Brexit likely to increase UK Tech Prices

This is not investment communication. The author has no position in any of the stocks mentioned. WCCF TECH INC has a disclosure and ideals policy.

Well folks, after a chaotic twenty-four hour period in the markets, the wider impact of Brexit on ordinary consumers is start to make itself known. I've had many conversations with people in the U.k. tech industry both in the run upwardly to and in the aftermath of the result. The general mood seems to exist one of slight cynicism with a wait and encounter approach. Here nosotros will look at the touch on to your pocket specifically with a crucial piece of data for UK tech buyers which I'll come up back to.

As I'g sure yous're aware, the ramifications of the UK voting to leave the European Union in a referendum yesterday are widespread and unlikely to exist fully understood for years to come, nonetheless, we have covered several aspects of the story already which you lot can find here for Political Fallout and here for Financial Impact by my practiced colleagues Ramish and Usman respectively.

Still equally nosotros continue coverage, it is time to delve slightly deeper into how this may/will bear upon y'all, the consumer. Consumer sentiment is an important, fickle and delicate brute. Economies and coin is made and lost on the slow inexorable change in how the average person on the street feels their depository financial institution business relationship and future prospects wait and how companies react to major events. Well there'due south no bigger event than Brexit for making markets jittery and consumers expect over their shoulders, particularly given how in the United kingdom of great britain and northern ireland we have had months of predictions of economic doom in the result of leave winning.

Games and Tech Firms Worried

Earlier the vote, I spoke to several companies in the UK tech industry. Unsurprisingly, many didn't want to keep the record, but I did become this comment from Erin Roberts, the blood brother of Chris Roberts and Studio Managing director at Cloud Imperium Games Foundry 42 studio in Manchester.

I recall the main issue for us would be the uncertainty surrounding Brexit. At the moment nosotros can have advantage of the United kingdom game tax credit incentive, which may non survive or would accept to modify if nosotros exited the European Union, but besides a large number of our workforce are European Nationals, which once more would pb to uncertainty until a plan was in place. Nosotros source work and travel between the Eu a slap-up bargain (too every bit send / buy equipment) and of class nosotros have our Frankfurt Office and so leaving the Union would brand it more complicated for us to do business. Then you go into the Macro issues of what it will do to the UK and World economies, peculiarly in the short term. And so when yous add all the issues up, it feels similar staying in the EU is by far the less risky option for CIG / Foundry 42.

Additionally, I've spoken to several well-known tech companies with significant UK presence and although none of them are giving official statements, I have had off the record conversations which indicate that further investment in the UK is on hold pending the fallout of the vote after numerous internal meetings with senior managers. Additionally, all of them are considering the impact the collapse in Sterling will accept on their bottom lines. Many tech companies operate at very thin margins and given that almost applied science products we purchase are imported… well, you can see where this is going.

Your Pocket!

One company (a retailer) which was happy to proceed the record was Overclockers Uk. OcUK are a major retailer of PC components and systems in the UK and as the name suggests, cater to gamers. They had this to say:

Yep current substitution charge per unit drop is probable to cause around a 5-10% increase in pretty much all components if the charge per unit sustains around 1.35. We're actually re-working prices and only increasing around 2%, so soaking some of it upwardly to go on OcUK really competitive in market especially on graphics cards. Our prices (check at present as updated), 980Ti only £359.99, 980 only £275.99 and 970 only £209.99, inc vat and those prices will stay no thing what.
Also got really good prices on 1080 and 1070 and AMD kit as well, Fury at £341.99, 390X at £259.99 and 390 8G at £209.99.

Clearly, the impact of the collapse in Sterling will be widespread considering the plummet in manufacturing the Great britain economic system has seen over the decades. Many physical goods we buy are imported and a weaker pound will only make things more hard for us in this sense. Ultimately information technology means that Brexit will raise Britain tech prices.