The UK is due to leave the EU on March 29, 2019, with or without a deal. But the uncertainty that has hung over the UK economy since the country voted to leave the European Union in a referendum two-and-a-half years ago and now after its rejection in the British Parliament continues.
The uncertainty comes at a tough time for the UK’s retail sector. It’s already contending with higher prices because of the dampening impact of Brexit uncertainty on the value of the pound, as well as the broader challenges facing the global retail market.
The industry has suffered through a mixed holiday season, with online competition continuing to challenge traditional retailers, but even hot internet-based companies have struggled in the UK. The fashion sector, which relies heavily on imported materials and international talent, is particularly vulnerable to Brexit-related headwinds. The UK fashion establishment has opposed the country’s separation from the EU.
For the industry, the main areas of concern are the impact leaving the European Union could have on trade, investment and access to skilled international workers. The worst scenario for the fashion industry would be that the UK crashes out of the European Union with no deal at all. That would likely mean sharply higher import costs and could potentially lead to labor shortages and goods stuck outside ports of entry on both sides of the border, as freedom of movement and trade guaranteed by EU membership could be abruptly suspended.
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