Ruchi Dhir found, as an owner of a small to medium importing business, the most immediate impact following the decision to Brexit was that the value of sterling plummeted overnight. In 2016, it fell overnight from nearly 1.5 to 1.3 against the US Dollar, vastly increasing the cost of goods imported from outside the UK overnight. This was a huge challenge given it was so unexpected.

What stemmed from this, however, was a general increase in the price of services and goods. The UK is an Island with very little manufacturing, most items are procured from outside its borders, including packaging, components for items assembled in this country and workforces.

So on assessment, Ruchi Dhir found that ,even if imports were reduced, the cost of living had increased: a walk through any local supermarket fruit and vegetable aisle is a perfect illustration of just how much we as a country rely on imports for daily produce: green beans, blueberries, kiwis, for example, being flown into this country and a daily basis from places as far as South America and Asia  .

Since the decision to Brexit and now the approaching deadline at the end of March 2019, the battle of sterling against the US Dollar has been a hard one, with sterling never recovering its pre-Brexit decision levels.

Recently, as Ruchi Dhir prepared to review currency purchases: the approaching Chinese New Year means that there is always an influx of foreign payments in US dollars before the Chinese close for their long New Year break. As she reviewed the strength of sterling against the US dollar it surprised her that it was not as weak as pre Christmas, despite all of the doubt as to plans post Brexit, if Brexit was even going to go ahead, if it was going to going ahead as a ‘no deal’ Brexit, and how much say MPs would eventually have in how it would be plotted out .

This surprise in its position, even in spite of this uncertainties, becomes clearer when you look across the Atlantic at the current situation in American politics.

In an effort to pile on the pressure to have his wall financed, and the Democrats steadfast refusal of this President Trump has initiated a partial shut down most of the federal government, including, according to the CNBC, the following key departments

Department of the Treasury

Department of Agriculture

Homeland Security Department

Department of the Interior

Department of State

Department of Housing and Urban Development

Department of Transportation

Department of Commerce

Department of Justice

Essentially this means that a lot of workers will work, but without receiving pay immediately and some will not work at all. The knock on effect could then be to the taxpayer. Ironically, when Democrats first put to President Trump that they would not fund the wall, Trump was ready to sign to accept that without shutting down the federal government. It was only after he received a backlash from many rights of centre TV channels. Stations, that he withdrew his willingness to cooperate and insisted that government be shut down, illustrating that maybe the wall was never a real preoccupation for him – rather a tool to win the election and now it has become a symbol of increasing importance as both sides are refusing to back down, its existence is gaining more and more importance  .

Trump will address this topic on 8th January since parts of federal government have been shut down throughout the Christmas and New Year period. However, many believe that he will not say much different since the wall has so much significance to those who have believed in him, he cannot afford to back down on this particular issue. He has also commented that he would be proud to take responsibility for the shutdown which he has said could go on for ‘months or even years.

Some institutions have remained open, one being the Smithsonian who tweeted on December 25th 2018 that they were able to stay open as they could ‘use prior- year funds still available to them …in order to stay open ‘

Reports have been released of national parks with overflowing rubbish including human waste as four-fifths of the forest and national park services ( more than 44000 employees ) were sidelined.

The Guardian reported that the closures have had an impact on 800,000 federal workers, now that the shutdown is in its third week. Many have not been paid since before Christmas.

Essentially during a shutdown, only essential functions such as airport security and law enforcement continue to be performed. It is reported that this shutdown will last until new funding is approved by Congress and signed into law by the president.

A shut down comes about as the federal bureaucracy which supports many aspects of American Life is funded by an annual budget. Federal agencies outline how they will spend their money in the next fiscal year and the president must sign or veto these 12 outlines. These outlines or bills also require a certain amount of votes in the Senate which has left them open to be used in a political way in recent years:

October 2013: Republicans tried and failed to strip funding from Obama’s healthcare legislation. The Government was shut down for 16 days.

In January 2018 Government was briefly shut down when Democrats demanded that Congress enact protections for undocumented immigrants who came to the US as children.

If this shut down lasts until the 14th January, it will be the longest one on record.

With all this uncertainty in the US, one would expect sterling to strengthen considerably. Although it has, the UK is experiencing its own uncertainties and doubts up to its Brexit in March:

Only today, the 8th January, MPs have defeated the government over no-deal preparations: They have backed an amendment to the finance bill, which will limit the scope for tax changes following a no deal. This was won 303 MPs to 296.

On one side Corbyn said a no deal should be ruled out ‘ once and for all’, but Robert Jenrick ( the treasury minister ) said the UK would be leaving the EU on the 29th March. He has advised that no-deal planning was “prudent preparation “ and all this defeat had done is make the UK “less prepared”

Experts have commented that there are still ways for the government to raise money and No.10 had commented prior to the vote that a defeat of this kind would be “inconvenient “ as opposed to “significant”

Twenty conservative MPs rebelled against the government showing there are considerable fractions within the party as well as wider throughout the government.

Both sides of the Atlantic seem to be at political standoffs within their parties, seemingly at the detriment of the layperson.

As for SMEs, this kind of environment and atmosphere  can often pose substantial challenges in simple day to day procurement tasks  , without even touching on the challenges any business faces when it comes to deciding and implementing strategy, trying to work out trends in the market and maintain stability in employment and customer service as well as responding to the changing ways and methods that customers buy and sell .

SMEs in the UK continue to try and weather the storms of these external political forces that seem completely out of touch with the day to day workings of regular people.

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