The UK’s trade relations with the European Union have been thrown into disarray following the victory of the Leave side of the referendum on the country’s membership in the single market.

The 52% preference for leaving the trading bloc paves the way for a period of uncertainty, which may last a few months as Prime Minister David Cameron announced he won’t be leading the negotiations with the EU and will step down in October, when a new Prime Minister should be appointed at the Conservative Party conference.

All eyes and minds now turn to the new trade agreements that will have to be negotiated in the coming months and years. “We are in unchartered territories. We have massive challenges and the first thing we need to do is to protect our trading position. No mistaking UK government is in a weaker position as it tries to negotiate new trade agreements. Who will be responsible for delivering these new agreements is both unclear and a great concern,” says Gabriel Buck, managing director of GKB Ventures.

Once the heated campaign tones subside, it is likely the UK negotiators will seek an agreement mutually beneficial for both parties. “The UK and its European partners would have an interest in reaching an amicable resolution threatening neither the economic stability of the UK nor the delicate balance of the entire EU,” says Thanos Papasavvas, co-founder and CIO at Equant Analytics.

In a press conference today, President of the EU Commission Jean-Claude Juncker stated his wish for the UK to remain a “close partner in the future” and that ensuing trade negotiations will reflect “interests of both sides” and “be balanced in terms of rights and obligation.” German chancellor Angela Merkel also warned against hasty decisions. “We need to remain calm and composed,” she said, speaking to the press in Berlin.

The market for trade finance is adaptable and resilient and will adjust to the new world order. Geoffrey Wynne, Sullivan & Worcester

The feeling in the trade finance community is one of surprise and uncertainty, but also hope that the change in circumstances would open new opportunities. “Undoubtedly there will be challenges ahead, but we must focus on the positives. There are vast opportunities for our products and services in export markets outside the EU and I am confident trade with the EU will remain key for SMEs. Rational decisions are key at this time to make UK exports stronger and I urge our politicians to put their egos to one side as we plan this transition,” says Geoffrey de Mowbray, Dints CEO and co-chair of the British Exporters’ Association (BeXa).

Geoffrey Wynne, trade finance partner and head of the London office of Sullivan & Worcester, agrees: “Today is obviously a day of dramatic change for the UK and Europe, but the market for trade finance is adaptable and resilient and will adjust to the new world order. There will be trade opportunities in the emerging markets: they may be different, but they will be there.”

On the government’s side, a spokesperson says “It is important to understand that – as the Prime Minister has said – there will be no immediate changes in the way our goods can move or the way our services can be sold.” The UK export credit agency also reaffirms its commitment to UK exporters. “UK Export Finance (UKEF) remains ready and willing to help ensure no viable export fails for want of finance or insurance,” a UKEF spokesperson says. 

Until the end of the negotiations process, present laws and agreements will remain in place and in the legal environment, the expectation is that the UK will re-enact many regulations that affect trade finance. UK companies should take this time to consider how to ensure their core interests and priorities will be protected in the process. “The window to influence these commercially important negotiations is narrow. However, those companies who are able to clearly and quickly identify and articulate their offensive and defensive priorities on issues such as key markets and priority sectors will be best placed to influence the UK’s exit terms and define a future UK trade policy towards their business interests,” says John Forrest, head of international trade at DLA Piper.

“Information and knowledge as to what can be done is going to be key,” adds Buck, “The game has changed.”

Some of the investment plans will be cancelled altogether. Especially those companies that use the UK as gateway to the rest of the EU. Raoul Leering, ING

The impact of the referendum result will be negative for the overall business environment, at least in the short term. S&P told the Financial Times it may be lowering the AAA sovereign debt rating of the UK. ING’s forecast for UK growth in 2017 in case of a Leave victory is half of that in case of a victory for Remain, with 1.5% GDP growth. “Some of the investment plans will be cancelled altogether. Especially those companies that use the UK as gateway to the rest of the EU. And other investment plans will be put on hold until the uncertainty about what will happen to trade with the EU is resolved, and that can take two or more years,” Raoul Leering, head of international trade research at ING, tells GTR.

Euler Hermes research forecasts a growth in business insolvencies over the next three years, with an additional 1,500 to 1,700 companies becoming insolvent, in addition to the 20,300 total bankruptcies per year currently predicted.

On the trade side, the negative impact should be contained. According to Papasavvas, trade will weaken, but it should be a marginal reduction, as the risk of Brexit was known and companies were able to prepare for this possibilities.

We are well prepared for this. Mark Carney, Bank of England

Still, the results shocked the markets, which were betting on a Remain victory until last night. As the stock markets in London and continental Europe fall, banks are some of the hardest hit. Institutions like HSBC and Deutsche Bank have stated they will be following the situation closely. The German bank had been particularly ambivalent over its reaction to a possible Brexit, but a statement from its CEO today said the bank is unlikely to change its position any time soon: “We currently do not believe significant changes will be required to our current UK structure or business model in the short term as a result of the referendum.”

Governor of the Bank of England Mark Carney sought to reassure the markets and investors this morning, saying that despite the period of uncertainty and adjustment following this vote, the UK banking system is “well-capitalised, liquid and strong” enough to brave through it. “It will take time for the UK to establish new relationships with EU and rest of the world. But we are well prepared for this,” he said. The Bank of England stands ready to provide more than £250bn of additional funds through its normal facilities and also “substantial” liquidity in foreign currency, if required.