Well folks, after a chaotic day in the markets, the wider impact of Brexit on ordinary consumers is beginning to make itself known. I’ve had many conversations with people in the UK tech industry both in the run up to and in the aftermath of the result. The general mood seems to be one of slight pessimism with a wait and see approach. Here we will look at the impact to your pocket specifically with a crucial piece of information for UK tech buyers which I’ll come back to.

As I’m sure you’re aware, the ramifications of the UK voting to leave the European Union in a referendum yesterday are widespread and unlikely to be fully understood for years to come, even so, we have covered several aspects of the story already which you can find here for Political Fallout and here for Financial Impact by my good colleagues Ramish and Usman respectively.

However as we continue coverage, it is time to delve slightly deeper into how this may/will affect you, the consumer. Consumer sentiment is an important, fickle and delicate creature. Economies and money is made and lost on the slow inexorable change in how the average person on the street feels their bank account and future prospects look and how companies react to major events. Well there’s no bigger event than Brexit for making markets jittery and consumers look over their shoulders, particularly given how in the UK we have had months of predictions of economic doom in the event of leave winning.

Games and Tech Firms Worried

Before the vote, I spoke to several companies in the UK tech industry. Unsurprisingly, many didn’t want to go on the record, but I did get this comment from Erin Roberts, the brother of Chris Roberts and Studio Director at Cloud Imperium Games Foundry 42 studio in Manchester.

I think the main issue for us would be the uncertainty surrounding Brexit. At the moment we can take advantage of the UK game tax credit incentive, which may not survive or would have to change if we exited the European Union, but also a large number of our workforce are European Nationals, which once again would lead to uncertainty until a plan was in place. We source work and travel between the European Union a great deal (as well as send / buy equipment) and of course we have our Frankfurt Office and so leaving the Union would make it more complicated for us to do business. Then you get into the Macro issues of what it will do to the UK and World economies, especially in the short term. So when you add all the issues up, it feels like 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 have on their bottom lines. Many tech companies operate at very thin margins and given that most technology products we purchase are imported… well, you can see where this is going.

Your Pocket!

One company (a retailer) which was happy to go on 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:

Yes current exchange rate drop is likely to cause around a 5-10% increase in pretty much all components if the rate sustains around 1.35. We’re actually re-working prices and only increasing around 2%, so soaking some of it up to keep OcUK really competitive in market especially on graphics cards. Our prices (check now as updated), 980Ti only £359.99, 980 only £275.99 and 970 only £209.99, inc vat and those prices will stay no matter what.

Also got really good prices on 1080 and 1070 and AMD kit too, 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 collapse in manufacturing the UK economy has seen over the decades. Many physical goods we buy are imported and a weaker pound will only make things more difficult for us in this sense. Ultimately it means that Brexit will raise UK tech prices.