What is the Potential Impact of BREXIT on UK Polymer Prices?
Like it or not, on Friday 24th June the World learnt that following the UK referendum on EU membership, the democratic decision was made for the UK to leave the EU. The immediate impact was a significant devaluation of the GBP against the USD and a slightly less significant devaluation of the GBP against the Euro, as concerns were also raised about the potential impact of the World’s 5th largest economy divorcing itself from the EU.
Whilst there is much speculation about the removal of the UK from the EU, so far the known facts are:
- In early 2017, the UK will serve notice under Article 50 of the Lisbon Treaty and thereafter have a two-year period in which to attempt an orderly exit from the trading block it has been part of since 1973.
- Theresa May is the new Prime Minister and leader of the Conservative Party.
- The value of the GBP has fallen significantly against other major currencies.
Given that UK polymer prices are typically Euro or USD denominated, the effect of currency devaluation will mean that polymer prices relative to those countries will have to increase.
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