The question in all simplicity is, “What is the impact of Brexit on the economy of the UK?”
The answer to that is that there are many, and it depends. But let us take a look at the main effects of Brexit and how they will affect the economy. In short; The UK is leaving the European Union, which means that all economic sectors are affected.
The first and perhaps most obvious impact of a Leave vote is unemployment.
The number of jobless has increased due to the increase in demand for work in the UK from abroad. This means that the wages that British workers earn have become far more competitive.
It led to an increase in the number of people searching for work in the UK, meaning more competition for jobs. As it has been shown, the number of people looking for work is rising rather than falling. This, therefore, means that there is more competition for jobs and therefore a higher wage.
The second effect of a Leave vote on the economy is the increase in immigration.
There has been a sudden increase in people wanting to leave the country and settle in the United Kingdom. Some of them are investors who want to make investments in the United Kingdom.
Others are students who want to get a foot on the ladder of success in Britain.
Regardless of the reason, the influx of new workers means that there is a greater demand for certain types of jobs, which has led to an increase in the number of vacancies.
The third and final consequence of the post-referendum rise in economic expectations is the increase in inflation.
This is because of the rise in the value of the pound. Because the economy depends on exports, the fall in the value of British currency has led to cheaper goods and services for buyers worldwide. This has led to a price hike across most sectors of the economy, which has resulted in higher inflation.
The three main economic effects of what is the impact of Brexit on the economy can all be considered positive.
However, the changes that it has brought about may still prove to be felt years from now. This is because of how these effects will still take time to materialize fully.
And this means that for those concerned about the future of the economy of the United Kingdom, the uncertainty of the post-referendum period is something to be welcomed.
Impact of Brexit on the economy
One thing that must be said about what is the impact of Brexit on the economy is that it is not likely to last.
- The strong United Kingdom has always been able to weather stormy weather, and the current situation is no different.
- There is no denying that the result of the vote to leave the European Union was a shock to many people.
However, as the economy heals itself and begins to bounce back, the effects of the Leave vote will begin to fade. This is one of the positive aspects of what is the impact of Brexit on the economy.
What is The Impact of Brexit on the economy of the United Kingdom?
Many experts feel that the U.K. will suffer some form of backlash due to the European Union’s split.
According to one Financial Times writer, the shock vote
“should not be viewed in the context of any nationalistic feelings, but as a vote for free trade and an open society”.
That sentiment is certainly correct. No one can deny the reality that leaving the E.U. would mean bad news for the U.K. economy. And that said, there are positive aspects that should consider as the country begins its post-referendum recovery.
One of the positive impacts of a Leave vote is the possibility that it will reduce inward migration.
Britain is often viewed as a country with a large number of unemployed or underemployed people. And while unemployment statistics are subject to change depending upon the seasonal pattern, many economic experts believe that reducing the flow of immigrants would reduce the strain on Britain’s labour market.
The result would boost employment opportunities to a great extent and increase living standards for many citizens of British origin.
If the country’s residents were to stay and work in another country (let us hope it is not an E.U. country) rather than migrate to the U.K., the net gain to the economy would surely be positive.
Weakening of the stance of the U.K. economy against the backdrop of a possible exit from the European Union
Since many Remain voters did not want a hard or strict Brexiting position, this is a significant development.
In the past, when the U.K. was threatened with leaving the E.U., the government hardened its stance against a “hard” exit and made clear that it would pursue a limited form of economic exit.
Now, the government is trying to soften the blow of a Leave vote by assuring businesses in the U.K. that Britain will remain a strong and reliable partner in future trade relations. This is, after all, the very purpose of the E.U.
So the question that arises is: what is the impact of Brexit on the U.K.?
The short answer is that it has no major impact on the economy. As I already mentioned, some sectors could take a hit, but overall the economy will be unaffected. Some sectors could experience a fall in orders, but this would offset increased demand and increased supply. In short, there is no major economic problem that would be caused by a vote to leave the E.U.
According to many, the immediate economic effects are very bad.
- Some see consumer spending curtailed as essentials like food and clothing become more expensive.
- Others say that the effects could be far worse and that a hit to the U.K.’s economy would last well into the next decade, perhaps even longer.
- If you were to analyze the available facts, it is clear that the British economy’s problems are more long term than short term
How long should people wait before pondering the idea of leaving the European Union?
The most important thing to consider is that while many economists predict that a vote to leave the European Union will lead to a recession. The damage to the British economy would only be short term.
A longer period until the economy recovered and growth was achieved could even be under two years. This is something to keep in mind as you ponder the question ‘what the impact of Brexit on the U.K is.’
The other big question is whether leaving the European Union will negatively impact the United Kingdom’s relationship with the rest of the world.
If the U.K. were to cut off all ties with the E.U. completely. It would certainly cause a great deal of difficulty for businesses throughout the E.U.
However, a fast or slow withdrawal from the E.U. would more likely lead to trade barriers between the U.K. And the rest of the E.U. Which would cause problems for businesses wishing to operate in the U.K.
When thinking about the questions above, it is important not to focus too much on the negative aspects. While the short term implications of a vote to leave the European Union may prove damaging. It is important not to let this affect the long term viability of the economy. Instead, it is far more important to work towards healing the wounds. And repairing the damage caused by the recent economic crisis in the U.K. A successful exit door from the European Union will help the U.K. stay an independent state in the longer term. It will also help the U.K. remain a hub for international trade. This means that the benefits from remaining in the E.U. will outweigh the negative aspects and give the U.K. a distinct advantage in the global market.