Over the past week, international markets have been adjusting to the news that Britain will be leaving the European Union (EU). As is commonly the case with political announcements of this magnitude, the British economy entered a volatile period of trading with large shifts in stock prices and currency values.
Bank of England Governor Mark Carney was on hand to quickly reassure the market that there was no need for panic as extensive contingency plans were in place to ensure long-term stability: “Some market and economic volatility can be expected as this process unfolds. But we are well prepared for this. The Treasury and the Bank of England have engaged in extensive contingency planning… The Bank will not hesitate to take additional measures as required as those markets adjust and the UK economy moves forward.”
As expected, the British market stabilised this week, suggesting that the economy is now experiencing a post-Brexit rally. On 29 June, the FTSE 100 increased by 2.6% during the morning trading session to around 6,300 points – the highest it has been since Brexit was first announced. With the FTSE 100 poised for its best week of trading since 2011, the post-Brexit rally is a positive sign for market stability in the immediate and long-term term.
Over the coming weeks and months, as greater clarity is asserted during Britain’s formal withdrawal from the EU, the implications of Brexit on British businesses and the investor community will become more apparent. That being said, in light of the extensive pre-negotiation stage that lies before us, there are a series of pre-emptive observations that can be made based on the current relationship between EU State-aid legislation and Britain’s venture capital schemes.
With this in mind, IW Capital today launches its special Brexit edition of EIS in 2016: What does Brexit mean for the future of EIS? This report discusses the possible implications of Brexit on EIS, with a specific focus on:
- The short-to-medium-term impact of Brexit on EU State-aid reform and the EIS
- The role of EIS in helping to fulfil funding for small businesses in the UK
- The growing popularity of EIS for investors and SMEs based on revised HMRC statistics
- An outlook for EIS in 2016 should EU State-aid regulation be repealed
Find out the importance of private investment in supporting UK businesses during this time of significant transition by downloading our Brexit edition of EIS in 2016, here.