“Brexit blam­ing” won’t help

The Week Middle East - - City -

Jack Tor­rance

Man­age­ment To­day Mi­crosoft has be­come the lat­est com­pany to jack up prices, cit­ing the in­creased cur­rency costs since the Brexit vote, says Jack Tor­rance. Sen­si­bly, per­haps, it is tar­get­ing the planned 22% hike in “ser­vices” at com­mer­cial cus­tomers, “who will find it harder to switch to an­other provider”, rather than con­sumers. In eco­nomic terms, the move seems en­tirely jus­ti­fi­able – the pound has fallen 20% since June and shows no signs of re­cov­ery. It is prob­a­bly fair to sug­gest that were ster­ling to re­bound to $1.50, “Mi­crosoft wouldn’t be in any hurry to slash prices”. But we may never know, as the more likely sce­nario is that the low ex­change rate be­comes “the new nor­mal” – and that many other busi­nesses find they have lit­tle choice but to in­crease their prices, or re­duce head­counts. Even so, they should be care­ful: if they’re per­ceived to be “us­ing Brexit as an ex­cuse”, they risk suf­fer­ing long-term rep­u­ta­tional dam­age. Com­pa­nies that “take the mick” by “blam­ing all of their ills on the ref­er­en­dum re­sult” will re­ceive short shrift from a scep­ti­cal pub­lic. Trust in UK plc is “al­ready shaky”. Ex­ec­u­tives should be care­ful not to make it worse.

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