The United Kingdom’s historic vote could have consequences for U.S. business owners.
Global shockwaves abound after the United Kingdom’s recent referendum to leave the European Union. But where does that leave small businesses in the U.S.?
Ramifications from the historic “Brexit” vote are still uncertain, but gloom dominates most market outlooks so far. Yet, there is some potentially positive news for owners.
Let’s get to the bad first.
The British pound fell below a 31-year low on June 27, and many owners who do business in Europe are expecting “a drop in demand from European economies, and many are seeking legal advice on how Britain’s break from the EU could impact trade deals and regulations,” according to Fortune.
“Businesses don’t respond well to uncertainty, and even though this event happened in Europe, it makes U.S. businesses wary,” NerdWallet economist Jonathan Todd told Fast Company. Todd said that it could cause a decrease in U.S. business investment and limit economic growth, according to NerdWallet.
The U.S. stock market has been negatively impacted, too. The Dow plunged 611 points following the Brexit vote, the S&P 500 fell 76 points, and The Nasdaq Composite dropped 202 points, according to CBS News. Some economists are predicting U.S. investors will see their 401(k)s take a hit as the markets adjust to this news, according to CBS. Others, however, see a bright spot emerging for small businesses.
Brexit-spurred market volatility will most likely keep interest rates low in the U.S. for small business owners looking to borrow money, Fast Company reported. Owners could have a great opportunity to grow their businesses at “generationally low costs,” according to Fast Company.