In light of the threat of the Brexit pushing through without establishing a withdrawal agreement, businesses left and right are stockpiling. In fact, 2.4 million individuals said that they have invested GBP 500 and above on stockpiling. However, experts say that the economy is suffering from the negative impacts of this practice as early as now, according to the Insurance Times.
One of the most affected people are employees of companies that stockpiled. According to research sponsored by Premium Credit, 64% of these employees think that they were not able to get salary increases because of stockpiling. The study also showed that 22% of the participants claimed that their companies have stockpiled, whilst 4% believes that their organization will start in the following weeks.
In terms of the detrimental effects of this practice, 66% of the employees told the researchers that it had an impact on expansion plans, whilst 51% believes it influenced promotions. It also has an effect on the companies’ plan to recruit more employees, as said by 60% of the respondents.
‘Insufficient trade insurance’
Aside from the effects on employees and employers, stockpiling is also seen as a threat to trade credit insurance, according to the American International Group. Parties improve their inventory faces the risk on non-payment as companies may fail to get enough revenue to cover the credit. For people wanting to get items to and from the UK, it is advised to make sure that they have enough coverage of trade credit insurance as a protective measure.
Aside from trade insurance, there is also the danger of underinsured stockpiled goods in the market.
Meanwhile, analysts say that this could result in more individuals using credits for their transactions, making consumers rely heavily on credit lines for purchases.