will have on the UK retail and fashion industry remains unclear. "Retailers need to prepare for a period of high volatility – consumer confidence will be very fragile during a prolonged period of political instability," warned Patrick O’Brien, Content Director at Verdict Retail. "With import costs rising with the fall in the value of the pound, prices will rise, and many people will put off big ticket purchases until they have more confidence in their own personal economic prospects."
"Retailers need to prepare for a period of high volatility"
The UK fashion industry previously rallied together to show its support to remain in the EU. Designers including Sibling, Vivienne Westwood and Christopher Kane all publicly shared their opinion on the EU referendum, while a recent poll conducted by the British Fashion Council indicated that majority of designers questioned wished to stay within the EU. 90 percent of the 290 designers polled were in favour of remaining in. Other industry leaders were among the 1,300 business heads which signed a letter urging Britons to vote in ahead of the historic referendum.
"There was an overwhelming support from our designer survey for the UK to remain in Europe and there will no doubt be upset and dismay at today's result that will prompt an outreach to our friends, partners, business colleagues in Europe," said Caroline Rush, chief executive of the British Fashion Council, in a statement this morning. "We now have a role to play in keeping the government updated on our industry's priorities and keeping the designer community updated on any likely impact to business as our country prepares to leave the EU over the coming years."
Photos: Public domain pictures