How Did Braxit Affect The British Economy

The public was bombarded with warnings about how they would be poorer if they voted to leave the EU but, in the end they weren’t convinced by what they were told and/or believed it was a risk worth taking . For the Confederation of British Industry, the International Monetary Fund, the Organization for Economic Cooperation and Development, the Institute for Fiscal Studies, there was an alphabet soup of experts lined up to say economic growth would be hobbled, unemployment would go up, the pound would plummet and British business would be left in a no man’s land outside the EU . Overall, since UK left the EU they will be able to profit more and help their people to get out of unemployment and rebuild their country.

The first reason why Britain shouldn't leave the EU is because it would hurt trade. A major benefit of the EU is the trade. Combined, all the countries in the EU have a large influence over world trade. This allows them to get more money for other EU countries.

One of the potential problem that could arise because of BREXIT is connections within the EU would definitely be weaker, this touches upon many areas of life such as security, trade, terrorism and much more. Are we willing to risk a well working government collapse under the struggles that leaving the EU would cause? Apparently we are.

Brexit means that Britain is exiting or voted to leave EU. This can affect businesses in UK in a bad way because those businesses who are buying/importing from the countries who are part of EU will not experience the smooth process and cheap taxes/value of pounds . This is because UK will not experience the perks of being a member of EU anymore if they completely leave.

What kind of harm will Britain pulling out of the European Union cause to the equilibrium, even with them taking precautions?

The harsh truth is that our economy accounts for just 3% of the world economy and that figure shrinks every year. Despite the EU knocking down trade barriers, the 'NO ' camp claim that our poor trade with other countries are refraining us from economic prosperity. Again, this is false. UK sales to the BRICS nations was only 6.6% of our exports in 2012. This is paltry compared to the EU, who make up the majority of our exports. And no wonder, with free access to a market holding 500 million consumers, British businesses are taking full advantage of this. The nations that supposedly hold the key to our future don 't even want us to leave the EU. The Australia foreign minister commented that, "strong, active membership of the EU" contributes to the power of our economy. The USA President, Mr. Obama, recently said, "EU membership is necessary to keep UK 's global influence." And China, which is seen as the golden nation for us to export to, has briefed that they see Britain as, "an old European country only good for travel and study." Back home, our great businesses have talked out against leaving Europe one by one. A survey for CBI found 78% of our big employers reject leaving the EU. A separate survey found that 84% of small businesses wanted to stay in the single market. And large corporations such as Goldman Sachs, CitiGroup and JP Morgan have all said they 'd switch new business to central Europe. A

As well as this, the UK would be able to join organisations that they are currently unable to, such as the World Trade Organisation and The European Free Trade Association. However, it would be ill judged to assume that the UK would be able to dictate terms with the EU simply because it is running a trade deficit. Primarily, the EU buys half of Britain's exports whereas the UK accounts for little over 10 per cent of exports from the rest of the EU, so the UK would be in a weak position to negotiate the best terms by which to continue. Furthermore, it could be argued that the UK's access to many non-EU markets is thanks to its EU membership. On its own, the UK only accounts for 4% of global. Therefore, even trade that is not within the EU is at risk and the UK faces a potential significant reduction in trade that will likely cause a reduction in economic growth unless there is sharp growth in the domestic market. Also, although gaining membership to other bodies might be of some help, joining the World Trade Orginisation would be a purely cosmetic move, as it has 161 member states meaning that the UK would not have that much clout, whilst EFTA is essentially governed by EU regulation as all the companies that operating within the EU must still operate under EU guidelines.

Therefore, in conclusion, having weighed up both sides of the arguments of both staying as part of the EU and to leave the EU, I would be in favour of Britain remaining within the European Union. When looking at the benefits for each side, the UK would benefit most in terms of employment, immigration, taxes, trade, and economically by remaining as part of the EU. As discussed earlier, the EU is the UK’s biggest trading partner and the largest single consumer market in the world, leaving it would certainly involve a level of risk. However, although withdrawal from the European Union could cause some disruption to the economy, it is most unlikely that export sales to EU markets would cease completely, and monetary policy can be relaxed, and over time flexible wages and prices would help to recover employment rates.

