what does brexit mean?
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Post on 23-Jan-2018
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- 2. Brexit Consequences
- 3. Changes in Trade and Manufacturing Trade statistics mirror that the European Union is a landing-place for more than half of all the British exports. These trading links expand more if the countries which the UK trades freely with, simply because they have a free trading agreement with the EU.
- 4. These trading agreements are an indicator that 62% of Britains exports are connected to European Union Membership. It is highly expected that a better trade agreement will be reached after the exit since advantages for both sides will carry on a close commercial arrangement.
- 5. In a worse scenario, the exporters might face some extra charges such as abiding to the EU origin rules since they are not included in the single market, although these factors would be inconveniencing but not trade barriers. There is no doubt that a lack of a trade deal with the EU will not hurt the Unites Kingdoms total exports.
- 6. This is because the membership benefits of EU have diminished with time. Though the Brexit effects will be felt across various economic sectors, it will be a great opportunity for Britain to broker trade deals with countries that are non-members of the European Union.
- 7. This will give Britain a free trading policy. Also, the Brexit move may attract the non-EU countries to strike deals directly with Britain since it will be easier and quicker than using EU as a trade channel.
- 8. The sector of production faces a more uncertain result than the services sector. This is because the production sector depends on the trading agreements and the nature of the agreements between the UK and the European Union.
- 9. A huge potential downside are the taxes on goods to the EU, while there is a greater upside potential since Britain will be able to open trade opportunities with other countries and also increase sectors competition through cheaper inputs.
- 10. Contrary to many, leaving the European Union will be of great benefit to the Britains trading sector since it will be able to apply its newly found freedom to negotiate its trading deals.
- 11. Cities and Financial Services The financial services sector will have more to lose than any other sector after Brexit. Even on the brighter case whereby pass-porting rights are preserved, the UK would lose influence towards the rules of the single market. Though the city will still be wounded, it wont scream disaster. This is because the citys competitive advantage is not only founded on free access to the single market.
- 12. Property Market and Consumption The role of holding the property market by the financial services sector is obviously overstated, making us believe that the economic impacts will be less. We expect that the overall impacts on the property market, and increasing consumption in the economy will be less.
- 13. Immigration Since 2012, there has been a double up on the annual net migration. Due to the European Union immigration, the workforce is boosted by 0.5% per year. Due to this, the economy has been able to grow without causing inflation and wage growth by keeping interest rates low for a long period. The future relationship of the United Kingdom and the European Union will determine whether it will gain powers on immigration restriction.
- 14. Public Sector By leaving the European Union, the British government will save around 10 billion pounds which it contributes to the EUs budget. The government might also be required to contribute to the EU for it to be able to retain single market access. Compensation to sectors of the economy that currently benefit from EU handouts will be required. In addition, Britain will have to sacrifice custom duties income so as to be able to strike trading deals with countries that are outside Europe.
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