The United Kingdom has already been suffering from Brexit from a long time now. The economy has been crashing followed by several businesses moving their headquarters to the EU. For instance, Aviva, Credit Suisse, Barclays, Dyson, Ford, Goldman Sachs, Jaguar Land Rover, Honda, HSBC, Rolls-Royce, Unilever and Toyota are a few big names amongst others.
Consequences for the United Kingdom
Some of the consequences in terms of growth and trade are been detailed below.
Major disadvantage of Brexit is its damage to economic growth of the United Kingdom. Most of which is because of the improbability around its final result.
Ambiguity around Brexit has slowed down the economic growth of the United Kingdom from around 2.4 percent in 2015 to approx. 1.5% in 2018. The government of U.K. projected that Brexit would possibly lower the growth of the region by nearly 6.7 percent over the spell of 15 years.
Also, the British pound shrank from almost $1.48 on referendum day to almost $1.36 the following day. This might aid the exports but then also upsurges the imports prices. The GBP may perhaps build up once the deal is finally approved, depending upon the terms & conditions of trade.
Brexit will mostly eradicate tariff-free trade status of Britain with the other members of European Union, which will result at the rising cost of exports. This will ultimately make exports from the UK to Europe really expensive that will again weaken the pound.
Furthermore, tariffs will possibly increase the import prices into the U.K. as almost one third of its imports comes from the European Union. With the higher prices import there are huge chances of inflation that will result in lowering the living standard of for the residents of United Kingdom. Moreover, the region is already at risk due to the heat waves as well as droughts instigated by rising global warming, which has reduced the local food production.
Also, the region will lose the benefits of state-of-the-art technologies of the European Union that it grants to its member countries in terms of environmental protection, research & development as well as energy. Besides, companies in the UK might lose the facility towards biding on the public contracts in any member country of EU.
In addition, with the huge number of companies leaving the UK, it is very obvious that there would be a lot of job cuts in upcoming time leading to higher unemployment rates.
Consequences for the European Union
The Brexit vote has reinforced anti-immigration parties across the Europe. If in case these parties are able to gain adequate grounds in France & Germany, they might possibly force an anti-EU vote. Moreover, if any of these two countries happen to leave, then EU would lose its utmost strong economies and may perhaps would dissolve.
On the other hand, new elections proves that the majority of citizens in still strongly support the Union. Nearly 75 percent believe that the EU encourages peace and 55 percent say it is in favor of prosperity.
Consequences for the United States
The day of Brexit Vote currency markets were in turmoil, resulting in falling prices of pound and euro. This makes dollar strong, which is not good for the US stock markets.
The Insight Partners is a one stop industry research provider of actionable intelligence. We help our clients in getting solutions to their research requirements through our syndicated and consulting research services. We specialize in industries such as Semiconductor and Electronics, Aerospace and Defense, Automotive and Transportation, Biotechnology, Healthcare IT, Manufacturing and Construction, Medical Device, Technology, Media and Telecommunications, Chemicals and Materials.
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