I chose this topic as it is a matter that will directly affect my future, and I’m interested in finding more about what will happen if the UK decides to leave the EU.

Bearing all this in mind, the UK leaving the EU could be a possible downfall with the lack of inward labour migration affecting the productivity. This would mean a smaller labour supply making it harder to fill job vacancies. Resulting in some possible serious knock on effects for businesses and the economy, one of which being gradual wage inflation. This would mean firms would have to offer higher wages to fill positions. If this happened it will add higher costs to businesses putting pressure on smaller businesses who may not be able to afford this. Depending on the current minimum wage and how high they are, it will make lower level jobs harder to fill as there is no incentive for people to do them. In turn this will lead to more people seeking benefits and job seekers allowance as they would much rather get given money for doing nothing then working hard doing a low paid job for a couple extra thousand pounds a year. Subsequently this will increase unemployment as there is no motivation to work leading to people becoming unskilled and unemployable. Gradually increasing the government's budget deficit as they will be receiving less tax receipts and paying out more in benefits.(A budget deficit is when the government/state have spent more money than they have at their disposal leading to them borrowing the amount needed which is the deficit.) This would potentially slow down the UK’s economic growth.

Exports have been affected by global events. Most importantly, “Brexit” added to fears that the European Union is unstable and other countries may follow the UK and leave the union. The EU is a major trade partner of the US and China, which could disrupt global trade. Brexit has caused major volatility in global markets as well. This could trigger consumers to stop spending and save more. Brexit also hiked up the US dollar 6.3% against the British pound. This continues the trend from last year of low exports and revenues in the manufacturing sector further impeding profits and limiting their willingness to invest.

The effect of the Brexit has already started effecting UK already. It would be a major negative shock to the UK economy, with economic fallout in the rest of the OECD, particularly other European countries. In some respects, Brexit would effect tax on GDP, imposing a persistent and rising cost on the economy that would not be incurred if the UK remained in the EU.

For example, every country has different currency and different legislation. They follow different set of rules and the value of currency differs from one country to another. According to EU’s rule and regulations member states don’t pay extra tax because they are a part of single access market. But for example another country outside of EU needs to pay tax and there is cost involved when the products or goods cross borders. Since Norway, Iceland and Lichtenstein are not European Union’s member states they pay higher tax to enter in European Union area moreover they are entitled to follow their rules and regulation and their own tariffs. If UK decides to not to be a part of EEA or single access market they will be subject to trade barriers. As a result Britain will loss vast amount of profit which they made when they were part of EU.

There are several benefits that Britain has been enjoying as a member country of EU. Besides that, there have also been problems that Britain has been facing due to its membership in the EU and that are why the country is contemplating on its move of trying to distance itself or rather itself from the EU. The first benefit that has been enjoyed is employment. According to the current statistics, the EU has over three million people or jobs that directly rely on Britain 's membership of the EU. For instance, if trade and investments fell post-Brexit, the some of these jobs would be lost, and if it would have happened the opposite, then there would have been the creation of new jobs. Another reason is that Britain’s economy has been booming mostly because most of its biggest trading partners are the EU member state countries mainly German and France. More than fifty percent of the Britain’s export goes to the EU countries besides that, the country’s membership allows the traders to control how the trading rules are drawn up. Over 1.4 Britons have also been able to move and live abroad in the EU, furthermore, the driving license issued by the UK government in all the member states of the EU. The European Union (EU) has played a crucial role in the fighting of crime in England. This has because the European arrest warrants cut out the need for long and complicated extradition procedures and thus, this has allowed the criminals

To begin with, Brexit will detrimentally affect the easy migration of people in the European Union along with the immigration into their own nation as well. According to, “Brexit will have a tiny impact on immigration, experts say”, it states, “It predicts that net migrations will fall by a maximum of 15% to 285,000 a year but warns that trade deals with other countries after Brexit could wipe out that reduction. Global Future director Gurnek Bains said: "There has been considerable debate about the consequences of leaving the single market but very little about whether ending freedom of movement will have anything like the