For British exporters, weak pound may not offset Brexit turbulence

Fri Jul 8, 2016 2:16am EDT
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By Andy Bruce

WALSALL, England (Reuters) - The pound's plunge since Britain voted to leave the European Union is good news for factory boss Tony Hague.

He has received enquiries from potential buyers outside the country tempted by the lower prices for his company's products, as sterling has sunk to a 31-year low against the dollar after the June 23 referendum, which sparked pandemonium in British politics and financial markets.

But customers of Hague's company, PP Automation and Control, are also seeking something he cannot give: assurances about the future of British trade with the remaining 27 nations of the EU bloc and with the wider world.

They are wondering what Brexit will mean for Britain's ability to sell abroad in the long term.

"We're already having some of our customers, in Germany for example, asking for some statements and some thoughts about what (the Brexit vote) might mean longer term," Hague, PP Automation and Control's managing director, said at the headquarters of his company in the industrial West Midlands town of Walsall.

"And of course, no one can provide any answers," he said at the plant, which still flies a blue EU flag dotted with gold stars representing the bloc's member states, alongside Britain's Union Jack.

The lack of clarity reflects the wider uncertainties in Britain, once viewed as one of the West's most stable democracies, since the 52-48 percent Brexit vote tipped British politics into its biggest crisis of modern times.

After previous downward lurches in sterling - such as in the wake of Black Wednesday in 1992 when Britain crashed out of the European Exchange Rate Mechanism - exports rose sharply.   Continued...

Managing Director of PP Control and Automation Tony Hague poses for a portrait at their factory near Cannock, Britain, July 6, 2016. Picture taken July 6, 2016. REUTERS/Phil Noble